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Can the stockmarket swallow Anthropic, SpaceX and OpenAI?

economist.com

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Re: Can the stockmarket swallow Anthropic, SpaceX and OpenAI?

#631

Post by jwpapi »

camillomiller wrote: post #619
tristanj wrote: post #545

Earlier quoted context omitted.

One third of all software code is written by AI. At the frontier AI labs it's 80%+. It has completely upended the software industry. How is that not a massive adaption?

You couldn’t have picked a better argument to show how this bias is exactly what’s making tech people think this shift is ubiquitous. “It works extremely well for coding, in which I am a domain expert, so why wouldn’t it work for all the other domains I absolutely know nothing about?”

Because it doesn’t work without me

Re: Can the stockmarket swallow Anthropic, SpaceX and OpenAI?

#632

Post by Npovview »

paulpauper wrote: post #13
rconti wrote: post #2

So they're not just racing to gain dominance in AI, they're also racing to IPO before the music stops? IPOing and getting a bunch of cash, even if your stock subsequently suffers in the crash, is a lot better than being unable to get that capital infusion before the house of cards collapses.

People keep predicting "house of cards" and keep being wrong. AI bubble was supposed to burst as far back as 2023. When was the last time since 2009 there was a $500+ billion tech valuation that lost 90% or more? After a certain point , 100% market penetration is achieved and these products become mainstream and profitability follows. See Uber and Tesla for examples.

US markets will keep superpositiong S-curves upon S-curves upon S-curves. Just as Elon Musk does with his companies. Just ask Tesla/SpaceX bulls.

Re: Can the stockmarket swallow Anthropic, SpaceX and OpenAI?

#633

Post by duskdozer »

arrty88 wrote: post #605
pryce wrote: post #355

Earlier quoted context omitted.

This should be a 5 alarm fire. It reminds me of nothing more than organized crime rackets that targeted control of union retirement funds

Should one sell their 401ks ahead of the forced buying

401ks probably have limited control, but in proportion to their share of your index funds, you could short these stocks or use options or buy an inverse ETF (if one will exist).

Re: Can the stockmarket swallow Anthropic, SpaceX and OpenAI?

#634

Post by ejoso »

pryce wrote: post #355
augstein wrote: post #105

For SpaceX (and possible the others): Yes it can, since they changed the rules to force over $30 trillion in passive 401k and retirement money to buy SpaceX at IPO valuations. From https://x.com/Hedgeye/status/2060435253928604065 : "Rule changes for the SpaceX $SPCX IPO: Index providers waived the profitability requirement and cut the seasoning window from 90 days to 5. This forces over $30 trillion in passive 401k a…

This should be a 5 alarm fire. It reminds me of nothing more than organized crime rackets that targeted control of union retirement funds

This should trigger all of us to be spinning up lawsuits. This whole thing is an absurd grift.

Re: Can the stockmarket swallow Anthropic, SpaceX and OpenAI?

#635

Post by prepend »

fsuts wrote: post #603
ashdksnndck wrote: post #484

Earlier quoted context omitted.

The twitter debt is a negligible portion of the money at stake here. It’s a footnote compared to the trillions of dollars in wealth that are moving around. We are only talking about it because the internet commentariat has special interest in twitter. Not worth wasting time thinking about it if you are deciding how to allocate your portfolio. Nevertheless it is part of a pattern of weird deals in Elon’s companies. He…

Twitter was 40 billion ish overpriced purchase and SpaceX is seeking to raise 75billion Let’s not make billions into a footnote?

Space is raising $75B at an expected valuation of $750B so the Twitter value is just 5% of SpaceX’s IPO valuation and if it goes up then the fraction gets smaller.

Is 5% a footnote, maybe.

Re: Can the stockmarket swallow Anthropic, SpaceX and OpenAI?

#636

Post by MSFT_Edging »

BobbyJo wrote: post #277
calvinmorrison wrote: post #168

Earlier quoted context omitted.

except the last bubble pop hit fast and hard with post covid inflation.

It worked. The only people upset about it are young people who don't vote. If young people don't want a continual wealth transfer from them to the old, they need to start voting. That's been the case since 2008, and here we are a generation later.

It's hard to take the "just vote" seriously after the rash of gerrymandering happening in the south. Some elections were even downright cancelled.

Re: Can the stockmarket swallow Anthropic, SpaceX and OpenAI?

#637

Post by thegreatpeter »

augstein wrote: post #105

For SpaceX (and possible the others): Yes it can, since they changed the rules to force over $30 trillion in passive 401k and retirement money to buy SpaceX at IPO valuations. From https://x.com/Hedgeye/status/2060435253928604065 : "Rule changes for the SpaceX $SPCX IPO: Index providers waived the profitability requirement and cut the seasoning window from 90 days to 5. This forces over $30 trillion in passive 401k a…

It’s an index fund. It must follow the index. They’re forced to buy any company in the SP500.

They are buying it at IPO pricing

Re: Can the stockmarket swallow Anthropic, SpaceX and OpenAI?

#638

Post by OskarS »

eru wrote: post #561
energy123 wrote: post #465

Earlier quoted context omitted.

You protect yourself by understanding that this is one infinitesimally small cost (expressed as a fraction of your portfolio returns) that doesn't overcome the benefits of maximum diversification and the ultra-low fees of broad-based ETFs. Buy MSCI World, enjoy the 0.04% p.a. fees and minimal idiosyncratic risk, and relax. Index rebalance traders will reduce your annual returns by less (probably much less) than 0.1%,…

I broadly agree. Though I'm less pessimistic: lots of people will pay lots of attention to SpaceX and friends, and with short selling in public markets being possible, an accurate price will be established very quickly. Remember also: index funds are some of the participants most keen to lend out their shares to short sellers. It's one of the rare ways they can boost returns above the raw index they follow.

> and with short selling in public markets being possible, an accurate price will be established very quickly.

I know very little about markets, but: aren't the short-sellers just going to provide liquidity for the big index funds? Like, if the funds HAVE to buy SpaceX, and the funds are enormous, wont every single stock sold short be immediately gobbled up, as well as pretty much anyone else wanting to sell? Even if everyone else is selling like mad, it wont affect price much at all?

Maybe this is naive, but if these enormous funds are more or less forced to buy SpaceX, it seems impossible that "actual price discovery" is going to happen in any reasonable amount of time, and the short-sellers will be screwed.

Re: Can the stockmarket swallow Anthropic, SpaceX and OpenAI?

#639

Post by gizajob »

hagbarth wrote: post #403
guywithahat wrote: post #389

Earlier quoted context omitted.

Why? An index fund represents the market (usually top 100 or 500 companies), and SpaceX will certainly be in the top few companies. I would argue it's a lot riskier to buy it after the IPO price (if you're buying it secondary it would be easier to spike prices by accident), plus then it's not representative of the actual market until you've purchased the stock. Unless I'm misunderstanding this, buying at the sale pri…

Because 5 days is not enough for the market to discover the price of SpaceX. And the rules were changed so the float is weighted as if it was much much larger than it is.

Are you sure? It discovers it within seconds following a bad earnings report. It seems hard to know right now whether five days might actually be sufficient or not, seeing as the cat is out of the bag about how unprofitable and debt laden this trillion dollar enterprise is.

Re: Can the stockmarket swallow Anthropic, SpaceX and OpenAI?

#640

Post by crthpl »

tclancy wrote: post #593
jandrewrogers wrote: post #162

Earlier quoted context omitted.

If you are growing revenue at a high rate then taking profit is a misallocation of resources. That is short-term thinking. It is much better to reinvest in revenue growth. You can take small profit now or much larger profit later. Insisting that companies need to be profitable even when growing revenue rapidly is failing the marshmallow test.

That's not how classical valuations worked though. I was taught the rough shorthand for valuing a company was profits / real_interest_rate, treating the company like a perpetuity. Revenue ain't in it. Now we have a bunch of "We'll make it up on volume companies!" like https://www.youtube.com/watch?v=CXDxNCzUspM

no, it is discounted expected future cash flows
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