“Shocking nobody” I would add… This is an obvious Musk scam and anyone with financial knowledge called it as such ever since it’s been on the table. Why else lobby and change the NASDAQ listing rules for instance?
This is shaped like more-or-less every IPO I've seen. I think you have to wait for more of a collapse to claim dispositive evidence of a scam (or widen your claim to 'almost all IPOs are scams').
Very few IPOs changed the rules to allow themselves to be incuded in significant indexes far faster than the rules previously allowed, and then slipped below their initial offering.
Yeah that plus wrapping the xAI dogshit debt inside SpaceX is where it gets really scummy. At least the S&P500 didn't (yet) succumb and lower their requirements and that's where most of my investment money is parked.
This is something you could empirically study. Looks like this NASDAQ study from a few years back has some numbers. At 3 months, that’s what’s in their chart, it’s still about 50/50. At 3 years it’s 29% with returns greater than 10% and 69% with returns greater than -10%.
This is incorrect, the difference is that most IPOs do not have ETFs buying their stocks, meaning you have a institutional investor forced to buy your stock and keep the musical chairs game going even if your stock has an inflated price., hes robbing ETF owners of their hard earned money
SpaceX has a float of 5%. So only 5% of SpaceX shares have been released to the public. Slowly, starting in August, employees and investors will be able to sell their shares, about 45% more until December 2026 and another 45% until July 2027.
What do you think will happen to SpaceX share prices when roughly 18x the number of shares at IPO are released?
From a company that only made $18bn in sales last year and lost $5bn. For reference, Aramark, a company basically nobody has heard of made as much money and even turned a $0.5bn profit.
SpaceX shouldn't be worth more than $30 in 1 year's time.
Of course, irrationality can be an extremely strong force, so let's see.
Aramark is a horrible company for comparison. Maybe the only thing they have in common with SpaceX is that they are publicly traded companies. I'm not saying that SpaceX is a good investment or that Musk isn't trying to run a scam on index investors. But we also shouldn't be surprised that the financials of an incompetent commercial food service provider are a little different from those of a spaceflight company / data center real estate conglomerate / whatever else has been rolled into it.
Aramark is a specifically chosen insult for comparison. If spacex is less attractive than a mediocre food-service company (former employee for the record), what are they?
You've just told me that "the financials of an incompetent commercial food service provider" are better than those of SpaceX.
Aramark is profitable and SpaceX is wildly unprofitable[1] :-)))
* * *
[1] Almost nothing SpaceX does points at SpaceX scaling to huge profitability. The rocket business is super capital intensive and losing money. And its biggest customer by far is Starlink. Starlink is profitable, but even so, if Starlink hiccups, SpaceX rocketry goes kaput. Oh, the second biggest customer is the US government, and you only need one hostile US administration for that business to go away. xAI is a 2-bit player in the AI space and it's losing money hand over fist.
Yes, it's almost like that's why there _was_ a rule in place to prevent IPOs like this from being shoved down everyone's throats so quickly without further testing.
This is not shaped like any other IPO. Objectively, it’s the biggest IPO in history and was included in the Nasdaq unusually fast. More subjectively, a significant part of its value is tied to the vision and credibility of a single person. Which BTW happens to be the first trillionaire in the world if things go well.
Really? Which other IPO involves a company acquiring a completely unrelated company just before IPO in order to bail the founder out of a bad investment?
Can you name even one example in the last 50 years?
SpaceX acquired Cursor after their IPO likewise did Facebook with Instagram in 2012. Since xAI was merged with SpaceX before it’s not really unrelated.
Cursor investors and employees are the biggest winners of the SpaceX IPO, even if the IPO flops, they will still get much more out of their Cursor shares than they ever had a right to expect. Some SpaceX employees have been waiting over 10 years for liquidity.
Yes, thank you. The news story here is that it slipped below IPO price during intraday trading. In a perfect world, IPO price should equal the fair value; in our world, there are random-walk price variances moment to moment; in synthesis, briefly dipping below IPO price (and not even at close/open!) is not evidence of any wrongdoing.
I was responding to the person pointing to this as confirmation of the long-running social-media-populist narrative surrounding this IPO. I consider that confirmation bias. I was not responding to the narrative itself, on which my only positions are: a prior against social media populism, a prior towards our financial institutions, a prior against trusting Musk, and a prior against trusting our current governance.
> (or widen your claim to 'almost all IPOs are scams')
In a world where retail basically has no access to true IPO pricing, I don't think this is untrue for the majority of investors.
Jamming SpaceX directly into a bunch of indexes just because Musk wanted it (and everyone is a coward or complicit) stunk of "scam" in a very different way, though.
It's a scam because of the hype mind control and propaganda around it. Because Musk tried to force it into the NASDAQ and S&P 500 before the normal windows, attempting to bypass sensible regulations that protect investors.
Yes, it is an obvious scam, but as far as I understood, it was a scam that was guaranteed to succeed: SpaceX is listed on Nasdaq and added to the Nasdaq index after only two weeks thanks to the rules Nasdaq changed at SpaceX's behest, so all funds that track Nasdaq have to buy SpaceX shares, so the prices were going to explode automatically because they made sure there will not be enough shares available. What went wrong? Are SpaceX employees dumping their shares so fast that supply outstrips demand?
There's a lot to unpack here, but a few thoughts. SpaceX wasn't added to the Nasdaq until two days ago, which is right around the time the stock was reaching it's current lows. Doesn't make sense to say that they prices exploded because of that.
Second, I don't know the details but it's extremely unlikely that most SpaceX folks have been able to sell any shares. Typically there's a 90–180 restricted window where pre-IPO holders are not allowed to sell.
The limited float could theoretically drive up, but as I noted, it wasn't added to the Nasdaq 100 until two days ago, so it's not something we can really attribute to that.
Btw, I loathe Elon Musk as a human, but am just clarifying some facts.
All the investors knew that nasdaq and trackers would have to buy spacex and that number of shares traded is extremely limited. They might have bought earlier and planned to sell when the index crunch started?
I didn't say that the prices exploded, I said that (according to the maybe dodgy experts who I read/heard) they were practically guaranteed to explode. And by explode, I mean go up. But if SpaceX was only added to the index two days ago, maybe that might still happen. According to the same experts, the stock sale restrictions for pre-IPO holders were also changed for SpaceX, but I don't remember the specifics...
I don’t think scam is the right word. The valuation and bank price targets are absolutely insane. I myself could never invest at those multiples. I think they absolutely have governance problems but at the same time I have to admit he is a great financial engineer.
Investors who do have conviction here most likely see this as the platform vehicle for everything else coming through the pipeline. Again I could not buy into that but I think it’s a far cry from a scam.
I'm unclear why you don't think it's a scam, because "he is a great financial engineer" seems awfully close to admitting that and then the "platform vehicle for everything else coming through the pipeline" seems to be the clincher that it is indeed a scam.
For example, he's talking about data centers in space as the "everything else coming through the pipeline" and space data centers are an obvious engineering boondoggle, but sound cool to people that don't know anything about data center design or the challenges of space engineering (ie heat rejection)
I think you're collapsing a few different concepts together. Calling something a scam implied intentional deception about the underlying business. I don't think that's the same as selling an extremely optimistic vision at a valuation I personally think is unjustifiable.
Plenty of companies have traded at prices that assumed almost everythign would go right. Most of those expectations eventually proved wrong but that doesn't retroactively make them scams.
If the argument is that space data centers or some of these future initiatives are technically unrealistic, then criticize those ideas on their merits. If they're impossible or economically irrational, the market will eventually price that in, even if it takes a long time horizon.
Are you telling me that you believe the nobody at SpaceX has run the numbers and shown the richest person in the world that according to the known laws of physics each data center will have to have MANY ACRES of radiator?
Fuck, even Grok would have told him this.
The SpaceX IPO was intentional deception - no doubt.
I realize you are passionate about this topic and maybe I am just not in that same bucket. I could take it or leave it. The valuation is absurd, the TAM is wild and I have no faith in the underlying business being able to grow that fast. Forward looking statements are rarely a scam no matter how silly they sound.
You may be passionate enough to say intentional deception no doubt. I would argue I am happy to let the market figure it out. It may take a while but eventually over a long enough horizon it should figure it out.
They're perfectly consistent. An absured valuation isn't evidence of fraud. Exceptional capital formation isn't fraud either. You're conflating overpriced, good at raising money and scam as if they're synonyms. I am curious how the absurd bank price targets will play out in the long-term and if there will be any repercussions but its hard to immediately jump to scam but I realize this is the favorite fan-fic for folks on both sides.
Obviously it’s not “perfectly consistent”. There is at least a bit of incongruity in these three, no? A sniff of something off? Also, I’m not conflating anything. I asked you to say more on a couple of things you said in your comment. No need to be absolutist or argumentative about it.
What about Musk gutting government agencies (including the SEC) through DOGE?
Or Musk pushing NASDAQ & co to fast track SpaceX into their indexes, to force institutional investors to buy SpaceX?
Or about Musk & others weakening analyst protection through the current US administration cutting legal failsafes so that now basically every analyst on the market never releases negative share projections?
At which point do we accept that these billionaires push these systems until they crack, "legally", because they buy the people making the laws.
I did not realize that is what we were discussing. Just because I don't like someone (I don't like musk) does not mean I will immediately jump to the harshest classification. I could never get behind the valuations, I don't generally like how he behaves but I also recognize that he historically has done a great job at financial engineering and serving as a hypeman, both can be true at the same time for me.
Sorry if I did not make it clear enough. The original discussion was around SpaceX being a scam. That is what I was referring to. I have no disagreement on other points. As I continue to say both can be true.
Definitely not and I think those types of opinions erode any rational discussion. It’s part of the problem with these discussions. There are extreme views that take a position that is not defendable but follow the hive mind for whatever side they are on.
I like to think in shades of gray and I am somewhere in the middle. Tesla? Amazing product, crazy valuation. SpaceX, some of the underlying products are indeed very valuable but the valuation is again out of this world, no pun intended. The market can stay irrational a lot longer than I can stay solvent. Would never take a short against Elon but I also would never invest into his businesses.
The term scam is definitely inflammatory, but I think the sentiment is fair considering the unprecedented and extreme overvaluation and the unrealistic justification for it. It's even worse when you consider Elon's consistent track record of over-promising and under-delivering. Taken together with Elon's role in gutting regulations and coordinating to change listing rules, it's totally fair to characterize what's going on as intentional dishonesty for profit - i.e. a scam.
You’re moving the goal post in your argument. First it’s being good at raising money is a scam. Now you are pointing out his incredibly foolish claims. No disagreement, it’s an absurd statement. I don’t know if it classifies as fraud.
Just so we're clear: You think that the only company selling EVs in the USA for a net profit is a scam?
What do you call Rivian, Lucid, Fisker, Bolinger, Lordstown, Slate, and Aptera?
Slate has been conspicuously silent about orders since the day after launch. Lucid is on the brink of bankruptcy. Fisker has gone bankrupt... twice. Lordstown no longer exists (with assets purchased for pennies on the dollar by their former CEO). Aptera has reorganized more times than I can count, and has been planning to release their product any day now for over 10 years!
Rivian actually lost a lawsuit this year for misleading investors about the potential profitability of their product leading up to IPO. An IPO which raised more money in one fell swoop than all the external funding Tesla had in their entire existence. By your own metric, is Rivian not a bigger scam than Tesla?
By the way, a bad fact for Rivian in that case was that they sexually harassed a female exec, who turned around and revealed (in her own lawsuit against them, just weeks before IPO) that the expected ASP of the R1 would be less than the production cost. Oops.
And, somehow, Tesla is the problem. Yea, that makes sense.
It's a scam only if you think the stock market in general is a scam. Remember, SpaceX is completely globally dominant in its industries (launch technology and orbital telecom)
I don't understand what kind of media someone has to consume to not understand that SpaceX does completely globally dominate launch services. Like, it's not even close.
I have no opinion on whether other companies might catch up to them (either tomorrow or 10 years from now), but your quote is a completely accurate statement about the world as it exists today.
Launch service makes billions in losses and the Chinese have now the same technology. The only cash cow they have is Starlink.
If you read the IPO prospectus, none of theses things is were the money is supposed to be earned in the future. The money comes from the 3rd pillar, AI. Again AI is the biggest loss maker they have.
I would not invest in their launch services, nor in their AI. But I would invest in StarLink if they spun it off and if it were decently priced.
Yes, I think Musk has proven the stock market is a scam. If it wasn’t, the SEC would have thrown him in prison years ago for his regular violations of law in Tesla earnings calls.
I guess the difference between "scam" and "financial engineer" is whether it works.
If everyone loses their money it will be a scam. If people get rich he will be a financial engineer.
These aren't two different things. The winning side will make up reasons why they are right, and the losing side will make up excuses why they were wrong.
What is this scheme he is getting away with? We all saw the numbers, it is an absolute absurd valuation. Like I said I would never make the bet but just because I don't like him, does not mean I will immediately call the scam card. Both can be true.
When this gets listed, your retirement savings will be obligated to support it whether it makes sense or not. If it tanks AI, or the broader economy, everyone will pay the price.
No matter what, your money is going to Elon and friends. That's one of the schemes.
There's plenty of other schemes too, like merging in Twitter and an AI company to confuse investors and inflate valuations.
I'm not calling it a scam either. I'm saying it entirely depends on whether this insane level of scheming causes people to lose a trillion dollars or gain a trillion dollars, then history will be rewritten to match the narrative.
I guess it depends on the framing: a scam perpetrated on whom? It's not a scam on active investors if you lock in a bump from guaranteed passive investors. The active investors will see gains from that bump. But on the passive investors? On wider society?
If you spot the regulator looking the other way and try to sneak one past, is that legitimate, or sketchy? What if you recently had the influence to make them look the other way or be under-resourced?
You could argue 'treason' is a better word than 'scam'.
> I don’t think scam is the right word. The valuation and bank price targets are absolutely insane.
I was hoping you were headed to "...beyond scam" into serious fraud or something. Regardless how this is categorized, everyone (banks, stock market, the executive branch) is complicit, and I think SpaceX stock should have stayed off the public market.
There's no room in the global economy to justify the kinds of numbers.
Like spacex isn't going to be the world's first 100 trillion dollar company because there isn't that much money. That's nearly as high as the global GDP.
Almost all of their promises since start have just been corporate puffery and pure vaporware. Going to Mars, point-to-point Earth travel, Starship, reusable rockets...
What's the point of an IPO? Show problematic institutional investors the door and replace them with disorganized public investors? Attract talent?
Seems like if the company is really doing great you'd want to retain ownership. Raise from bonds or something. Put simply, if it's valuable why would anyone sell it?
A lot of VCs had money locked up in SpaceX, like, portfolios going back a decade or more had some sort of investment in SpaceX. The IPO gave them an exit.
Not a scam IMO, I don’t think musk is that motivated by wealth but im sure plenty of the heavy hitter investors are. I’m sure he didn’t complain about the valuation however. I think SpaceX is a solid well run company (praise be to Gwen Shotwel) but $1T is a bit much. I’ll eventually buy in when things settle down and we have a few quarters of financial data to work with.
What you describe is exactly a scam: he somehow convinced you that he's not motivated by wealth! That alone is clearly a scam, the idea that Musk is not motivated by huge amounts of wealth and high valuations is just implausible considering g his behavior at every single turn.
He is possessing it. That is the goal. To have more and to continue to acquire more. The mountain is there and he feels a need to climb it. But if he were to reach the top he would not be happy. The greed admits no conclusion. It must be fed continually. The joy is in the moment of 'winning', which is transient. There is no end other than death.
Some people are like this. Ever major religion and thought movement throughout history recognizes people like this. They need to have more for themselves even (and in many cases especially) if it means less for others. In pre-history when we lived in small groups and we really knew each other the group could identify and isolate and disempower them. Populations grew and so did their ability to lie and get away with it. To deceive and amass power. To exploit the systems that we built to help the collective to their own ends.
I would much prefer Mr. Musk found a nice hobby like yachts or race horses instead of buying communication platforms, bulldozing regulations, and bribing officials with PAC money.
That said, he needs the wealth to keep the whole machine from falling over. One element might be stable but the rest is overstretched and about to go bankrupt at any minute. He is doing this to get back control of Tesla while also investing in AI and not exploding.
He is running forward falling and his wealth legs need to keep up or it all goes down hard (and takes a bunch of bagholders with)
He's too busy shitposting on twitter to use his wealth in any meaningful way. I just want to know if once he's on his deathbed he thinks to himself "I just wish I could call one more person on twitter retarded, that was a good use of my time on earth"
IDK what the calculation is for rich people, but for middle class who had that many children by that many women I don't think the state would leave them anything to survive on other than maybe prior savings.
The IPO was meant for the VCs to cash out as all fundamentals were completely irrational, but seems like no one cares about cash flow and profitability anymore during QE times. Dumb money will keep being dumb I guess
The IPO featured less than 5% of shares as free float. So the investors are still in pretty deep with their hands tied until lock-up restrictions expire. The IPO was more of a quick, public financing round for their AI branch than an exit for SpaceX VCs.
As those lock-ups expire I only see the stock sliding further. Still, the very early investors will probably make bank, with the retail investors holding the bag.
Many of those early investors would have invested in a rocket company, I doubt many of them were overjoyed to be saddled with all the debts from an AI company and Twitter.
Is it possible that people who don't care about short term profitability but still want a strategic ownership of the company bought at a high price on IPO day and now that the day traders are in, speculation will readjust the price to short term values? The change of price just reflect the different buyer profiles.
SpaceX is a pretty important company not just for "the market" but also for many other things (see Russia/Ukraine war).
But why would you want to buy a company where the valuation reflects an extremely optimistic outcome already? Basically you are assuming obscene growth from SpaceX in AI, datacenters, rocket launches etc just to for the stock to go nowhere. The market cap was over 2T!
When you buy equities, if the company turns out shockingly successful beyond most peoples probable expectations you dont simply want your investment to just stay flat, you want to make multiples of your money. In order to do this, you simply cant start from a 2T marketcap. No company worth 2T can make you 100x your money or even 10x or 5x your money in a reasonable amount of time given the overall size of the economy.
Buying at a high price just gives money to the early investors, the company itself doesn't get richer unless they're doing a raising capital round, but after an IPO you're just giving liquidity (+ profit) to early investors.
If you wait till the price comes down to its natural level, you'll be able to buy more of the company for less money.
> If no one cared about cash flow and profitability wouldn't SpaceX stock go up instead of down?
In addition to looking at the "fundamentals" of a company like cash flow and profitability, there is also a 'meta-game' that traders (as opposed to investors) have to look at:
> A Keynesian beauty contest is a metaphorical beauty contest in which judges are rewarded for selecting the most popular choices among all judges, rather than those they may personally find the most attractive. This idea is often applied in financial markets, whereby investors could profit more by buying whichever stocks they think other investors will buy, rather than the stocks that have fundamentally the best value, because when other people buy a stock, they bid up the price, allowing an earlier investor to cash out with a profit, regardless of whether the price increases are supported by its fundamentals and theoretical arguments.
"whereby investors could profit more by buying whichever stocks they think other investors will buy, rather than the stocks that have fundamentally the best value"
I think one thing to point out is "everyone" in this context is probably the broader market, but the stock holdings aren't distributed uniformly. A few large investors could actually be sophisticated and unload a fortune and the rest of the shareholders could still largely still ignore fundamentals and suffer large losses. The broad market can be ignorant and the stock can (and is) be down, both things can be true.
People cared after the IPO but initially in far less informed circles I constantly heard from lower sophisticated investors bragging about how they'd been allocated X shares like they were Pokemon trading cards they managed to snag. They weren't very sensitive to the price, only to brag to their friends they had snagged them. After the shiny wore off and no one cared about how cool they were, they sold them.
No this was anomalous for an IPO. People were limited to something like 10 shares that they had to pre-order like they were special order trading cards with an order cap as direct recipients of the initial shares.
Usually the public starts buying IPOs in open market operations on the secondary market, which removes some of the shiny and "limited" factor.
IPOs are designed to achieve a 20% pump, generally do achieve it, and did achieve it in the case of SPCX. Buying shares at the base of the pump that you are allowed to sell at +20% is a license to cash in. Why would anyone sell you those shares at that price, then? They are paying you to cultivate the "rare pokemon card" atmosphere that gets the less sophisticated investors excited and willing to buy the top. A dollar spent selling below-market shares to a promoter returns many dollars of exit liquidity. This is how investment banks make their IPO money and it's how social media promoters make their money. The promoters aren't the ones being fleeced. There are people who think they are promoters but are actually suckers -- but that's a separate matter. The price always tells the true story.
> No this was anomalous for an IPO. People were limited to something like 10 shares that they had to pre-order like they were special order trading cards with an order cap as direct recipients of the initial shares.
It all depends on your broker. My Australian broker gave everyone ~40% of their request and refunded the rest (typical Australian practice for IPOs). An American friend put in for >20x as much as I did with his US broker, they gave him nothing and refunded the full amount.
I don’t think the allocation process changes the underlying point. The mechanics may have been unusual, but highly anticipated IPOs almost always attract buyers motivated by participation as much as valuation. Whether they got 10 shares through a special allocation or bought on the open market, there is usually a cohort that wants to say “I got in on the IPO.” Once the novelty fades, some of that demand naturally disappears. I’m not convinced that’s unique enough to call it anomalous.
No one can care about fundamentals in QE times. If you stay out of the market just because nothing there is valuable, you will lose your money to the hidden inflation and won't be able to buy anything there when you want in.
In normal inflation you can at least buy commodities. But the US economy is organized in a way that will concentrate the money on stocks, not commodities.
You've been through this before and have the scars or have seen them on others. It is hard to explain to those who have not. Though they only need look at a historical chart.
I suggest you take a deeper look at what's happening.
The Fed announced they will transition away from QE yesterday. When they did that 5 years ago, a lot of things happened and they completely gave up on the idea.
Not sure if people not caring about cash flow and profitability is applicable across the board, it might just be because SpaceX is one of Elon's companies which seem to defy traditional financial analytic standards.
SpaceX, despite its name is an AI company, supposedly. Its S-1 states that the company estimates its total addressable market (TAM) at $28.5 trillion, of which $26.5 trillion, or 92.98%, is expected to come from AI.
SpaceX is an AI company without a frontier model. Until Jan 2026 SpaceX was an aerospace company. Then xAI was merged into SpaceX on January 30, 2026, so SpaceX became an AI company less than 6 months ago.
Mainly it’s a REIT that bought a bunch of hardware which is now depreciating like fresh lettuce. They don’t even have a way to use it productively for AI purposes themselves and are instead renting it to competitors, who are using it to lap them.
> SpaceX is an AI company without a frontier model.
Unless they manage to build such a model, then their plan looks like they intend to be an AI _infrastructure_ company. Which is probably viable and healthy business! One with lots of competition and low margins that is completely misaligned with their current valuation.
Isn't it a little absurd to be guessing what the business model might be or should be for the company with the largest ever IPO, which got a free pass on (lack of) profitability? It's a little late.
Only a little, not a lot. It seems like the easy answer is still terrestrial with a heck of a lot more giving back. For example:
- offering to pay some nominal subsidy for all households electricity bills in the region.
- committing to only closed loop cooling
- if the location is amenable, then providing free heating to neighboring buildings.
- only building in blighted locations with no current economic value
Other random ideas: I wonder if anyone is considering building server racks directly into offshore windfarms. Replacing failed hardware is annoying, but surely more economical than in space where IIUC, there _is_ no plan to ever maintain hardware at all, just deorbit and replace. All the water is right there for cooling (though I'm sure saltwater has its own problems with corrosion). While the current US administration is clearly anti windmill, that might work nicely in Europe.
Every time there is an economic boom like this, you get unscrupulous actors coming in and extracting as much value as they can before the regulatory environment catches up. Yes, datacenters should be doing all these things, but that costs money, so they won't until there are local statutes and federal regulations that require them to do so. I expect the current situation to continue at a huge social cost for at least the next 5-10 years unless the bottom falls out of the AI boom before then.
As a scientific adventure, SpaceX is a worthy company full of awesome people. But the management and VCs is another story, as usual. To price it at a market cap of $1.8T, somewhere double that of Walmart is insane.
My understanding is that an ideally priced IPO should not move much from the opening price in the near term. If it pops it means they left money on the table. If it drops, then I am not sure what the implication is exactly?
Now I think SpaceX is massively overhyped, but is the share price returning to IPO opening not just a sign that the banks accurately estimated something?
Your bank will get a ton of orders from institutional investors of how many shares they want at a given price. You will have a preference as to which investors you want on your cap table. Almost all of those investors value your stock less than the "pop price" (which includes the investors you want on your cap table). So you'll need to target the IPO below the "pop price" so you get them on your cap table.
You're probably picking investors based on how likely they'll let you stay on the board / CEO and if you think they're just going to dump the stock during the IPO (which would be bad for it's price).
So (unlike the SpaceX IPO) you're going to sell relatively little shares to retail who will buy at any price which during the opening days will cause it to spike as the demand (in nominal dollars) per share is beyond the IPO price target.
> but is the share price returning to IPO opening not just a sign that the banks accurately estimated something?
Sure they estimated something. But there's a ton of different things that can be estimated.
What do you mean by this? The person you responded to never used the words "should" or "should not", and then you basically repeated what they said using more neutral words...
What is so controversial about saying that SpaceX seems overpriced?
His point is that sellers can do whatever suits their interests best, they don't have a duty to pick a fair price. And that it's on the buyer to decide whether to accept it or reject the price.
Duh? That point was actually implied by my initial comment.
Nobody said anything about fairness or duty.
My point was that if the seller is trying to maximize its self-interest by maximizing the IPO price, leaving no room for growth after IPO, then buyers probably want to take a pass at that price.
I’m way out of my depth in suggesting this idea, so forgive me if I’m committing a conceptual “divide by zero” and it’s not even wrong:
It seems like the SpaceX IPO really breaks the traditional notion of market cap.
Market cap has an unstated assumption that most of a company’s stock could, in theory, be traded unencumbered. Thus shares * price gives a very rough view of the value of the company. Everyone understands that this valuation has problems: it attributes the last marginal trade to the entire stock, and doesn’t account for large purchases/sales. But it’s useful nonetheless.
But with SpaxeX, only a tiny fraction of those shares are even theoretically tradeable, so it seems bizarre to calculate valuation using price * shares. I think this is the source of discomfort around the $2T market cap.
It seems like, similar to how there are long and short term liabilities, there should be long and short term market caps.
“Short term market cap” would be price * “number of shares that could theoretically be available for trade within the next year”, from all sources (including vesting employee options, expiring lockups, etc).
“Long term market cap” would be price * total authorized shares.
So SpaceX’s long term market cap would remain at $2T and its short term market cap would be, say, 5% of that (about $100B).
Market cap has been that sort of fiction from the beginning. It's never been a terribly useful number. There's really no fixing it because the only way to "truly" value a company is to sell it, for real, on the open market. Anything else is just a guess. More or less educated, but a guess. SpaceX isn't creating this problem or making it particularly worse.
What you are describing is what's called free float market cap and is generally what market indices use to weigh stocks. That way you're only trying to replicate the market of stocks that are actually available to trade. There's nothing new about SpaceX in that respect, plenty of companies have float much lower than their total.
You're not wrong, but the weakness you point out isn't a new concept.
Market cap is, at best, a rough valuation of the company. It has many confounding variables of which liquidity can be one of them. That's part of why investment analysts put out price targets for companies. The counterpoint is that market price is driven by what people are actually paying.
One of the major challenges with valuation is settling on a methodology overall. There are many ways, appropriate and not, to value a company. Many will have different estimates for value. There are also factors, like control premium, that start to become relevant when you try to completely acquire a company.
One of the benefits of an open and liquid market is that future availability of locked shares can be priced in early. We all get the benefit of consensus information.
Different classes of shares are possible, as are other time-varying schemes such as warrants. But that's not what Musk did. The shares all have the same class.
There’s still really nothing keeping it at even these lower levels except pure hype. By the fundamentals typically applied to aggressive growth companies a “sane” price is closer to $40-60 and even that would be very aggressive considering the company’s financials.
If the company doesn’t quickly show a financial picture that matches the sky high pro formas then even anything close to those levels will become extremely hard to justify.
The bond markets have already turned very negative on SpaceX with extreme red flags developing there.
Anyone buying IPO for short term gain would have exited at initial spike, others (like me got in at allocation price) will be holding for a decade or two so this is noise, expected not sure why it posted here, do we post every tech stock intra day price move
And I don't understand why a serious media outlet is covering this at all. The entire article could be irrelevant the next day.
Without any actual, meaningful news coming out of the company (important financial update, new product, bankruptcy etc), stock price moves are only meaningful to day traders, not anyone who is doing serious investing. LA Times is making themselves the same as CNBC or sources you find on Yahoo finance.
Same here. It's such a shame because I always wanted to invest in SpaceX (even despite it's CEO), but now most of the money would go to AI stuff rather than space exploration, so I'm out.
It surprises me that this seems so consequential to observers. According to a quick search, around 40% of IPOs are below their IPO price at their one year anniversary.
I'm not invested in this myself, figuratively or literally.
I guess for any stock to rise, there have to be people thinking it will be worth more in the future.
I presume there is a way to mathematically determine how atypical the SoaceX stock is behaving. Does anyone have a reference to how this would normally be done?
I always wonder why not more companies are using more creative approaches like Google's Dutch auction to set their IPO price.
It seems direct listings gained some popularity but overall most companies seem to rely on the traditional underwriter model.
According to [0] -
> 22 companies went public on major exchanges using IPO auctions in the U.S. between 1999-2008, but there have been none since then, as of May 2025. Starting in 2018 when Spotify went public, there have been at least 20 companies that have gone public using a direct listing. With both IPO auctions and direct listings, underwriters do not have discretion to allocate shares to their preferred clients.
The Dutch auction wasn't all that smooth, with Google having to adjust prices at the last minute. Most results show that it didn't really produce all that much of a benefit over a traditional IPO, where (the issuing company) at least gets a guaranteed minimum amount of money to raise. Pretty much the only alternative is a direct listing for companies that want to go public, but don't need to raise money. (Well, there's also SPACs, but that's a different beast).
When banks, pension funds and other institutional investors are fighting to outbid each other to get a slice of your IPO why would you care about finding an accurate value and being "fair"? Whether the price goes up and down post IPO isn't really the company's concern. They already have the cash.
Google's process produced a price of IIRC $85/share and on first-day trading soared to >$100 so there was a lot of discussion at the time about how efficient that process was.
But really that's how all IPOs work, basically. You have one of more investment banks that underwrite the offering. They're basically guaranteeing to sell a certain number of shares to their clients at a given price. Those clients can be institutional investors, pension funds, high net worth individuals and so on. But there's a feedback loop here where clients might push back on a certain price.
IPOs love these sorts of investors because they tend to buy and not sell. If everyone sells the IPO will flop. Retail investors are far less "loyal".
The IPOing company also has levers where they can manipulate the price, most notably on the supply side ie by limiting or expanding the size of the float. SpaceX's float (as a percentage of the company) was actually really small.
What's unique about the SpaceX IPO was that it would immediately become one of the world's most valuable listed companies so there'd be a lot of induced demand from index funds. The underhanded (IMHO) aspect to all this was that the rules were deliberately changed so passive investors would be exposed almost immediately rather than first allowing some form of price discovery by the market. NASDAQ capitualted. S&P did not.
I guess the real manipulation here is the fiction that SpaceX is an AI company, which ultimately goes back to a series of bailouts for terrible decisions going back to the Twitter purchase. SpaceX's AI pitch was orbital data centers, which make no sense, and using their ill-gotten NVidia chip allocations to rent them to Google.
IPOs are generally not a good investment, at least not relative to average market return:
> However, a year later, we see that the majority of companies are either outperforming or underperforming the market by more than 10%. We also see that more companies are underperforming than beating the index (the red bars stretch below the 50% line).
> That seems to indicate that for some companies, the initial IPO enthusiasm wanes or expected earnings are not met, and investors reprice the IPO to reflect the actual, slower growth of the company.
> Three years after their IPO, we calculate that almost two-thirds of IPOs are underperforming the market, with most (64%) more than 10% behind the market’s returns.
> 56% of IPOs bought at the offer price lost money after 3 years. That number rises to 57% after five years. The numbers are higher when bought at the first day closing price: 60% lost money after 3 and 5 years. Worse than a coin flip.
> Only 19% of IPOs doubled or more after three years and 22% after 5 years when bought at the offering price. The numbers were worse when bought at the closing price.
> Of course, the lottery-like returns were possible, but it amounted to about 0.4% of all IPOs after 3 years and 1% after five years.
Interview with a researcher that has looked at IPOs over the last few decades:
> We’ve previously compared IPOs to lotteries that are prone to inflated valuations and low returns. Today we welcome “Mr. IPO,” Professor Jay Ritter onto the show for a deeper dive into IPO performance, for his insights into SPACs, and to hear his research into why economic growth doesn’t correlate with stock returns. Early in the episode, Jay unpacks how long-term IPO returns perform against first-day trading. While exploring the role that venture capital plays in tech IPOs, Jay talks about why negative earnings don’t affect tech IPOs in the short-term before sharing how skewness factors tend to impact young companies. Reflecting on how IPOs are usually underpriced, Jay discusses how the interests of companies are not aligned with the interests of IPO underwriters. After looking into IPO allocation, Jay compares the 2020 ‘hot IPO market’ with the internet bubble of the late 90s. Later, we ask Jay about what special-purpose acquisition companies (SPACs) are and why they’ve exploded in recent years. His answers highlight their investing benefits, risks, and why SPACs might be a better option for companies than IPOs. We examine how SPACs have historically performed and then jump into our next topic; why economic growth isn’t a good indicator that a country is worth investing in. He touches on why returns don’t correlate with economic growth, the place of capital gains and dividend yields when investing abroad, and how innovations in an industry can lead to higher stock returns. We wrap up our conversation by asking Jay for his take on whether the stock market is efficient before hearing how he defines success in his life. Tune in to hear our incredible and informative talk with Jay Ritter.
Many IPO's have the same trajectory that SpaceX did - first going up steeply and then dropping steeply. So there's certainly money to be made if you get the timing right but that is always the challenge.
If the IPO can't find institutional buyers at the price and has to resort transferring the initial shares directly to the public, safe to assume they've hyped the public into being the bag holder. What SpaceX did is rare for a reason.
This all feels like it was designed to artificially inject cash into xAI despite the average person being strongly against it. First they merge that company with SpaceX despite having very little in common in either of their infrastructure or goals, then they change the rules to get the stock out to the general public as quickly as possible on the promise that obviously it's going to explode in value and make everyone very rich to justify that decision, then once they have investor cash in-hand the stock price slips. I think they just tried to leverage SpaceX's relatively popular, positive image into investments into xAI by more or less giving up on SpaceX being anything but a wrapper around xAI.
Typical IPO pattern. Hyped IPOs shoot up and then correct, some correct more than others. Traders take their profits. Nothing new here, just bigger headlines because it's a big name. The bigger the name, the bigger the hype.
Maybe this has to do with the technical unfeasibility of sending human to Mars and back to earth while keeping them alive ? Throwing billions at it won't make it happen magically.
ffs, wake me up when it's at least 10% below what it IPO'd for. The idiotic tulip mania that followed in the few days after it floated was noise, but as of today, it seems the IPO price was pretty much right. However, endless headlines about the price crashing etc.
From a fundamentals perspective, it's an insane price, obviously. But the narrative that it's all coming crashing down is obviously not correct (today).
I'm thinking that over the course of the next 10-18 months the price should continue to come down as pre-IPO shareholders become unlocked and can sell their shares.
Me too, and not for any rational reason or because I value my money or my investing strategies, but simply because I have a high risk tolerance, and it seems like these days that’s all you need to make money.
No real skill, no real research. Just ride the hype train, shrug if you lose, and never gloat when you win. Simply take the profit, stfu, and buy a Porsche or some RAM.
Do yourself a favor and DCA in from here. SpaceX was "only" valued at 210 Billion back in June 2024, around 11% of its current valuation. A return to that valuation would take it down to ~$16/share!
SpaceX is a phenomenal company. I've wanted to buy in since 2009. But the stock is the exact inverse of my ideal single-stock investment thesis--huge downside with severely limited short-to-mid-term upside, given the huge premium already being paid.
Still far to high. I love SpaceX as in 'space', they were a great company, doing things nobody else could. Now its a dumb AI company that hands over cash to micron, nvidia and friends who literally print money, while financing that with delusional promises.
Many people can soon sell their SpaceX stock, I don't think the S&P will safe them later.
People generally hate to see scams stealing money from naive marks. Both SpaceX and Tesla are obvious scams at anything close to their current valuations (despite having real, functional businesses in there! ), that Elon keeps pumping up with ever more ridiculous claims (50 million humanoid robots by 2026/7! Tesla Roadster out by 2024, pre-order now! Starship point-to-point for business travel by 2030! Datacenters in space!).
Because he's a psychopath who is actively making the world worse. Anyone who stands on stage with a chain saw and cuts US AID with a smile on his face is a truly horrible person. Anyone who hoards a trillion dollars while others starve is a truly horrible person. Did you root for the Empire in Star Wars? I hope nothing but the worst for him so maybe someone with a conscious and a soul replaces him.
It has helped me to live with the model that the probability of there being any sort of objective morality or ethics is close to zero, and that a hierarchy of influence within any given context is generally unavoidable. Once you accept this model, you spend less time moralising and angering yourself over perceived wrongs, and can now spend more time on figuring out how to live a happier life despite the fact that there are no set rules.
I was a fan of early Elon. He had many problems but he was overall good.
Then he turned full ultra right wing nationalist who engaged in science denial. Supported a president that is unquestionably racists and unquestionably fascists. And he made this clear by doing some Nazi salutes on top of that.
Then he used that influence to sell a completely false idiotic story that cuts to discretionary spending could 'fix' the budget deficit, like a complete idiot who had never watched 2 youtube videos about the US budget. Then used to slash and burn many beneficial programs while having no impact on the deficit what so ever.
He was supposed to be science and engineering progress driven, but then allied himself with ultra-right wing anti-scientific fascists who try to dismantle the whole education system in favor of at best best creationism or more likely nothing at all.
Not sure why its hard to understand. The only people who don't understand are ultra-right wing facists who don't understand why other people don't want to support ultra-right wing facists.
I hear what you are saying. There are many CEOs and companies that I also dont like. But I dont spend everyday checking their stock price and cheering for them to fail like they are my rival sports team. I just dont understand why many people are so glued to watching his companies, rooting for failure, and running to post on the internet as soon as something bad happens. I cant think of a similar situation.
SpaceX is not just any old company. Its a trillion $ company at the heart of one of the most contentious topic in the modern world, AI. And its not just relevant for Elon, its also about the general outlook for the economy and AI. Most people retirements are in index funds that Musk tried to manipulate, so the stock value coming down before any S&P inclusion is important for many on a personal level.
Also, the reality is, Elon made himself a massive public figure deliberately, he very publicly embraced one side of the culture war and make his opinion on every public constantly. He literally one of the most important people because he literally bought one of the largest media platforms and made sure it fully embraced right wing points of view.
You are complaining why Elon is in public debate and people are so interested. That's because politics is a public argument between different parties, and Elon has used all his influence to support one side of that. And that is the result.
And not just in the US, Elon tried to insert himself into politics of other nations, such as Britain or Germany as well. Making most of the western world angry.
Why are you surprised that he gets treated like a politician when he acting like a politician?
You can't be the CEO of total independent technocratic companies and at the same time be a public ultra-right wing facist supporter who endlessly engages in a public culture war. Specially if those companies are directly linked to him view voting shares that give him ultimate power.
“Shocking nobody” I would add… This is an obvious Musk scam and anyone with financial knowledge called it as such ever since it’s been on the table. Why else lobby and change the NASDAQ listing rules for instance?
This is shaped like more-or-less every IPO I've seen. I think you have to wait for more of a collapse to claim dispositive evidence of a scam (or widen your claim to 'almost all IPOs are scams').
Many IPOs slide below their initial offering.
Very few IPOs changed the rules to allow themselves to be incuded in significant indexes far faster than the rules previously allowed, and then slipped below their initial offering.
Yeah that plus wrapping the xAI dogshit debt inside SpaceX is where it gets really scummy. At least the S&P500 didn't (yet) succumb and lower their requirements and that's where most of my investment money is parked.
not to mention hiding all the Twitter losses inside of xAI because AI in general loses lots of money.
This is something you could empirically study. Looks like this NASDAQ study from a few years back has some numbers. At 3 months, that’s what’s in their chart, it’s still about 50/50. At 3 years it’s 29% with returns greater than 10% and 69% with returns greater than -10%.
https://www.nasdaq.com/articles/what-happens-to-ipos-over-th...
the scam here is knowing that the price will be lower, but forcing index funds to buy high
This is incorrect, the difference is that most IPOs do not have ETFs buying their stocks, meaning you have a institutional investor forced to buy your stock and keep the musical chairs game going even if your stock has an inflated price., hes robbing ETF owners of their hard earned money
SpaceX has a float of 5%. So only 5% of SpaceX shares have been released to the public. Slowly, starting in August, employees and investors will be able to sell their shares, about 45% more until December 2026 and another 45% until July 2027.
What do you think will happen to SpaceX share prices when roughly 18x the number of shares at IPO are released?
From a company that only made $18bn in sales last year and lost $5bn. For reference, Aramark, a company basically nobody has heard of made as much money and even turned a $0.5bn profit.
SpaceX shouldn't be worth more than $30 in 1 year's time.
Of course, irrationality can be an extremely strong force, so let's see.
Aramark is a horrible company for comparison. Maybe the only thing they have in common with SpaceX is that they are publicly traded companies. I'm not saying that SpaceX is a good investment or that Musk isn't trying to run a scam on index investors. But we also shouldn't be surprised that the financials of an incompetent commercial food service provider are a little different from those of a spaceflight company / data center real estate conglomerate / whatever else has been rolled into it.
Aramark is a specifically chosen insult for comparison. If spacex is less attractive than a mediocre food-service company (former employee for the record), what are they?
LOL. I'm not American, I chose Aramark at random because... <drumroll>... Aramark has the same revenue as SpaceX:
https://companiesmarketcap.com/largest-companies-by-revenue/...
You've just told me that "the financials of an incompetent commercial food service provider" are better than those of SpaceX.
Aramark is profitable and SpaceX is wildly unprofitable[1] :-)))
* * *
[1] Almost nothing SpaceX does points at SpaceX scaling to huge profitability. The rocket business is super capital intensive and losing money. And its biggest customer by far is Starlink. Starlink is profitable, but even so, if Starlink hiccups, SpaceX rocketry goes kaput. Oh, the second biggest customer is the US government, and you only need one hostile US administration for that business to go away. xAI is a 2-bit player in the AI space and it's losing money hand over fist.
This is the main point. I bought Backblaze too early in its post IPO phase. It's a good company and I am a customer, but I am down $15k on the buy.
Most IPOs don’t put up 5% of the float for sale. Usually it’s closer to 30-60%.
Yes, it's almost like that's why there _was_ a rule in place to prevent IPOs like this from being shoved down everyone's throats so quickly without further testing.
This is not shaped like any other IPO. Objectively, it’s the biggest IPO in history and was included in the Nasdaq unusually fast. More subjectively, a significant part of its value is tied to the vision and credibility of a single person. Which BTW happens to be the first trillionaire in the world if things go well.
Really? Which other IPO involves a company acquiring a completely unrelated company just before IPO in order to bail the founder out of a bad investment?
Can you name even one example in the last 50 years?
SpaceX acquired Cursor after their IPO likewise did Facebook with Instagram in 2012. Since xAI was merged with SpaceX before it’s not really unrelated.
Cursor investors and employees are the biggest winners of the SpaceX IPO, even if the IPO flops, they will still get much more out of their Cursor shares than they ever had a right to expect. Some SpaceX employees have been waiting over 10 years for liquidity.
SpaceX bought back shares twice yearly
To be fair, I think they just meant the stock price shape post IPO. Jumped up, then fell back down.
That said, I'm also not sure how accurate that is.
Yes, thank you. The news story here is that it slipped below IPO price during intraday trading. In a perfect world, IPO price should equal the fair value; in our world, there are random-walk price variances moment to moment; in synthesis, briefly dipping below IPO price (and not even at close/open!) is not evidence of any wrongdoing.
I was responding to the person pointing to this as confirmation of the long-running social-media-populist narrative surrounding this IPO. I consider that confirmation bias. I was not responding to the narrative itself, on which my only positions are: a prior against social media populism, a prior towards our financial institutions, a prior against trusting Musk, and a prior against trusting our current governance.
The valuation based on fundamentals is a scam, you can just look at the numbers. This is unlike any other IPO.
> (or widen your claim to 'almost all IPOs are scams')
In a world where retail basically has no access to true IPO pricing, I don't think this is untrue for the majority of investors.
Jamming SpaceX directly into a bunch of indexes just because Musk wanted it (and everyone is a coward or complicit) stunk of "scam" in a very different way, though.
It's a scam because of the hype mind control and propaganda around it. Because Musk tried to force it into the NASDAQ and S&P 500 before the normal windows, attempting to bypass sensible regulations that protect investors.
The governance of the company is also prone to scamming.
Yes, it is an obvious scam, but as far as I understood, it was a scam that was guaranteed to succeed: SpaceX is listed on Nasdaq and added to the Nasdaq index after only two weeks thanks to the rules Nasdaq changed at SpaceX's behest, so all funds that track Nasdaq have to buy SpaceX shares, so the prices were going to explode automatically because they made sure there will not be enough shares available. What went wrong? Are SpaceX employees dumping their shares so fast that supply outstrips demand?
There's a lot to unpack here, but a few thoughts. SpaceX wasn't added to the Nasdaq until two days ago, which is right around the time the stock was reaching it's current lows. Doesn't make sense to say that they prices exploded because of that.
Second, I don't know the details but it's extremely unlikely that most SpaceX folks have been able to sell any shares. Typically there's a 90–180 restricted window where pre-IPO holders are not allowed to sell.
The limited float could theoretically drive up, but as I noted, it wasn't added to the Nasdaq 100 until two days ago, so it's not something we can really attribute to that.
Btw, I loathe Elon Musk as a human, but am just clarifying some facts.
All the investors knew that nasdaq and trackers would have to buy spacex and that number of shares traded is extremely limited. They might have bought earlier and planned to sell when the index crunch started?
I didn't say that the prices exploded, I said that (according to the maybe dodgy experts who I read/heard) they were practically guaranteed to explode. And by explode, I mean go up. But if SpaceX was only added to the index two days ago, maybe that might still happen. According to the same experts, the stock sale restrictions for pre-IPO holders were also changed for SpaceX, but I don't remember the specifics...
Priced in before the event then?
I don’t think scam is the right word. The valuation and bank price targets are absolutely insane. I myself could never invest at those multiples. I think they absolutely have governance problems but at the same time I have to admit he is a great financial engineer.
Investors who do have conviction here most likely see this as the platform vehicle for everything else coming through the pipeline. Again I could not buy into that but I think it’s a far cry from a scam.
I'm unclear why you don't think it's a scam, because "he is a great financial engineer" seems awfully close to admitting that and then the "platform vehicle for everything else coming through the pipeline" seems to be the clincher that it is indeed a scam.
For example, he's talking about data centers in space as the "everything else coming through the pipeline" and space data centers are an obvious engineering boondoggle, but sound cool to people that don't know anything about data center design or the challenges of space engineering (ie heat rejection)
I think you're collapsing a few different concepts together. Calling something a scam implied intentional deception about the underlying business. I don't think that's the same as selling an extremely optimistic vision at a valuation I personally think is unjustifiable.
Plenty of companies have traded at prices that assumed almost everythign would go right. Most of those expectations eventually proved wrong but that doesn't retroactively make them scams.
If the argument is that space data centers or some of these future initiatives are technically unrealistic, then criticize those ideas on their merits. If they're impossible or economically irrational, the market will eventually price that in, even if it takes a long time horizon.
Are you telling me that you believe the nobody at SpaceX has run the numbers and shown the richest person in the world that according to the known laws of physics each data center will have to have MANY ACRES of radiator?
Fuck, even Grok would have told him this.
The SpaceX IPO was intentional deception - no doubt.
I realize you are passionate about this topic and maybe I am just not in that same bucket. I could take it or leave it. The valuation is absurd, the TAM is wild and I have no faith in the underlying business being able to grow that fast. Forward looking statements are rarely a scam no matter how silly they sound.
You may be passionate enough to say intentional deception no doubt. I would argue I am happy to let the market figure it out. It may take a while but eventually over a long enough horizon it should figure it out.
The space data centers are intentional deception.
Can you spell out a bit more how these three thoughts live together consistently for you:
1) The price is insane
2) The price is a work of great financial engineering
3) The price isn’t a scam
They're perfectly consistent. An absured valuation isn't evidence of fraud. Exceptional capital formation isn't fraud either. You're conflating overpriced, good at raising money and scam as if they're synonyms. I am curious how the absurd bank price targets will play out in the long-term and if there will be any repercussions but its hard to immediately jump to scam but I realize this is the favorite fan-fic for folks on both sides.
Obviously it’s not “perfectly consistent”. There is at least a bit of incongruity in these three, no? A sniff of something off? Also, I’m not conflating anything. I asked you to say more on a couple of things you said in your comment. No need to be absolutist or argumentative about it.
What about Musk gutting government agencies (including the SEC) through DOGE?
Or Musk pushing NASDAQ & co to fast track SpaceX into their indexes, to force institutional investors to buy SpaceX?
Or about Musk & others weakening analyst protection through the current US administration cutting legal failsafes so that now basically every analyst on the market never releases negative share projections?
At which point do we accept that these billionaires push these systems until they crack, "legally", because they buy the people making the laws.
I did not realize that is what we were discussing. Just because I don't like someone (I don't like musk) does not mean I will immediately jump to the harshest classification. I could never get behind the valuations, I don't generally like how he behaves but I also recognize that he historically has done a great job at financial engineering and serving as a hypeman, both can be true at the same time for me.
> I will immediately jump to the harshest classification.
The first points are just facts. Not "harshest classifications".
Sorry if I did not make it clear enough. The original discussion was around SpaceX being a scam. That is what I was referring to. I have no disagreement on other points. As I continue to say both can be true.
“Good at raising money” = scam. The valuation is based of fraudulent promises, just like Musk’s other scam, TSLA.
Definitely not and I think those types of opinions erode any rational discussion. It’s part of the problem with these discussions. There are extreme views that take a position that is not defendable but follow the hive mind for whatever side they are on.
I like to think in shades of gray and I am somewhere in the middle. Tesla? Amazing product, crazy valuation. SpaceX, some of the underlying products are indeed very valuable but the valuation is again out of this world, no pun intended. The market can stay irrational a lot longer than I can stay solvent. Would never take a short against Elon but I also would never invest into his businesses.
The term scam is definitely inflammatory, but I think the sentiment is fair considering the unprecedented and extreme overvaluation and the unrealistic justification for it. It's even worse when you consider Elon's consistent track record of over-promising and under-delivering. Taken together with Elon's role in gutting regulations and coordinating to change listing rules, it's totally fair to characterize what's going on as intentional dishonesty for profit - i.e. a scam.
Musk literally said SpaceX would be worth more than all of planet earth. That’s fraud.
Forward-looking statements (even unrealistic ones) are not fraud. If that's your standard for fraud, then literally every public company is a fraud.
You’re moving the goal post in your argument. First it’s being good at raising money is a scam. Now you are pointing out his incredibly foolish claims. No disagreement, it’s an absurd statement. I don’t know if it classifies as fraud.
> just like Musk’s other scam, TSLA
Just so we're clear: You think that the only company selling EVs in the USA for a net profit is a scam?
What do you call Rivian, Lucid, Fisker, Bolinger, Lordstown, Slate, and Aptera?
Slate has been conspicuously silent about orders since the day after launch. Lucid is on the brink of bankruptcy. Fisker has gone bankrupt... twice. Lordstown no longer exists (with assets purchased for pennies on the dollar by their former CEO). Aptera has reorganized more times than I can count, and has been planning to release their product any day now for over 10 years!
Rivian actually lost a lawsuit this year for misleading investors about the potential profitability of their product leading up to IPO. An IPO which raised more money in one fell swoop than all the external funding Tesla had in their entire existence. By your own metric, is Rivian not a bigger scam than Tesla?
By the way, a bad fact for Rivian in that case was that they sexually harassed a female exec, who turned around and revealed (in her own lawsuit against them, just weeks before IPO) that the expected ASP of the R1 would be less than the production cost. Oops.
And, somehow, Tesla is the problem. Yea, that makes sense.
It's a scam only if you think the stock market in general is a scam. Remember, SpaceX is completely globally dominant in its industries (launch technology and orbital telecom)
"SpaceX is completely globally dominant in its industries (launch technology and orbital telecom)"
1. Have you seen what the Chinese have come up with? https://x.com/pronounced_kyle/status/2075526710003413004
2. None of these things are, where the money is supposed to come from in the future: https://www.youtube.com/watch?v=IHD8BDFYyGI
I don't know the future, nor do I give investing advise. I don't want this stock.
I don't understand what kind of media someone has to consume to not understand that SpaceX does completely globally dominate launch services. Like, it's not even close.
I have no opinion on whether other companies might catch up to them (either tomorrow or 10 years from now), but your quote is a completely accurate statement about the world as it exists today.
Launch service makes billions in losses and the Chinese have now the same technology. The only cash cow they have is Starlink.
If you read the IPO prospectus, none of theses things is were the money is supposed to be earned in the future. The money comes from the 3rd pillar, AI. Again AI is the biggest loss maker they have.
I would not invest in their launch services, nor in their AI. But I would invest in StarLink if they spun it off and if it were decently priced.
Yes, I think Musk has proven the stock market is a scam. If it wasn’t, the SEC would have thrown him in prison years ago for his regular violations of law in Tesla earnings calls.
> It's a scam only if you think the stock market in general is a scam.
So in other words, yes, it's a scam.
If people have access to the information and the price reflects demand, then it feels more like “bad decision” than “scam”.
I guess the difference between "scam" and "financial engineer" is whether it works.
If everyone loses their money it will be a scam. If people get rich he will be a financial engineer.
These aren't two different things. The winning side will make up reasons why they are right, and the losing side will make up excuses why they were wrong.
What is this scheme he is getting away with? We all saw the numbers, it is an absolute absurd valuation. Like I said I would never make the bet but just because I don't like him, does not mean I will immediately call the scam card. Both can be true.
When this gets listed, your retirement savings will be obligated to support it whether it makes sense or not. If it tanks AI, or the broader economy, everyone will pay the price.
No matter what, your money is going to Elon and friends. That's one of the schemes.
There's plenty of other schemes too, like merging in Twitter and an AI company to confuse investors and inflate valuations.
I'm not calling it a scam either. I'm saying it entirely depends on whether this insane level of scheming causes people to lose a trillion dollars or gain a trillion dollars, then history will be rewritten to match the narrative.
Why will my retirement savings be obligated to be part of it? No doubt it will be part of some indexes but I know for example mine it won’t.
It’s illegal for a CEO to make fraudulent promises regarding product delivery, timelines and financial projections. Musk does this regularly.
I guess it depends on the framing: a scam perpetrated on whom? It's not a scam on active investors if you lock in a bump from guaranteed passive investors. The active investors will see gains from that bump. But on the passive investors? On wider society?
If you spot the regulator looking the other way and try to sneak one past, is that legitimate, or sketchy? What if you recently had the influence to make them look the other way or be under-resourced?
You could argue 'treason' is a better word than 'scam'.
> I don’t think scam is the right word. The valuation and bank price targets are absolutely insane.
I was hoping you were headed to "...beyond scam" into serious fraud or something. Regardless how this is categorized, everyone (banks, stock market, the executive branch) is complicit, and I think SpaceX stock should have stayed off the public market.
Luckily neither you or I get to make that decision.
"Luckily"?
> I have to admit he is a great financial engineer.
so was Madoff
There's no room in the global economy to justify the kinds of numbers.
Like spacex isn't going to be the world's first 100 trillion dollar company because there isn't that much money. That's nearly as high as the global GDP.
Crazy growth rates are not possible.
> Like spacex isn't going to be the world's first 100 trillion dollar company because there isn't that much money.
That doesn't really matter. As we saw with crypto valuations, market cap is just number of shares * last price.
If you have 1 trillion shares and one is traded for $100 you have a 100 trillion market cap.
SPCX has 555 million shares, thats $180,000 for a share for this 100 trillion market cap. Don't be ridiculous.
Completely irrelevant to my point.
The point was just this: you don't need $100 trillion to actually exist for that market cap to be possible.
Sure, your point is factual, but it is unrealistic, which does make your point irrelevant.
> there isn't that much money
It's almost as if SpaceX would have to use another planet's resources to generate money for that valuation. Oh wait...
Oh, bull. The market is not pricing in a theoretical gdp of Mars in 2070.
They’re thinking “Tesla stock trades at absurd P/E for no reason other than vibes… this one might, too!”
Almost all of their promises since start have just been corporate puffery and pure vaporware. Going to Mars, point-to-point Earth travel, Starship, reusable rockets...
Same with all his other companies.
I warned people 2 months ago:
https://news.ycombinator.com/item?id=48368668
I was told I was giving poor advice explaining how to avoid exposure to the latest Musk grift. Unfortunate.
“It's easier to fool people than to convince them that they have been fooled.” —- Mark Twain
https://news.ycombinator.com/item?id=48374430
(SpaceX shorts have made ~$4B in profits on paper so far, as of this comment)
It really showed which financial commentators should be ignored. Hearing some of them speak was just painful.
And it worked. And whatever schemes he has in mind to have Space X merge with Tesla to increase market cap further will work too.
What's the point of an IPO? Show problematic institutional investors the door and replace them with disorganized public investors? Attract talent?
Seems like if the company is really doing great you'd want to retain ownership. Raise from bonds or something. Put simply, if it's valuable why would anyone sell it?
A lot of VCs had money locked up in SpaceX, like, portfolios going back a decade or more had some sort of investment in SpaceX. The IPO gave them an exit.
It's ok. Let the Musk-riders enjoyed their ride ...
Elon bought them an imaginary horse ...
Some would still say Tesla is a scam.
So I presume you made a lot of money shorting the stock if you were so confident?
Why would anyone want to risk any money going any way with these stocks?
Tesla isn’t behaving rationally, there is no way to tell whether SpaceX will behave rationally or not.
It seems like it’s becoming somewhat more rational, but all these stocks just seem to be incomprehensible to me.
The market can stay irrational longer than you can stay solvent
I can hold a strong opinion on this matter without risking any of my own money.
I own no Musk stock and never short anything.
I don’t think that affects the opinion I stated in any way.
Well I sure did. Not sure why you are writing this as a "gotcha". Buying puts is not some insane play. I gained about 85%.
“The world can remain irrational longer than you can remain liquid.”
It's right at IPO price, which (thus far) means it was more or less priced correctly.
Not a scam IMO, I don’t think musk is that motivated by wealth but im sure plenty of the heavy hitter investors are. I’m sure he didn’t complain about the valuation however. I think SpaceX is a solid well run company (praise be to Gwen Shotwel) but $1T is a bit much. I’ll eventually buy in when things settle down and we have a few quarters of financial data to work with.
What you describe is exactly a scam: he somehow convinced you that he's not motivated by wealth! That alone is clearly a scam, the idea that Musk is not motivated by huge amounts of wealth and high valuations is just implausible considering g his behavior at every single turn.
What is he doing with all that wealth? Taking lavish vacations? Buying luxurious yacht? Buying islands and making bunkers?
He is possessing it. That is the goal. To have more and to continue to acquire more. The mountain is there and he feels a need to climb it. But if he were to reach the top he would not be happy. The greed admits no conclusion. It must be fed continually. The joy is in the moment of 'winning', which is transient. There is no end other than death.
Some people are like this. Ever major religion and thought movement throughout history recognizes people like this. They need to have more for themselves even (and in many cases especially) if it means less for others. In pre-history when we lived in small groups and we really knew each other the group could identify and isolate and disempower them. Populations grew and so did their ability to lie and get away with it. To deceive and amass power. To exploit the systems that we built to help the collective to their own ends.
I would much prefer Mr. Musk found a nice hobby like yachts or race horses instead of buying communication platforms, bulldozing regulations, and bribing officials with PAC money.
That said, he needs the wealth to keep the whole machine from falling over. One element might be stable but the rest is overstretched and about to go bankrupt at any minute. He is doing this to get back control of Tesla while also investing in AI and not exploding.
He is running forward falling and his wealth legs need to keep up or it all goes down hard (and takes a bunch of bagholders with)
Having the wealth, of course, the glory of being the richest man to have walked earth.
Spending it is not the goal, having the wealth is.
Remember the ridiculous Tesla compensation package that he demanded? That's about having wealth, it's not about spending it.
He is buying countries dear, buying influence. It is all about power.
> Buying islands and making bunkers? It was reported a few years back he'd built a bunker in New Zealand.
Interfering with democracies.
He's too busy shitposting on twitter to use his wealth in any meaningful way. I just want to know if once he's on his deathbed he thinks to himself "I just wish I could call one more person on twitter retarded, that was a good use of my time on earth"
IDK what the calculation is for rich people, but for middle class who had that many children by that many women I don't think the state would leave them anything to survive on other than maybe prior savings.
SpaceX makes its revenue from renting out GPUs
> "Not a scam IMO"
> "I think SpaceX is a solid well run company"
This should be all the proof you need that it's a scam. Here's why:
The company isn't "SpaceX" it's "SpaceXAI", and nearly all of the valuation comes from the "AI" component, not the "SpaceX" component.
The IPO was meant for the VCs to cash out as all fundamentals were completely irrational, but seems like no one cares about cash flow and profitability anymore during QE times. Dumb money will keep being dumb I guess
The IPO featured less than 5% of shares as free float. So the investors are still in pretty deep with their hands tied until lock-up restrictions expire. The IPO was more of a quick, public financing round for their AI branch than an exit for SpaceX VCs.
As those lock-ups expire I only see the stock sliding further. Still, the very early investors will probably make bank, with the retail investors holding the bag.
Many of those early investors would have invested in a rocket company, I doubt many of them were overjoyed to be saddled with all the debts from an AI company and Twitter.
Big shift will happen after their Q2, 20% of eligible shares release; directed-share (friends & family) participants may sell for the first time.
Q2 call is expected in a month or so? But they also state Aug 21 is 37% of shares will go public.
https://spcx.capital/spacex-stock-lockup-dates
Is it possible that people who don't care about short term profitability but still want a strategic ownership of the company bought at a high price on IPO day and now that the day traders are in, speculation will readjust the price to short term values? The change of price just reflect the different buyer profiles.
SpaceX is a pretty important company not just for "the market" but also for many other things (see Russia/Ukraine war).
Fair warning: I know nothing about all this.
But why would you want to buy a company where the valuation reflects an extremely optimistic outcome already? Basically you are assuming obscene growth from SpaceX in AI, datacenters, rocket launches etc just to for the stock to go nowhere. The market cap was over 2T!
When you buy equities, if the company turns out shockingly successful beyond most peoples probable expectations you dont simply want your investment to just stay flat, you want to make multiples of your money. In order to do this, you simply cant start from a 2T marketcap. No company worth 2T can make you 100x your money or even 10x or 5x your money in a reasonable amount of time given the overall size of the economy.
>But why would you want to buy a company where the valuation reflects an extremely optimistic outcome already?
To hedge against the stock going up and making your buy in even more expensive.
Sure. But the market is littered with companies you can invest in. You don't "need" to bet on any single one of them.
It's all a bit of a mess with the consolidation of multiple businesses.
> SpaceX is a pretty important company not just for "the market" but also for many other things (see Russia/Ukraine war)
Starlink, which was rolled in to SpaceX, is/was profitable and it is a factor in Ukraine.
The rocket division is not profitable, but I sense that there might be a path to a profitably operating business.
As for the X/xAI piece, who knows? Long-term it seems like a moon-shot. I appreciate the irony that it's in the wrong division.
Buying at a high price just gives money to the early investors, the company itself doesn't get richer unless they're doing a raising capital round, but after an IPO you're just giving liquidity (+ profit) to early investors.
If you wait till the price comes down to its natural level, you'll be able to buy more of the company for less money.
What is your idea of strategic ownership? Musk has voting control, everyone else is along for the ride.
has it occurred to you some (from the amount of demand, a lot) people actually want to buy it because of that?
There are no "pretty important" companies with the relatively meager revenues SpaceX has got.
> SpaceX is a pretty important company not just for "the market" but also for many other things (see Russia/Ukraine war).
True, if Twitter and xAI stopped existing, there would be an uproar from all the suddenly unemployed disinformation botters.
SpaceX / Musk is the company which will build the Dyson Swarm. This is an opportunity to get in at the ground level.
If no one cared about cash flow and profitability wouldn't SpaceX stock go up instead of down?
> If no one cared about cash flow and profitability wouldn't SpaceX stock go up instead of down?
In addition to looking at the "fundamentals" of a company like cash flow and profitability, there is also a 'meta-game' that traders (as opposed to investors) have to look at:
> A Keynesian beauty contest is a metaphorical beauty contest in which judges are rewarded for selecting the most popular choices among all judges, rather than those they may personally find the most attractive. This idea is often applied in financial markets, whereby investors could profit more by buying whichever stocks they think other investors will buy, rather than the stocks that have fundamentally the best value, because when other people buy a stock, they bid up the price, allowing an earlier investor to cash out with a profit, regardless of whether the price increases are supported by its fundamentals and theoretical arguments.
* https://en.wikipedia.org/wiki/Keynesian_beauty_contest
"whereby investors could profit more by buying whichever stocks they think other investors will buy, rather than the stocks that have fundamentally the best value"
I think one thing to point out is "everyone" in this context is probably the broader market, but the stock holdings aren't distributed uniformly. A few large investors could actually be sophisticated and unload a fortune and the rest of the shareholders could still largely still ignore fundamentals and suffer large losses. The broad market can be ignorant and the stock can (and is) be down, both things can be true.
The company is still overvalued by a pretty massive multiplier
People cared after the IPO but initially in far less informed circles I constantly heard from lower sophisticated investors bragging about how they'd been allocated X shares like they were Pokemon trading cards they managed to snag. They weren't very sensitive to the price, only to brag to their friends they had snagged them. After the shiny wore off and no one cared about how cool they were, they sold them.
That is to be expected with any high profile IPO.
No this was anomalous for an IPO. People were limited to something like 10 shares that they had to pre-order like they were special order trading cards with an order cap as direct recipients of the initial shares.
Usually the public starts buying IPOs in open market operations on the secondary market, which removes some of the shiny and "limited" factor.
IPOs are designed to achieve a 20% pump, generally do achieve it, and did achieve it in the case of SPCX. Buying shares at the base of the pump that you are allowed to sell at +20% is a license to cash in. Why would anyone sell you those shares at that price, then? They are paying you to cultivate the "rare pokemon card" atmosphere that gets the less sophisticated investors excited and willing to buy the top. A dollar spent selling below-market shares to a promoter returns many dollars of exit liquidity. This is how investment banks make their IPO money and it's how social media promoters make their money. The promoters aren't the ones being fleeced. There are people who think they are promoters but are actually suckers -- but that's a separate matter. The price always tells the true story.
> No this was anomalous for an IPO. People were limited to something like 10 shares that they had to pre-order like they were special order trading cards with an order cap as direct recipients of the initial shares.
It all depends on your broker. My Australian broker gave everyone ~40% of their request and refunded the rest (typical Australian practice for IPOs). An American friend put in for >20x as much as I did with his US broker, they gave him nothing and refunded the full amount.
I don’t think the allocation process changes the underlying point. The mechanics may have been unusual, but highly anticipated IPOs almost always attract buyers motivated by participation as much as valuation. Whether they got 10 shares through a special allocation or bought on the open market, there is usually a cohort that wants to say “I got in on the IPO.” Once the novelty fades, some of that demand naturally disappears. I’m not convinced that’s unique enough to call it anomalous.
Edit: why would this get flagged lol?
No one can care about fundamentals in QE times. If you stay out of the market just because nothing there is valuable, you will lose your money to the hidden inflation and won't be able to buy anything there when you want in.
In normal inflation you can at least buy commodities. But the US economy is organized in a way that will concentrate the money on stocks, not commodities.
You've been through this before and have the scars or have seen them on others. It is hard to explain to those who have not. Though they only need look at a historical chart.
The Fed transitioned from QE to tightening almost 5 years ago.
I suggest you take a deeper look at what's happening.
The Fed announced they will transition away from QE yesterday. When they did that 5 years ago, a lot of things happened and they completely gave up on the idea.
Not sure if people not caring about cash flow and profitability is applicable across the board, it might just be because SpaceX is one of Elon's companies which seem to defy traditional financial analytic standards.
Since when are we still in "QE times"?
SpaceX, despite its name is an AI company, supposedly. Its S-1 states that the company estimates its total addressable market (TAM) at $28.5 trillion, of which $26.5 trillion, or 92.98%, is expected to come from AI.
SpaceX is an AI company without a frontier model. Until Jan 2026 SpaceX was an aerospace company. Then xAI was merged into SpaceX on January 30, 2026, so SpaceX became an AI company less than 6 months ago.
> AI company, supposedly
Mainly it’s a REIT that bought a bunch of hardware which is now depreciating like fresh lettuce. They don’t even have a way to use it productively for AI purposes themselves and are instead renting it to competitors, who are using it to lap them.
> now depreciating like fresh lettuce
Musk for Prime Minister is what I am hearing here.
> SpaceX is an AI company without a frontier model.
Unless they manage to build such a model, then their plan looks like they intend to be an AI _infrastructure_ company. Which is probably viable and healthy business! One with lots of competition and low margins that is completely misaligned with their current valuation.
It might be a viable business model, but does not warrant anywhere near these valuations.
Isn't it a little absurd to be guessing what the business model might be or should be for the company with the largest ever IPO, which got a free pass on (lack of) profitability? It's a little late.
All these bans on building data centers on Earth are starting to make this wild proposition seem a little more rational.
Only a little, not a lot. It seems like the easy answer is still terrestrial with a heck of a lot more giving back. For example:
- offering to pay some nominal subsidy for all households electricity bills in the region.
- committing to only closed loop cooling
- if the location is amenable, then providing free heating to neighboring buildings.
- only building in blighted locations with no current economic value
Other random ideas: I wonder if anyone is considering building server racks directly into offshore windfarms. Replacing failed hardware is annoying, but surely more economical than in space where IIUC, there _is_ no plan to ever maintain hardware at all, just deorbit and replace. All the water is right there for cooling (though I'm sure saltwater has its own problems with corrosion). While the current US administration is clearly anti windmill, that might work nicely in Europe.
Every time there is an economic boom like this, you get unscrupulous actors coming in and extracting as much value as they can before the regulatory environment catches up. Yes, datacenters should be doing all these things, but that costs money, so they won't until there are local statutes and federal regulations that require them to do so. I expect the current situation to continue at a huge social cost for at least the next 5-10 years unless the bottom falls out of the AI boom before then.
The SpaceX subsidiary SpaceXAI (formerly xAI) is X (Formerly Twitter) and xAI. Things move fast in the trillion dollar valuation world.
As a scientific adventure, SpaceX is a worthy company full of awesome people. But the management and VCs is another story, as usual. To price it at a market cap of $1.8T, somewhere double that of Walmart is insane.
My understanding is that an ideally priced IPO should not move much from the opening price in the near term. If it pops it means they left money on the table. If it drops, then I am not sure what the implication is exactly?
Now I think SpaceX is massively overhyped, but is the share price returning to IPO opening not just a sign that the banks accurately estimated something?
In general terms you want the stock to pop.
Your bank will get a ton of orders from institutional investors of how many shares they want at a given price. You will have a preference as to which investors you want on your cap table. Almost all of those investors value your stock less than the "pop price" (which includes the investors you want on your cap table). So you'll need to target the IPO below the "pop price" so you get them on your cap table.
You're probably picking investors based on how likely they'll let you stay on the board / CEO and if you think they're just going to dump the stock during the IPO (which would be bad for it's price).
So (unlike the SpaceX IPO) you're going to sell relatively little shares to retail who will buy at any price which during the opening days will cause it to spike as the demand (in nominal dollars) per share is beyond the IPO price target.
> but is the share price returning to IPO opening not just a sign that the banks accurately estimated something?
Sure they estimated something. But there's a ton of different things that can be estimated.
Many IPOs slide below the initial price. This isn't a SpaceX thing.
If the NASDAQ changes their inclusion rules to court SpaceX... it sort of does become all about SpaceX.
> an ideally priced IPO
Ideally priced from the perspective of pre-IPO investors.
This seems like an argument for outside investors not to buy IPO stock.
There is no should or should not.
Look at the financials and the price, and you as an individual get to determine if it's worth buying (or selling).
What do you mean by this? The person you responded to never used the words "should" or "should not", and then you basically repeated what they said using more neutral words...
What is so controversial about saying that SpaceX seems overpriced?
His point is that sellers can do whatever suits their interests best, they don't have a duty to pick a fair price. And that it's on the buyer to decide whether to accept it or reject the price.
Duh? That point was actually implied by my initial comment.
Nobody said anything about fairness or duty.
My point was that if the seller is trying to maximize its self-interest by maximizing the IPO price, leaving no room for growth after IPO, then buyers probably want to take a pass at that price.
>If it drops, then I am not sure what the implication is exactly?
Surely you understand it's inverse of an IPO that jumps after intro, right?
SpaceX is not seen by investors as worth its price. This is because it is not.
All of the IPO banks have a public position that SpaceX is actually undervalued and should be at least $200. (Are they telling the truth? lol.)
I’m way out of my depth in suggesting this idea, so forgive me if I’m committing a conceptual “divide by zero” and it’s not even wrong:
It seems like the SpaceX IPO really breaks the traditional notion of market cap.
Market cap has an unstated assumption that most of a company’s stock could, in theory, be traded unencumbered. Thus shares * price gives a very rough view of the value of the company. Everyone understands that this valuation has problems: it attributes the last marginal trade to the entire stock, and doesn’t account for large purchases/sales. But it’s useful nonetheless.
But with SpaxeX, only a tiny fraction of those shares are even theoretically tradeable, so it seems bizarre to calculate valuation using price * shares. I think this is the source of discomfort around the $2T market cap.
It seems like, similar to how there are long and short term liabilities, there should be long and short term market caps.
“Short term market cap” would be price * “number of shares that could theoretically be available for trade within the next year”, from all sources (including vesting employee options, expiring lockups, etc).
“Long term market cap” would be price * total authorized shares.
So SpaceX’s long term market cap would remain at $2T and its short term market cap would be, say, 5% of that (about $100B).
Market cap has been that sort of fiction from the beginning. It's never been a terribly useful number. There's really no fixing it because the only way to "truly" value a company is to sell it, for real, on the open market. Anything else is just a guess. More or less educated, but a guess. SpaceX isn't creating this problem or making it particularly worse.
What you are describing is what's called free float market cap and is generally what market indices use to weigh stocks. That way you're only trying to replicate the market of stocks that are actually available to trade. There's nothing new about SpaceX in that respect, plenty of companies have float much lower than their total.
You're not wrong, but the weakness you point out isn't a new concept.
Market cap is, at best, a rough valuation of the company. It has many confounding variables of which liquidity can be one of them. That's part of why investment analysts put out price targets for companies. The counterpoint is that market price is driven by what people are actually paying.
One of the major challenges with valuation is settling on a methodology overall. There are many ways, appropriate and not, to value a company. Many will have different estimates for value. There are also factors, like control premium, that start to become relevant when you try to completely acquire a company.
One of the benefits of an open and liquid market is that future availability of locked shares can be priced in early. We all get the benefit of consensus information.
Nah, it's fairly common for only a relatively small part of a company to be tradeable.
No, shares are shares. Public or not.
Different classes of shares are possible, as are other time-varying schemes such as warrants. But that's not what Musk did. The shares all have the same class.
There’s still really nothing keeping it at even these lower levels except pure hype. By the fundamentals typically applied to aggressive growth companies a “sane” price is closer to $40-60 and even that would be very aggressive considering the company’s financials.
If the company doesn’t quickly show a financial picture that matches the sky high pro formas then even anything close to those levels will become extremely hard to justify.
The bond markets have already turned very negative on SpaceX with extreme red flags developing there.
Anyone buying IPO for short term gain would have exited at initial spike, others (like me got in at allocation price) will be holding for a decade or two so this is noise, expected not sure why it posted here, do we post every tech stock intra day price move
And I don't understand why a serious media outlet is covering this at all. The entire article could be irrelevant the next day.
Without any actual, meaningful news coming out of the company (important financial update, new product, bankruptcy etc), stock price moves are only meaningful to day traders, not anyone who is doing serious investing. LA Times is making themselves the same as CNBC or sources you find on Yahoo finance.
Because anti-Elon thinking is a thing that really seems to impact the judgement of some people and this kind of news really gets them to engage
Bingo, hacker news has this tendency hence this is on the front page.
The sheer scale of global fiber optic, 5G, and FWA deployments is rapid enough along with middle distillates (jet fuel) getting rekt.
Something like 100k flights cancelled. Upgrading the planes to have starlink is onerous, high idle/offline time, and capital intensive.
The total potential market for Starlink shrinks by at least a few hundred thousand people each week.
SpaceX blasting up and dropping right back where it started feels appropos.
It landed back where it started.
Seems very appropos.
I think SpaceX has a great future ahead of it.
I didn't buy a single share.
That's good! Because this stock has pretty much nothing to do with the reality of SpaceX or its future. It's a trillion dollar memecoin.
Same here. It's such a shame because I always wanted to invest in SpaceX (even despite it's CEO), but now most of the money would go to AI stuff rather than space exploration, so I'm out.
Right on time for https://arstechnica.com/space/2026/07/how-hard-is-it-to-buil...
Mid-August there’s a shareholder unlock of 20%, we haven’t seen the dip yet.
only if other investors "catch" it...
It surprises me that this seems so consequential to observers. According to a quick search, around 40% of IPOs are below their IPO price at their one year anniversary.
I'm not invested in this myself, figuratively or literally.
I guess for any stock to rise, there have to be people thinking it will be worth more in the future.
I presume there is a way to mathematically determine how atypical the SoaceX stock is behaving. Does anyone have a reference to how this would normally be done?
As reported in The Shovel: https://theshovel.com.au/2026/06/29/factory-that-makes-world...
I always wonder why not more companies are using more creative approaches like Google's Dutch auction to set their IPO price.
It seems direct listings gained some popularity but overall most companies seem to rely on the traditional underwriter model.
According to [0] -
> 22 companies went public on major exchanges using IPO auctions in the U.S. between 1999-2008, but there have been none since then, as of May 2025. Starting in 2018 when Spotify went public, there have been at least 20 companies that have gone public using a direct listing. With both IPO auctions and direct listings, underwriters do not have discretion to allocate shares to their preferred clients.
[0] https://en.wikipedia.org/wiki/OpenIPO
The Dutch auction wasn't all that smooth, with Google having to adjust prices at the last minute. Most results show that it didn't really produce all that much of a benefit over a traditional IPO, where (the issuing company) at least gets a guaranteed minimum amount of money to raise. Pretty much the only alternative is a direct listing for companies that want to go public, but don't need to raise money. (Well, there's also SPACs, but that's a different beast).
When banks, pension funds and other institutional investors are fighting to outbid each other to get a slice of your IPO why would you care about finding an accurate value and being "fair"? Whether the price goes up and down post IPO isn't really the company's concern. They already have the cash.
thats been replaced with spac deals
also: can't pump the ipo and get exit liquidity for vc through a dutch auction
Google's process produced a price of IIRC $85/share and on first-day trading soared to >$100 so there was a lot of discussion at the time about how efficient that process was.
But really that's how all IPOs work, basically. You have one of more investment banks that underwrite the offering. They're basically guaranteeing to sell a certain number of shares to their clients at a given price. Those clients can be institutional investors, pension funds, high net worth individuals and so on. But there's a feedback loop here where clients might push back on a certain price.
IPOs love these sorts of investors because they tend to buy and not sell. If everyone sells the IPO will flop. Retail investors are far less "loyal".
The IPOing company also has levers where they can manipulate the price, most notably on the supply side ie by limiting or expanding the size of the float. SpaceX's float (as a percentage of the company) was actually really small.
What's unique about the SpaceX IPO was that it would immediately become one of the world's most valuable listed companies so there'd be a lot of induced demand from index funds. The underhanded (IMHO) aspect to all this was that the rules were deliberately changed so passive investors would be exposed almost immediately rather than first allowing some form of price discovery by the market. NASDAQ capitualted. S&P did not.
I guess the real manipulation here is the fiction that SpaceX is an AI company, which ultimately goes back to a series of bailouts for terrible decisions going back to the Twitter purchase. SpaceX's AI pitch was orbital data centers, which make no sense, and using their ill-gotten NVidia chip allocations to rent them to Google.
IPOs are generally not a good investment, at least not relative to average market return:
> However, a year later, we see that the majority of companies are either outperforming or underperforming the market by more than 10%. We also see that more companies are underperforming than beating the index (the red bars stretch below the 50% line).
> That seems to indicate that for some companies, the initial IPO enthusiasm wanes or expected earnings are not met, and investors reprice the IPO to reflect the actual, slower growth of the company.
> Three years after their IPO, we calculate that almost two-thirds of IPOs are underperforming the market, with most (64%) more than 10% behind the market’s returns.
* https://www.nasdaq.com/articles/what-happens-to-ipos-over-th...
> 56% of IPOs bought at the offer price lost money after 3 years. That number rises to 57% after five years. The numbers are higher when bought at the first day closing price: 60% lost money after 3 and 5 years. Worse than a coin flip.
> Only 19% of IPOs doubled or more after three years and 22% after 5 years when bought at the offering price. The numbers were worse when bought at the closing price.
> Of course, the lottery-like returns were possible, but it amounted to about 0.4% of all IPOs after 3 years and 1% after five years.
* https://novelinvestor.com/the-hype-and-hot-air-around-ipos/
Interview with a researcher that has looked at IPOs over the last few decades:
> We’ve previously compared IPOs to lotteries that are prone to inflated valuations and low returns. Today we welcome “Mr. IPO,” Professor Jay Ritter onto the show for a deeper dive into IPO performance, for his insights into SPACs, and to hear his research into why economic growth doesn’t correlate with stock returns. Early in the episode, Jay unpacks how long-term IPO returns perform against first-day trading. While exploring the role that venture capital plays in tech IPOs, Jay talks about why negative earnings don’t affect tech IPOs in the short-term before sharing how skewness factors tend to impact young companies. Reflecting on how IPOs are usually underpriced, Jay discusses how the interests of companies are not aligned with the interests of IPO underwriters. After looking into IPO allocation, Jay compares the 2020 ‘hot IPO market’ with the internet bubble of the late 90s. Later, we ask Jay about what special-purpose acquisition companies (SPACs) are and why they’ve exploded in recent years. His answers highlight their investing benefits, risks, and why SPACs might be a better option for companies than IPOs. We examine how SPACs have historically performed and then jump into our next topic; why economic growth isn’t a good indicator that a country is worth investing in. He touches on why returns don’t correlate with economic growth, the place of capital gains and dividend yields when investing abroad, and how innovations in an industry can lead to higher stock returns. We wrap up our conversation by asking Jay for his take on whether the stock market is efficient before hearing how he defines success in his life. Tune in to hear our incredible and informative talk with Jay Ritter.
* https://rationalreminder.ca/podcast/139
Picking individual winning stocks can be hard:
* https://en.wikipedia.org/wiki/A_Random_Walk_Down_Wall_Street
Many IPO's have the same trajectory that SpaceX did - first going up steeply and then dropping steeply. So there's certainly money to be made if you get the timing right but that is always the challenge.
Worth considering that "trading" and "investing" are different words. :)
Honest question here: What does this mean for Anthropic's OPenAI's rumored IPOs?
Looks to still be over a trillion market cap.
If the IPO can't find institutional buyers at the price and has to resort transferring the initial shares directly to the public, safe to assume they've hyped the public into being the bag holder. What SpaceX did is rare for a reason.
Obvious mess. I bought it on IPO and sold 1-2 hours later with some gain
This all feels like it was designed to artificially inject cash into xAI despite the average person being strongly against it. First they merge that company with SpaceX despite having very little in common in either of their infrastructure or goals, then they change the rules to get the stock out to the general public as quickly as possible on the promise that obviously it's going to explode in value and make everyone very rich to justify that decision, then once they have investor cash in-hand the stock price slips. I think they just tried to leverage SpaceX's relatively popular, positive image into investments into xAI by more or less giving up on SpaceX being anything but a wrapper around xAI.
Typical IPO pattern. Hyped IPOs shoot up and then correct, some correct more than others. Traders take their profits. Nothing new here, just bigger headlines because it's a big name. The bigger the name, the bigger the hype.
Not really, it got turbo charged to Nasdaq which involves some involuntary investments.
something something about fools and their money are easily parted.
Maybe this has to do with the technical unfeasibility of sending human to Mars and back to earth while keeping them alive ? Throwing billions at it won't make it happen magically.
It doesn't, because SPCX isn't a space company, it's an AI company with a space hobby. That's what the IPO paperwork says at least.
Buy low sell high
shocking, who could have predicted that?
Related:
SpaceX bond worth 10% less than issue price – heading for junk bond status
https://news.ycombinator.com/item?id=48920181
It's typical to happen after IPOs. The same happened to: IBM, Meta, Google, Nvidia, Apple, and many others...
PS: I am not saying SpaceX is a good investment.
I think people around here just dislike Elon Musk for his politics and are rooting for his stuff to fail at every turn.
Could be a great buying opportunity depending on your theory of investment.
This line of thinking could be applied to literally any company in the world, even to Spirit Airlines 5 minutes before it went out of business.
> closing at $135.27
ffs, wake me up when it's at least 10% below what it IPO'd for. The idiotic tulip mania that followed in the few days after it floated was noise, but as of today, it seems the IPO price was pretty much right. However, endless headlines about the price crashing etc.
From a fundamentals perspective, it's an insane price, obviously. But the narrative that it's all coming crashing down is obviously not correct (today).
noooo my stonks
“The shares regained some ground later in the day, closing at $135.27.”
I’m really tempted to buy a chunk right now lol
I'm thinking that over the course of the next 10-18 months the price should continue to come down as pre-IPO shareholders become unlocked and can sell their shares.
Me too, and not for any rational reason or because I value my money or my investing strategies, but simply because I have a high risk tolerance, and it seems like these days that’s all you need to make money.
No real skill, no real research. Just ride the hype train, shrug if you lose, and never gloat when you win. Simply take the profit, stfu, and buy a Porsche or some RAM.
> or some RAM.
Look at Mr. Billionaire right here.
Do yourself a favor and DCA in from here. SpaceX was "only" valued at 210 Billion back in June 2024, around 11% of its current valuation. A return to that valuation would take it down to ~$16/share!
SpaceX is a phenomenal company. I've wanted to buy in since 2009. But the stock is the exact inverse of my ideal single-stock investment thesis--huge downside with severely limited short-to-mid-term upside, given the huge premium already being paid.
Maybe take a look at Rocket Lab :)
Still 10x higher than any rational price.
And I had to scroll all the way down here to find a post that wasn't high octane copium.
This was completely predictable. Anyone with a brain looking at this stock would have shorted it.
Still far to high. I love SpaceX as in 'space', they were a great company, doing things nobody else could. Now its a dumb AI company that hands over cash to micron, nvidia and friends who literally print money, while financing that with delusional promises.
Many people can soon sell their SpaceX stock, I don't think the S&P will safe them later.
Ive never understood why so many people seem to cheer for Elon's companies to fail.
People generally hate to see scams stealing money from naive marks. Both SpaceX and Tesla are obvious scams at anything close to their current valuations (despite having real, functional businesses in there! ), that Elon keeps pumping up with ever more ridiculous claims (50 million humanoid robots by 2026/7! Tesla Roadster out by 2024, pre-order now! Starship point-to-point for business travel by 2030! Datacenters in space!).
https://en.wikipedia.org/wiki/Schadenfreude#Psychological_ca...
Because he's a psychopath who is actively making the world worse. Anyone who stands on stage with a chain saw and cuts US AID with a smile on his face is a truly horrible person. Anyone who hoards a trillion dollars while others starve is a truly horrible person. Did you root for the Empire in Star Wars? I hope nothing but the worst for him so maybe someone with a conscious and a soul replaces him.
It has helped me to live with the model that the probability of there being any sort of objective morality or ethics is close to zero, and that a hierarchy of influence within any given context is generally unavoidable. Once you accept this model, you spend less time moralising and angering yourself over perceived wrongs, and can now spend more time on figuring out how to live a happier life despite the fact that there are no set rules.
I was a fan of early Elon. He had many problems but he was overall good.
Then he turned full ultra right wing nationalist who engaged in science denial. Supported a president that is unquestionably racists and unquestionably fascists. And he made this clear by doing some Nazi salutes on top of that.
Then he used that influence to sell a completely false idiotic story that cuts to discretionary spending could 'fix' the budget deficit, like a complete idiot who had never watched 2 youtube videos about the US budget. Then used to slash and burn many beneficial programs while having no impact on the deficit what so ever.
He was supposed to be science and engineering progress driven, but then allied himself with ultra-right wing anti-scientific fascists who try to dismantle the whole education system in favor of at best best creationism or more likely nothing at all.
Not sure why its hard to understand. The only people who don't understand are ultra-right wing facists who don't understand why other people don't want to support ultra-right wing facists.
Does that explanation help?
I hear what you are saying. There are many CEOs and companies that I also dont like. But I dont spend everyday checking their stock price and cheering for them to fail like they are my rival sports team. I just dont understand why many people are so glued to watching his companies, rooting for failure, and running to post on the internet as soon as something bad happens. I cant think of a similar situation.
SpaceX is not just any old company. Its a trillion $ company at the heart of one of the most contentious topic in the modern world, AI. And its not just relevant for Elon, its also about the general outlook for the economy and AI. Most people retirements are in index funds that Musk tried to manipulate, so the stock value coming down before any S&P inclusion is important for many on a personal level.
Also, the reality is, Elon made himself a massive public figure deliberately, he very publicly embraced one side of the culture war and make his opinion on every public constantly. He literally one of the most important people because he literally bought one of the largest media platforms and made sure it fully embraced right wing points of view.
You are complaining why Elon is in public debate and people are so interested. That's because politics is a public argument between different parties, and Elon has used all his influence to support one side of that. And that is the result.
And not just in the US, Elon tried to insert himself into politics of other nations, such as Britain or Germany as well. Making most of the western world angry.
Why are you surprised that he gets treated like a politician when he acting like a politician?
You can't be the CEO of total independent technocratic companies and at the same time be a public ultra-right wing facist supporter who endlessly engages in a public culture war. Specially if those companies are directly linked to him view voting shares that give him ultimate power.
SpaceX: The Biggest Money Loser in IPO History
https://www.youtube.com/watch?v=IHD8BDFYyGI