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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?

#841

Post by mlsu »

rybosworld wrote: post #648
arrty88 wrote: post #605

Earlier quoted context omitted.

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…

I think the idea here isn't the absolute numbers, but that if Elon manages to successfully fleece everyone's retirement, it will collapse confidence in the market, which could wipe out far more value than SpaceX alone.

IF SpaceX is actually worth 400-500bn and it's a few hundred billion dollars of fleece, sure, that's a "small" amount (still.. lord almighty it is never enough for these people). But the hazard is that it is a fleece. That would shake confidence in the system, the bear case is basically unlimited at that point.

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

#842

Post by prepend »

spikehoppins wrote: post #161
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…

Do you have a source for the $30 million claim? It'd be nice to work out the math. Not _all_ of 401k funds / index funds are going to go to SpaceX.

As of April, the combined market cap of index funds (including ETFs) is just under $21T. [0]

Actively managed funds is $18T. And, for example, the S&P500 alone is $69T.

[0] https://www.ici.org/research/stats/combined_active_index_042...

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

#843

Post by prepend »

riffraff wrote: post #321
roflulz wrote: post #289

Earlier quoted context omitted.

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...

Why? Was space exploration incompatible with Sharia? Is it the pornography bit of xAI?

Dogs went into space. Dogs are haram. Therefore, space is haram.

Probably not this reasoning.

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

#844

Post by HWR_14 »

throwaway2037 wrote: post #418
HWR_14 wrote: post #311

Earlier quoted context omitted.

SpaceX is slowly and steadily increasing the float over the first 6 months by having a rolling end to the lockup. The only major cliff will be Elons shares

> The only major cliff will be Elons shares Do you really think he would see a large portion of his shares on his unlock date? If so, why? What would he do with the capital?

I don't think he'll sell a large portion of his shares. My point was that when his shares become sellable will be the only time there is a giant leap in available shares. Because everyone else will be able to sell some of their shares in regular intervals.

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

#845

Post by ashdksnndck »

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?

It’s a category error to compare the equity value of Twitter during its purchase to the amount of cash to be raised by SpaceX during its IPO.

Twitter has about $13B of debt, and about $1.5B of annual interest payments (that’s how much cash it actually needs to come up with this year). SpaceX has a planned IPO market cap of $2T and plans to raise $75B cash during the IPO.

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

#846

Post by ai_slop_hater »

jurschreuder wrote: post #360

They're doing an IPO now because the war in Europe with Ukraine is almost over it seems, and after that a big percentage of capital will relocate from the USA to Europe again. They are just cashing out right before the tide turns.

Why is it almost over?

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

#847

Post by chasd00 »

ashdksnndck wrote: post #499
tdeck wrote: post #349

Earlier quoted context omitted.

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

If you intend to remain a passive investor, keep doing what you’re doing. If you have conviction that AI boom will bust and you want to become an active investor, follow the advice from other comments on how to prevent these companies from being part of your portfolio. If you're going to become an active trader, I suggest thinking about both upside and downside risks and look beyond the local echo chamber.

> If you're going to become an active trader

and remember the best way to make a small fortune is to start with a large fortune.

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

#848

Post by SwellJoe »

rnewme wrote: post #458
SwellJoe wrote: post #447

Earlier quoted context omitted.

Which, again, benefits the wealthy and well-informed and well-connected. The suckers who have their retirement savings in some kind of index fund because all the experts have been saying, "Buy index ETFs and forget about it" for decades are gonna get fleeced, and the wealthiest get wealthier.

What to do then, if "Boogleheads" are wrong?

Bogleheads aren't wrong, historically. At least, not in the general sense that buying index funds and mostly forgetting about it is smarter than trying to beat the market with individual stock picks and timing the market.

But, that philosophy came about in an era when there were protections for small investors that prevented the richest man on earth from dipping into your retirement fund to make himself even richer. I don't know how to be a smart investor when the game is so thoroughly rigged for a handful of billionaires.

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

#849

Post by varenc »

londons_explore wrote: post #441
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 forces over $30 trillion in passive 401k and retirement money to buy SpaceX at IPO valuations. And more importantly forces them to sell the rest of the market. Who will be on the other side of these trades? I suspect the stock market is not sufficiently liquid for all of that to happen in a single day without the rest of the market seeing a significantly depressed price, and index holders effectively gifting v…

[flagged]

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

#850

Post by ashdksnndck »

collabs wrote: post #578
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…

Sure, I don't like him either but it shouldn't be about him. It should be about the institutions we trusted to keep our index funds safe. Or was this always based on "vibes"? Was VOO never safe? Was it always possible for the people in charge of the stock market to simply include some money pit into our retirement funds? I feel like the people responsible for these decisions must fear life in prison or this will keep…

I believe the (apparently AGI-pilled?) folks running the indices are more afraid of the public’s pitchforks in the scenario where the AI stocks go public at $3T value, then increase to $30T before the index rules dictate they buy in. Hence the rule change to prevent that from happening.
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