I'm more worried about the early inclusion into the Nasdaq 100 index and if other indexes will follow. I don't want my retirement to be passively buying Elon's latest shell game.
Yeah this is pretty shady. The S&P 500 in particular has fairly strict criteria (e.g. 4 consecutive quarters of profitability) and those criteria exist for a reason. They made me more comfortable buying the S&P 500 knowing I'm not buying pre-revenue companies. This is a bad precedent to set just to please Elon.
I'm a bit out of the loop, but has SpaceX not been profitable for the last 4 quarters? I understand they're investing a lot into R&D for Starship but I was under the impression they've been making a killing on Starlink.
Starlink itself is profitable but the insane valuation they're trying to get for the IPO is based on an assumed continued massive growth of users - and even then I don't think Starlink by itself makes SpaceX a trillion dollar company.
If Musk personally wasn't completely toxic worldwide, and if there wasn't all the other new space companies noticing the Egg of Columbus* that is cheap rockets and the potential for comm sat constellations that launch prices enable, I could believe 100e6 people would buy a $50/month service. A common rating for valuation is profit over 20 years, that revenue (not profit, IDK the margin) would be $1.2T.
Many seem to also be doing this with androids around the time he started talking about them, hence how we can buy them and put them to work even though Optimus still hasn't launched yet.
Past performance as a company is like 20% of the concern here.
The concern is ~80% that a brand new stock enters the market & immediately has to be bought by everyone. The market has no time to adjust & settle.
This is fleecing everyone & it's entirely unclear under what madness this would ever have been considered.
There's so many irregularities and abnormalities being considered here, and all of them seem like pretty straightforward safeguards. It feels like nothing short of a conspiracy that so many norms would be pushed aside to consider listing spacex so quickly in so many indexes. "The proposal could also remove the minimum Investable Weight Factor requirement for megacap companies." For fuck sake! https://x.com/Benzinga/status/2050244492335206911
Absolutely, that's the main reason there's been a push for that for decades. It's a giant pile of poor people's money that rich people can't easily skim from, and they'd really, really like to. Once it's "in the market" they gain all kinds of options for turning some of that money into their money, some immediately, some with tweaks to laws or policy.
That’s literally not how it works.
You buy a share of stock and participate in their gains.
For example, I owned a bunch of Tesla stock since around 2017.
Now I have a ton in the stock as well as a new house and a model s plaid thanks to their greatness.
Did the same with Apple, that is my retirement and travel fund. it ain’t hard.
Way better returns when you take charge of your investments rather than bitching about the government, anyone can be a millionaire with minimal effort, just being smart.
I learned just how bad of a deal Social Security is when an employer (a bootstrapped startup) offered a predatory 401k plan. It was free for my employer to setup but the employees were stuck with extremely high fees. It was so bad that John Oliver made an episode[0] about it!
Yet, even for the worst 401K plan in America, the projected retirement returns were 1600% of the Social Security returns. Even America's worst 401K would be better for the average consumer than the federal debacle
Uncle Sam should sunset SSI and allow citizens to select from and move freely between a number of accredited funds.
Are you aware that SSI is an insurance (or lifetime annuity) not an investment?
SSI covers disability, and supplements income no matter what happens. Disability? You're covered. Live to 105? You're covered. Market dips 50% in a period you have a lot of expenses? Your benefits are unaffected.
Tax advantaged 401k is already the vehicle of choice for retirement funds.
it doesn't cover you getting disabled so you can't work anymore at the age of 30 after working 8 years.
1600% higher return is great when you work from yours 20s to your 50s/60s and can essentially self insure yourself at that point with it, but as the person you are responding to you is (I believe) trying to say, that's not everyone.
Fair, but given that we're talking about a hypothetical government program, "index-based retirement fund" doesn't imply you're the only one contributing to said fund.
Who knows, I mean it would certainly make it easier for them to turn the entire population into their bag holders. Don't even have to hype the company any more or spin up a bunch of bullshit about space.
Not to mention that they always harp on it being supposedly unsustainable and insolvent, while deliberately not mentioning that it is solely because the social security is the most regressive tax, where the more you earn the lower your rate.
If it was a flat tax where everyone paid the same percentage of instead of a regressive tax where only working people pay the rate, then social security would be well funded.
Obviously they don’t want to pay the same tax rate as working people, so theyd rather get rid of social security instead.
This is not correct. For people who earn less than the SS wage cap ($184.5k in 2026), Social Security is a progressive tax due to the bend points in the benefit formula. You explicitly get less benefit for each additional dollar you pay in tax.
But every dollar of income earned over the SS wage cap reduces effective tax rate. The more you earn, the less the effective Social Security tax rate is for you. At Elon Musk levels, it rounds down to zero. Therefore, there would be no motivation for super rich people to get rid of social security.
The only material reduction in tax rate would be for those relying on annual earned income of a few hundred thousand dollars or less (i.e. the bottom 95% of income earners).
That's what I'm saying, they pretend that the only way to fix SS is to cut services/replace it, because actually fixing it without cuts would involve removing the lobbyhole/cap that makes their rate close to zero.
I am a non billionaire and I would prefer Social Security to go away.
Mathematically, there is no alternative to the purchasing power of my Social Security benefits being reduced, simply due to the changes in the population age histogram.
It has to become more and more of a wealth transfer from the working to non working, which means my kids will benefit less and less from their work.
The reason we have social security like it is is twofold: 1) current retirees are paid directly from our contributions. There is no pot of money to be invested and 2) we want to be able to guarantee a defined benefit that is not below a certain number. You can't do that with the market.
Between the pyramid scheme nature of social security, the high inflation potential of the USD, and the ability for politicians to leverage social security for short term approval boosts
You definitely can't do it with the government either...
I think it really speaks volumes that they only thing you have on Obama is that he spent $70M with Russia to get astronauts to the ISS in an effort to show them that we could be partners (versus them lose a million people in a war with Ukraine).
> Elon has control and optimizes for cool shit and going to Mars
This trope needs to die. SpaceX has no plans to go to Mars. Elon meanwhile regularly says forward looking stuff to attempt to justify the lofty valuations of his companies. Let's just say there is a ... mixed track record on these proclamations (Full self driving, Hyperloop anyone?)
This trope has to die. SpaceX Starship design is optimized for Mars (instead of Blue Origin NG) and the gigantic Starship Factory and multiple launch pads under construction in Texas, Florida and Louisiana (plus potentially foreign countries) only make sense with Mars.
While yes, I agree Mars appears to have been Musk's long term goals:
> the gigantic Starship Factory and multiple launch pads under construction in Texas, Florida and Louisiana (plus potentially foreign countries) only make sense with Mars.
There's a few other things that also make sense as use-cases for that infrastructure. Orbital manufacturing is already starting to get interesting. I don't want to bet either way on space-based data centres, the research I've seen from Google says that makes sense at $200/kg which Starship can only reach if SpaceX solves re-use and that's clearly difficult but I don't want to say impossible.
The Antarctica population peaks at about 5,000, which is a paradise compared to Mars, with drinkable water and breathable air. It even has naturally occurring food! You can get there with a mere boat!
One million people on Mars within our lifetimes is a total fantasy. Like the Nigerian Prince emails, its main purpose is to identify marks.
> Like the Nigerian Prince emails, its main purpose is to identify marks.
I may be overly-generous to the guy (bad habit, billionaires don't need or benefit from best-faith interpretations of the stuff they do, leads to sycophancy), but I think this may be more like grandiose delusion than a 419 scam.
The continual promises of full-self-driving, however, those definitely seem like a 419: up-front fees for promises never delivered on, repeated again with newer better hardware. What version is the hardware on now?
> yet agreeing to only get paid when he does go to Mars.
He already owns hundreds of billions of dollars worth of SpaceX. He "gets paid" whether or not these goals are achieved (a million people on mars definitely won't be achieved this century, as the place is fucking awful; one thousand is vanishingly unlikely, one million is flat-out not happening). In fact, hyping the company up ahead of IPO gets him paid, to the tune of thousands of working people's lifetime earnings.
> a million people on mars definitely won't be achieved this century, as the place is fucking awful
Mars could make for an interesting prison, though. Like the Australia of two centuries ago. If nobody volunteers to live there I wouldn't put it past Musk to meet his target that way.
Hmm, why would a guy who is best known for spectacularly lying to boost his stock price do a spectacular lie? I do wonder… it’s almost like he wants to value the companies like they already achieved these impossible feats, so he can boost his net worth.
But it isn’t like he lied about full self driving for over a decade and then recently admitted none of his cars that people bought for that promise will be able to do that or anything…
> would constitute the most management-favorable governance structure ever brought to the U.S. public markets at this scale
The "at this scale" is doing a lot of work here. The SpaceX IPO will be $1.5T to $2T, and the next highest IPO ever on the US public markets was Alibaba at $231B. This is so far outside the previous scale that their statement would be true even if EVERY other public company was structured in the same way.
Worldwide, the five highest have been Saudi Aramco, NTT, Alibaba, Facebook, and Uber, at 1.7T, 300B, 231B, 104B, and 75B. Note the outlier, here, which was not on the US public market, AND has a very similar tiny float.
If you go by capital raised, it's not quite as stark, but it's still quite different in the US market: 25B raised by Alibaba, the previous high, compared to 75B expected for SpaceX according to the article. The point that SpaceX isn't at the same scale regardless of governance is still pretty good, I think.
> The New York and California pension systems would become holders of SpaceX shares through their passive allocations if the company is admitted to major U.S. stock indexes.
> The officials… objected to the amount of power the board has given Musk over the company, including:
- voting control over the stock,
- veto power over his own removal as CEO, and
- protections from litigation, including mandatory arbitration for SpaceX shareholder claims.
> …
> In their letter, the pension leaders urged SpaceX to:
- adopt one-share, one-vote or sunset super-voting shares within seven years;
- install a majority-independent board and separate the CEO and chair roles;
- eliminate provisions protecting Musk from termination without his approval;
- scrap mandatory arbitration; and require independent approval of related-party transactions with Musk's other companies.
(Formatting mine; moved paragraph about becoming holders above the lists of concerns and recommendations.)
I’d love to hear one of you staunch capitalists tell me why the description of this persons control over 13,000+ employees is any different than a feudal “Lord”
Over the entire lifetime of SpaceX Nearly 100% of the revenue comes from the government
They pay gifts and tributes to the government
They spend an absurd amount of money on lobbying and writing laws to take monopoly control of the subsection of the market
What am I missing here? Pretty sure there’s Universal agreement that the feudal system is not something anybody should be promoting
The vast majority of those 13k workers are highly skilled and in very high demand. They could work elsewhere or start their own company. In addition, they are far better educated and have more welfare options than anyone living under a feudal system.
Oh yes the classic “but the standard of living has gone up and now people have televisions” argument
They are living under a feudal system
Any one of the 13,000 could be fired on whim of Musk and even if it was in error they would have months if ever to get restitution. The employees describe him as a “tyrant” that fires people based on ego
The fact that people aren’t dying of scurvy is all you’re pointing to?
Maybe you replied to the wrong comment? Peasants under a feudal lord couldn’t work elsewhere. If an engineer was fired from SpaceX they’d have another job before the end of the month… and if they didn’t then they wouldn’t starve to death because of welfare. That seems materially different.
Why lie about something that's easily proven false with a Google search?
Over last 5 years government revenue is under 25% and if you go off of last 2 years its closer to like 10-15% (and declining!) Starlink is the vast majority of spacex revenue
Every gov-tech company on the planet has a team of people hired and dedicated to suing the government via a well understood process that is intended to filter out organizations that do not have the financial capacity to deal with the government.
As an AF SES I owned $300 million worth of contracts for the Air Force starting in 2020 and by 2022 my acquisition portfolio for AFLMC was $6B yearly. Guess how many of those contracts had actual competition despite months of solicitation? Almost none because the FAR is written/updated by corporations such that the barriers to entry are impossible to meet.
Go tell me how quickly you can get a piece of software running on a govt network and come back to me and tell me that there’s equal competition.
You have no idea how much corruption is baked into the structure of government contracts.
The corruption is not that someone violated the acquisition system; the corruption is that the acquisition system legally converts concentrated contractor influence into unequal access, unequal rule-shaping power, and unequal probability of award.
The government was a customer that paid for a product/service. Are you saying all entities that sell to the government are being "propped up" by the government?
There are no non-corrupt government contractors if for no other reason then the government contracting market is not a open and free market it is regulated specifically by the federal acquisitions regulation which was in large part written and consistently adjusted by non-elected corporate leaders: https://www.jacksonlewis.com/insights/dod-seeks-contractors-...
It’s enough to show that they’re wrong - and if you guess wrong that they are lying, and they were just wrong in good faith, you’re much more likely to convince them (and others).
And, from the HN guidelines:
Be kind. Don't be snarky. Converse curiously; don't cross-examine. Edit out swipes.
…
Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize. Assume good faith.
Feudalism is a political system whereby land is granted to vassals on the conditional basis that they provide levy or taxes to their lord. While the system is notionally a reciprocal system (the fief is a conditional grant, both sides have obligations to each other), by comparing it with the dominant form of taxation that preceded and succeeded it--tax farming--it's fairly clear that the locus of power is decisively with the vassal here and not the liege. Whereas a state who engages in tax farming lets out a new contract every few years, and usually to the same people, a fief is an explicitly hereditary instrument that is abrogated by the liege only at great risk, since the power he has to enforce such a decision comes from his other vassals and his ability to personally persuade them of a course of action.
That is to say that the hallmark of a feudal society is one with very, very weak central authority and powerful local authorities, mediated by the personal interrelationships within and across different levels of authority. Apply that to your analysis of SpaceX and the mismatch is clear. In your analysis, SpaceX is an entity that is utterly dependent on the government for its existence, and need to invest a large amount of energy in acquiring the beneficence of said government. That's not the behavior associated with a feudal society but rather the absolutist monarchies that replaced them, pretty much the antithesis of a feudal society.
> That is to say that the hallmark of a feudal society is one with very, very weak central authority and powerful local authorities, mediated by the personal interrelationships within and across different levels of authority
This is precisely the state of affairs in the United States today. Where people get confused is that the idea of property being specific hectares of land rather than what property is at maximum is capitalism which is simply paper contracts and debt, per graeber
> In your analysis, SpaceX is an entity that is utterly dependent on the government for its existence, and need to invest a large amount of energy in acquiring the beneficence of said government. That's not the behavior associated with a feudal society
It is the behavior of a Lord.
The United States is not an absolute monarchy and it has a rotating set of governors
What doesn’t rotate are the capitalist leaders (investors) for the top 100 corporations and they are the actual governors of this society
Because they determine where capital flows they are the ones who you have to pay homage to in order to get property so that you can then become a Lord
I know few here will understand this, but trust me, from an older wiser very successful investor, do yourself a favor, get into the stock market early, no excuses. Pick companies you know will do well. You’ll be able to control your future. Spacex will create more millionaires than Tesla + Apple + Microsoft combined.
The SpaceX IPO may go down as one of the most manipulated in US history. I'd actually like to see the likes of Vanguard and Blackrock do is ignore the rules that will force passive funds to invest in SpaceX on a small float, creating passive funds with their own rules that won't invest in small floats. I know I'd move my money to more "total market" type funds that required their investments to be sufficiently liquid.
It may not even come to that. I think if large pension funds and the large mutual fund managers coming out and saying "we don't trust this process" will probably be sufficient pressure to change it.
There are two other issues with SpaceX in particular that kind of show just what a house of cards the Elon Empire is:
1. The whole xAI bailout. This isn't a new tactic. Elon did it with SolarCity where one of his companies bought another of his companies who owed a lot of money to yet another of his companies. Elon way overpaid for Twitter. Fidelity had slashed the valuation by as much as 80%. Elon rescued himself from a margin call on his Tesla shares by raising money for xAI and using that to buy Twitter. But now the xAI investors who (IMHO) felt fleeced had to be rescued and so SpaceX "bought" xAI.
So the problem is that I've seen reports that xAI is losing >$1B/month. That's a huge drain on SpaceX's estimated ~$15B of annual revenue where it's already losing money due to the Starship program cost and delays;
2. Allegedly, one of the biggest buyers of Cybertrucks is (drum roll please) SpaceX. So, again, one Elon company is rescuing another.
I have huge respect for what SpaceX achieved with Falcon 9 but honestly, I wouldn't touch any of this, as an investor, wtih a 10 foot barge pole. At least, not until the SpaceX float gets sufficiently large and the lock ups on selling expire so you get a true market picture of its value.
And I think passive investors need to rewrite their rules to do this too.
It's interesting how Musk has engaged in such a distracting lawsuit against openai while he also prepares for the largest deal of his life, and the largest IPO in history. Exceedingly generous of him.
They, and the S&P 500, need to declare that they will refuse to invest in it with this structure. Honestly, I'd like to see the S&P 500 also require two years of profit as a public company before investing as well.
> The New York and California pension systems would become holders of SpaceX shares through their passive allocations if the company is admitted to major U.S. stock indexes.
If they have discretion, these pensions can replicate the S&P500 minus SpaceX if they don't like SpaceX's governance.
If they're forced to passively hold precisely the S&P500 then shaddup and stop active managing.
True. But doing so would be a fair amount (by index standards) of overhead and hassle. Plus they'd get endless complaints any time the S&P500 was outperforming the "S&P 499" that they were using. Plus they'd put themselves in the crosshairs of a whole range of activists who wanted them to switch to an "S&P 498", or ...497, or ... - by excluding various other companies the activists didn't like.
> If they're forced to passively hold...
Their responsibility is managing their pension funds in the interests of their state, and their current & future retirees. Not pious adherence to passive indexing canon. Their calculus here might be to throw a small bone to the anti-Musk activists who are currently bothering them, while acquiring some "we tried!" butt-coverage for whenever Musk really goes off the rails. (And, obviously, trying to discourage other companies from using such control structures.)
I'd like to be able to invest in an "index minus certain companies which I choose" fund so that people can exclude companies that they don't like for whatever reason.
You can. A bunch of companies offer SMAs like this. It's a retail product, usually labeled as some smart tax loss harvesting atop the indices where you can denylist particular stocks.
> But doing so would be a fair amount (by index standards) of overhead and hassle.
Any product provider, like Blackrock, would jump at the opportunity to sell them an S&P499 given the scale of those pension funds.
> Plus they'd put themselves in the crosshairs of a whole range of activists...
Not to mention putting their own jobs on the line if SpaceX outperformed the rest of the index.
The first point, that an S&P499 is easy for them but they won't do it, means they have no conviction. The second point (where I agree with you), that it's obvious we-tried CYA lacking any real teeth that'll go nowhere, means they have no courage.
They're an asset manager: put your money where your mouth is. If their hypothesis is that SpaceX governance will be bad then short the bloody thing and use the proceeds to buy the S&P499. It's not a complicated trade given their industry position and ability to call third-party providers.
This is subjective, there are companies that are mostly an investment vehicle and companies that have a strong motivation to make changes in the world. Investors, especially passive investors like pension funds that are only interested in returns, should know in advance what they are getting into and decide if they want to buy shares or not; it should not be "I will buy shares and try to change the company".
I worked for a company where activist investors bought enough shares to have influence, then practically messed up with the company in a way that today, 10-15 years later, the company is a shadow of what it used to be - fell from top positions in Fortune 500, share price is lower in inflation-adjusted money, management is extremely politized and unprofessional, most professionals left or retired. I don't think this is what we want from SpaceX, in the end this is the company that moved the needle in space launches and cost per launch/kg, it's not a ketchup company that not too many people will cry about.
As investors for other people, the pension funds, have a fiduciary responsibility to ask questions. I don't care if Space X is changing the world or making potato chips for consumers.
If you read the article, they have concerns about the governance structure of Space X and the ability of investors to question what the company is doing.
There is the problem. The fund managers have legal requirements on what they invest in. They don't get a choice in some cases. Which means they sometimes are forced to invest in companies they don't like. (often they had input into the law in years past, but they never imaged this situation and so the law doesn't cover it)
> there are companies that are mostly an investment vehicle and companies that have a strong motivation to make changes in the world.
And there are companies that are mostly an investment vehicle whose leaders spin their self-serving decisions as necessary to make changes in the world. Some of them might even be right! (that their decisions are better in the long run, and that ceding more control to shareholders would lead to better short term outcomes but far worse long term outcomes).
Accredited investors did mind for the longest time; dual class shares were banned outright for like 40 years by the NYSE (and they'd declined to list individual companies before that because of investor outcry).
They only allowed them again in the 80s as part of the larger wave of "let's stop regulating capital".
For whatever reason, there are a few very successful businesses with super voting shares. If the alternative was to keep those businesses private, I do not know if that would have been better for the public.
Presumably, the market will price in the risks of super voting shares.
Only very successful CEOs can negotiate super voting shares. In this context "successful" means "runs very profitable company".
If you're crap CEO (your company is not very profitable) then investors won't say "sure, you're crap CEO but we'll give you a complete control so that you can continue to be crap CEO".
Only when you're very successful you can negotiate complete control (which investors don't want to give unless they think they'll make lots of money).
And the best predictor of future success is past success.
Therefore companies run by CEOs with super voting shares were successful in the past and are more likely to be successful in the future.
They make money by curating an index i.e. a list of companies and licensing that list to other companies for a fee.
If they pick good, profitable companies with great future, then the business continues. If not, the business fails.
So when you're debating "should/shouldn't", the only perspective is that of Nasdaq, the company, and they only question they "should" be interested in is: is SpaceX a good company with great feature that will make the list better.
The 6 month rule was created by Nasdaq, the company, in order to pick good companies. It's not a religion. It's not a suicide pact.
Therefore when faced with historic IPO (the largest IPO ever) it's a sign of good management that they are not applying the same rules to SpaceX (debuting at $1.75 Trillion) as they do to companies that IPO at $100 million.
Option 3: Elon takes over the Federal government, causes some major security incidents, and cuts off USAID stranding a number of Federal employees and cutting off short term food support for hundreds of thousands of people depending on it.
Option 4: Elon takes over a social network and tries to Orbanize the West with it.
>> In addition, we are unable to directly update our analysis using the previous approach given the complexity of using USASpending.gov and SF133 report data from the Office of Management and Budget (OMB) to update from foreignassistance.gov because ID codes do not match up.
They can't really tie the cuts to actually useful programs. That was a big reason for the cuts.
I deliberately undersold the claim because this is one of those things that's so big and yet so invisible in the news and discourse. If we had 100k people die in a city anywhere on the globe due to, say, an earthquake, it would be headlines. These people just .. cease to exist, unremarked.
(It does raise questions about how Elon might manage the food supply to Mars, if that ever happened)
> (It does raise questions about how Elon might manage the food supply to Mars, if that ever happened)
Indeed.
One of the various things which made me down-rate my estimation for Musk's competence was him suggesting someone may want to run the first pizza restaurant on Mars. Like, sure, someone will, but this is so far down the chain of necessary tech it's like me personally pontificating about what I'll do when I'm as rich as Musk is today: If he's thinking about pizza restaurants, one has to ask if anyone's bothered with figuring out how to clean the perchlorates from the soil to get the minerals needed to fertilise the wheat to make the dough for the pizza.
I've yet to see any sign SpaceX have even built a machine for doing the Sabatier process on Mars, which itself is a prerequisite for anything like a Starship-based Mars colony even getting started, though at least Musk has gotten as far as talking about it.
Investors should optimize for long term growth, yes. The problem is Management (CEO, etc.) will get fired if things look bad. So the incentive for management, if they can get fired, is to ensure monotonic increase. Sometimes — especially for a rocket company! — you should be allowed to fail for a few years. You should be allowed to take big swings, without risk of getting fired. If Elon knows he is in control, he can think long-term. If he's at risk of being let go if things look bleak, his optimization function will be different (and, IMO, net worse for society).
People raised on a diet of social democracy propaganda will kick and scream when you tell them people aren't equal and that decisions should be limited to exceptional individuals and not the mob. If you don't like the SpaceX structure don't invest. It's that easy. I'd rather give Elon the reins and see what happens. He managed to make electric cars viable and starlink is an incredible technical achievement. There's so much cool engineering to be done and only Elon seems to be capable of half of it. One person with a vision is more valuable than a million shareholders with a slight level of financial investment.
Elon has control and optimizes for ability to abuse the corporate entity as much as possible. Expects other people to pay for issues he caused, causes as much harm as possible to feel as a manly man with no empathy and his friends in government and Epstein circles back all that up.
You must be living under a rock if you think all super rich billionaires like Musk are doing is "abuses the corporate entity a bit, as a piggy bank, or whatever"
You can either concentrate power or disperse it. NASA, Boing, etc. is what happens when you disperse it. Committees aren't bold. The reason SpaceX exists is because Elon willed it into existence.
> The reason SpaceX exists is because Elon willed it into existence.
And then sued the government into considering using them.
He's also setting the rules so shareholders can't sue him.
Concentrated power can indeed get a lot more done at speed; it does not say anything about if the things being done more of and faster are sensible, and while Musk used to make bets that seemed to be risky to him but with positive expected return, he's now openly talking about things like wanting the Tesla "robot army" under his control and the chance of AI killing everyone, where it becomes everyone else's problem if he's wrong.
According to Gemini, index funds in total own about 20% of the value on the Nasdaq 100 index. So if you list a new company in Nasdaq, typically they have to buy 20% of it. But only about 5% of SpaceX will floated, which means there won't be enough shares to go round.
They are doing a bunch of changes to rules to try and make this not completely break, but even if it doesn't, it feels like index funds are going to have to buy a lot of the SpaceX float, which is going to make it look like a successful IPO even if hardly any real investors buy it.
I'm more worried about the early inclusion into the Nasdaq 100 index and if other indexes will follow. I don't want my retirement to be passively buying Elon's latest shell game.
Yeah this is pretty shady. The S&P 500 in particular has fairly strict criteria (e.g. 4 consecutive quarters of profitability) and those criteria exist for a reason. They made me more comfortable buying the S&P 500 knowing I'm not buying pre-revenue companies. This is a bad precedent to set just to please Elon.
I'm a bit out of the loop, but has SpaceX not been profitable for the last 4 quarters? I understand they're investing a lot into R&D for Starship but I was under the impression they've been making a killing on Starlink.
Maybe, but since then it has absorbed xAI and Twitter, neither of which are known for producing money.
Starlink itself is profitable but the insane valuation they're trying to get for the IPO is based on an assumed continued massive growth of users - and even then I don't think Starlink by itself makes SpaceX a trillion dollar company.
If Musk personally wasn't completely toxic worldwide, and if there wasn't all the other new space companies noticing the Egg of Columbus* that is cheap rockets and the potential for comm sat constellations that launch prices enable, I could believe 100e6 people would buy a $50/month service. A common rating for valuation is profit over 20 years, that revenue (not profit, IDK the margin) would be $1.2T.
* Egg of Columbus: https://en.wikipedia.org/wiki/Egg_of_Columbus
Many seem to also be doing this with androids around the time he started talking about them, hence how we can buy them and put them to work even though Optimus still hasn't launched yet.
Past performance as a company is like 20% of the concern here.
The concern is ~80% that a brand new stock enters the market & immediately has to be bought by everyone. The market has no time to adjust & settle.
This is fleecing everyone & it's entirely unclear under what madness this would ever have been considered.
There's so many irregularities and abnormalities being considered here, and all of them seem like pretty straightforward safeguards. It feels like nothing short of a conspiracy that so many norms would be pushed aside to consider listing spacex so quickly in so many indexes. "The proposal could also remove the minimum Investable Weight Factor requirement for megacap companies." For fuck sake! https://x.com/Benzinga/status/2050244492335206911
This is why he (and other billionaires) are pining to get Social Security replaced with an indexed based retirement fund?
Absolutely, that's the main reason there's been a push for that for decades. It's a giant pile of poor people's money that rich people can't easily skim from, and they'd really, really like to. Once it's "in the market" they gain all kinds of options for turning some of that money into their money, some immediately, some with tweaks to laws or policy.
That’s literally not how it works. You buy a share of stock and participate in their gains. For example, I owned a bunch of Tesla stock since around 2017. Now I have a ton in the stock as well as a new house and a model s plaid thanks to their greatness. Did the same with Apple, that is my retirement and travel fund. it ain’t hard.
Way better returns when you take charge of your investments rather than bitching about the government, anyone can be a millionaire with minimal effort, just being smart.
> Social Security replaced with an index
Yes please!
I learned just how bad of a deal Social Security is when an employer (a bootstrapped startup) offered a predatory 401k plan. It was free for my employer to setup but the employees were stuck with extremely high fees. It was so bad that John Oliver made an episode[0] about it!
Yet, even for the worst 401K plan in America, the projected retirement returns were 1600% of the Social Security returns. Even America's worst 401K would be better for the average consumer than the federal debacle
Uncle Sam should sunset SSI and allow citizens to select from and move freely between a number of accredited funds.
[0]: https://www.youtube.com/watch?v=gvZSpET11ZY
Are you aware that SSI is an insurance (or lifetime annuity) not an investment?
SSI covers disability, and supplements income no matter what happens. Disability? You're covered. Live to 105? You're covered. Market dips 50% in a period you have a lot of expenses? Your benefits are unaffected.
Tax advantaged 401k is already the vehicle of choice for retirement funds.
1600% higher returns can cover a lot of eventualities.
it doesn't cover you getting disabled so you can't work anymore at the age of 30 after working 8 years.
1600% higher return is great when you work from yours 20s to your 50s/60s and can essentially self insure yourself at that point with it, but as the person you are responding to you is (I believe) trying to say, that's not everyone.
Fair, but given that we're talking about a hypothetical government program, "index-based retirement fund" doesn't imply you're the only one contributing to said fund.
Absolutely!
Who knows, I mean it would certainly make it easier for them to turn the entire population into their bag holders. Don't even have to hype the company any more or spin up a bunch of bullshit about space.
Not to mention that they always harp on it being supposedly unsustainable and insolvent, while deliberately not mentioning that it is solely because the social security is the most regressive tax, where the more you earn the lower your rate.
If it was a flat tax where everyone paid the same percentage of instead of a regressive tax where only working people pay the rate, then social security would be well funded.
Obviously they don’t want to pay the same tax rate as working people, so theyd rather get rid of social security instead.
This is not correct. For people who earn less than the SS wage cap ($184.5k in 2026), Social Security is a progressive tax due to the bend points in the benefit formula. You explicitly get less benefit for each additional dollar you pay in tax.
https://www.ssa.gov/oact/cola/bendpoints.html
But every dollar of income earned over the SS wage cap reduces effective tax rate. The more you earn, the less the effective Social Security tax rate is for you. At Elon Musk levels, it rounds down to zero. Therefore, there would be no motivation for super rich people to get rid of social security.
The only material reduction in tax rate would be for those relying on annual earned income of a few hundred thousand dollars or less (i.e. the bottom 95% of income earners).
That's what I'm saying, they pretend that the only way to fix SS is to cut services/replace it, because actually fixing it without cuts would involve removing the lobbyhole/cap that makes their rate close to zero.
Not sure why you are getting downvoted. This is exactly right. They want a constant source of buying that they can steer investments into.
I am a non billionaire and I would prefer Social Security to go away.
Mathematically, there is no alternative to the purchasing power of my Social Security benefits being reduced, simply due to the changes in the population age histogram.
It has to become more and more of a wealth transfer from the working to non working, which means my kids will benefit less and less from their work.
Pretty much everyone already has an index based retirement fund.
The reason we have social security like it is is twofold: 1) current retirees are paid directly from our contributions. There is no pot of money to be invested and 2) we want to be able to guarantee a defined benefit that is not below a certain number. You can't do that with the market.
Between the pyramid scheme nature of social security, the high inflation potential of the USD, and the ability for politicians to leverage social security for short term approval boosts
You definitely can't do it with the government either...
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I think it really speaks volumes that they only thing you have on Obama is that he spent $70M with Russia to get astronauts to the ISS in an effort to show them that we could be partners (versus them lose a million people in a war with Ukraine).
I made a ton off of Tesla, expecting to do the same with spacex.
> Elon has control and optimizes for cool shit and going to Mars
This trope needs to die. SpaceX has no plans to go to Mars. Elon meanwhile regularly says forward looking stuff to attempt to justify the lofty valuations of his companies. Let's just say there is a ... mixed track record on these proclamations (Full self driving, Hyperloop anyone?)
This trope has to die. SpaceX Starship design is optimized for Mars (instead of Blue Origin NG) and the gigantic Starship Factory and multiple launch pads under construction in Texas, Florida and Louisiana (plus potentially foreign countries) only make sense with Mars.
While yes, I agree Mars appears to have been Musk's long term goals:
> the gigantic Starship Factory and multiple launch pads under construction in Texas, Florida and Louisiana (plus potentially foreign countries) only make sense with Mars.
There's a few other things that also make sense as use-cases for that infrastructure. Orbital manufacturing is already starting to get interesting. I don't want to bet either way on space-based data centres, the research I've seen from Google says that makes sense at $200/kg which Starship can only reach if SpaceX solves re-use and that's clearly difficult but I don't want to say impossible.
Or the attempt to Kessler Syndrome and Neuromancer it up as fast as possible by trying to send up 1m satellites. https://spacenews.com/spacex-files-plans-for-million-satelli...
Elon put out a musing akin to a blog post on Hyperloop.
Musk just tied his compensation to having 1 million people on Mars.
https://www.reuters.com/sustainability/boards-policy-regulat...
Do explain to me his evil plan of becoming rich by lying about going to Mars and yet agreeing to only get paid when he does go to Mars.
We currently have 0 people on the moon.
The Antarctica population peaks at about 5,000, which is a paradise compared to Mars, with drinkable water and breathable air. It even has naturally occurring food! You can get there with a mere boat!
One million people on Mars within our lifetimes is a total fantasy. Like the Nigerian Prince emails, its main purpose is to identify marks.
> Like the Nigerian Prince emails, its main purpose is to identify marks.
I may be overly-generous to the guy (bad habit, billionaires don't need or benefit from best-faith interpretations of the stuff they do, leads to sycophancy), but I think this may be more like grandiose delusion than a 419 scam.
The continual promises of full-self-driving, however, those definitely seem like a 419: up-front fees for promises never delivered on, repeated again with newer better hardware. What version is the hardware on now?
> yet agreeing to only get paid when he does go to Mars.
He already owns hundreds of billions of dollars worth of SpaceX. He "gets paid" whether or not these goals are achieved (a million people on mars definitely won't be achieved this century, as the place is fucking awful; one thousand is vanishingly unlikely, one million is flat-out not happening). In fact, hyping the company up ahead of IPO gets him paid, to the tune of thousands of working people's lifetime earnings.
> a million people on mars definitely won't be achieved this century, as the place is fucking awful
Mars could make for an interesting prison, though. Like the Australia of two centuries ago. If nobody volunteers to live there I wouldn't put it past Musk to meet his target that way.
People already lived in Australia before Britain shipped its prisoners there. It was habitable.
Nobody is spending trillions to build a prison on another planet.
Subterfuge so simple it is designed to target only the most foolish.
Hmm, why would a guy who is best known for spectacularly lying to boost his stock price do a spectacular lie? I do wonder… it’s almost like he wants to value the companies like they already achieved these impossible feats, so he can boost his net worth.
But it isn’t like he lied about full self driving for over a decade and then recently admitted none of his cars that people bought for that promise will be able to do that or anything…
Sure, until he changes that plan to something else that is 5 years out in the future next year.
*part of his compensation
The rest of his compensation isn't tied to that, but is tied to the bubble and hype that the lie of Mars living helps prop up.
Does Elon need the money though or does Elon need the valuation? Do you think he actually needs that paycheck to actually happen?
good, pensions should not go into companies where you have no control.
That's not an investment, it's a wealth transfer to original investors at a price they dictate.
without control you can get original founder deciding to build cybertrucks and associating your brand with nazis.
These should not be included in indexes either.
> would constitute the most management-favorable governance structure ever brought to the U.S. public markets at this scale
The "at this scale" is doing a lot of work here. The SpaceX IPO will be $1.5T to $2T, and the next highest IPO ever on the US public markets was Alibaba at $231B. This is so far outside the previous scale that their statement would be true even if EVERY other public company was structured in the same way.
Worldwide, the five highest have been Saudi Aramco, NTT, Alibaba, Facebook, and Uber, at 1.7T, 300B, 231B, 104B, and 75B. Note the outlier, here, which was not on the US public market, AND has a very similar tiny float.
If you go by capital raised, it's not quite as stark, but it's still quite different in the US market: 25B raised by Alibaba, the previous high, compared to 75B expected for SpaceX according to the article. The point that SpaceX isn't at the same scale regardless of governance is still pretty good, I think.
Same article syndicated on msn.com, without paywall: https://www.msn.com/en-us/money/companies/new-york-californi...
The issues:
> The New York and California pension systems would become holders of SpaceX shares through their passive allocations if the company is admitted to major U.S. stock indexes.
> The officials… objected to the amount of power the board has given Musk over the company, including:
- voting control over the stock,
- veto power over his own removal as CEO, and
- protections from litigation, including mandatory arbitration for SpaceX shareholder claims.
> …
> In their letter, the pension leaders urged SpaceX to:
- adopt one-share, one-vote or sunset super-voting shares within seven years;
- install a majority-independent board and separate the CEO and chair roles;
- eliminate provisions protecting Musk from termination without his approval;
- scrap mandatory arbitration; and require independent approval of related-party transactions with Musk's other companies.
(Formatting mine; moved paragraph about becoming holders above the lists of concerns and recommendations.)
I’d love to hear one of you staunch capitalists tell me why the description of this persons control over 13,000+ employees is any different than a feudal “Lord”
Over the entire lifetime of SpaceX Nearly 100% of the revenue comes from the government
They pay gifts and tributes to the government
They spend an absurd amount of money on lobbying and writing laws to take monopoly control of the subsection of the market
What am I missing here? Pretty sure there’s Universal agreement that the feudal system is not something anybody should be promoting
The vast majority of those 13k workers are highly skilled and in very high demand. They could work elsewhere or start their own company. In addition, they are far better educated and have more welfare options than anyone living under a feudal system.
Oh yes the classic “but the standard of living has gone up and now people have televisions” argument
They are living under a feudal system
Any one of the 13,000 could be fired on whim of Musk and even if it was in error they would have months if ever to get restitution. The employees describe him as a “tyrant” that fires people based on ego
The fact that people aren’t dying of scurvy is all you’re pointing to?
https://www.businessinsider.com/tesla-employee-survey-elon-m...
Maybe you replied to the wrong comment? Peasants under a feudal lord couldn’t work elsewhere. If an engineer was fired from SpaceX they’d have another job before the end of the month… and if they didn’t then they wouldn’t starve to death because of welfare. That seems materially different.
> If an engineer was fired from SpaceX they’d have another job before the end of the month
This is just wrong
Have you not been paying attention to the last five years of layoffs and a decimated technology labor market?
Why lie about something that's easily proven false with a Google search? Over last 5 years government revenue is under 25% and if you go off of last 2 years its closer to like 10-15% (and declining!) Starlink is the vast majority of spacex revenue
The company was entirely dependent on government funding for its first 17 years
that’s undeniable
Starlink would not exist if the government did not prop up the whole thing in the beginning
This is precisely how the Commons get privatized and your ignorance around this topic is unbelievable
Unreal how simplistic you people are
SpaceX had to literally sue the military to even be allowed to bid for projects. And won. And then won the contracts.
The guy who landed on the Moon testified in congress opposing giving SpaceX any money.
The government wanted nothing to do with SpaceX.
SpaceX won the contracts despite the government, not because. They won the contracts because they offered the best product at the lowest price.
> SpaceX had to literally sue the military to even be allowed to bid for projects. And won. And then won the contracts.
This is literally how government contracts work on massive multibillion dollar systems.
Palantir famously did this with the Army: https://www.defensenews.com/land/2019/03/29/palantir-who-suc...
Every gov-tech company on the planet has a team of people hired and dedicated to suing the government via a well understood process that is intended to filter out organizations that do not have the financial capacity to deal with the government.
As an AF SES I owned $300 million worth of contracts for the Air Force starting in 2020 and by 2022 my acquisition portfolio for AFLMC was $6B yearly. Guess how many of those contracts had actual competition despite months of solicitation? Almost none because the FAR is written/updated by corporations such that the barriers to entry are impossible to meet.
Go tell me how quickly you can get a piece of software running on a govt network and come back to me and tell me that there’s equal competition.
You have no idea how much corruption is baked into the structure of government contracts.
The corruption is not that someone violated the acquisition system; the corruption is that the acquisition system legally converts concentrated contractor influence into unequal access, unequal rule-shaping power, and unequal probability of award.
The government was a customer that paid for a product/service. Are you saying all entities that sell to the government are being "propped up" by the government?
Yes
There are no non-corrupt government contractors if for no other reason then the government contracting market is not a open and free market it is regulated specifically by the federal acquisitions regulation which was in large part written and consistently adjusted by non-elected corporate leaders: https://www.jacksonlewis.com/insights/dod-seeks-contractors-...
Read war is a racket and it will be clear: https://archive.org/details/WarIsARacket
You don’t need to accuse someone of lying when correcting them.
You need if they are doing it on purpose.
Actually you don’t. Why are you lying about this?
It’s enough to show that they’re wrong - and if you guess wrong that they are lying, and they were just wrong in good faith, you’re much more likely to convince them (and others).
And, from the HN guidelines:
Be kind. Don't be snarky. Converse curiously; don't cross-examine. Edit out swipes.
…
Please respond to the strongest plausible interpretation of what someone says, not a weaker one that's easier to criticize. Assume good faith.
They’re just fanboy for these mini dictators because they view themselves as a future one
Feudalism is a political system whereby land is granted to vassals on the conditional basis that they provide levy or taxes to their lord. While the system is notionally a reciprocal system (the fief is a conditional grant, both sides have obligations to each other), by comparing it with the dominant form of taxation that preceded and succeeded it--tax farming--it's fairly clear that the locus of power is decisively with the vassal here and not the liege. Whereas a state who engages in tax farming lets out a new contract every few years, and usually to the same people, a fief is an explicitly hereditary instrument that is abrogated by the liege only at great risk, since the power he has to enforce such a decision comes from his other vassals and his ability to personally persuade them of a course of action.
That is to say that the hallmark of a feudal society is one with very, very weak central authority and powerful local authorities, mediated by the personal interrelationships within and across different levels of authority. Apply that to your analysis of SpaceX and the mismatch is clear. In your analysis, SpaceX is an entity that is utterly dependent on the government for its existence, and need to invest a large amount of energy in acquiring the beneficence of said government. That's not the behavior associated with a feudal society but rather the absolutist monarchies that replaced them, pretty much the antithesis of a feudal society.
> That is to say that the hallmark of a feudal society is one with very, very weak central authority and powerful local authorities, mediated by the personal interrelationships within and across different levels of authority
This is precisely the state of affairs in the United States today. Where people get confused is that the idea of property being specific hectares of land rather than what property is at maximum is capitalism which is simply paper contracts and debt, per graeber
> In your analysis, SpaceX is an entity that is utterly dependent on the government for its existence, and need to invest a large amount of energy in acquiring the beneficence of said government. That's not the behavior associated with a feudal society
It is the behavior of a Lord.
The United States is not an absolute monarchy and it has a rotating set of governors
What doesn’t rotate are the capitalist leaders (investors) for the top 100 corporations and they are the actual governors of this society
Because they determine where capital flows they are the ones who you have to pay homage to in order to get property so that you can then become a Lord
I know few here will understand this, but trust me, from an older wiser very successful investor, do yourself a favor, get into the stock market early, no excuses. Pick companies you know will do well. You’ll be able to control your future. Spacex will create more millionaires than Tesla + Apple + Microsoft combined.
The SpaceX IPO may go down as one of the most manipulated in US history. I'd actually like to see the likes of Vanguard and Blackrock do is ignore the rules that will force passive funds to invest in SpaceX on a small float, creating passive funds with their own rules that won't invest in small floats. I know I'd move my money to more "total market" type funds that required their investments to be sufficiently liquid.
It may not even come to that. I think if large pension funds and the large mutual fund managers coming out and saying "we don't trust this process" will probably be sufficient pressure to change it.
There are two other issues with SpaceX in particular that kind of show just what a house of cards the Elon Empire is:
1. The whole xAI bailout. This isn't a new tactic. Elon did it with SolarCity where one of his companies bought another of his companies who owed a lot of money to yet another of his companies. Elon way overpaid for Twitter. Fidelity had slashed the valuation by as much as 80%. Elon rescued himself from a margin call on his Tesla shares by raising money for xAI and using that to buy Twitter. But now the xAI investors who (IMHO) felt fleeced had to be rescued and so SpaceX "bought" xAI.
So the problem is that I've seen reports that xAI is losing >$1B/month. That's a huge drain on SpaceX's estimated ~$15B of annual revenue where it's already losing money due to the Starship program cost and delays;
2. Allegedly, one of the biggest buyers of Cybertrucks is (drum roll please) SpaceX. So, again, one Elon company is rescuing another.
I have huge respect for what SpaceX achieved with Falcon 9 but honestly, I wouldn't touch any of this, as an investor, wtih a 10 foot barge pole. At least, not until the SpaceX float gets sufficiently large and the lock ups on selling expire so you get a true market picture of its value.
And I think passive investors need to rewrite their rules to do this too.
It's interesting how Musk has engaged in such a distracting lawsuit against openai while he also prepares for the largest deal of his life, and the largest IPO in history. Exceedingly generous of him.
They, and the S&P 500, need to declare that they will refuse to invest in it with this structure. Honestly, I'd like to see the S&P 500 also require two years of profit as a public company before investing as well.
> The New York and California pension systems would become holders of SpaceX shares through their passive allocations if the company is admitted to major U.S. stock indexes.
If they have discretion, these pensions can replicate the S&P500 minus SpaceX if they don't like SpaceX's governance.
If they're forced to passively hold precisely the S&P500 then shaddup and stop active managing.
Next.
> If they have discretion...
True. But doing so would be a fair amount (by index standards) of overhead and hassle. Plus they'd get endless complaints any time the S&P500 was outperforming the "S&P 499" that they were using. Plus they'd put themselves in the crosshairs of a whole range of activists who wanted them to switch to an "S&P 498", or ...497, or ... - by excluding various other companies the activists didn't like.
> If they're forced to passively hold...
Their responsibility is managing their pension funds in the interests of their state, and their current & future retirees. Not pious adherence to passive indexing canon. Their calculus here might be to throw a small bone to the anti-Musk activists who are currently bothering them, while acquiring some "we tried!" butt-coverage for whenever Musk really goes off the rails. (And, obviously, trying to discourage other companies from using such control structures.)
I'd like to be able to invest in an "index minus certain companies which I choose" fund so that people can exclude companies that they don't like for whatever reason.
You can. A bunch of companies offer SMAs like this. It's a retail product, usually labeled as some smart tax loss harvesting atop the indices where you can denylist particular stocks.
Fidelity offers one: https://www.fidelity.com/managed-accounts/separately-managed...
It'd probably take you an afternoon worth of time to research then enact it.
> But doing so would be a fair amount (by index standards) of overhead and hassle.
Any product provider, like Blackrock, would jump at the opportunity to sell them an S&P499 given the scale of those pension funds.
> Plus they'd put themselves in the crosshairs of a whole range of activists...
Not to mention putting their own jobs on the line if SpaceX outperformed the rest of the index.
The first point, that an S&P499 is easy for them but they won't do it, means they have no conviction. The second point (where I agree with you), that it's obvious we-tried CYA lacking any real teeth that'll go nowhere, means they have no courage.
They're an asset manager: put your money where your mouth is. If their hypothesis is that SpaceX governance will be bad then short the bloody thing and use the proceeds to buy the S&P499. It's not a complicated trade given their industry position and ability to call third-party providers.
This is subjective, there are companies that are mostly an investment vehicle and companies that have a strong motivation to make changes in the world. Investors, especially passive investors like pension funds that are only interested in returns, should know in advance what they are getting into and decide if they want to buy shares or not; it should not be "I will buy shares and try to change the company".
I worked for a company where activist investors bought enough shares to have influence, then practically messed up with the company in a way that today, 10-15 years later, the company is a shadow of what it used to be - fell from top positions in Fortune 500, share price is lower in inflation-adjusted money, management is extremely politized and unprofessional, most professionals left or retired. I don't think this is what we want from SpaceX, in the end this is the company that moved the needle in space launches and cost per launch/kg, it's not a ketchup company that not too many people will cry about.
As investors for other people, the pension funds, have a fiduciary responsibility to ask questions. I don't care if Space X is changing the world or making potato chips for consumers.
If you read the article, they have concerns about the governance structure of Space X and the ability of investors to question what the company is doing.
I think the investors should NOT invest if they don't like the governance structure. This is calling "voting with your wallet".
There is the problem. The fund managers have legal requirements on what they invest in. They don't get a choice in some cases. Which means they sometimes are forced to invest in companies they don't like. (often they had input into the law in years past, but they never imaged this situation and so the law doesn't cover it)
> there are companies that are mostly an investment vehicle and companies that have a strong motivation to make changes in the world.
And there are companies that are mostly an investment vehicle whose leaders spin their self-serving decisions as necessary to make changes in the world. Some of them might even be right! (that their decisions are better in the long run, and that ceding more control to shareholders would lead to better short term outcomes but far worse long term outcomes).
> it should not be "I will buy shares and try to change the company".
it should not be “I will go public and try to stop the public from exercising their rights as shareholders”...just stay private.
Or, if those business owners want to retain their right to make all the decisions, they should structure the shares like Meta or Alphabet.
Super voting shares were a mistake to allow in general.
Why? Accredited investors don't seem to mind, and they should be able to judge the pluses and the minuses.
Accredited investors did mind for the longest time; dual class shares were banned outright for like 40 years by the NYSE (and they'd declined to list individual companies before that because of investor outcry).
They only allowed them again in the 80s as part of the larger wave of "let's stop regulating capital".
For whatever reason, there are a few very successful businesses with super voting shares. If the alternative was to keep those businesses private, I do not know if that would have been better for the public.
Presumably, the market will price in the risks of super voting shares.
> For whatever reason
The reason is not "whatever".
Only very successful CEOs can negotiate super voting shares. In this context "successful" means "runs very profitable company".
If you're crap CEO (your company is not very profitable) then investors won't say "sure, you're crap CEO but we'll give you a complete control so that you can continue to be crap CEO".
Only when you're very successful you can negotiate complete control (which investors don't want to give unless they think they'll make lots of money).
And the best predictor of future success is past success.
Therefore companies run by CEOs with super voting shares were successful in the past and are more likely to be successful in the future.
More like if these funds have an issue with the management structure they should just not buy the shares.
Maybe Nasdaq shouldn't put Space X in the Nasdaq-100 index fund 15 trading days later vs six months.
Nasdaq is a company that exists to make money.
They make money by curating an index i.e. a list of companies and licensing that list to other companies for a fee.
If they pick good, profitable companies with great future, then the business continues. If not, the business fails.
So when you're debating "should/shouldn't", the only perspective is that of Nasdaq, the company, and they only question they "should" be interested in is: is SpaceX a good company with great feature that will make the list better.
The 6 month rule was created by Nasdaq, the company, in order to pick good companies. It's not a religion. It's not a suicide pact.
Therefore when faced with historic IPO (the largest IPO ever) it's a sign of good management that they are not applying the same rules to SpaceX (debuting at $1.75 Trillion) as they do to companies that IPO at $100 million.
[dead]
Then don’t buy the stock
Option 1: Elon has control and optimizes for cool shit and going to Mars, and maybe abuses the corporate entity a bit, as a piggy bank, or whatever.
Option 2: the market has control, and optimizes for short term starlink revenue and the launch business.
I prefer Option 1.
Option 3: Elon takes over the Federal government, causes some major security incidents, and cuts off USAID stranding a number of Federal employees and cutting off short term food support for hundreds of thousands of people depending on it.
Option 4: Elon takes over a social network and tries to Orbanize the West with it.
It’s not just cutting food support. Hundreds of thousands of people have died because we cut USAID.
https://www.cgdev.org/blog/update-lives-lost-usaid-cuts
>> In addition, we are unable to directly update our analysis using the previous approach given the complexity of using USASpending.gov and SF133 report data from the Office of Management and Budget (OMB) to update from foreignassistance.gov because ID codes do not match up.
They can't really tie the cuts to actually useful programs. That was a big reason for the cuts.
[dead]
I deliberately undersold the claim because this is one of those things that's so big and yet so invisible in the news and discourse. If we had 100k people die in a city anywhere on the globe due to, say, an earthquake, it would be headlines. These people just .. cease to exist, unremarked.
(It does raise questions about how Elon might manage the food supply to Mars, if that ever happened)
> (It does raise questions about how Elon might manage the food supply to Mars, if that ever happened)
Indeed.
One of the various things which made me down-rate my estimation for Musk's competence was him suggesting someone may want to run the first pizza restaurant on Mars. Like, sure, someone will, but this is so far down the chain of necessary tech it's like me personally pontificating about what I'll do when I'm as rich as Musk is today: If he's thinking about pizza restaurants, one has to ask if anyone's bothered with figuring out how to clean the perchlorates from the soil to get the minerals needed to fertilise the wheat to make the dough for the pizza.
I've yet to see any sign SpaceX have even built a machine for doing the Sabatier process on Mars, which itself is a prerequisite for anything like a Starship-based Mars colony even getting started, though at least Musk has gotten as far as talking about it.
If you want Option 1, then stay a private company.
Don't ask the public for money and then not provide any of the corporate requirements under the SEC for the proper operation of the markets.
You can't have both.
You can, e.g. Zuck/Meta. (I understand you are making a moral argument, not a legal one, I understand it, I disagree, courts disagree too)
Tesla is already publically traded. It's valuation depends on investors buying into Musks vision.
As a rule, investors optimize for long term growth since that's what maximizes valuations. All the megacap companies are judged by future growth.
The effect is companies tend to exaggerate and lie about what they can achieve in the long term to juice their own stock. Elon's def got the juice.
Investors should optimize for long term growth, yes. The problem is Management (CEO, etc.) will get fired if things look bad. So the incentive for management, if they can get fired, is to ensure monotonic increase. Sometimes — especially for a rocket company! — you should be allowed to fail for a few years. You should be allowed to take big swings, without risk of getting fired. If Elon knows he is in control, he can think long-term. If he's at risk of being let go if things look bleak, his optimization function will be different (and, IMO, net worse for society).
In that case they should stay private
Lol net worse for society. You types can’t stop the blatant propaganda and bullshit price pumping statements can you?
People raised on a diet of social democracy propaganda will kick and scream when you tell them people aren't equal and that decisions should be limited to exceptional individuals and not the mob. If you don't like the SpaceX structure don't invest. It's that easy. I'd rather give Elon the reins and see what happens. He managed to make electric cars viable and starlink is an incredible technical achievement. There's so much cool engineering to be done and only Elon seems to be capable of half of it. One person with a vision is more valuable than a million shareholders with a slight level of financial investment.
It's just undesirable to let people get too powerful if you believe in democracy. Fall of the Roman Empire etc.
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I suspect that the set of interested investors would look very different in both cases. Maybe even with an empty intersection.
Elon has control and optimizes for ability to abuse the corporate entity as much as possible. Expects other people to pay for issues he caused, causes as much harm as possible to feel as a manly man with no empathy and his friends in government and Epstein circles back all that up.
Wrote without evidence
You must be living under a rock if you think all super rich billionaires like Musk are doing is "abuses the corporate entity a bit, as a piggy bank, or whatever"
You can either concentrate power or disperse it. NASA, Boing, etc. is what happens when you disperse it. Committees aren't bold. The reason SpaceX exists is because Elon willed it into existence.
> The reason SpaceX exists is because Elon willed it into existence.
And then sued the government into considering using them.
He's also setting the rules so shareholders can't sue him.
Concentrated power can indeed get a lot more done at speed; it does not say anything about if the things being done more of and faster are sensible, and while Musk used to make bets that seemed to be risky to him but with positive expected return, he's now openly talking about things like wanting the Tesla "robot army" under his control and the chance of AI killing everyone, where it becomes everyone else's problem if he's wrong.
I prefer Option 2 as musk has an alleged track record of trading things between his companies with no oversight, and how sAfE cybertrucks are
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According to Gemini, index funds in total own about 20% of the value on the Nasdaq 100 index. So if you list a new company in Nasdaq, typically they have to buy 20% of it. But only about 5% of SpaceX will floated, which means there won't be enough shares to go round.
They are doing a bunch of changes to rules to try and make this not completely break, but even if it doesn't, it feels like index funds are going to have to buy a lot of the SpaceX float, which is going to make it look like a successful IPO even if hardly any real investors buy it.