okay, but shorts have to take profits sooner than latter, so upside is comming
Short sellers notch $8.7B profit as SpaceX shares dip to IPO price
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Re: Short sellers notch $8.7B profit as SpaceX shares dip to IPO price
#62it is just so weird to me that nearly $9 BILLION can be created out of nowhere for nothing how can that be healthy for civilization
$9 Billion was not created, just exchanged, with some intermediary institutions and people making money for facilitating the transactions.
It's actually more like 1 trillion of value was "lost" when the stock dropped, and $9 billion was gained by some (and equivalently lost from others) for being right about the stock dropping.
Stock dropping is not literally a loss of any underlying good. It is a "assessment of how valuable something is". So when we say "omg we lost $1t in value" is not quite right. It's "we (everyone betting in the stock market) now collectively understand the value of this thing (company in this case) to be $1t less than assumed previously"
In this case, massive swings in value mean that the assessed value of a thing is very uncertain. I'd say this is extremely true for spacex, where in theory many people think it could be worth a fortune, or nothing, and no one can ever know the "true" value.
This is because there is not such thing as "absolute value" in the real world. And when it comes to things like stocks, "value" is just "hypothesized current value", which is a whole bunch of things combined: long term value of company, plus short term expected movement, even things like "who wants to own more of this this in the next few milliseconds", make up what a thing is estimated to be worth right now.
Assuming the stock market is some oracle of absolute value will make the world look insane. Seeing it as estimated value at one point in time in a very uncertain world where nothing has "true" value and all value is just relations between people and the things they want and the things they own and can exchange, is much closer to reality.
Re: Short sellers notch $8.7B profit as SpaceX shares dip to IPO price
#63If you make money shorting a stock, who do you make money from?
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Re: Short sellers notch $8.7B profit as SpaceX shares dip to IPO price
#64I completely understood the idea of Starlink and expected that it would be successful and useful, which it is. I've worked in data centers for decades now, and I am incredibly skeptical of the "data centers in space" sales pitch. It seems like an actual scam. Data centers submerged in the ocean or placed in the desert seem much more promising. But I have only an enthusiast's understanding of rockets and physics, so I…
SPCX is valued as an AI company; any and all issues you have with AI company valuations apply to to SPCX. I too agree that SPCX’s space business is real and valuable, but it’s (almost completely) irrelevant here.
Because SpaceX bought xAI/Twitter.
All of the losses are from the xAI/Twitter side of the house. And Elon Musk needs a flimsy story so that no one sues him. It doesnt have to be a believable story, it just needs to be enough so that no lawyer cares to bring a case in Texas vs SpaceX and Elon for breach of fiduciary duty.
The story did its job. Elon offloaded the money losing Twitter/xAI out of his personal wealth and onto the public through SpaceX. Done and done. SpaceX is now an AI company (or contains one) and needs to perform as such.
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It's literally the same story as Tesla/Solar City. Make up bullshit about solar panel synergy with EVs and buy out his cousins failing company. Make it TSLA shareholders problem for figuring out how to make a profit from the failing company, it's no longer Kimball Musks concern since the buyout
Re: Short sellers notch $8.7B profit as SpaceX shares dip to IPO price
#65I completely understood the idea of Starlink and expected that it would be successful and useful, which it is. I've worked in data centers for decades now, and I am incredibly skeptical of the "data centers in space" sales pitch. It seems like an actual scam. Data centers submerged in the ocean or placed in the desert seem much more promising. But I have only an enthusiast's understanding of rockets and physics, so I…
Repairability and depreciation are the main problems. A earth data center can be repaired, depreciated, and recycled at EoL recovering some of the costs. SpaceX datacenters are a total write off from the moment they are launched.
That's actually not a concern I'd have, because hardware that has been sufficiently tested and burned in tends not to fail for a very long time.
I've done builds that ran for 5+ years with virtually no physical attention, just continual degradation as hardware is taken out of service. There's also not much money to recover from 5+ year-old hardware.
I used to run AI inference GPU servers in road vehicles, which is probably an even harsher environment than a single rocket launch, and the vibration problems are real but solvable.
Re: Short sellers notch $8.7B profit as SpaceX shares dip to IPO price
#66Insiders who have locked up stocks but still want to sell could presumably just short the stock and take out a loan secured on the stock to get the financial effects of selling, without actually selling... I wonder if that's what's happening with ~$1T of stocks currently locked up...
Insiders aren't allowed to short a stock. It's against the law.
Against corporate policy, it's against the law only if they trade on material non public information.
Once the lockup expire they'll be able to trade (sometimes there's trading window but some tech company don't have any for lower level employees), and they'll still be insiders.
Re: Short sellers notch $8.7B profit as SpaceX shares dip to IPO price
#67I completely understood the idea of Starlink and expected that it would be successful and useful, which it is. I've worked in data centers for decades now, and I am incredibly skeptical of the "data centers in space" sales pitch. It seems like an actual scam. Data centers submerged in the ocean or placed in the desert seem much more promising. But I have only an enthusiast's understanding of rockets and physics, so I…
No. It really is a scam. Everyone with understanding of the physics involved wrote so. Heat dissipation + radiation + launch cost make it a no-go.
Re: Short sellers notch $8.7B profit as SpaceX shares dip to IPO price
#68Insiders who have locked up stocks but still want to sell could presumably just short the stock and take out a loan secured on the stock to get the financial effects of selling, without actually selling... I wonder if that's what's happening with ~$1T of stocks currently locked up...
If anyone knows of a broker who will let you withdraw the proceeds (cash) of a short sale, I will buy the name of the broker off you. I'll also let you know why I would pay for this (although you may already know anyway, hah). I spent a week researching this talking to fidelity, schwab, IBKR, and Robinhood, none would allow it.
I asked an adjacent question to a broker friend who flatly replied: "Not interested in being served a Wells Notice."
Which more or less answered the question for me, even if he was being a bit hyperbolic.
Re: Short sellers notch $8.7B profit as SpaceX shares dip to IPO price
#69If you make money shorting a stock, who do you make money from?
This is actually a very good question.
The funniest and simplest answer is that you make money off yourself.
Re: Short sellers notch $8.7B profit as SpaceX shares dip to IPO price
#70I completely understood the idea of Starlink and expected that it would be successful and useful, which it is. I've worked in data centers for decades now, and I am incredibly skeptical of the "data centers in space" sales pitch. It seems like an actual scam. Data centers submerged in the ocean or placed in the desert seem much more promising. But I have only an enthusiast's understanding of rockets and physics, so I…
> Is there anyone credible who thinks this is a plausible pathway for SpaceX to make huge amounts of profit?
Scott Manly (who I think is credible) has a video where he goes over the logistics of SpaceX's space based data centers. He seems to think its an idea worth pursuing, but its important to note that his expertise is space tech, and not business strategy.