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 this is a control issue: given proper control models none of this could happen.
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 now under constant threat around the world (Baltic Sea, Straight of Hormuz, Red Sea, South China Sea, and the Taiwan Straight, etc). Which leaves Starlink as the last resort option should shit hit the fan.
Note the tide has changed considerably in the Ukraine war in Ukraine's favor once Starlink locked down access - this proves how vital internet access it was to both sides, as once Russia could no longer use stolen terminals their manpower advantage became moot.
So I simply don't get this manufactured outrage - the vast majority of US retirement savings are already tied to the military sector (RTX, Lockheed Martin, Boeing, and Northrop Grumman) via index funds. I personally would have more concern with those laggards in the new age of drone warfare vs the likes of SpaceX and Anduril (when they ipo).
> the Ukraine war in Ukraine's favor once starlink locked down access
I think this is coincidental correlation. In the same period drone warfare was evolving until it reached some stalemate with an optic-fiber strewn killzone where none of the belligerents have an upper hand, and Ukraine's ballistic missile industry picked up pace, allowing Ukraine to hit far into Russia without relying on American long-range munitions, or needing American permission to use those munitions.
The US national security depends far more on the separate but related Starshield constellation than on Starlink. Your general point is correct though in that widespread use of high-bandwidth, low-latency satellite communications has caused another revolution in military affairs on the same level as GPS and precision guided munitions. SpaceX might be overvalued but politically it's too big to fail.
If it is vital then that is a national security concern that it is under the control of a single person.
So what you’re trying to imply is they have leverage to hold the US public hostage both via military contracts and retirement savings, and nobody should be concerned?
Their current valuation makes absolutely no sense given the size of their business and the next century of business unless they’re going to pull the rug on the US and its allies and increase costs 100x.
It’s the absurd governance and obvious manipulation of inclusion rules and limited float.
Doesn't it feel like Falcon 9 is destined to be spun off so that adults can take care of it, and then X Corp is to be allowed to consolidate freely for a quick and easy disposal?
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So let's assume you are right.
Does that justify the price?
Spacex price/sales: 100x-130x
RTX Corporation's (formerly Raytheon Technologies) Price-to-Sales (P/S) ratio currently hovers around 2.74 to 2.76.
Boeing price-to-sales (P/S) ratio sits at 1.86,
Lockheed Martin's (LMT) trailing twelve-month (TTM) price-to-sales (P/S) ratio sits at 1.64.
Northrop Grumman's current Trailing Twelve Month (TTM) price-to-sales (P/S) ratio sits at approximately 1.76 to 1.89
So based on the peer comps you provided, SpaceX is overvalued by 50-100x. Your $185 shares are worth about $2.
Fine if you want to take that bet. Not fine if you force (via indexing) the majority of US pension savings to take that bet.
> the vast majority of US retirement savings are already tied to the military sector (RTX, Lockheed Martin, Boeing, and Northrop Grumman) via index funds
I don't hear any concern about SpaceX due to military ties, it's that it seems like financial tricks are being used and forcing it into the markets and it might be seriously unstable.
SpaceX is not "vital" for national security. It's a powerful tool, but it's not vital. And in any true peer conflict involving the US, Starlink satellites would also prove vulnerable just like undersea cables.
If SpaceX is vital then we need to nationalize the company and have it under democratic control, not under a dictatorship of one.
Is it *vital*
No.
It's really helpful, but it's not vital.
WRT Ukraine - the drones are now (AIUI) flown with a tethered fibre connection (inside the Ukraine) - because jammers have made radio traffic with drones near impossible for operators
Nope. The fiber optic drones are relatively short range, maybe up to 20km. And they can only work over land, not significant bodies of water. Ukraine is still using Starlink heavily for controlling longer range and naval drones. Starlink uses an ingenious phased array antenna system which makes it highly resistant to jamming. Recently Russia has been trying to overload Starlink satellite transceivers with powerful directional jamming but the huge size of the constellation limits how many birds they can effectively target.
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 years and heard so much breathless cheerleading for web apps “changing the world” but now we have companies that really might change the world and it’s a scam?
> but somehow companies that make freaking EVs, robots, and rocket ships, and AI can’t possibly be worth that much?
The sky-high valuation of SpaceX is almost entirely related to it's estimated TAM from AI entreprise solutions, not robots and rocketships. HN news comments have a similar bias against the sky-high valuations of OpenAI and Anthropic.
> The sky-high valuation of SpaceX is almost entirely related to it's estimated TAM from AI entreprise solutions, not robots and rocketships
That’s not how TAM works. The valuation of each business unit isn’t just a simple proportion of its TAM like that. In the SpaceX/xAI merger, which was just a few months ago, the rocket company was valued at $1 trillion and the AI company at $250 billion: https://www.reuters.com/legal/government/how-math-works-175-...
EDIT: To elaborate: TAM is not a valuation for a specific business. It’s a ceiling in the size of the market the business targets. AI has an astronomical TAM because you can sell AI into almost every market. E.g. shipping and logistics is a $10 trillion business. You could sell AI into that market and capture some of that revenue. But if one business has a $10 trillion TAM and another is $5 trillion, that doesn’t mean the valuation of the first business is double the second one.
$26.5 trillion dollars. That's more than $3,000/yr from every single man woman and child on the planet. Another way to put it - more than 10x as much as all of the US spends on food every year. For Grok/xAI. That's bonkers.
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The difference being, of course, that the photo app actually earns a profit, whereas the "EVs, robots and rocket ships" and ESPECIALLY the AI so far do not, and most likely will not any time soon.
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Valuation is based on future prospects. Investing 101.
There is no moat around what they are doing really and they have competitors in all these sectors. All it takes is another administration to come in with a brain and a spine to not just hand contract blindly to Elon.
Which competitors? Blue Origin and Amazon are trying but they're way behind on space launch capability, and still using SpaceX to launch a lot of their TeraWave and Kuiper satellites. Arianespace and ULA seem to have given up and aren't even trying to compete.
Who do you think the viable alternatives are? Be realistic.
Blindly? SpaceX launches cost only 10% of what NASA was previously spending.
Not to mention it had to pay Russia $4 billion for seats on Soyez flights to ferry astronauts to the ISS.
No moat lol, hardware has much more of a moat than all these SaaS companies
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"No moat" are you serious? It took SpaceX 20 years to develop reusable rocket launch tech they have and everyone else who is working on it is decade behind. Falcon Heavy per kg cost to LEO is 25 times lower than what SLS can provide. Freaking 25 times!
There are a lot more consumers in the world willing to use the photo app than entities that do rocket launches. This isn't to say that it is changing the world more, it's just that it makes more money. That's how capitalism is set up right now.
But if SpaceX does anything _other than become the most valuable company in history by delivering at least two technologies predicated on the largest stock rise in history based on a single technology (LLMs)_, the gains from zero to now will have been privatized and the losses will be born by the public. Which is what everyone is thinking about.
The SP500 (the index the article is using for their example) literally requires profitability. Tesla wasn't includes for years and years because of it.
Everybody is upset about the rule change, but to be honest, they would’ve just ended up in the same position a few months later. Elon has kept Tesla’s market cap at 5-10x what any reasonable investor would think it should be for the better part of a decade. It’s not like SpaceX is going to tank in the next 3 months and they’ll be left holding the bag. It’s not like it wasn’t going to end up in every index in a year.
And to be clear, I’m not saying it’s a good thing. I just don’t think it matters so much.
Moving to have 401ks investing in it when 5% of the stock is publicly available versus 30-40%+ that would have been available on the previous timelines seems like it could have pretty dramatic effects on its price.
The relevant indices (S&P500, Vanguard) buy in proportion to available float -- i.e., its market cap is weighted by 5%. Only Nasdaq 100 ignores float, stupidly, but almost no money, especially 401(k) money, is in that.
This may be true (I'm sure it is, but I haven't verified) but the large majority of people do not know this, which is why hearing "my retirement account is going to be forced to by a bunch of spacex at a $2.5T valuation" makes them.... uneasy.
Oh there are ETFs that track Nasdaq 100.
There are ETFs that track pretty much everything you can imagine. How much retirement money is in those?
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Musk tried mightily to get S&P to change their 12 month rule to 15 days but they refused. Nasdaq, however, caved to Musk and agreed to change the rules of its Index - from a 12 months wait to 15 days - in exchange for Musk agreeing to list SpaceX on Nasdaq's exchange.
There are ETFs that were issued tied to the Nasdaq 100 which are therefore legally bound to buy SpaceX. But the biggest immorality is the SEC allowing Musk's attempt to manipulate the market by:
1. Setting an IPO price for SpaceX (which absorbed xAi and its money guzzling losses) at unsustainable, incredibly inflated prices; and then
2. Putting incredible pressure on SP500 and other index makers to change their rules to force the purchase of SpaceX at those sky high prices (in an IPO, company gets to set the IPO price).
It's legal. At least in the eyes of the SEC which, of course, is an institution that is controlled by the wealthiest who control the markets, so of course it's legal.
But it is outrageous market manipulation that is fraudulent in its intent to enrich the wealthiest man on earth at the expense of ever wage earner putting her money into Index Funds.
Thank goodness the S&P and CRSP refused to change their rules. Otherwise the shifting of risk from Musk onto the shoulders of every working American would have been complete.
I don't understand your comment. The SEC doesn't control IPO prices. No one was forced to buy $SPCX at the IPO price.
If Musk's pressure had succeeded and the S&P and CRSP had changed their index rules, then the major indexes would have been legally obligated to buy SpaceX at the IPO price - or presumably higher because their own mass purchases would have driven the price even higher.
That was Musk's plan. It failed because he couldn't get the major indexes to cow tail to his pressure and demands.
Edit: My reference to the SEC is that they are charged with investigating market manipulation. And Musk was involved in the biggest attempt at market manipulation probably in history - trying to pressure private indexes used by almost every ETF in the world (S&P and CRSP) to change their rules which would have legally obligated those ETFs to purchase SpaceX within 15 days.
However, the SEC cannot investigate it because no laws would be violated despite the fact it would have been an incredible market manipulation.
In fact, the change in rules by Nasdaq 100 is a huge market manipulation that has taken place exactly as I describe - it's simply not as catastrophically large as it would have been had all the major indexes succumbed to Musk's demands.
You seem to be confused about how index funds work. Hypothetically even if $SPCX was added to the S&P500, funds that track that index wouldn't be legally required to purchase it at the IPO price. Have you ever even read a fund prospectus or do you believe the uninformed nonsense you read online? The way it actually works is that when a stock is added to an index the index funds gradually build a position using a series of trades over time.
Mutual funds and ETFs set forth a prospectus that is a legal document binding them by law to comply with how they operate. While an etf is free to create its own index, that is not the way the market works. Vanguard, Fidelity, iShares, BlackRock and the other major players, state in their prospectus what index the ETF will follow - such as the CRSP US Total Market Index to use one example from Vanguard's VTI etf.
That means Vanguard VTI tracks the stocks that are contained in the CRSP US Total Market Index. So, if CRSP adds a new holding to its US Total Market Index, Vanguard VTI is legally bound by its prospectus to add that stock to VTI and to do so in a manner that assures VTI returns track the CRSP US Total Market Index returns as closely as possible (meaning they own every stock CRSP does and in the same proportion that CRSP does).
This is not just a 'good idea'. It is legally binding upon Vanguard by virtue of the VTI prospectus.
Without rapid purchasing by indexes SpaceX’s stock would likely to tank as ever more people would be able to sell over the first year.
It’s a 24 year old company with a current high flying stock price based on very questionable numbers.
We all said that about Tesla for years, and a lot of people got burned on the trade. This time may be different, but it also may not be.
Tesla’s numbers looked vastly more reasonable.
“In 2025, SpaceX generated $18.7 billion in revenue, with its Starlink satellite internet service accounting for $11.39 billion, or 61% of total sales.”
Tesla had higher revenue number in at the start of 2019, when it had a market cap of ~0.06 trillion. Further Tesla was highly volatile in 2021 despite huge earnings growth with some people bank when it fell from 1.2T to 0.34T before recovering.
Yes, Tesla was ridiculous at the time, but Tesla’s valuation at the time is normal for tech companies these days. However, the main comparison, which Elon has been trying desperately to escape, is traditional automakers. If you compare how out-of-line Tesla’s PE and PS ratios are against Toyota and other car makers, it’s about the same ratio as SpaceX to tech companies today.
I also remember lots of people saying Uber wasn’t a $100B company.
With several large bets on the table with starship that have yet to play out.
Remember mars by 2024? I think that was around the time they started accepting deposits on tesla semi.
They shipped the Semi though. Yes the situation is bad but its not vaporware. Musk had to scam the markets to survive in late 2017/2018
The problem is the stock is not valued based on the space part. It's sky-high valuation is based on absurd projected AI revenues.
We’ll have to agree to disagree on this one; anytime someone has to scam the markets to survive it’s my opinion they deserve jail and ruination, not a harem.
Depends, they've gone to pains to ensure the indexes will buy as share lockups end. It's dodgy no matter how you look at.
The one saving grace is s&p isnt changing anything, and they were by far the biggest index.
The whole IPO was designed to be like a short squeeze where index funds have to buy soon but there's not enough shares. For the little float that's available they are weighting it significantly more than they should by previous rules. They need to have tens of billions worth of what was 70 billion by next week, and retail investors who got in on the IPO were told by their brokers if they sell early on they will not get to participate in future IPOs.
There were not enough shares actually trading for the index funds to fulfill their requirements that's why the price keeps going up
They probably won't be on the S&P for years, because of profitability requirements.
If they can keep google and anthropic deals, they're already profitable.
That's huge IF, both of them have 90 day exit clause, and it's not like it's a long-term business.
Those deals are doable because xAI failed and SpaceX has a bunch of spare compute lying around they can rent out. However, SpaceX doesn't make the hardware or software so moat is nonexistent.
If compute capacity increases or AI demand decreases, Google/Anthropic will likely skip SpaceX and just buy their own hardware in their own datacenters or go back to their own datacenters.
I think anthropic needs that compute. They'll probably rent it as long as they can. They aren't really in the datacenter business. Google yes, I think they'll stop at some point.
There is no way that Elon Musk wants to be leasing out compute. He'd rather be using that compute to power Grok.
Bubbles always blow. Maybe not in 3 months but eventually someone will figure that those trillions can't possibly be made back ever again.
And then the fall down is hard.
I got a good investment vehicle for you. How would you like to purchase shares in the Brooklyn bridge? You could see returns in the form of tolls.
Plus if AI is indeed a bubble, investors are already up to the neck in it. Think of all the key stocks of the S&P and Nasdaq that are lifted by AI: nvidia, microsoft, amazon, oracle, micron, intel, amd, etc. And add their lenders and the whole datacenter supply chain.
> It’s not like SpaceX is going to tank in the next 3 months and they’ll be left holding the bag.
A stock's value can disappear in a matter of days to a degree it leads to a complete collapse. It has happened before, see Enron or Wirecard.
> It’s not like it wasn’t going to end up in every index in a year.
Sure, but it's still not wise to let unripe stocks into most American and RoW retirement funds. There's a reason why many complex software projects keep some sort of "staging" tree, and the stock markets should do so as well.
Matt Levine's take was essentially that if you're in the index fund game, you want the market. You don't pick and choose what parts of the market you want--that's active management. SPCX mostly isn't an issue because most indices include the float in the weight, so it isn't really even a $1T company.
The problem isn’t that you’re invested in the index. The problem is that the index decided it wanted to change its rules to include companies that are not profitable. I still remember the days when you needed to be profitable for x quarters and have a minimum amount of float to be listed in an index. That changed overnight and we all know why.
A simpler solution to this would be to introduce new ETF tickers for changed rules. It's a breaking change -- version it.
S&P 500 did not change its rules right?
Right.
Can someone make an etf that uses the older more conservative criteria for inclusion?
No need. There are already plenty of them that track the S&P — which notably decided NOT to change its rules.
Feel like many of these articles were either prewritten, lazy, or have intentionally omitted the non-impact that S&P opting to not change its rules has had, just so the headline and lede could be as sensational as possible.
Index licensing might be an issue.
Can they? Yes, anyone can.
Will they... that's a different question
And even if there are new ETFs like this, will ETF customers bother to move at enough scale. It's like the old quote for buying IBM, no one get's fired for returning the benchmark, so if it's the benchmark adjusting the way they do things there is lots of inertia.
Okay then why is SPCX going to be weighted 3x its actual float in the Nasdaq? A rule made just for SPCX.
That's absolutely insane -- how the hell did anyone think that was a good idea under these circumstances ... This is an absolute scam -- why does it make sense for an index's buying volume requirement to be based on the implied value of shares that can't even be bought or sold ...?
it's not a scam if no one gets hurt
To the same point I also don't want the index itself picking and choosing which companies to apply which rules to.
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.
Yeah but Matt Levine is wrong.
1) Index funds and ETFs are highly active.
They're just low-cost due to largely algorithmic decisions but at all of the edge cases manual _active_ decisions are made.
IIRC, in this podcast Vanguard goes into detail about all of the active decisions they do [1]. It's long because uh, they do a lot.
2) You're in the index fund game because "you liked that index". There are literally thousands of ETFs. Saying "you want the market" is just wrong, you wanted a specific slice of the market and if the ETF changes the slice under you then that feels like a bait and switch.
What exactly can an individual do? For many their accounts have limited fund choices and if you don't want to pay high ER for fund manager's pedicures then you end up on an index, which (S&P500 excluded) have now bent the knee. Mine are on russel indexes so I have no choice.
Short spacex is the only answer I've heard but I'm wise enough to know I don't have the mentality for derivatives.
The vast majority of American employees are not maxing out every tax advantaged retirement account instrument, and putting everything in a 401(k) past the employer match level is not advisable exactly because of the limited investment choices.
except if you self-employed. I have maxed the shit out of my 401k (i401k, self-managed) and after 3 decade career have more saved than I can spend in 8 lifetimes
I too love solo 401ks. Saving 70k tax free is a beautiful arbitrage.
Well don't know your life but I suspect for a lot of people then it would've been more advantageous to not max out the 401k and retire pre-55 and spend the non-401k funds until 55.
This largely being my gripe about the Trump accounts in that you're allocating funds into them that can't be touched without penalties until like 50 years later. And for most people this probably isn't even a benefit because you can lifetime gift ~$15 million so like unless you're Bezos just invest the money yourself and gift your kid whatever large value item they wanted.
I don’t follow why retiring pre-55 is a good idea. Can you elaborate?
Shorting SpaceX when you own the same amount of SpaceX in an ETF doesn't require any derivatives and is a fairly safe play. The amount of interest you have to pay will vary a little bit, but it should cost a very small amount net.
The biggest issues are the effort and tax implications of balancing the SpaceX short.
You can buy the companies making up the index instead of the index itself.
It was proven to be a good strategy on the SP500 [1, 2]
With 500 companies, it's work. But you can probably approximate it with a top 100.
Q: What is the purpose of modifying the liquidity and seasoning requirements? Could this change result in the inclusion
of illiquid securities in the index?
A: Most indexes require a liquidity threshold for new constituents, often as a minimum share count or average daily trading value.
For the Nasdaq-100®, securities must have a three-month average daily traded value of at least $5 million. Since only very large
companies – typically with full market capitalizations over $100 billion as of March 2026 – would have qualified for fast entry, they
are expected to easily and quickly meet this requirement. However, an average daily traded value of at least $5 million from the
time of listing will still be required for fast entry candidates.
Many indexes have included seasoning requirements to ensure that traditional IPOs undergo price discovery and stabilization
before being included. These requirements were originally intended to prevent small or little-known companies from entering too
soon. However, there is now a trend toward IPOs being larger and more mature than in the past. Companies expected to meet the
fast entry threshold are likely to be among the world’s most significant and well-known firms. High investor interest and trading
volumes should accelerate price discovery, further supporting a shorter seasoning period. Note that the seasoning period for
companies outside of the Top 40 remains at three months.
Several indexes have changed not just Nasdaq, but it’s one more people have heard about.
Nasdaq isn't super relevant.
Sure but it’s not the only one. Add in SPY, QQQ, and IWM Force Index Funds and the percentage of Americans buying SpaceX early due to rule changes looks bad.
Edit: Ops SPY didn’t change their rules.
SPYis sp500 is it not? Why would they include it?
For others like qqq it has no bearing to be frank. It follows the nasdaq 100. Maybe an argument that the extra few months would have allowed more price discovery but I am not so sure.
Love the HN hive mind that downvotes things they don’t understand.
Also CRSP, which is the index used by US Total Market funds and many Target Date funds.
CRSP is float-weighted!
float adjustment results in any CRSP tracking fund/etf having a $10,000 investment being approximately $17 worth of SpaceX. This isn't a real problem the media is trying to push it as.
S&P 500 has not therefore the index funds tracking it are not going to put money on it. But nasdaq has, that means the ETFs tracking are pouring money into spcx. On top of that, all 401k target funds are total market funds, that track all of the market regardless of what the indices do. They own trillions in capital from people’s retirement, and by their own investment rules, a listing with that kind of market cap forces a bunch of money to flow into the company.
Rage bait article or the author is just misinformed
Less informed journalists heard about it after we did and then decided to publish what they learned on twitter.
CRSP publishes the index used by VTI. They changed their rules to lower the float requirement.
Firms or funds, don’t care, want to put money in anyway…
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 revenue, with around 50% growth. Blue Origin will offer them competition soon.
X, formerly Twitter, has around $2B revenue, limited potential.
The massive 2030 projections ($474B total, $144B Starlink, $322B AI) are Goldman Sachs' IPO roadshow model. The projections are so aggressive they feel scammy.
SpaceX's 2025 revenue is $18.7 billion. A typical premium valuation for a top-tier tech company might be around 10x to 14x revenue, which would imply a strong IPO valuation of roughly $187 billion to $262 billion.
The reason for the outlandish valuation is because of naive retail investors who believe Elon Musk has never failed at anything.
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Those naive retail investors can stay irrational longer than I can stay solvent.
Sounds like the retirement funds should buy it then.
Time to insolvency and time to retirement, apples and oranges…
Expect more of this type of crap in the media now that SPCX is public. The guardian is notoriously anti-Musk and used to mention him by name in the article footer begging for money.
The recent AI craze is really just LLMs. I feel like finance was likely already the most AI-adopted industry without LLMs and their impact the last few years may have taken them from “80 to 100” where most industries are going “10 to 50.” Go back to 2022 for a moment and I think this article is identical.
This isn't investment advice etc etc but there are many options that can capture large sections of the stock market without being exposed to the tech bubble (assuming there is one).
Many people say you should stay invested in the SP500 anyway and I won't argue against that. But funds like VTV, DGRO, VIG, SCHD etc don't have the same level of exposure to tech, as well as international funds like VEA. Many 401ks allow you to invest in them through brokerage "link" options. Of course, do your research or talk to a pro before considering these.
> exposed to the tech bubble
Aside, I think many people forget to account for their own job/career when thinking about diversification.
Just working "in tech" means that industry is already an oversized part of my financial future by default, even before talking about investment stuff.
You can opt to put some or all of your 401K into a "Value fund"
VVIAX (Vanguard) or FLCOX (Fidelity)
to reduce your exposure to the highest of high-flying stocks.
Of course, many small company 401Ks limit your investment options to a small family of high expense ratio funds...
Unfortunately most people won't do that, either from ignorance or fear of missing out. Sometime in the next few years the chickens are going to come home to roost on the infinibubble, and I'm not really sure if the US financial system will weather it.
Half of the companies in the S&P 500 are trading at over 10x sales.
SpaceX is just another one on top of the pile, whenever it gets included.
Valuation multiples always mean revert on a long enough timeline... you can position for it today if you care to.
I have to say it is incredibly annoying that the wealthiest man in the world is so thin skinned that every post on Hacker News that talks about him in ways he doesn't like gets flagged.
Of course Musk isn't doing it himself. He already bought Twitter so he could control what is said about him. And, as the wealthiest man in the world, he'd be stupid if he hasn't hired tens of thousands of people to monitor posts about him or his concerns and to downvote them (or whatever he wants). The cost to him for doing that would be similar to us spending ten cents.
I have a feeling the article and the comments on this trend would be very different if Elon Musk did not support Trump, even if he were still just as crazy and rich.
Regardless of what you think of his politics, SpaceX is waaaay overvalued.
Just a year ago the two were feuding. They're both lying conman with nothing to contribute.
"Time to drop the really big bomb: @realDonaldTrump is in the Epstein files. That is the real reason they have not been made public. Have a nice day, DJT!"
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 this is a control issue: given proper control models none of this could happen.
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 now under constant threat around the world (Baltic Sea, Straight of Hormuz, Red Sea, South China Sea, and the Taiwan Straight, etc). Which leaves Starlink as the last resort option should shit hit the fan.
Note the tide has changed considerably in the Ukraine war in Ukraine's favor once Starlink locked down access - this proves how vital internet access it was to both sides, as once Russia could no longer use stolen terminals their manpower advantage became moot.
So I simply don't get this manufactured outrage - the vast majority of US retirement savings are already tied to the military sector (RTX, Lockheed Martin, Boeing, and Northrop Grumman) via index funds. I personally would have more concern with those laggards in the new age of drone warfare vs the likes of SpaceX and Anduril (when they ipo).
> the Ukraine war in Ukraine's favor once starlink locked down access
I think this is coincidental correlation. In the same period drone warfare was evolving until it reached some stalemate with an optic-fiber strewn killzone where none of the belligerents have an upper hand, and Ukraine's ballistic missile industry picked up pace, allowing Ukraine to hit far into Russia without relying on American long-range munitions, or needing American permission to use those munitions.
The US national security depends far more on the separate but related Starshield constellation than on Starlink. Your general point is correct though in that widespread use of high-bandwidth, low-latency satellite communications has caused another revolution in military affairs on the same level as GPS and precision guided munitions. SpaceX might be overvalued but politically it's too big to fail.
If it is vital then that is a national security concern that it is under the control of a single person.
So what you’re trying to imply is they have leverage to hold the US public hostage both via military contracts and retirement savings, and nobody should be concerned?
Their current valuation makes absolutely no sense given the size of their business and the next century of business unless they’re going to pull the rug on the US and its allies and increase costs 100x.
It’s the absurd governance and obvious manipulation of inclusion rules and limited float.
Doesn't it feel like Falcon 9 is destined to be spun off so that adults can take care of it, and then X Corp is to be allowed to consolidate freely for a quick and easy disposal?
So let's assume you are right.
Does that justify the price?
Spacex price/sales: 100x-130x
RTX Corporation's (formerly Raytheon Technologies) Price-to-Sales (P/S) ratio currently hovers around 2.74 to 2.76. Boeing price-to-sales (P/S) ratio sits at 1.86, Lockheed Martin's (LMT) trailing twelve-month (TTM) price-to-sales (P/S) ratio sits at 1.64. Northrop Grumman's current Trailing Twelve Month (TTM) price-to-sales (P/S) ratio sits at approximately 1.76 to 1.89
So based on the peer comps you provided, SpaceX is overvalued by 50-100x. Your $185 shares are worth about $2.
Fine if you want to take that bet. Not fine if you force (via indexing) the majority of US pension savings to take that bet.
> the vast majority of US retirement savings are already tied to the military sector (RTX, Lockheed Martin, Boeing, and Northrop Grumman) via index funds
I don't hear any concern about SpaceX due to military ties, it's that it seems like financial tricks are being used and forcing it into the markets and it might be seriously unstable.
SpaceX is not "vital" for national security. It's a powerful tool, but it's not vital. And in any true peer conflict involving the US, Starlink satellites would also prove vulnerable just like undersea cables.
If SpaceX is vital then we need to nationalize the company and have it under democratic control, not under a dictatorship of one.
Is it *vital*
No.
It's really helpful, but it's not vital.
WRT Ukraine - the drones are now (AIUI) flown with a tethered fibre connection (inside the Ukraine) - because jammers have made radio traffic with drones near impossible for operators
Nope. The fiber optic drones are relatively short range, maybe up to 20km. And they can only work over land, not significant bodies of water. Ukraine is still using Starlink heavily for controlling longer range and naval drones. Starlink uses an ingenious phased array antenna system which makes it highly resistant to jamming. Recently Russia has been trying to overload Starlink satellite transceivers with powerful directional jamming but the huge size of the constellation limits how many birds they can effectively target.
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 years and heard so much breathless cheerleading for web apps “changing the world” but now we have companies that really might change the world and it’s a scam?
> but somehow companies that make freaking EVs, robots, and rocket ships, and AI can’t possibly be worth that much?
The sky-high valuation of SpaceX is almost entirely related to it's estimated TAM from AI entreprise solutions, not robots and rocketships. HN news comments have a similar bias against the sky-high valuations of OpenAI and Anthropic.
> The sky-high valuation of SpaceX is almost entirely related to it's estimated TAM from AI entreprise solutions, not robots and rocketships
That’s not how TAM works. The valuation of each business unit isn’t just a simple proportion of its TAM like that. In the SpaceX/xAI merger, which was just a few months ago, the rocket company was valued at $1 trillion and the AI company at $250 billion: https://www.reuters.com/legal/government/how-math-works-175-...
EDIT: To elaborate: TAM is not a valuation for a specific business. It’s a ceiling in the size of the market the business targets. AI has an astronomical TAM because you can sell AI into almost every market. E.g. shipping and logistics is a $10 trillion business. You could sell AI into that market and capture some of that revenue. But if one business has a $10 trillion TAM and another is $5 trillion, that doesn’t mean the valuation of the first business is double the second one.
SpaceX's S-1 listed its expected TAM and did break it out by segment. $26.5 trillion to AI, $1.6 trillion to connectivity (Starlink), $0.370 trillion to space launch. https://www.sec.gov/Archives/edgar/data/1181412/000162828026...
$26.5 trillion dollars. That's more than $3,000/yr from every single man woman and child on the planet. Another way to put it - more than 10x as much as all of the US spends on food every year. For Grok/xAI. That's bonkers.
The difference being, of course, that the photo app actually earns a profit, whereas the "EVs, robots and rocket ships" and ESPECIALLY the AI so far do not, and most likely will not any time soon.
Valuation is based on future prospects. Investing 101.
There is no moat around what they are doing really and they have competitors in all these sectors. All it takes is another administration to come in with a brain and a spine to not just hand contract blindly to Elon.
Which competitors? Blue Origin and Amazon are trying but they're way behind on space launch capability, and still using SpaceX to launch a lot of their TeraWave and Kuiper satellites. Arianespace and ULA seem to have given up and aren't even trying to compete.
Who do you think the viable alternatives are? Be realistic.
Blindly? SpaceX launches cost only 10% of what NASA was previously spending.
Not to mention it had to pay Russia $4 billion for seats on Soyez flights to ferry astronauts to the ISS.
No moat lol, hardware has much more of a moat than all these SaaS companies
"No moat" are you serious? It took SpaceX 20 years to develop reusable rocket launch tech they have and everyone else who is working on it is decade behind. Falcon Heavy per kg cost to LEO is 25 times lower than what SLS can provide. Freaking 25 times!
There are a lot more consumers in the world willing to use the photo app than entities that do rocket launches. This isn't to say that it is changing the world more, it's just that it makes more money. That's how capitalism is set up right now.
But if SpaceX does anything _other than become the most valuable company in history by delivering at least two technologies predicated on the largest stock rise in history based on a single technology (LLMs)_, the gains from zero to now will have been privatized and the losses will be born by the public. Which is what everyone is thinking about.
The SP500 (the index the article is using for their example) literally requires profitability. Tesla wasn't includes for years and years because of it.
Everybody is upset about the rule change, but to be honest, they would’ve just ended up in the same position a few months later. Elon has kept Tesla’s market cap at 5-10x what any reasonable investor would think it should be for the better part of a decade. It’s not like SpaceX is going to tank in the next 3 months and they’ll be left holding the bag. It’s not like it wasn’t going to end up in every index in a year.
And to be clear, I’m not saying it’s a good thing. I just don’t think it matters so much.
Moving to have 401ks investing in it when 5% of the stock is publicly available versus 30-40%+ that would have been available on the previous timelines seems like it could have pretty dramatic effects on its price.
The relevant indices (S&P500, Vanguard) buy in proportion to available float -- i.e., its market cap is weighted by 5%. Only Nasdaq 100 ignores float, stupidly, but almost no money, especially 401(k) money, is in that.
This may be true (I'm sure it is, but I haven't verified) but the large majority of people do not know this, which is why hearing "my retirement account is going to be forced to by a bunch of spacex at a $2.5T valuation" makes them.... uneasy.
Oh there are ETFs that track Nasdaq 100.
There are ETFs that track pretty much everything you can imagine. How much retirement money is in those?
Musk tried mightily to get S&P to change their 12 month rule to 15 days but they refused. Nasdaq, however, caved to Musk and agreed to change the rules of its Index - from a 12 months wait to 15 days - in exchange for Musk agreeing to list SpaceX on Nasdaq's exchange.
There are ETFs that were issued tied to the Nasdaq 100 which are therefore legally bound to buy SpaceX. But the biggest immorality is the SEC allowing Musk's attempt to manipulate the market by: 1. Setting an IPO price for SpaceX (which absorbed xAi and its money guzzling losses) at unsustainable, incredibly inflated prices; and then 2. Putting incredible pressure on SP500 and other index makers to change their rules to force the purchase of SpaceX at those sky high prices (in an IPO, company gets to set the IPO price).
It's legal. At least in the eyes of the SEC which, of course, is an institution that is controlled by the wealthiest who control the markets, so of course it's legal.
But it is outrageous market manipulation that is fraudulent in its intent to enrich the wealthiest man on earth at the expense of ever wage earner putting her money into Index Funds.
Thank goodness the S&P and CRSP refused to change their rules. Otherwise the shifting of risk from Musk onto the shoulders of every working American would have been complete.
I don't understand your comment. The SEC doesn't control IPO prices. No one was forced to buy $SPCX at the IPO price.
If Musk's pressure had succeeded and the S&P and CRSP had changed their index rules, then the major indexes would have been legally obligated to buy SpaceX at the IPO price - or presumably higher because their own mass purchases would have driven the price even higher.
That was Musk's plan. It failed because he couldn't get the major indexes to cow tail to his pressure and demands.
Edit: My reference to the SEC is that they are charged with investigating market manipulation. And Musk was involved in the biggest attempt at market manipulation probably in history - trying to pressure private indexes used by almost every ETF in the world (S&P and CRSP) to change their rules which would have legally obligated those ETFs to purchase SpaceX within 15 days.
However, the SEC cannot investigate it because no laws would be violated despite the fact it would have been an incredible market manipulation.
In fact, the change in rules by Nasdaq 100 is a huge market manipulation that has taken place exactly as I describe - it's simply not as catastrophically large as it would have been had all the major indexes succumbed to Musk's demands.
You seem to be confused about how index funds work. Hypothetically even if $SPCX was added to the S&P500, funds that track that index wouldn't be legally required to purchase it at the IPO price. Have you ever even read a fund prospectus or do you believe the uninformed nonsense you read online? The way it actually works is that when a stock is added to an index the index funds gradually build a position using a series of trades over time.
Mutual funds and ETFs set forth a prospectus that is a legal document binding them by law to comply with how they operate. While an etf is free to create its own index, that is not the way the market works. Vanguard, Fidelity, iShares, BlackRock and the other major players, state in their prospectus what index the ETF will follow - such as the CRSP US Total Market Index to use one example from Vanguard's VTI etf.
That means Vanguard VTI tracks the stocks that are contained in the CRSP US Total Market Index. So, if CRSP adds a new holding to its US Total Market Index, Vanguard VTI is legally bound by its prospectus to add that stock to VTI and to do so in a manner that assures VTI returns track the CRSP US Total Market Index returns as closely as possible (meaning they own every stock CRSP does and in the same proportion that CRSP does).
This is not just a 'good idea'. It is legally binding upon Vanguard by virtue of the VTI prospectus.
Without rapid purchasing by indexes SpaceX’s stock would likely to tank as ever more people would be able to sell over the first year.
It’s a 24 year old company with a current high flying stock price based on very questionable numbers.
We all said that about Tesla for years, and a lot of people got burned on the trade. This time may be different, but it also may not be.
Tesla’s numbers looked vastly more reasonable.
“In 2025, SpaceX generated $18.7 billion in revenue, with its Starlink satellite internet service accounting for $11.39 billion, or 61% of total sales.”
Tesla had higher revenue number in at the start of 2019, when it had a market cap of ~0.06 trillion. Further Tesla was highly volatile in 2021 despite huge earnings growth with some people bank when it fell from 1.2T to 0.34T before recovering.
Yes, Tesla was ridiculous at the time, but Tesla’s valuation at the time is normal for tech companies these days. However, the main comparison, which Elon has been trying desperately to escape, is traditional automakers. If you compare how out-of-line Tesla’s PE and PS ratios are against Toyota and other car makers, it’s about the same ratio as SpaceX to tech companies today.
I also remember lots of people saying Uber wasn’t a $100B company.
With several large bets on the table with starship that have yet to play out.
Remember mars by 2024? I think that was around the time they started accepting deposits on tesla semi.
They shipped the Semi though. Yes the situation is bad but its not vaporware. Musk had to scam the markets to survive in late 2017/2018
The problem is the stock is not valued based on the space part. It's sky-high valuation is based on absurd projected AI revenues.
We’ll have to agree to disagree on this one; anytime someone has to scam the markets to survive it’s my opinion they deserve jail and ruination, not a harem.
Depends, they've gone to pains to ensure the indexes will buy as share lockups end. It's dodgy no matter how you look at.
The one saving grace is s&p isnt changing anything, and they were by far the biggest index.
The whole IPO was designed to be like a short squeeze where index funds have to buy soon but there's not enough shares. For the little float that's available they are weighting it significantly more than they should by previous rules. They need to have tens of billions worth of what was 70 billion by next week, and retail investors who got in on the IPO were told by their brokers if they sell early on they will not get to participate in future IPOs.
There were not enough shares actually trading for the index funds to fulfill their requirements that's why the price keeps going up
They probably won't be on the S&P for years, because of profitability requirements.
If they can keep google and anthropic deals, they're already profitable.
That's huge IF, both of them have 90 day exit clause, and it's not like it's a long-term business.
Those deals are doable because xAI failed and SpaceX has a bunch of spare compute lying around they can rent out. However, SpaceX doesn't make the hardware or software so moat is nonexistent.
If compute capacity increases or AI demand decreases, Google/Anthropic will likely skip SpaceX and just buy their own hardware in their own datacenters or go back to their own datacenters.
I think anthropic needs that compute. They'll probably rent it as long as they can. They aren't really in the datacenter business. Google yes, I think they'll stop at some point.
There is no way that Elon Musk wants to be leasing out compute. He'd rather be using that compute to power Grok.
Bubbles always blow. Maybe not in 3 months but eventually someone will figure that those trillions can't possibly be made back ever again.
And then the fall down is hard.
I got a good investment vehicle for you. How would you like to purchase shares in the Brooklyn bridge? You could see returns in the form of tolls.
Plus if AI is indeed a bubble, investors are already up to the neck in it. Think of all the key stocks of the S&P and Nasdaq that are lifted by AI: nvidia, microsoft, amazon, oracle, micron, intel, amd, etc. And add their lenders and the whole datacenter supply chain.
China enters the chat https://spacenews.com/china-conducts-4-launches-in-3-days-bu...
> It’s not like SpaceX is going to tank in the next 3 months and they’ll be left holding the bag.
A stock's value can disappear in a matter of days to a degree it leads to a complete collapse. It has happened before, see Enron or Wirecard.
> It’s not like it wasn’t going to end up in every index in a year.
Sure, but it's still not wise to let unripe stocks into most American and RoW retirement funds. There's a reason why many complex software projects keep some sort of "staging" tree, and the stock markets should do so as well.
Matt Levine's take was essentially that if you're in the index fund game, you want the market. You don't pick and choose what parts of the market you want--that's active management. SPCX mostly isn't an issue because most indices include the float in the weight, so it isn't really even a $1T company.
The problem isn’t that you’re invested in the index. The problem is that the index decided it wanted to change its rules to include companies that are not profitable. I still remember the days when you needed to be profitable for x quarters and have a minimum amount of float to be listed in an index. That changed overnight and we all know why.
A simpler solution to this would be to introduce new ETF tickers for changed rules. It's a breaking change -- version it.
S&P 500 did not change its rules right?
Right.
Can someone make an etf that uses the older more conservative criteria for inclusion?
No need. There are already plenty of them that track the S&P — which notably decided NOT to change its rules.
Feel like many of these articles were either prewritten, lazy, or have intentionally omitted the non-impact that S&P opting to not change its rules has had, just so the headline and lede could be as sensational as possible.
Index licensing might be an issue.
Can they? Yes, anyone can.
Will they... that's a different question
And even if there are new ETFs like this, will ETF customers bother to move at enough scale. It's like the old quote for buying IBM, no one get's fired for returning the benchmark, so if it's the benchmark adjusting the way they do things there is lots of inertia.
Okay then why is SPCX going to be weighted 3x its actual float in the Nasdaq? A rule made just for SPCX.
That's absolutely insane -- how the hell did anyone think that was a good idea under these circumstances ... This is an absolute scam -- why does it make sense for an index's buying volume requirement to be based on the implied value of shares that can't even be bought or sold ...?
it's not a scam if no one gets hurt
To the same point I also don't want the index itself picking and choosing which companies to apply which rules to.
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.
Depends which index. S&P isn't giving them anything special. https://finance.yahoo.com/markets/stocks/articles/spacex-fac...
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.
Yeah but Matt Levine is wrong.
1) Index funds and ETFs are highly active.
They're just low-cost due to largely algorithmic decisions but at all of the edge cases manual _active_ decisions are made.
IIRC, in this podcast Vanguard goes into detail about all of the active decisions they do [1]. It's long because uh, they do a lot.
2) You're in the index fund game because "you liked that index". There are literally thousands of ETFs. Saying "you want the market" is just wrong, you wanted a specific slice of the market and if the ETF changes the slice under you then that feels like a bait and switch.
[1]: https://www.youtube.com/watch?v=hQVz_VGJNnY
TIL about float for stock, thanks.
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What exactly can an individual do? For many their accounts have limited fund choices and if you don't want to pay high ER for fund manager's pedicures then you end up on an index, which (S&P500 excluded) have now bent the knee. Mine are on russel indexes so I have no choice.
Short spacex is the only answer I've heard but I'm wise enough to know I don't have the mentality for derivatives.
The vast majority of American employees are not maxing out every tax advantaged retirement account instrument, and putting everything in a 401(k) past the employer match level is not advisable exactly because of the limited investment choices.
except if you self-employed. I have maxed the shit out of my 401k (i401k, self-managed) and after 3 decade career have more saved than I can spend in 8 lifetimes
I too love solo 401ks. Saving 70k tax free is a beautiful arbitrage.
Well don't know your life but I suspect for a lot of people then it would've been more advantageous to not max out the 401k and retire pre-55 and spend the non-401k funds until 55.
This largely being my gripe about the Trump accounts in that you're allocating funds into them that can't be touched without penalties until like 50 years later. And for most people this probably isn't even a benefit because you can lifetime gift ~$15 million so like unless you're Bezos just invest the money yourself and gift your kid whatever large value item they wanted.
I don’t follow why retiring pre-55 is a good idea. Can you elaborate?
Shorting SpaceX when you own the same amount of SpaceX in an ETF doesn't require any derivatives and is a fairly safe play. The amount of interest you have to pay will vary a little bit, but it should cost a very small amount net.
The biggest issues are the effort and tax implications of balancing the SpaceX short.
You can buy the companies making up the index instead of the index itself.
It was proven to be a good strategy on the SP500 [1, 2]
With 500 companies, it's work. But you can probably approximate it with a top 100.
[1] https://rodneywhitecenter.wharton.upenn.edu/wp-content/uploa...
[2] https://www.tandfonline.com/doi/full/10.1080/0015198X.2023.2...
SpaceX has not been added to the S&P 500. They asked for the rules to be waived. S&P said no. I don't understand this article.
S&P 500 didn’t change their rules but other indexes have.
https://indexes.nasdaqomx.com/docs/2026_May_NDX_Changes_FAQ....
Q: What is the purpose of modifying the liquidity and seasoning requirements? Could this change result in the inclusion of illiquid securities in the index?
A: Most indexes require a liquidity threshold for new constituents, often as a minimum share count or average daily trading value. For the Nasdaq-100®, securities must have a three-month average daily traded value of at least $5 million. Since only very large companies – typically with full market capitalizations over $100 billion as of March 2026 – would have qualified for fast entry, they are expected to easily and quickly meet this requirement. However, an average daily traded value of at least $5 million from the time of listing will still be required for fast entry candidates. Many indexes have included seasoning requirements to ensure that traditional IPOs undergo price discovery and stabilization before being included. These requirements were originally intended to prevent small or little-known companies from entering too soon. However, there is now a trend toward IPOs being larger and more mature than in the past. Companies expected to meet the fast entry threshold are likely to be among the world’s most significant and well-known firms. High investor interest and trading volumes should accelerate price discovery, further supporting a shorter seasoning period. Note that the seasoning period for companies outside of the Top 40 remains at three months.
Several indexes have changed not just Nasdaq, but it’s one more people have heard about.
Nasdaq isn't super relevant.
Sure but it’s not the only one. Add in SPY, QQQ, and IWM Force Index Funds and the percentage of Americans buying SpaceX early due to rule changes looks bad.
Edit: Ops SPY didn’t change their rules.
SPYis sp500 is it not? Why would they include it?
For others like qqq it has no bearing to be frank. It follows the nasdaq 100. Maybe an argument that the extra few months would have allowed more price discovery but I am not so sure.
Love the HN hive mind that downvotes things they don’t understand.
Also CRSP, which is the index used by US Total Market funds and many Target Date funds.
CRSP is float-weighted!
float adjustment results in any CRSP tracking fund/etf having a $10,000 investment being approximately $17 worth of SpaceX. This isn't a real problem the media is trying to push it as.
S&P 500 has not therefore the index funds tracking it are not going to put money on it. But nasdaq has, that means the ETFs tracking are pouring money into spcx. On top of that, all 401k target funds are total market funds, that track all of the market regardless of what the indices do. They own trillions in capital from people’s retirement, and by their own investment rules, a listing with that kind of market cap forces a bunch of money to flow into the company.
Rage bait article or the author is just misinformed
Less informed journalists heard about it after we did and then decided to publish what they learned on twitter.
CRSP publishes the index used by VTI. They changed their rules to lower the float requirement.
Firms or funds, don’t care, want to put money in anyway…
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 revenue, with around 50% growth. Blue Origin will offer them competition soon.
X, formerly Twitter, has around $2B revenue, limited potential.
The massive 2030 projections ($474B total, $144B Starlink, $322B AI) are Goldman Sachs' IPO roadshow model. The projections are so aggressive they feel scammy.
SpaceX's 2025 revenue is $18.7 billion. A typical premium valuation for a top-tier tech company might be around 10x to 14x revenue, which would imply a strong IPO valuation of roughly $187 billion to $262 billion.
The reason for the outlandish valuation is because of naive retail investors who believe Elon Musk has never failed at anything.
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Those naive retail investors can stay irrational longer than I can stay solvent.
Sounds like the retirement funds should buy it then.
Time to insolvency and time to retirement, apples and oranges…
Expect more of this type of crap in the media now that SPCX is public. The guardian is notoriously anti-Musk and used to mention him by name in the article footer begging for money.
The recent AI craze is really just LLMs. I feel like finance was likely already the most AI-adopted industry without LLMs and their impact the last few years may have taken them from “80 to 100” where most industries are going “10 to 50.” Go back to 2022 for a moment and I think this article is identical.
This isn't investment advice etc etc but there are many options that can capture large sections of the stock market without being exposed to the tech bubble (assuming there is one).
Many people say you should stay invested in the SP500 anyway and I won't argue against that. But funds like VTV, DGRO, VIG, SCHD etc don't have the same level of exposure to tech, as well as international funds like VEA. Many 401ks allow you to invest in them through brokerage "link" options. Of course, do your research or talk to a pro before considering these.
> exposed to the tech bubble
Aside, I think many people forget to account for their own job/career when thinking about diversification.
Just working "in tech" means that industry is already an oversized part of my financial future by default, even before talking about investment stuff.
You can opt to put some or all of your 401K into a "Value fund"
VVIAX (Vanguard) or FLCOX (Fidelity)
to reduce your exposure to the highest of high-flying stocks.
Of course, many small company 401Ks limit your investment options to a small family of high expense ratio funds...
Unfortunately most people won't do that, either from ignorance or fear of missing out. Sometime in the next few years the chickens are going to come home to roost on the infinibubble, and I'm not really sure if the US financial system will weather it.
Half of the companies in the S&P 500 are trading at over 10x sales.
SpaceX is just another one on top of the pile, whenever it gets included.
Valuation multiples always mean revert on a long enough timeline... you can position for it today if you care to.
https://www.multpl.com/s-p-500-price-to-sales
yes I am concerned about my downside puts
I have to say it is incredibly annoying that the wealthiest man in the world is so thin skinned that every post on Hacker News that talks about him in ways he doesn't like gets flagged.
Of course Musk isn't doing it himself. He already bought Twitter so he could control what is said about him. And, as the wealthiest man in the world, he'd be stupid if he hasn't hired tens of thousands of people to monitor posts about him or his concerns and to downvote them (or whatever he wants). The cost to him for doing that would be similar to us spending ten cents.
I have a feeling the article and the comments on this trend would be very different if Elon Musk did not support Trump, even if he were still just as crazy and rich.
Regardless of what you think of his politics, SpaceX is waaaay overvalued.
Just a year ago the two were feuding. They're both lying conman with nothing to contribute.
"Time to drop the really big bomb: @realDonaldTrump is in the Epstein files. That is the real reason they have not been made public. Have a nice day, DJT!"
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