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SpaceX bond worth 10% less than issue price – heading for junk bond status

ft.com

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Re: SpaceX bond worth 10% less than issue price – heading for junk bond status

#101

Post by lumost »

somat wrote: post #53

A stupid/naive question. Why does this affect SpaceX? They have their money(The IPO) Any third party trading value does not change that. Sure there may be individuals, officers of SpaceX who hold these instruments who will be negatively affective, but the company itself? My best guess, it makes it harder to get loans in the future.

This is a potentially strong indicator of how institutional investors view spacex. Given that Spacex is in a high depreciation/capital intensive business, a high cost of capital and potentially difficult capital terms is problematic.

Spacex will raise more money again, they have no known path to structural profitability.

Re: SpaceX bond worth 10% less than issue price – heading for junk bond status

#102

Post by shafyy »

tyre wrote: post #62
formvoltron wrote: post #48

Earlier quoted context omitted.

nah the very worst thing about the spacex ipo is that schwab won't allow me to short it. has nothing to do with the recency of the issue. today i shorted some skhy when i realized it's trading about 30% over the Korean share price (I could be wrong about that)

I'm not an investor in SpaceX but I don't think shorting stocks at IPO should be allowed. The market should be given time to settle on a price, and it's unlikely that anyone needs to short it on day 1 for hedging. It's purely price speculation. Yeah, I know why people _want to_ (betting), but it doesn't serve a broader economic purpose.

Isn't it all speculation always though? That's why stock picking doesn't work and ETFs are popular.

Re: SpaceX bond worth 10% less than issue price – heading for junk bond status

#103

Post by 33hgtt »

londons_explore wrote: post #26
notahacker wrote: post #13

Earlier quoted context omitted.

yeah, as the article said bond prices have fallen slightly over the time period but this is much more bond buyers seeing increased risk SpaceX isn't going to have the cashflow or ease of further equity raises to pay them back in the long run. (With it being bonds the upside of "but what if SpaceX actually does become bigger than the present US economy" is capped too)

I don't see a future in which those bondholders don't get paid back. The company has plenty of revenue, and if needed can just turn off the r&d tap and become a boring company. Terrible for the shareholders obviously, but the bond holders will be fine.

Another example of complete idiocy on this board.

Yep spacex can afford to have a declining value of equity… its talent who are mostly paid with stock will leave for its competitors - increasing the probability of bankruptcy. Putting the company in a tail spin heading for default.

So how are the bond holders gonna get paid in the event that happens? Oh in bankruptcy court? Lmao.

Raising equity is not a loophole either - ebit and ebitda drive measures of default risk.

Most of you on here should never ever talk about finance. It’s like you learned how to discount a cash flow and have it all figured out lololol

Re: SpaceX bond worth 10% less than issue price – heading for junk bond status

#104

Post by tjwebbnorfolk »

swader999 wrote: post #15

I'm impressed with the general public. I thought these guys would get away with their hype train. Nice surprise.

but they did. they already got their money. it's the investors who are going to take a bath, not spacex

Re: SpaceX bond worth 10% less than issue price – heading for junk bond status

#105

Post by runarberg »

infecto wrote: post #85
lucd wrote: post #41

The worst about the SpaceX IPO is Nasdaq changing their inclusion rules for the Nasdaq 100. The index fast-tracked SpaceX stock for inclusion 15 days after the IPO, instead of the normal three-month seasoning period. They also changed its 10% minimum float rule to a 3x weighting boost for low-float stockss. So many people will unwillingly and prematurely invest into SpaceX, before it has any chance to discover its re…

Is this really the worst thing? People keep bringing this up but it’s the Nasdaq 100. It would be shocking if we were talking about the SP500.

So you are saying it could have been worse, and therefor it is not that bad. I feel like this may be a logical fallacy.

It is like saying that the worst thing about twin earthquakes in Venezuela was not the fact that there were two of them, because there could have been three.

Re: SpaceX bond worth 10% less than issue price – heading for junk bond status

#106

Post by stackghost »

tjwebbnorfolk wrote: post #97
khurs wrote: post #95

Earlier quoted context omitted.

Yes Index and other funds are forced to buy as their contractual mandate is to follow the index or methodology set out by the fund.

ok but who is forced to buy the nasdaq 100?

Index funds, for starters.

Re: SpaceX bond worth 10% less than issue price – heading for junk bond status

#107

Post by khurs »

tjwebbnorfolk wrote: post #97
khurs wrote: post #95

Earlier quoted context omitted.

Yes Index and other funds are forced to buy as their contractual mandate is to follow the index or methodology set out by the fund.

ok but who is forced to buy the nasdaq 100?

quick search:

https://www.justetf.com/uk/search.html?search=ETFS&assetClas...

Re: SpaceX bond worth 10% less than issue price – heading for junk bond status

#108

Post by Octoth0rpe »

somat wrote: post #53

A stupid/naive question. Why does this affect SpaceX? They have their money(The IPO) Any third party trading value does not change that. Sure there may be individuals, officers of SpaceX who hold these instruments who will be negatively affective, but the company itself? My best guess, it makes it harder to get loans in the future.

> My best guess, it makes it harder to get loans in the future.

Which is pretty important! It's my understanding that from all that money they raised during their IPO, a good amount of it went right back out the door again to pay off misc loans for the twitter acquisition. They may only have bought themselves 6 more months of time given their purported burn rate (mostly driven by AI investment), so they're going to need more loans really soon, or another major stock offering.

Re: SpaceX bond worth 10% less than issue price – heading for junk bond status

#109

Post by binaryturtle »

nijave wrote: post #3
binaryturtle wrote: post #2

Article needs registration.

magnolia1234 bypass-paywalls-clean https://archive.is/tnSeY

There's a weird "Cloudflare" captcha on that site. I can't get past that either. :)

Oh well… the article probably hasn't anything useful or important to say anyway. Time to move on.

Re: SpaceX bond worth 10% less than issue price – heading for junk bond status

#110

Post by macintux »

marcusverus wrote: post #90
lmohseni wrote: post #72

Earlier quoted context omitted.

[flagged]

If these figure represent actual deaths (big if), those people will have died because literally nobody on earth was willing to pay to keep them alive--yourself included.

If a pillar is removed from a building with no warning, no one would claim that its collapse was from the unwillingness of anyone else to put a new one in place.

If DOGE had announced a 2-year phaseout of humanitarian aid, governments and NGOs might have had time to fill the gap. Doing so arbitrarily and abruptly was simply cruel.

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