It's really concerning given how the indexes are changing rules to fast-track SpaceX being forced into index funds. S&P is also working on updates to S&P 500 to force it down everyone's throats quickly and algorithmically.
ngriffiths 1 minutes ago [-]
In addition to covering the IPO in general last week, Matt Levine also wrote about this specific question Tuesday[1]:
> Historically index providers were in the business of making these sorts of quality decisions, so that index funds were not forced to buy stocks they didn’t like.
> These rules create some tension between the idea that an index is a list of all the stocks and the idea that an index is a list of all the good stocks. Historically, it didn’t matter all that much: The point of the stock market is to tell you which stocks are good, so a company with a high stock valuation should be a very good company, so it should get a high weighting in both the Index of Good Companies and the Index of All the Companies.
> But SpaceX — and also maybe OpenAI and Anthropic in their coming IPOs — will probably break that link. SpaceX will probably (1) do all sorts of stuff that index funds hate and that index providers have specifically tried to exclude and also (2) be gigantic, because the market loves it.
I'm usually a Boglehead, with some exceptions, and one exception I'd love is some sort of trade that would eliminate my exposure to SpaceX for the next few years. I'm sure there's some combo of options that would do it.
Probably finding an ESG-focused ETF would do it. ESG basically meant "good governance, we follow laws" which translated into better governed public companies that therefore had better returns, as one would expect. Really weird how it was politicized into something entirely different...
Galanwe 12 minutes ago [-]
> I'd love is some sort of trade that would eliminate my exposure to SpaceX
You can just short SpaceX of an amount equivalent to its share of your SP500 holdings. You will have to pay borrowing costs though, but on something that liquid it will be very small.
BJones12 4 minutes ago [-]
Yeah. For comparison, SpaceX will be maybe half the size of MSFT. MSFT is 7.4% of the SP500 index, so for a $1,000,000 portfolio if you were to short MSFT you'd pay 0.25% on the value of that 7.4%, or $185/year.
So eliminating SpaceX exposure will cost you $100 per million of your SP500 ETF per year, or so.
parliament32 8 minutes ago [-]
Shorts have unlimited risk. Buying a put is risk-defined and probably a better strategy.
BJones12 3 minutes ago [-]
No, because the unlimited risk of shorting is balanced (hedged) by the unlimited upside of holding the same number of shares via the ETF.
parliament32 9 minutes ago [-]
> some sort of trade that would eliminate my exposure to SpaceX
I think it's less complicated than you'd think.. just buy LEAPS puts proportional to your exposure.
jakub_g 11 minutes ago [-]
One annoying thing is that those "non-standard" ETF variants have much higher management costs than basic S&P500 / All World ETFs.
nothercastle 3 minutes ago [-]
Dimension funds aren’t bad
xenospn 17 minutes ago [-]
Stock markets are ruled by hype and fomo. Good corporate governance has little to do with returns, unfortunately.
epistasis 16 minutes ago [-]
Short term gains are hype and fomo, but if you're holding index funds long like I am, then returns have a lot more to do with performance. And given the lack of hype around ESG, it seems like an exceptional time to buy in to it.
JumpinJack_Cash 11 minutes ago [-]
Bro the index is about riding the hype and fomo and when the phenomenon progressively loses track it gets less and less quota
aNoob7000 1 hours ago [-]
Add Anthropic and OpenAI to the list. Companies that are bleeding money.
Personally, a company should be making money before adding it to the index.
parliament32 1 hours ago [-]
Interestingly, these are the exact rules they're working to overturn: currently, no matter how many stupid accounting tricks you pull off, you need to actually be profitable to be included in the S&P 500.
hparadiz 1 hours ago [-]
[flagged]
LarsDu88 47 minutes ago [-]
This is a fallacy. OpenAI and Anthropic would not continue to make money indefinitely by simply sitting still for the simple fact that their models can easily be distilled by competitors. Their value is contingent on sitting at the top of the leaderboards and staying there such that the marginal value of their AI is better than the mostly Chinese competitors.
And b/c these chinese competitors are open weight, the layer below frontier class AI is totally commoditized.
If there were a recession, the first thing enterprise customers would do is setup Kimi or Deepseek rigs. It would be a race to the bottom and no one would be profitable.
A similar phenomenon happened with rail lines in the 1850s where irrational exuberance led to a massive overbuild of rail lines, followed by a race to the bottom and the bankruptcy of almost all players. In the end, banks ended up absorbing the few companies that survived.
parliament32 1 hours ago [-]
Because they're doing the fancy equivalent of selling $20 bills for $15 and chirping about how high their revenue is. You, me, and everyone else could generate $inf revenue with that strategy, but that doesn't make it a viable business model.
MBCook 52 minutes ago [-]
Right.
At this point burying money in jars in the back yard and forgetting where some are has a much higher rate of return.
hparadiz 46 minutes ago [-]
Using Google’s own IPO S-1 / SEC filings:
Year Revenue Net income / loss
1998 Not reported
1999 $220k -$6.076M
2000 $19.108M -$14.690M
Do you guys not know what a loss lead is?
MBCook 2 minutes ago [-]
Survivorship bias.
Also, those numbers are multiple orders of magnitude smaller than the AI stuff going on now.
MadxX79 25 minutes ago [-]
But Google didn't go public until 2004, when they were highly profitable.
Every startup goes through a phase where they aren't profitable... For most of of them that ends when they go bankrupt.
logifail 27 minutes ago [-]
> Do you guys not know what a loss lead is?
We don't know which of today's companies will be successful and/or highly-valued in N years' time.
Check Cisco's valuation on March 27, 2000; it was briefly the most valuable publically traded company in the world. Almost everyone believed it was worth it. Then it fell 88% over two years.
Full disclosure: some of us are old enough to have held stocks during the dot-com boom. Fortunately I was still a student and therefore too poor to have had any significant amount of money to lose :)
parliament32 42 minutes ago [-]
I have no doubt there are a handful of positive examples when we ignore the tens of thousands of failed companies along these lines.
I have no problem with money-furnaces trading publicly. If people want to invest in those, fantastic, power to them. But they absolutely should not be included in vehicles like pensions and indexes.
marcosdumay 42 minutes ago [-]
You seem to be ignoring that a loss lead is supposed to lead people into doing something profitable.
matthewdgreen 1 hours ago [-]
Really depends on the valuation and P/E they plan to list at, and some estimate of their future revenue story. I love Codex and Claude Code but OpenCode/Kimi is wildly cheaper and 90% as good.
tclancy 1 hours ago [-]
Didn't we have a story just yesterday that Anthropic's run-rate now looks like $49 billion/ year and they might have their first quarterly profit? I would suggest if you have billions of dollars coming in the door and aren't breaking even, maybe you do have a small leak somewhere?
mrweasel 24 minutes ago [-]
Part of that potential profitability is reportedly coming the fact that they get a discount on compute from SpaceX in May and June. Anthropic and SpaceX signing a contract where Anthropic leases datacenter capacity for the low low price of $1.25 billion per month, except for the first two month when they get some sort of discount.
Anthropics expected profitable quarter just happens to be the quarter were their cost is artificially low?
alpha_squared 1 hours ago [-]
> Because from where I'm sitting it seems like you're just operating on hopes and feels.
I hate these flippant comments. Similarly, from where I'm sitting it seems you're struggling to disentangle revenue from profit.
hparadiz 1 hours ago [-]
I buy 50 billion of hardware. Make 45 billion back in year 1. My losses are 5 billion. I Pay of all my creditors by year two. Then spend another 55 billion on hardware in the second half of year two. My profit is at this point zero.
<you are here>
By year three I am printing money.
It's not a flippant comment. It's basic math.
zdragnar 34 minutes ago [-]
In year three your competitors invest in making a better model and crush your business because you have no moat at all.
The entire business requires massive ongoing investment because getting massive investments is the only thing resembling a competitive advantage that you can get.
The equivalent to anything you can do will be available as an open weight set in six months to a year. Sink or swim.
zzleeper 49 minutes ago [-]
Sorry that's confusing cash flow with profits, where things get amortized
rchaud 36 minutes ago [-]
It's not basic math when the numbers are this big. There's not going to be $50 billion coming in Year 3 if there's a market correction and lenders scale back financing. Borrowed money is how companies are paying for AI, and that's the first thing that disappears in a recession.
43fg 1 hours ago [-]
" But they could just not do anything and continue raking in the money."
Hahaha what a fucking bozo.
Log out and dont talk about valuation again.
wg0 1 minutes ago [-]
We're going to witness bigger blast than the great depression, dot com bust and 2008 crisis combined.
These greedy capitalists are after the pension funds + retail investor (ETFs in particular) through IPOs but there's no profitability in sight.
mohsen1 1 hours ago [-]
There is a market for an S&P 500 ETF without those companies. I'll immediately switch over
Let me know if you find one! I'm at a loss. (And even then, if I switch I have to pay $$$ taxes on capital gains)
stouset 57 minutes ago [-]
You can sidestep this entirely with a total-market fund like VTSAX/VTI, which hold the entire market and should be more resistant to being gamed.
They’re free-float adjusted so entities like SpaceX are valued only by what’s available on public markets. And Vanguard (and its funds) are owned by its investors, which makes it seem implausible that the rules would be rewritten in a way that would damage investors.
SilverElfin 56 minutes ago [-]
VTI lists fast even before these recent changes as I recall. So it’s more vulnerable, not less.
19 minutes ago [-]
LPisGood 52 minutes ago [-]
It may list fast, but it covers many more securities from what I understand so it’s insulated. I think the fact is that any broad market ETF is gonna own at least some piece of a $1 trillion company.
felixgallo 24 minutes ago [-]
well that's the problem, right? There is no justification for a trillion dollar Elon Musk valuation. And he and his investors know this. That's why they're trying to change the rules to dump the stock while it's irrational on every investor in the world. If they really believed in the value of the company, would they be bribing people to scam the index funds?
_delirium 1 hours ago [-]
Any of the direct indexing providers will let you blacklist individual stocks from the index. The intended use is to exclude stocks you hold elsewhere (or receive as stock grants) to avoid causing wash sales, but it can also be easily used to make a custom "S&P 499".
And accelerating the schedules for insiders to dump shares.
rchaud 46 minutes ago [-]
Waiving profitability requirements to join the S&P 500 and trigger auto-buys from index funds is DEI for corporations.
philwelch 29 minutes ago [-]
Almost all of the YoY growth in the S&P500 is in a very small number of tech companies. If one of those fast-growing tech companies isn't in the S&P500, the index as a whole becomes obsolete.
SilverElfin 57 minutes ago [-]
The same rules are now affecting other big IPOs. I think Cerebras was confirmed as getting fast listing too even though they’re much smaller. It’s one big act of dumping on retail markets
lokar 2 hours ago [-]
How can I transfer my shares of VTI for an interest in this pension fund, before it’s too late?
stouset 53 minutes ago [-]
VTI won’t really be affected by this.
It’s based on the total market and not artificially limited to a small number of large companies. Plus it’s free-float adjusted so only the publicly-tradable portion of SpaceX is considered when weighting its inclusion so it will constitute only a small portion of the fund. There is also a (small) mandatory delay period which I don’t recall between it going public and it becoming included in the index which should give time for the SpaceX valuation to stabilize on something notionally realistic.
Thankfully, Vanguard and its member funds are investor-owned so are likely more resilient against someone like Elon trying to change the rules.
lokar 46 minutes ago [-]
The index they use is altering the rules. I complained to my account rep, he agreed it was not great and is asking the fund mgmt what the plan is. I doubt there is a lot they can do.
ambicapter 18 minutes ago [-]
VTI
> Seeks to track the performance of the CRSP US Total Market Index.
The index that is changing its rules is the NASDAQ100, commonly referred to as the NASDAQ, although NASDAQ is also the name of the exchange.
Morningstar said its CRSP Market Indexes will "undergo enhancements to introduce an alternative liquidity screen", making it possible to add SpaceX and other giant IPOs to these benchmarks more rapidly. The funds that use the CRSP indexes as a portfolio benchmark include Vanguard's $607 billion Total Stock Market ETF.
ambicapter 2 minutes ago [-]
Well shit.
tgv 1 hours ago [-]
BY getting a job in Denmark in the sector that this pension fund covers. It's a "member-owned pension fund for academics."
red-iron-pine 2 hours ago [-]
is anyone surprised? the IPO documents are a disaster, and the finance-tube talking heads are all tearing it to shreds
> The deal, with SpaceX, is that Elon Musk runs it however he wants, and he does weird stuff, and you have to trust him, and if you don’t like it you can’t complain.
> When SpaceX acquired xAI a few months ago, did a special committee of independent directors approve the transaction? Did Musk recuse himself from negotiations? Was the price set by independent valuation experts using a rigorous process? Did outside shareholders sue to block the deal? Stop. Musk wanted SpaceX to buy xAI, so it did.
> [...] Surely SpaceX has created all that shareholder value more because Musk does what he wants than in spite of Musk doing what he wants; it is hard to accidentally create $1.75 trillion of value. SpaceX’s shareholders signed up for this deal — letting Musk cook — and have been rewarded;
vondur 2 hours ago [-]
Isn't that how Facebook is ran too? Basically Zuckerberg's private company, that in theory is public?
zardo 2 minutes ago [-]
Though (at least to my knowledge) Zuckerberg doesn't have a history of abusing his authority to make deals that advantage other companies he owns at the expense of Facebook.
E.g. SpaceX buying up large numbers of Cybertrucks Tesla couldn't sell at MSRP, not even negotiating a good fleet sale deal.
grassfedgeek 58 minutes ago [-]
Right, if Meta had good governance Zuck wouldn't have been allowed to invest so much in Metaverse.
stefan_ 48 minutes ago [-]
Facebook is still a Delaware company, with lots of established case law for what Zuckerberg can and can not do, voting majority or not. SpaceX is now some Texas corporation with a state legislature ready to enable whatever Musk wants.
tonetheman 1 hours ago [-]
[dead]
jdgoesmarching 56 minutes ago [-]
Tech bros reinvent autocracy
nicole_express 54 minutes ago [-]
It seems like a fine offer to have exist, but one that a pension fund with low risk tolerance wouldn't want to take. So everything seems reasonable with the world.
Similarly I don't understand why indicies are rushing to change their rules to allow SpaceX in. People accept a certain risk tolerance and changing the rules to ramp up the risk seems questionable at best.
Any chance of bypassing the paywall? Does someone have a archive link perhaps?
mikeodds 2 minutes ago [-]
Just prepend url with archive.is/ if you want to check
iso1631 15 minutes ago [-]
Pay perhaps?
Or do you work for free?
SilverElfin 2 hours ago [-]
It’s obviously a scam. First xai acquires failing Twitter and then SpaceX acquires xai? At a made up valuation number that’s too high? The voting structure of SpaceX prevents Elon from ever being held accountable. Not to mention that the revenue and profits are simply not enough to justify the desired value.
nolok 1 hours ago [-]
Merging the failling companies into the other ones is the usual Elon thing, Solar City didn't get acqui-merged into Tesla for its great result.
It's not a "scam" in the traditionnal sense, it's riding the bubble while it's there, stock value is "supposed" to be about the company performance and potential but technically it doesn't have to be, it's about what some people are willing to pay for it (the stock, not the product the company sells) and that's all. That's also why tesla has such a valuation.
You can see it in the comments even here and other thread about this IPO, some people read the numbers, and some have just religious sounding comments about it being the biggest revolution ever or making the history book etc ...
And that's also why they need to keep elon as CEO because in the scenario where they remove it and get the best car company CEO and become a great regular car company that works and ships lots of great car ... Their valuation would be reduced a factor of ten
Danox 24 minutes ago [-]
It’s a scam and the party will be over when Tesla finally bites the dust, and it will. The worldwide trajectory is not in their favor.
LightBug1 16 minutes ago [-]
Good for Denmark.
Yeah, for all the technical excellence by Shotwell and the team ... I don't want my ETF's and pensions buying into that piece of shit CEO and his corrupt 'at a whim' entity manipulation.
Sorry, fuck SpaceX
rvz 2 hours ago [-]
Good. Would love to buy SpaceX stock at a 90% discount after the IPO and the next tech / AI correction.
Danox 31 minutes ago [-]
Why is it a good thing to buy something that is financially not well run up front, and usually things don’t get better as time goes on however, if you’re in first, you can just sell it down the road and let someone else hold the bag in time.
Tesla was a great ride if you got in early but long-term from this point on if you had any significant amount of money, why would you buy them now? Unless you like sleepless nights…
hparadiz 1 hours ago [-]
Imagine not wanting to own a piece of the first company to make a re-usable orbital class booster.
horsawlarway 1 hours ago [-]
Yeah, I also don't want to eat a tasty morsel if you roll it around in the dirt and serve it up covered in bugs and hair.
And that's basically what SpaceX is right now after you account for xAI and twitter in the mix.
So I'd love to own a piece of the SpaceX from a decade ago - but the current offering smells pretty bad.
Combined with the fact that at this point, Musk clearly isn't opposed to running a business with dramatically inflated valuations based on vaporware, lies, & hype (cough - Tesla - cough) it just makes me far more skeptical than I might otherwise be.
I think caution is warranted here.
Essentially - I want to own the SpaceX that could have been if we didn't end up with the shoddy k-hole version of musk in charge of things.
hparadiz 1 hours ago [-]
The current SpaceX is in a far better financial and operational position than 10 years ago. By an order of magnitude. 90% of all payload to orbit right now is SpaceX alone. Starlink is profitable all on it's own. Right now. And they are just now picking up steam. American Airlines just signed onto Starlink just last week. This company is most likely gonna be the Coca-Cola of transportation between celestial bodies in solar system for the next 500 years but people on here are arguing over peanuts. On HN of all places.
horsawlarway 3 minutes ago [-]
I guess I don't consider leadership integrity and honesty to be "peanuts".
If anything - as an investor I'd call those core concerns about how I'll make my money back.
Further... this company isn't actually making ANY DAMN MONEY. Of the bundled orgs, only Starlink is profitable, and not profitable enough to offset the losses on spaceX and xAI/Grok. (starlink +4b, spacex -700mm, xAI -6b = -2.7b..., with 30b in debt).
So... no... right now this company is not "Coca-Cola". And that delusional comparison is part of why I think it's correct to be wary right now. On a scale between Enron and Coke... I'd wager we're closer to Enron.
I'll pick up some shares by default given the ETFs I'm in anyways, and that's enough for me...
Danox 25 minutes ago [-]
SpaceX is completely dependent upon the government. If said government decides to move on then what long-term and they will move on because of China, Russia and the EU but mostly because of China.
This brief dalliance in private enterprise in space will not last long-term.
capitainenemo 19 minutes ago [-]
Only a fifth of spacex revenue is currently from government contracts, a percentage that they forecast will continue to trend downwards.
(not to say that isn't a huge risk if it disappeared, it's just far from "completely dependent")
Octoth0rpe 1 hours ago [-]
> Imagine not wanting to own a piece of the first company to make a re-usable orbital class booster.
They didn't say they didn't want to own it, they said they wanted to own it at a : "90% discount after the IPO and the next tech / AI correction."
It is possible for a company to be both technically impressive and horrifically overvalued.
hparadiz 58 minutes ago [-]
I think it's undervalued.
amanaplanacanal 28 minutes ago [-]
Have you looked at the S1? The valuation is not based on launchers, it's based on all the potential money they can make as an AI company. Given that they are probably not even in the top 10 in that business, it's just pie in the sky.
anonymars 9 minutes ago [-]
Welp, if enough people think like the other fella, line will go up and money will be made
Something about finding out who's swimming naked once the tide goes out
FireBeyond 1 minutes ago [-]
Great, you have an opportunity to make bank, then, no?
lostlogin 28 minutes ago [-]
If Musk thought that, why would he need to have all the rules changed?
mrhottakes 38 seconds ago [-]
Imagine ignoring actual financial reality because Wow Big Rocket Go Up!!!
rchaud 31 minutes ago [-]
With this governance structure, you won't actually own anything. Ownership implies that you have a say as a shareholder.
wombatpm 27 minutes ago [-]
SpaceX is now an AI company with a rocket side hustle. At least that’s how the S1 looks.
petesergeant 57 minutes ago [-]
This implies there's no price at which owning SpaceX is a bad idea, which is obvious nonsense.
twalla 54 minutes ago [-]
I'd love to own SpaceX - what I don't want to own is all the unprofitable, toxic dogshit its ketamine-addled CEO folded into it that has nothing to do with putting stuff into orbit or selling Starlink.
malcolmgreaves 53 minutes ago [-]
Don’t make emotional investment decisions!
49 minutes ago [-]
bix6 1 hours ago [-]
Imagine buying the most overvalued company of all time helmed by a crazy man who does Nazi salutes. Payback period? Who cares! Orbital class booster yayyyy
MadxX79 9 minutes ago [-]
Say what you want about nazis, but they are good at rockets.
43fg 1 hours ago [-]
[dead]
formvoltron 51 minutes ago [-]
prediction: SpaceX will not escape Earth's gravity. Meaning... what goes up will come down.
the piece explains how modern finance is de facto built on the shoulders of the privatization of the welfare state. i find it particularly relevant here: the finance class - in this case musk - wants pensioners money via mutual funds, even modifying the rules of indexing...
it’s not a great sight tbh.
jmyeet 41 minutes ago [-]
The part that gets me is that changing of the rules by exchanges and financial regulators to essentially force mass purchases on a small float. That's disgusting and in a just world, those people would go to jail.
The funny part of all this is that SpaceX has achieved a lot but what might break them, or at least weigh them down heavily, is the impulsive and forced purchase of Twitter. Before anyone claims it was some kind of master plan, Elon went to court to get out of it but was forced into it [1].
What happened? Mass firings, pushing his own tweets because his fragile ego couldn't handle Joe Biden getting more likes [2] and Twitter opened the floodgates for hate speech [3] and worse [4]. Advertisers fled. Fidelity (who foolishly was part of the acquisition) massively wrote down the value [5]. Elon had used Tesla shares as collateral and was possibly facing a margin call.
How did he get out of it? Well, in 2023 Elon founded xAI to challenge OpenAI. People invested in this for some reason. And by 2025, Elon merged Twitter with xAI, overvaluing Twitter at $33 billion (which is still down 25% from the purchase) [6].
Now, I imagine the xAI investors were unhappy with Elon using xAI to bail out himself so what did he do? Easy. Make SpaceX acquire xAI of course [7].
Thing is, xAI and Twitter/Grok are a massive drain on SpaceX's finances, losing more than $10 billion annually allegedly [8].
Twitter did not have to end up as part of SpaceX. SpaceX would've been a better company without it. SpaceX already faces headwinds from the incredibly expensive and behind-schedule Starship program. Part of all of this regulatory fixing is to make sure the insiders (and Elon himself) get bailed out.
With their balanced budget and no social services cut?
rayiner 32 minutes ago [-]
What "balanced budget?" Mamdani got a massive bailout from the state of New York, and deferred pension payments.
It's classic third worldism, made possible by a low-information electorate that not only can't do the math, but lacks instinctual skepticism of the idea of a free lunch. Chicago went down the same path, and found that these gimmicks work until they don't.
kingleopold 2 hours ago [-]
YES, remember who they elected in NYC :)
BigTTYGothGF 46 minutes ago [-]
It's pretty surprising considering all the bums they've elected over the previous few decades.
malcolmgreaves 51 minutes ago [-]
A mayor who balanced the city’s budget.
DivingForGold 2 hours ago [-]
[flagged]
gmerc 54 minutes ago [-]
Calm down Grok
hparadiz 1 hours ago [-]
[flagged]
wizzwizz4 54 minutes ago [-]
Can you provide an example of a history book that lists minor shareholders of companies?
Their names are known and are part of history now. Maybe not famous but certainly better than being a forgotten weathered tomb stone after 5 centuries.
50 minutes ago [-]
NuclearPM 56 minutes ago [-]
???
Rendered at 17:39:15 GMT+0000 (Coordinated Universal Time) with Vercel.
> Historically index providers were in the business of making these sorts of quality decisions, so that index funds were not forced to buy stocks they didn’t like.
> These rules create some tension between the idea that an index is a list of all the stocks and the idea that an index is a list of all the good stocks. Historically, it didn’t matter all that much: The point of the stock market is to tell you which stocks are good, so a company with a high stock valuation should be a very good company, so it should get a high weighting in both the Index of Good Companies and the Index of All the Companies.
> But SpaceX — and also maybe OpenAI and Anthropic in their coming IPOs — will probably break that link. SpaceX will probably (1) do all sorts of stuff that index funds hate and that index providers have specifically tried to exclude and also (2) be gigantic, because the market loves it.
[1]: https://www.bloomberg.com/opinion/newsletters/2026-05-26/ind...
Probably finding an ESG-focused ETF would do it. ESG basically meant "good governance, we follow laws" which translated into better governed public companies that therefore had better returns, as one would expect. Really weird how it was politicized into something entirely different...
You can just short SpaceX of an amount equivalent to its share of your SP500 holdings. You will have to pay borrowing costs though, but on something that liquid it will be very small.
So eliminating SpaceX exposure will cost you $100 per million of your SP500 ETF per year, or so.
I think it's less complicated than you'd think.. just buy LEAPS puts proportional to your exposure.
Personally, a company should be making money before adding it to the index.
And b/c these chinese competitors are open weight, the layer below frontier class AI is totally commoditized.
If there were a recession, the first thing enterprise customers would do is setup Kimi or Deepseek rigs. It would be a race to the bottom and no one would be profitable.
A similar phenomenon happened with rail lines in the 1850s where irrational exuberance led to a massive overbuild of rail lines, followed by a race to the bottom and the bankruptcy of almost all players. In the end, banks ended up absorbing the few companies that survived.
At this point burying money in jars in the back yard and forgetting where some are has a much higher rate of return.
Year Revenue Net income / loss
1998 Not reported
1999 $220k -$6.076M
2000 $19.108M -$14.690M
Do you guys not know what a loss lead is?
Also, those numbers are multiple orders of magnitude smaller than the AI stuff going on now.
Every startup goes through a phase where they aren't profitable... For most of of them that ends when they go bankrupt.
We don't know which of today's companies will be successful and/or highly-valued in N years' time.
Check Cisco's valuation on March 27, 2000; it was briefly the most valuable publically traded company in the world. Almost everyone believed it was worth it. Then it fell 88% over two years.
Full disclosure: some of us are old enough to have held stocks during the dot-com boom. Fortunately I was still a student and therefore too poor to have had any significant amount of money to lose :)
I have no problem with money-furnaces trading publicly. If people want to invest in those, fantastic, power to them. But they absolutely should not be included in vehicles like pensions and indexes.
Anthropics expected profitable quarter just happens to be the quarter were their cost is artificially low?
I hate these flippant comments. Similarly, from where I'm sitting it seems you're struggling to disentangle revenue from profit.
<you are here>
By year three I am printing money.
It's not a flippant comment. It's basic math.
The entire business requires massive ongoing investment because getting massive investments is the only thing resembling a competitive advantage that you can get.
The equivalent to anything you can do will be available as an open weight set in six months to a year. Sink or swim.
Hahaha what a fucking bozo.
Log out and dont talk about valuation again.
These greedy capitalists are after the pension funds + retail investor (ETFs in particular) through IPOs but there's no profitability in sight.
They’re free-float adjusted so entities like SpaceX are valued only by what’s available on public markets. And Vanguard (and its funds) are owned by its investors, which makes it seem implausible that the rules would be rewritten in a way that would damage investors.
I would assume this is not an ETF but sth else?
It’s based on the total market and not artificially limited to a small number of large companies. Plus it’s free-float adjusted so only the publicly-tradable portion of SpaceX is considered when weighting its inclusion so it will constitute only a small portion of the fund. There is also a (small) mandatory delay period which I don’t recall between it going public and it becoming included in the index which should give time for the SpaceX valuation to stabilize on something notionally realistic.
Thankfully, Vanguard and its member funds are investor-owned so are likely more resilient against someone like Elon trying to change the rules.
> Seeks to track the performance of the CRSP US Total Market Index.
The index that is changing its rules is the NASDAQ100, commonly referred to as the NASDAQ, although NASDAQ is also the name of the exchange.
Morningstar said its CRSP Market Indexes will "undergo enhancements to introduce an alternative liquidity screen", making it possible to add SpaceX and other giant IPOs to these benchmarks more rapidly. The funds that use the CRSP indexes as a portfolio benchmark include Vanguard's $607 billion Total Stock Market ETF.
> The deal, with SpaceX, is that Elon Musk runs it however he wants, and he does weird stuff, and you have to trust him, and if you don’t like it you can’t complain.
> When SpaceX acquired xAI a few months ago, did a special committee of independent directors approve the transaction? Did Musk recuse himself from negotiations? Was the price set by independent valuation experts using a rigorous process? Did outside shareholders sue to block the deal? Stop. Musk wanted SpaceX to buy xAI, so it did.
> [...] Surely SpaceX has created all that shareholder value more because Musk does what he wants than in spite of Musk doing what he wants; it is hard to accidentally create $1.75 trillion of value. SpaceX’s shareholders signed up for this deal — letting Musk cook — and have been rewarded;
E.g. SpaceX buying up large numbers of Cybertrucks Tesla couldn't sell at MSRP, not even negotiating a good fleet sale deal.
Similarly I don't understand why indicies are rushing to change their rules to allow SpaceX in. People accept a certain risk tolerance and changing the rules to ramp up the risk seems questionable at best.
Or do you work for free?
It's not a "scam" in the traditionnal sense, it's riding the bubble while it's there, stock value is "supposed" to be about the company performance and potential but technically it doesn't have to be, it's about what some people are willing to pay for it (the stock, not the product the company sells) and that's all. That's also why tesla has such a valuation.
You can see it in the comments even here and other thread about this IPO, some people read the numbers, and some have just religious sounding comments about it being the biggest revolution ever or making the history book etc ...
And that's also why they need to keep elon as CEO because in the scenario where they remove it and get the best car company CEO and become a great regular car company that works and ships lots of great car ... Their valuation would be reduced a factor of ten
Yeah, for all the technical excellence by Shotwell and the team ... I don't want my ETF's and pensions buying into that piece of shit CEO and his corrupt 'at a whim' entity manipulation.
Sorry, fuck SpaceX
Tesla was a great ride if you got in early but long-term from this point on if you had any significant amount of money, why would you buy them now? Unless you like sleepless nights…
And that's basically what SpaceX is right now after you account for xAI and twitter in the mix.
So I'd love to own a piece of the SpaceX from a decade ago - but the current offering smells pretty bad.
Combined with the fact that at this point, Musk clearly isn't opposed to running a business with dramatically inflated valuations based on vaporware, lies, & hype (cough - Tesla - cough) it just makes me far more skeptical than I might otherwise be.
I think caution is warranted here.
Essentially - I want to own the SpaceX that could have been if we didn't end up with the shoddy k-hole version of musk in charge of things.
If anything - as an investor I'd call those core concerns about how I'll make my money back.
Further... this company isn't actually making ANY DAMN MONEY. Of the bundled orgs, only Starlink is profitable, and not profitable enough to offset the losses on spaceX and xAI/Grok. (starlink +4b, spacex -700mm, xAI -6b = -2.7b..., with 30b in debt).
So... no... right now this company is not "Coca-Cola". And that delusional comparison is part of why I think it's correct to be wary right now. On a scale between Enron and Coke... I'd wager we're closer to Enron.
I'll pick up some shares by default given the ETFs I'm in anyways, and that's enough for me...
This brief dalliance in private enterprise in space will not last long-term.
(not to say that isn't a huge risk if it disappeared, it's just far from "completely dependent")
They didn't say they didn't want to own it, they said they wanted to own it at a : "90% discount after the IPO and the next tech / AI correction."
It is possible for a company to be both technically impressive and horrifically overvalued.
Something about finding out who's swimming naked once the tide goes out
the piece explains how modern finance is de facto built on the shoulders of the privatization of the welfare state. i find it particularly relevant here: the finance class - in this case musk - wants pensioners money via mutual funds, even modifying the rules of indexing...
it’s not a great sight tbh.
The funny part of all this is that SpaceX has achieved a lot but what might break them, or at least weigh them down heavily, is the impulsive and forced purchase of Twitter. Before anyone claims it was some kind of master plan, Elon went to court to get out of it but was forced into it [1].
What happened? Mass firings, pushing his own tweets because his fragile ego couldn't handle Joe Biden getting more likes [2] and Twitter opened the floodgates for hate speech [3] and worse [4]. Advertisers fled. Fidelity (who foolishly was part of the acquisition) massively wrote down the value [5]. Elon had used Tesla shares as collateral and was possibly facing a margin call.
How did he get out of it? Well, in 2023 Elon founded xAI to challenge OpenAI. People invested in this for some reason. And by 2025, Elon merged Twitter with xAI, overvaluing Twitter at $33 billion (which is still down 25% from the purchase) [6].
Now, I imagine the xAI investors were unhappy with Elon using xAI to bail out himself so what did he do? Easy. Make SpaceX acquire xAI of course [7].
Thing is, xAI and Twitter/Grok are a massive drain on SpaceX's finances, losing more than $10 billion annually allegedly [8].
Twitter did not have to end up as part of SpaceX. SpaceX would've been a better company without it. SpaceX already faces headwinds from the incredibly expensive and behind-schedule Starship program. Part of all of this regulatory fixing is to make sure the insiders (and Elon himself) get bailed out.
It's also not the first time [9].
[1]: https://www.pbs.org/newshour/economy/elon-musk-offers-to-end...
[2]: https://www.theguardian.com/technology/2023/feb/15/elon-musk...
[3]: https://www.nytimes.com/2022/12/02/technology/twitter-hate-s...
[4]: https://www.washingtonpost.com/technology/2023/07/27/twitter...
[5]: https://www.axios.com/2023/10/29/fidelity-twitter-x-value-el...
[6]: https://www.fintechweekly.com/magazine/articles/xai-acquires...
[7]: https://www.reuters.com/business/musks-spacex-merge-with-xai...
[8]: https://www.bloomberg.com/news/articles/2025-06-17/musk-s-xa...
[9]: https://www.theverge.com/2016/11/21/13698314/tesla-completes...
1. https://comptroller.nyc.gov/reports/letter-to-spacex-re-ipo-...
It's classic third worldism, made possible by a low-information electorate that not only can't do the math, but lacks instinctual skepticism of the idea of a free lunch. Chicago went down the same path, and found that these gimmicks work until they don't.
Their names are known and are part of history now. Maybe not famous but certainly better than being a forgotten weathered tomb stone after 5 centuries.