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Can the stockmarket swallow Anthropic, SpaceX and OpenAI?

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

#641

Post by crthpl »

smallerize wrote: post #181
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.

I guess net isn't the relevant measure, but what are the unit economics? Are they actually making money selling tokens?

on the API, their margins are very high

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

#642

Post by gib444 »

olalonde wrote: post #120
ravenstine wrote: post #90

All these things are apparently valued at trillions of dollars these days. Where's the trillions, or hundreds of billions worth in improved quality of life? What has gotten better other than the ability to produce more crap?

Comments like these make me feel like we're living in different worlds. I use LLMs multiple times a day and they've significantly improved my quality of life. They are also steadily becoming more useful over time (e.g. now solving math problems).

Another generic, useless comment which absolutely refuses to mention any particular aspect, eg how your life has been improved. It's so tiring

And when pushed all we get is another teaser of "Significantly increased my productivity"

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

#643

Post by dTal »

SomaticPirate wrote: post #66

No doubt these companies are woefully overvalued. But this won’t stop me from putting in orders for several thousand dollars of shares with at market open. There will undoubtedly be plenty of buyers and I expect them to gain rapid entry into the indexes which will unlock a flood of additional capital from 401ks and pensions

Why? You think an obvious scam is easy money for you? You think you're smarter than the next retail investor? Why?

Don't give your money to Elon Musk, he doesn't need more.

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

#644

Post by crthpl »

aurareturn wrote: post #18
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.

I don't think OpenAI or Anthropic are predicting that the AI market is going to collapse. In fact, I think both are bullish that the public still isn't pricing in exponential growth. I think what is happening is that OpenAI is racing to IPO before Anthropic because their growth isn't as impressive. If you are the weaker company, you should IPO first to lock up the cash.

where the heck are you seeing OpenAI racing to IPO before anthropic?

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

#645

Post by gizajob »

thephyber wrote: post #386
jauntywundrkind wrote: post #150

Earlier quoted context omitted.

Also worth asking what SpaceXLAI's plan is to make money. $22.7T of their $28.5T Total Addressable Market is... Drumroll... Enterprise AI! That's the plan, that's what we are investing in: spacex and Tesla and Twitter are all side shows, to sell AI. That's what everyone's absurdly overpriced forced passive investment is going to. https://bsky.app/profile/segyges.bsky.social/post/3mnan7hr2j... There is nowhere near en…

Tesla’s market cap is entirely about Optimus vaporware hopium. Similarly Space-X’s IPO valuation is about “data centers in space” vaporware hopium and “timeshare all the GPU time that Grok isn’t using”. There’s a trend with Musk’s companies.

And ten years of full self driving being ready in mere days.

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

#646

Post by etempleton »

tdeck wrote: post #349
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…

What can those of us who are passive investors do to protect ourselves?

You could move your passive investment to an index that includes a great proportion of bonds or move to an entirely bond based index. You reduce the upside potential and downside potential.

I personally have moved my retirement accounts to bonds while being more aggressive with my personal investments.

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

#647

Post by gizajob »

roflulz wrote: post #289
fragmede wrote: post #199

Earlier quoted context omitted.

So the obvious thing to do, for someone that's got ~$3mm to play with, is to setup an ETF that is SP500 but with the old rules. If you can convince $40mm of other people's money to go into your not-specifically-Musk-less-but-just-happens-to-be ETF, they'd come out ahead.

The S&P Shariah index fund is required to exclude SpaceX and already exists https://www.spglobal.com/spdji/en/indices/equity/sp-500-shar...

Seems bizarre to have a Shariah-compliant index fund comprising companies that are all levered with huge amounts of debt financing.

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

#648

Post by rybosworld »

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

Definitely not.

What Spacex/Elon are doing is sketchy as hell. But the numbers involved here are not terribly meaningful for your portfolio.

At IPO, $75B of Spacex shares will be bought/sold. The S&P 500 uses float-adjusted weightings, and the current float-adjusted total is $54T. If you are 100% invested in SPY, then about 0.14% of your holdings will be spacex on IPO day (75B/54T~=0.14%).

Obviously Musk and friends will start dumping some of the locked up float (~1.65T) when they can. But they definitely will not be doing so in a way that crashes the price or the market. That's in nobody's interest.

If you assume that half of the shares end up as float eventually (post-lockup), you'd end up owning around 1.6% of spacex in your S&P 500 etf (875B/~55T~=1.6%). That's not nothing but it's not significant enough that you should consider liquidating your 401k.

I'm picking on Spacex specifically because they are the biggest and imo, have the sketchiest/worst finances of the 3.

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

#649

Post by fsuts »

greggoB wrote: post #425
nelox wrote: post #265

What a stupid proposition. The capitalisation has already flowed to theses companies through private means.

So then what is the point of them seeking to do an IPO, if they are already capitalized?

Investors can bank a profit at what they regard as the peak of the hype

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

#650

Post by SlinkyOnStairs »

iLoveOncall wrote: post #481
saidnooneever wrote: post #456

Earlier quoted context omitted.

i read it as most likely people will lose their retirements if the companies goes bust. is that correct? in my country now they move to new pension model which will allow more aggressive investments with them. i am worried it will just get sent to these bros and i'll work until i die.

No, it's wrong. Amazon is worth $2.81T right now and only represents 4.03% of the S&P500. So a $1T share would represent less than 2% of the S&P500. This is significant for a single company, and 6% for 3 shit-tier companies (SpaceX, OpenAI and Anthropic) is even more significant, but we're far from "losing retirement if they go bust"-levels.

You're not modelling the contagion here. The problem is that while any single one isn't that big a share of the S&P 500, similar companies do make up a lot collectively. Excl some non-tech/AI firms:

NVIDIA Corp NVDA 8.02%

Apple Inc AAPL 6.53%

Microsoft Corp MSFT 4.84%

Amazon.com Inc AMZN 4.01%

Broadcom Inc AVGO 3.36%

Alphabet Inc GOOGL 3.32%

Alphabet Inc GOOG 3.09%

Meta Platforms Inc META 2.23%

Micron Technology Inc MU 1.71%

Advanced Micro Devices Inc AMD 1.19%

Oracle Corp ORCL 0.99%

That's 40% of the S&P 500.

And if anything happens to the AI bubble all of these go down together. While they won't all go to zero and cause a "-40%" overnight, Nvidia's rise is so meteoric that they will trigger a -8% and the rest's valuation has more than doubled since 2023. Even Apple, which isn't much of an "AI company", is still following the AI-tech hype.

If Nvidia eats shit, and the others go -50%, that translates to an overall ~-24% on the stock market.

Before any contagion outside the tech industry is considered. Look at the Dotcom Bubble and a -40% to -50% crash is quite plausible.

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