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Americans express unease over SpaceX's influence on retirement savings

theguardian.com

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Re: Americans express unease over SpaceX's influence on retirement savings

#151

Post by mattmaroon »

keernan wrote: post #148
nradov wrote: post #144

Earlier quoted context omitted.

It's always disappointing to see that level of aggressive ignorance on HN. You completely missed the point. The fund is legally bound to make a good faith effort to track a target index, not to immediately buy every stock the day it's added to the index.

>aggressive ignorance on HN That's rich in view of the fact you are the one who is expressing aggressive ignorance. The truth is: 1. An ETF tracking a specific passive index is legally obligated to purchase the shares of a new company added to that index with zero discretion allowed no matter how irrational the pricing might be. 2. Contrary to what you've been spewing about ETFs adding the stock gradually over time,…

2. You’re misreading that. They do it before the rebalance date, not before it is added to the index. Rebalances only happen every 3-6 months generally, so they definitely are buying it over a period of time, not all at once, specifically so they don’t move markets.

The aggressive ignorance (not my term, I’ve got a better one) is that multiple times this guy just didn’t even respond to the actual point. See his first response to me where he just restated the thing I was clearly replying to, rather than addressing my actual argument, which is that all those people would’ve ended up with the same amount of SpaceX shars at the same time, even if the rules had not changed. He just restated the argument I had already just rebutted, then he did the same thing in this branch.

It does not matter that SpaceX is in the index sooner. The future in six months or 12 months would look the same in either case.

Re: Americans express unease over SpaceX's influence on retirement savings

#152

Post by danny_codes »

testaburger wrote: post #73
ggm wrote: post #14

An interesting variant of "privatise the profits, socialise the losses" played wholly in the private sector capital investment space. "When you're rich they let you" is big in this because a functional board of a company about to be vested with a massive debt overhang from a serial offender (X and xAI) would surely have said "could we NOT" about this and the whole model including A and B class voting shares suggests…

Is spaceX absolutely vital for the US national security through Starlink as well as the launch of military satellites? Yes, and as a matter of fact this is also true for NATO allies, Japan, Taiwan, SK, etc in any future conflict for at least the next 5 to 10 years, just as it has been for the past 4 years in Ukraine. In addition to land based infrastructure that can be targeted in any future war -undersea cables are…

> The vast majority of US retirement savings are already tied to the military sector

The defense sector is 2% of the stock market. So if by majority you mean 2%, then that's a reasonable statement.

Re: Americans express unease over SpaceX's influence on retirement savings

#153

Post by danny_codes »

rayiner wrote: post #58
ggm wrote: post #14

An interesting variant of "privatise the profits, socialise the losses" played wholly in the private sector capital investment space. "When you're rich they let you" is big in this because a functional board of a company about to be vested with a massive debt overhang from a serial offender (X and xAI) would surely have said "could we NOT" about this and the whole model including A and B class voting shares suggests…

If SpaceX succeeds, the gains will go to the same people who will bear the losses if it doesn’t. Both the gains and losses are privatized. The consumer/ad tech bias of HN is really showing. The app I use to share photos of my kids with my elderly relatives is worth $1.45 trillion, but somehow companies that make freaking EVs, robots, and rocket ships, and AI can’t possibly be worth that much? I’ve been in HN for 16 y…

I'm not sure I understand. The cynical analysis is that SpaceX insiders are dumping on retail at a high valuation. They know the valuation is ridiculous, but are relying on "dumb" retail (think wallstreetbeets level of gambling) and "forced" retail (your 401k) to create artificial demand so the valuation doesn't collapse until the insiders have sold.

The cynical part (that they know the valuation is ridiculous) is supported by the structure of the IPO. A 4% float with a, what, 30% retail component is unheard of. NASDAQ QQQ admission rule-change is also unheard of. If SpaceX insiders actually thought their company was worth $2T or whatever, why make this highly suspicious changes?

This is irrespective of whether or not SpaceX will eventually be worth more. It definitely could be. But when you look at this IPO, you can't help but catch a smell that something fishy is going on.

Re: Americans express unease over SpaceX's influence on retirement savings

#154

Post by burnerRhodov3 »

overfeed wrote: post #146
Gud wrote: post #140

Earlier quoted context omitted.

Many of the long range drones use starlink terminals. The deep attacks inside Russia would be significantly more difficult without starlink.

> The deep attacks inside Russia would be significantly more difficult without starlink This is inaccurate: Starlink was geofenced to Ukrainian territory after Musk's World War III tweet. Deep strikes inside Russia are mostly missiles, but not even the deep-strike drones can use Starlink due to geofencing.

Starlink can't, but Starshield can.

Re: Americans express unease over SpaceX's influence on retirement savings

#155

Post by burnerRhodov3 »

petilon wrote: post #49

SpaceX is being valued as an AI company and yet they don't have a frontier AI model. Goldman Sachs is predicting 100x growth in 4 years for xAI, but it is a failed company with no frontier model. Top employees have left, and the company is renting out datacenter capacity. Satellite launch business has $4.1 billion in revenue, but only growing 8% annually. Most of the revenue is from Starlink. It has $11.4 billion in…

2025 revenue, $18.7B. 2026 revenue is going to be ~$60B+ with the neocloud deals. Profit margins are going to be around 60%. 300% growth in a year and improving profit margins from a negative number to a $40B in profit in one year is... wild.

Plus, terafab and merging with Tesla is a pretty big forward looking narrative.

Arbing tokens instead of selling them to the consumer turned out the be the better business model. Turns out you don't need to have a frontier model and is actually the worse business model and letting everyone else burn the energy to compete.

Re: Americans express unease over SpaceX's influence on retirement savings

#156

Post by petilon »

burnerRhodov3 wrote: post #155
petilon wrote: post #49

SpaceX is being valued as an AI company and yet they don't have a frontier AI model. Goldman Sachs is predicting 100x growth in 4 years for xAI, but it is a failed company with no frontier model. Top employees have left, and the company is renting out datacenter capacity. Satellite launch business has $4.1 billion in revenue, but only growing 8% annually. Most of the revenue is from Starlink. It has $11.4 billion in…

2025 revenue, $18.7B. 2026 revenue is going to be ~$60B+ with the neocloud deals. Profit margins are going to be around 60%. 300% growth in a year and improving profit margins from a negative number to a $40B in profit in one year is... wild. Plus, terafab and merging with Tesla is a pretty big forward looking narrative. Arbing tokens instead of selling them to the consumer turned out the be the better business model…

Neocloud is a low margin business. SpaceX has no advantage over competitors such as Oracle, Microsoft, AWS and others. Renting out hardware purchased from Nvidia will give them 15% profit margin. Terafab does not have any advantage over TSMC. TSMC has massive economy of scale and mature supply chain.

In short, there is nothing to explain the massive overpricing of SpaceX stock, it will come down to earth at some point. Don't be left holding the bag at that point.

Re: Americans express unease over SpaceX's influence on retirement savings

#157

Post by mattmaroon »

Retric wrote: post #145
mattmaroon wrote: post #138

Earlier quoted context omitted.

Tesla’s P/E ratio is currently 365. They have less than 1% market share, and declining, weak profits, products that seem to be suffering from weak updates and brand harm due to Elon’s politics, and competitors outpacing them from all sides. Toyota’s P/E is under ten. They’ll make more money selling cars this quarter than TSLA will in ten years. TSLA prices have never been within an order of magnitude of reasonable. T…

I agree Tesla’s stock is horribly overvalued, it’s the poster child for the market can remain irrational longer than you can remain solvent. My point is as a benchmark it still makes SpaceX look like a bad investment.

Right and my point is that whether or not it’s a bad investment makes absolutely no difference to the people who own the shares because the price is divorced from that. SpaceX shares only have to stay irrational for six months for this rule change to have had no effect.

Re: Americans express unease over SpaceX's influence on retirement savings

#158

Post by [deleted] »

mattmaroon wrote: post #157
Retric wrote: post #145

Earlier quoted context omitted.

I agree Tesla’s stock is horribly overvalued, it’s the poster child for the market can remain irrational longer than you can remain solvent. My point is as a benchmark it still makes SpaceX look like a bad investment.

Right and my point is that whether or not it’s a bad investment makes absolutely no difference to the people who own the shares because the price is divorced from that. SpaceX shares only have to stay irrational for six months for this rule change to have had no effect.

[deleted]

Re: Americans express unease over SpaceX's influence on retirement savings

#159

Post by dehrmann »

richwater wrote: post #51
Zigurd wrote: post #44

Earlier quoted context omitted.

Except they did pick and choose SPCX and did special favors by giving them a multiplier on the float and an exceedingly short interval before including it in indices.

The only index that I know that float multiplied is Nasdaq which no one should even be investing in via their 401k anyway. Shitty index. Most consumers are utilizing some type of fund that tracks the CSRP, which float adjusts with no multiplier.

It's not even the Nasdaq Composite, It's the Nasdaq 100. And yes, the Nasdaq 100 is a shitty index because Nasdaq vs. NYSE is a bit of an arbitrary, tradition-based way to get tech exposure. It's missing NYSE tech companies (Oracle, Dell, Spotify, Uber) but gets some non-tech like Costco and Pepsi. It'd be like only dating iPhone users. It's sort of a rough proxy for something, but you're better off choosing what you actually care about.

Re: Americans express unease over SpaceX's influence on retirement savings

#160

Post by Retric »

mattmaroon wrote: post #157
Retric wrote: post #145

Earlier quoted context omitted.

I agree Tesla’s stock is horribly overvalued, it’s the poster child for the market can remain irrational longer than you can remain solvent. My point is as a benchmark it still makes SpaceX look like a bad investment.

Right and my point is that whether or not it’s a bad investment makes absolutely no difference to the people who own the shares because the price is divorced from that. SpaceX shares only have to stay irrational for six months for this rule change to have had no effect.

Ok that seems like a reasonable argument, but it’s got a glaring hole.

The reason for these rules is lockup periods. There’s presumably many people really want to sell significant SpaceX stock at the current price who can’t yet. Effectively August 2026 is going to add more stock to the market and that’s going to continue for a while.

Such post IPO volatility is the justification for indexes to wait, and honestly it’s a very good argument IMO.

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