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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

#531

Post by JumpCrisscross »

fc417fc802 wrote: post #530
JumpCrisscross wrote: post #474

Earlier quoted context omitted.

> unless there's enough money in play in which case the rules are edited then and there to specifically accommodate that company The Nasdaq 100 rule change covers multiple companies. Like, there is so much wrong with the SpaceX IPO. It’s kind of weird, as someone who’s spent time in both the equity capital markets and private markets, to see this being the thing finance Twitter has fixated on.

> The Nasdaq 100 rule change covers multiple companies. I don't think that's relevant to the point you're responding to there. A rule change can apply to many parties while the content and timing nonetheless target a single player. The two things aren't at odds.

> A rule change can apply to many parties while the content and timing nonetheless target a single player. The two things aren't at odds

Fair enough. From what I understand, the decisions were timed to anticipate the cohort. It Anthropic made it out first, they’d have gotten the shade.

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

#532

Post by yieldcrv »

dofm wrote: post #383
DennisP wrote: post #303

Earlier quoted context omitted.

Institutional bond traders are pretty sophisticated. They're aware of all the possibilities you mentioned, and pricing the bonds low anyway.

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

I too can play devil’s advocate

and now back to being an adult

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

#533

Post by yieldcrv »

dofm wrote: post #255
ForHackernews wrote: post #203

Earlier quoted context omitted.

He's only the "richest" man in the world because of the inflated valuations of his companies. At some point the market looks like a dog chasing its own tail: Q: Why is this stock so valuable? A: Duh, because Musk is worth a kajillion dollars and everything he touches is gold! Q: Why is Musk worth a kajillion dollars? A: Because he holds so many shares of extremely valuable companies, silly!

There is this, but he is also a quasi-government figure. As Trump weakens he will reappear in that sphere.

you’re right, the bonds of this overlevered money losing enterprise AI and space cargo conglomerate should be trading at a premium

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

#534

Post by dofm »

DennisP wrote: post #487
dofm wrote: post #415

Earlier quoted context omitted.

> 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.

A lot of mortgages were trash but the securities were a new and complicated financial product with a plausible story. A few people figured out the problems, but Michael Burry for example did it by combing through thousands of pages of prospectuses. SpaceX bonds are just plain ol' corporate bonds, the same stuff these investors have been analyzing for a very long time.

Max Keiser of Karmabanque was talking about and writing about it in public more than a year before Burry acted, with pretty solid predictions, without any obvious forensic action. He's quite bonkers, but if it was obvious to Keiser it should have been obvious to these highly intelligent people we're discussing.

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

#535

Post by danielmarkbruce »

malfist wrote: post #241
danielmarkbruce wrote: post #204

Earlier quoted context omitted.

His reasoning is valid. Compared to the S&P500, it's a small sum of money. Most people aren't buying a fund that tracks that nasdaq index. The total effect isn't that large.

His reasoning isn't valid. Not only is he wrong that it doesn't impact him, because VTI is impacted, but the whole premise is wrong. "I'm not harmed" does not mean things are fine. If I go murder your neighbor, will you come to my trial and demand I go free because you weren't harmed? Should the judge let me go because he wasn't harmed?

He wasn't making the case he isn't harmed. He was making the case that the effect isn't large. You don't appear to understand the claim itself, let alone the reasoning.

Just because you don't understand the basics of the financial system, or the different indices, or the amount of money flowing into the funds that track each, it doesn't mean others don't. The impact if it had been included in the S&P500 would have been at least an order of magnitude more than just the nasdaq 100.

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

#536

Post by wantguns »

bix6 wrote: post #331
homebrewer wrote: post #196

Earlier quoted context omitted.

https://gitlab.com/magnolia1234/bypass-paywalls-clean-filter...

That’s making me sign in?

i signed in only to find that link 404s (which makes sense for why it asked to sign in, in the first place)

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

#537

Post by malfist »

danielmarkbruce wrote: post #535
malfist wrote: post #241

Earlier quoted context omitted.

His reasoning isn't valid. Not only is he wrong that it doesn't impact him, because VTI is impacted, but the whole premise is wrong. "I'm not harmed" does not mean things are fine. If I go murder your neighbor, will you come to my trial and demand I go free because you weren't harmed? Should the judge let me go because he wasn't harmed?

He wasn't making the case he isn't harmed. He was making the case that the effect isn't large. You don't appear to understand the claim itself, let alone the reasoning. Just because you don't understand the basics of the financial system, or the different indices, or the amount of money flowing into the funds that track each, it doesn't mean others don't. The impact if it had been included in the S&P500 would have be…

Your honor, I only murdered one person, that effect size isn't large, there's 9 billion people on earth. You should dismiss this case.

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

#538

Post by DoesntMatter22 »

Terr_ wrote: post #483
DoesntMatter22 wrote: post #388

Earlier quoted context omitted.

The United States is far more socialist than capitalist and it’s not close. In the early 1900s the federal tax rate was 0. Now we spend 125% of what we bring in in taxes. That is definitely not capitalism. That’s not a free market, that is the government spending far beyond what’s even feasible

> socialist than capitalist [...] federal tax rate My dude, you're acting like Federal government is the only government that matters. It's a common mistake, but in this context it's fatal to your argument. It's fatal because federal spending is the least relevant kind, since so much of it (and so much of its growth) is for the military, and military spending indicates very little about whether a country is socialist…

"since so much of it (and so much of its growth) is for the military"

So clearly you are pretty uninformed as the military spending is only 13% of the federal budget. Social Security (AKA a socialist program, IDK if anyone can deny that) is 22%, Medicare (another socialist program is 14.2%). Interest on our prior spending (a lot of it from SS and Medicare, etc, some military too. is 14%

So, if you add social programs you has (SS = 22.5%, Medicare = 14.2%, not counting education) that is 36% of the budget or nearly 3x miltitary spending.

A capitalist economy would NOT have those things are as they are not free market at all, they are the government forcing your to pay into them.

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

#539

Post by DoesntMatter22 »

fragmede wrote: post #493
DoesntMatter22 wrote: post #401

Earlier quoted context omitted.

They said we live under true capitalism right now we I’m clearly showing we do not. Not to mentions the US is far from “self regulating” there are millions of words of regulation in the US.

No you didn't, all you did was complain about taxes and say that there exist regulations by counting the number words in them. Not all words are equal, not does it mean that they're effectively enforced. Looking at various monopolies like Ticketmaster or the UnitedHealth group and how they've been allowed to flourish it doesn't seem like America has anywhere near enough regulations to be considered true capitalism. I…

First of all I didn't complain. I don't care what happens personally. Secondly it's just a fact that the US has a tremendous amount of regulations compared to the past. Just look at how few regulations existed in the 70s vs today. Apparently you don't like word counts, but the reality is there are a enormous amount today that didn't exist in the past.

That's not a free market economy.

"it doesn't seem like America has anywhere near enough regulations to be considered true capitalism."

You can't regulate your way into capitalism because capitalism by definition means markets free from government interference. The more it interferes the less capitalism you have.

United Healthcare is a great example. The governments enforce these companies being a monopoly be restricting which companies can operate in which states, having an enormous amount of red tape and regulation, documentation laws, etc.

If it was truly "capitalism" the government wouldn't' get involved at all. Part of the reason that doctors are so expensive to see is because there is a board that the US Government certifies to allow them to control which hospitals are allowed to be teaching hospitals for doctors.

If it was true capitalism there would be no regulation there and any college could graduate doctors. This artificially keeps the supply lower than it would be. These are facts.

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

#540

Post by danielmarkbruce »

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.

There is the affect as you say - but more interesting is that it just suggests people who sit around analyzing companies all day think there is a pretty decent chance this thing goes bankrupt.
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