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

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

#411

Post by rtkwe »

wbl wrote: post #78
rhplus wrote: post #28

Earlier quoted context omitted.

Some media companies had them before the 1980s. New York Times issued dual class in 1969 so that the owning family maintained editorial control. Berkshire Hathaway is possibly the most famous from the 80s/90s. The class A shares are significantly more expensive and proportionately even more powerful than the class B shares. The lower price version was important back when physical exchanges didn’t support fractional s…

Berkshires share classes are different in that A is exactly ten B shares and anyone can convert A to B and hold them. The dual share classes that are bad separate control from ownership.

The BRK A and B are slightly different in that A is worth 1500 B but B only has 1/10000 of a vote so it IS a somewhat lopsided value vs voting share but not as bad as the 0 vote SPCX shares that just got dumped on the market.

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

#412

Post by torginus »

HPMOR wrote: post #364
bko wrote: post #350

Earlier quoted context omitted.

I think the rules are there are hard limits unless a multi-trillion dollar company IPOs with a significant absolute float, in which case tracking the "market" obviously includes said company.

Yeah, this is correct. There are so many large multi-trillion dollar companies coming to IPO, which if your are passive index holder and you are trying to track the market it is correct for these companies to be included. And besides SPY has chosen not to fast track where QQQ has. It is a free market, and folks are free to NOT buy QQQ. So I'm not sure why this is a point of debate.

My (non-motivated, don't have NASDAQ or SpaceX) take is that isn't this how these funds are supposed to behave? You buy NASDAQ if you can take risk, S&P otherwise. If you check out what companies are in the NASDAQ, it's not like it's not majority tech, of which a lot of them are AI-based, so adding SpaceX to that mix is reasonable - and if they waited a year or so for price discovery, and had SpaceX been a popular choice (still can turn out like that), then investors would've missed out on those gains.

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

#413

Post by ge96 »

RealityVoid wrote: post #279
xutopia wrote: post #93

Earlier quoted context omitted.

You're mistaken. Name 3 accomplishments he made and I'll show you world class work done elsewhere by other companies. The only thing he did which was notable was Starlink and I'll gladly grant you that. China is about to eat Starlink's lunch with their own tech. Again I think people overestimate Musk's contributions to the world.

Falcon rockets, starlink, Tesla. They all pushed the envelope in their field. Are the stocks overpriced? Yes. Did they do impressive technical work? Also yes. They might get surpassed by competitors, but that is to be expected for all companies. But they clearly did something special there. And I deff am no Musk fanboy, but you have to give him the credit for establishing those systems.

I think the fact that China is copying SpaceX's tech is a testament to SpaceX's success

There's also the bit about people talking shit about other people they're not even close to, to feel like they matter. Ahh well

Hey guys Elon Musk sucks haha high fives all around, great

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

#414

Post by jt2190 »

alistairSH wrote: post #402
HPMOR wrote: post #364

Earlier quoted context omitted.

Yeah, this is correct. There are so many large multi-trillion dollar companies coming to IPO, which if your are passive index holder and you are trying to track the market it is correct for these companies to be included. And besides SPY has chosen not to fast track where QQQ has. It is a free market, and folks are free to NOT buy QQQ. So I'm not sure why this is a point of debate.

"People" in this instance aren't always informed buyers. Sometimes they're buying an index fund because they don't have the time to research individual stocks and sometimes it's their pension investing. The normal seasoning period is there for a reason. There is a massive downside to premature inclusion of a stock that is initially overvalued and then settles to a reasonable/sustainable value.

> There is a massive downside to premature inclusion of a stock that is initially overvalued

Define “massive”. SpaceX is only 1.2% of QQQ.

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

#415

Post by dofm »

DennisP wrote: post #389
dofm wrote: post #383

Earlier quoted context omitted.

> Institutional bond traders are pretty sophisticated. I am old enough to remember Long Term Capital Management.

I'm old enough to remember they weren't just buying and selling corporate bonds like most of the bond market. They were a hedge fund that used massive leverage to exploit tiny arbitrage opportunities between correlated securities. There may be important factors that the bond market isn't aware of, just like most of them didn't know about the problems with mortgage-backed securities in 2008. But anything you and I are…

> But anything you and I are aware of, they probably are too.

This is something that seems like it should be true but the subprime crisis (which didn't at all come out of the blue — anyone with any instinct at all should have understood when they first saw someone get given insane mortgages) argues against.

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

#416

Post by rightbyte »

kmeisthax wrote: post #221
georgeecollins wrote: post #23

Earlier quoted context omitted.

Ford has them. What it has meant for Ford-- and will probably mean for Facebook-- is that Zuck's heirs will control the company, for better or for worse. The common justification for this is that for a media company (NYT) you want a person or family to take responsibility for the editorial content, not a pure profit seeker. Facebook has it both ways and typically denies it has editorial control. IMO, the flaw of mark…

The USSR's main problem was not that it was socialist or communist, but that it was Russian. Russia is run by people who are adept at coopting revolutionary movements into a corrupt, authoritarian core. When left-wing libertarians say "true Socialism has never been tried", this is (along with China) what they are referring to. The theoretical arguments against socialism (or, more specifically, centrally planned state…

I would not put empaphis on some sort of ethnological mythos to why the USSR was like it was. It is a weak argument.

> Zuckerberg can bribe the shareholders to not care about their lack of control.

Monarchies had to please the aristocracy, etc.

I would say that "democracy" happens on party level not voter level. Party members are way more into the details than even the most engaged voters. You need to be at the meetings to know who is pushing what. It is all in subtle things. Most people I speak to have the most naive view on how parties work internally. Like it is a person. Goomba fallacy..

And party members more understand power hierarchy. All the drama is about that internally. Commité of whatever doing whatever having a say in whatever and delegate count of whatever county level org. to distict congress org. etc.

I think a big problem is that far too few people are engaged in politics nowadays. Active party members are aware of power structures and how they work.

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

#417

Post by notahacker »

wredcoll wrote: post #367
clickety_clack wrote: post #339

Earlier quoted context omitted.

Yes, because the guy buying your bananas is able to make banana-buying decisions for next week based on the price you give him. You’re not going to make up a silly low number because you actually have to buy the bananas yourself at some point, and you help price discovery because now that guy isn’t buying bananas at a higher price than someone is willing to sell them for.

Just as a thought experiment, would you say there are any (societal) negatives to the possibility of thr price of bananas (or the share price of spacex) being able to fluctuate wildly based on semi-abstract economic manipulations, like shorts and futures and such. What I'm getting at is when does it go from investing, "I think this entity is going to take my money and use it to build a profitable factory that will th…

The price of bananas is generally likely to fluctuate less as a result of shorts, futures etc.

The distinction between investing vs gambling and positives and negatives sounds like more the subject of a PhD thesis than an HN comment! At some point the marginal benefit of smaller price spreads from very short term trade to actually allocating physical capital and labour to producing more valuable stuff might actually be lower than the amount it simply inflates asset prices, but that is much closer to microseconds than "you're not allowed to bet against this IPO, the insiders artificially pumping its value need to be able to cash out first"...

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

#418

Post by moffkalast »

jkaptur wrote: post #312
_ink_ wrote: post #157

Earlier quoted context omitted.

I am really curious for what reason they choose to do it? Like what is in for Nasdaq?

Putting cynicism aside (there's plenty of that here already): there is a theory that people invest in index funds because they don't want to pick individual stocks. They want exposure to "the public stock market as a whole". I think there are good arguments on both sides of including SpaceX in such an index.

Oh come on, that's a view so charitable that not even Musk giving away all of his wealth would come close.

Pretty much everybody know what it was about on day one, brokers were (and still are) operating in blatant bad faith for personal gain and they know they can count on the current US administration to get off scot free. It's like if Jordan Belfort was in charge of Nasdaq.

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

#419

Post by shermantanktop »

names_are_hard wrote: post #404
shermantanktop wrote: post #118

Earlier quoted context omitted.

“Broader economic purpose”? It’s all betting. If someone wants to dress it up in jargon or talk about beneficial second order effects, they can. But if putting money on an outcome you can’t control isn’t gambling, I don’t know what is.

Is buying insurance gambling? Is giving your second cousin 100k some money so he can open up is restaurant gambling if you expect a percent of the profits but won't actively be involved in advising him on running the business?

Yes.

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

#420

Post by usefulcat »

xutopia wrote: post #61

I can't comprehend for the life of me that people put their life savings in what Elon Musk is doing. Are people not seeing how he's lying about the future all the time? He said he aimed to have 5000 Optimus robots out by end of 2025, 50000 by 2026 and 10 times that in 2027. He promised in 2015 that full autonomous driving would arrive in 2 years and we aren't there yet 11 years later. He even said in 2016 that there…

Like Trump, he excels at self promotion, and a lot of self promotion is about being able to lie fluently.

For such people, lying comes as easy as breathing. No wonder they do it all the time.

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