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Morningstar values SpaceX at $780B, half its IPO target

reuters.com

101–110 of 208 posts

Re: Morningstar values SpaceX at $780B, half its IPO target

#101
post #6

Doesn't matter, as soon as they can they'll shove it into the indexes, meaning pension funds all over the world will be let holding the bag.

I keep seeing this comment on all these spacex posts, can someone ELI5 to me why the pension funds are going to be forced to buy this? (do they not have free will on what they buy?)

Thanks for the responses; next question...

in theory, people that do this for a living know this? shouldn't they all be raising the red flags on this, as opposed to say just people on hackernews?

Re: Morningstar values SpaceX at $780B, half its IPO target

#102

Man I'm so eager to find out how all this unfolds and when does the music stop for Elon and his shenanigans.

Same here. I’ve had an IRA and 401k since I was 21 and I’m 59 now (but still feel as smart as a 21 year old). I doubt I’ll see my lifetime of investment go up in smoke, just a big hill: up super high for a few years and then back to 2024 levels by 2030.

> I’m 59 now (but still feel as smart as a 21 year old)

Any tips?

Re: Morningstar values SpaceX at $780B, half its IPO target

#103
post #25

Earlier quoted context omitted.

Additional concern is the push to get it added to indices immediately. Forcing it into our retirement funds, 401ks and IRAs.

>Forcing it into our retirement funds, 401ks and IRAs. Do you think people buying the SP 500 are forced to buy Apple? Dell? Workday? I see headlines like "401k holders forced to by SpaceX" and think "WTF, that is crazy." Then I look at the article and it just says its being added to the SP500. You may not like that it's being added to the SP500 but no one is saying you are forced to buy any other companies being adde…

> Apple? Dell? Workday?

How long after their IPOs were they added to the appropriate indexes? Did the rules change specifically for them?

Re: Morningstar values SpaceX at $780B, half its IPO target

#104
post #25

Earlier quoted context omitted.

Additional concern is the push to get it added to indices immediately. Forcing it into our retirement funds, 401ks and IRAs.

>Forcing it into our retirement funds, 401ks and IRAs. Do you think people buying the SP 500 are forced to buy Apple? Dell? Workday? I see headlines like "401k holders forced to by SpaceX" and think "WTF, that is crazy." Then I look at the article and it just says its being added to the SP500. You may not like that it's being added to the SP500 but no one is saying you are forced to buy any other companies being adde…

You've been missing important parts of the articles, or perhaps the ones you've seen aren't very informative. The concern is that SpaceX reached out to the indexes to get the rules changed (https://www.reuters.com/business/nasdaq-proposes-fast-entry-...); under the old rules, they would have had to wait much longer before being added. This doesn't prove anything wrong, but it's pretty suspicious, because why should SpaceX care if they are or are not in some particular list of stocks?

Re: Morningstar values SpaceX at $780B, half its IPO target

#105
post #25

Earlier quoted context omitted.

Additional concern is the push to get it added to indices immediately. Forcing it into our retirement funds, 401ks and IRAs.

>Forcing it into our retirement funds, 401ks and IRAs. Do you think people buying the SP 500 are forced to buy Apple? Dell? Workday? I see headlines like "401k holders forced to by SpaceX" and think "WTF, that is crazy." Then I look at the article and it just says its being added to the SP500. You may not like that it's being added to the SP500 but no one is saying you are forced to buy any other companies being adde…

> Do you think people buying the SP 500 are forced to buy...

If it's an index fund, like the vast majority of pension/roth/etc funds, then yes, yes they are. It's literally the whole point of an index fund.

https://www.investopedia.com/terms/i/indexfund.asp

> For broad indexes like the S&P 500, it would be impractical or expensive for an investor to construct the right proportions in a portfolio. Index funds do the work by holding a representative sample of the securities. S&P 500 index funds, the most popular and oldest such funds in the U.S., mimic the moves of the stocks in the S&P 500, which covers about 80% of all U.S. equities by market cap.3

So while yes, people are parroting things they don't understand, so are you.

Re: Morningstar values SpaceX at $780B, half its IPO target

#106

Earlier quoted context omitted.

The risk here is severely overblown. Low earth orbit is self-cleaning with atmospheric drag. There’s comparatively little in MEO and even in a catastrophic Kessler syndrome scenario it’s still safe to transit through. Polluting higher orbits is so far beyond our current capabilities that it’s not even worth discussing.

This is the first time I’ve ever seen someone downplay Kessler syndrome so matter-of-factly. Has anti-doomerism spread to nearly every topic, or is Kessler syndrome really something whose severity has been massively overstated? Opportunity to shift my priors I suppose.

Kessler syndrome doesn't "work" with the orbits these sats sit in. Even left dead and tumbling, the sats would re-enter by their own in ~5 years time. Even less with the recent lowering of their operational orbits.

Also, a common misunderstanding of orbital mechanics (probably amplified by otherwise great cinematography, but poor physics depictions movie Gravity) is that after a collision things move to higher orbits and thus remain up there forever / change planes and affect other satellites. But that's not how it works, the orbit gets elongated, but the periapsis remains the same (or slightly lower), so the things / parts / pieces still re-enter the atmosphere. And the satellites are grouped in rings, with different inclinations, making it extremely hard to reach one from the other.

Also also, space is like really really big. Plenty of space (hah) to put lots of rings of satellites and coordinate between themselves up there. The operators are the first ones who care about it, and they're slowly improving the existing systems, in both tracking (and access to tracking) and automated collision avoidance. Having 10k sats up there makes you good at keeping them separated.

Re: Morningstar values SpaceX at $780B, half its IPO target

#107
post #25

Earlier quoted context omitted.

Additional concern is the push to get it added to indices immediately. Forcing it into our retirement funds, 401ks and IRAs.

>Forcing it into our retirement funds, 401ks and IRAs. Do you think people buying the SP 500 are forced to buy Apple? Dell? Workday? I see headlines like "401k holders forced to by SpaceX" and think "WTF, that is crazy." Then I look at the article and it just says its being added to the SP500. You may not like that it's being added to the SP500 but no one is saying you are forced to buy any other companies being adde…

With the change to only five days of being publicly traded requirements, incentivising market makers to keep a high valuation becomes very cheap.

After five days the index funds have to buy at the last price making it final.

In other words even if the vast majority of the market believes it's worth much less, they can force a high price and force basically everyone to hold it via retirement funds.

Re: Morningstar values SpaceX at $780B, half its IPO target

#108

Earlier quoted context omitted.

[flagged]

Idk… The original “revenue thesis” was that SpaceX, with landing orbital rocket boosters, can undercut all competitors and essentially have a monopoly on payload-to-orbit, and that their lower prices would massive increase the market. Seems a fine business. But then a couple years ago they say “actually with this brand new technological edge we can spin up a monopoly on an entirely NEW industry, Space Internet” and w…

Starlink has a hard limit on how much it can grow. If you are within the reach of wired Internet, you aren't going to pay more for starlink. As terrestrial coverage continues to increase, the potential market shrinks. Basically mobile devices is what their market is. Aircraft, ships, etc.

I don't know what to think about data centers in space. It's hard to see how it could be cheaper than terrestrial. Plus, if you actually have to service any of those space assets, it's going to cost a fortune.

Asteroid mining doesn't make sense to me unless you are going to use those mined resources in space somehow, and that seems far off.

Re: Morningstar values SpaceX at $780B, half its IPO target

#109
post #54

Earlier quoted context omitted.

The irrational exuberance around Tesla was at least somewhat grounded in reality. There were some possible future(s) where it was really going to take off and completely redefine the auto industry. Then of course things went really off the rails with the Cybertruck, pivot to robotics, and just seemingly giving up on their existing line of business to go chasing whatever bong fueled dream Musk is having this quarter.…

Can you image how much better Tesla would be doing if musk was no longer involved?

Without Musk, they wouldn't have squandered their market advantage with high-profile failure after high-profile failure. They would have released a good enough pickup truck in 2017. They wouldn't have spent a whole decade gaslighting everyone about self-driving cars.

The real reason Tesla was remarkable, and why Musk bought into it, was that they released a mass-market electric car that didn't look and perform like a vacuum cleaner and that got an okay range for commuting. That was the value proposition. China can now exceed those design parameters at a wholesale price of about $8k USD.

Re: Morningstar values SpaceX at $780B, half its IPO target

#110

Earlier quoted context omitted.

The best you can do is avoid the exposure with changes to your portfolio composition while everyone else gets grifted. It's regrettable.

I think this is poor advice. Its share of the index will be relatively small and if it is indeed a dud, the index will organically rebalance. If you’re a long-term investor, this would just be a temporary blip. On the other hand, if this is thr opposite of a dud, you’ll get the benefit of that.

> I think this is poor advice. Its share of the index will be relatively small and if it is indeed a dud, the index will organically rebalance.

If a 1 to $1.5t IPO that was fast tracked onto the S&P500 and then hoovered up a bunch of index fund money becomes a dud, the organic rebalance is going to start with a full reassessment of if index funds and the S&P can be TRUSTED.

Its very possible it will be more than a blip, although to be fair if it isn't it's going to be the sort thing you aren't going to dodge.

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