Comment by jordanb
6 months ago
You don't have to believe. If you have a 401k you will be an investor 15 days after launch.
The IPO will go great, because the company will float a fairly small issuance. The big shareholders will not immediately sell. They will hold on and maybe even buy to support the price.
Then, after 15 days, it will enter the indexes and everyone's 401k will start auto-buying this stock.
You might say this is an obvious flaw in how the indexes work if they start immediately accept a brand new IPOed stock with limited float. You'd be right, which is why they won't list for a year.
At least they wouldn't until Elon got them to change their rules: https://www.bloomberg.com/news/articles/2026-03-30/nasdaq-cl...
I really wish more people were aware of this. It's a major scandal and definitely not being talked enough about.
Nevermind SpaceX, which at least have some importance for US defense industry, but xAI ? We will be investing in Elon's private venture, at the price that he himself set and which is at least 2 orders of magnitude too high...
> It's a major scandal and definitely not being talked enough about
It’s being extensively talked about and debated. It hasn’t entered the mainstream discourse because it’s too technical.
It doesn't need to enter the mainstream discourse.
It needs to enter the inbox of a grand jury docket.
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There are enough Elon haters that you can rest assured there will be an inverse ETF so that you can easily hedge away your index exposure if you really want to.
He's strapped them together because xAI is about to go bankrupt and has fuck all, so this way he can dump it on the bag holders.
Just call it what it is: SpaceTwitter
SpaceXitter
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Well, we elected a bunch of criminals, and Elon fired everyone who regulates this. The SEC was gutted like a fish, and contract terminations resulted in a large percentage of FINRA staff being laid off.
But the Dow is over 50,000 right now!!!1
(actually, 46,565.74 right now)
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You have to be more specific when talking about "socialist europe". The Netherlands, for example, has the best-managed pension system in the world. Despite what many people believe, "Europe" isn't one country and it doesn't have a single healthcare system, pension system, or anything else related to the welfare state.
US social security on the other hand is exactly as you describe pension systems in "socialist europe". Money taken from current workers and invested in state debt.
https://www.mercer.com/en-au/about/newsroom/mercer-cfa-insti...
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>I really wish more people were aware of this. It's a major scandal and definitely not being talked enough about.
Aware of what? A rule change that has been asked for long before Elon stepped foot into the White House? Just because the collective brain rot and Elon Derangement Syndrome on BlueSky is calling it a "scandal" doesn't make it so.
In order to be incredulous at xAI, you'd have to be incredulous of the AI business in general, which is fair.
But then you'd also be basically betting against the entire tech sector, and really the entire US economy and against the value add of AI. That kind of bet is much more difficult to swallow.
That's not true at all.
I am confident some companies will make bank with AI. I am also confident xAI is not one of those.
It's as if you said "if you don't think Lycos is a good business you don't think search engines can work in general".
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xAI's value is irrelevant here. This is about Elon throwing his weight around and rigging the game to create an artificial squeeze so him and his early investors can make bank by transferring wealth from everyone's retirement fund.
The company is irrelevant. The focus should be on the money making scheme
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> against the value add of AI
Hasn't the surprising lack of value add been discussed with increasing frequency?
Who is using Grok seriously?
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>float a fairly small issuance
SpaceX are widely reported to be planning to raise $75Billion in new capital. It may seem small a % for the valuation target. However that is about 3 times previous highest raise of $29B when Saudi Aramco went public few years back. The market simply may not be that deep[1]
There is a good chance this one becomes the Wework of this decade. The valuation, amount being raised, cooling interests in AI, and middle eastern capital changing priorities, interest rate outlook for the rest of the decade. These are all strong head winds to overcome even when not raising the largest ever amount in an IPO.
That is not say that it is destined to fail, Elon is excellent salesman of vision when fundamentals are weak, There is no better proof than Tesla P/E .
It is by no means clear this would be successful or not. The valuation, funds being raised, future growth potential are all not based on just SpaceX core businesses which would have been an easy sell.
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[1] i.e. it could be still under-subscribed even if everyone buys into the vision, growth projections, is comfortable with valuation gets fully onboard including retail.
Even in this best case scenario SpaceX would have to sell at the lower end of the target range or go even lower and still end up being short matter what, because there could simply be not enough money in the market.
I think you have to temper the skepticism a bit though.
SpaceX has dramatically lowered the cost of launching things into space. They are still the leader here. They can put a kg into orbit cheaper than anyone, even heavily subsidized state operations (EU and China).
Their order book continues to be full. Every single launch vehicle they roll off the line was pre-sold years ago, including its re-use flights.
I agree that Elon is their biggest potential problem and a big risk but their launch business is sound and wildly successful. If you believe access to space will be a growing segment of the economy in the future it isn't exactly a bad investment.
I remember all the people putting Tesla down when they IPO'd. I bought $4k of stock (all I could afford at that time). Sold $100k of it a few years ago, still have the other half worth near $220k. Their numbers at IPO time were garbage and it wasn't clear they would even survive. Then they started shipping hundreds of thousands then a million cars.
YMMV, consider all sides and make your own judgement. Just be careful about trusting the anti-SpaceX case. Even if everyone is technically correct about them it can still be a huge miss not to invest! The future is not static and if they can put the raised capital to productive use the IPO could end up being a fantastic deal. And FWIW I also agree the largest immediate risk is they are over-valued. Only time will tell on that front.
> Their order book continues to be full.
In 2024 66% of their launches were for Starlink. So it’s not quite correct to suggest there’s a vibrant external market for their product, a lot of it is sort of self dealing.
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Tesla IPO'd at 1.7B and is worth 1.4T today. Giving you the benefit of doubt since it would be closer to a 1000x gain rather than the 100x gain that you didn't buy right at IPO, I will point out that there's a world's difference buying in at 1.7B, because there's still room for the stock to 1000x, but there's not much gain to be had buying in at 1.7T valuation.
Even the most highly company in the world Nvidia is less than 3x that valuation, so it's not a good comparison with Tesla's IPO.
As I mentioned at the end, if the pitch was just for the launch (and starlink) it would be an easy sell.
The problem is launch market is not worth 1.5+ trillion though, you need much more than just starlink and all the satellites today to justify that .
You and other early investors who had the opportunity to get in early may come of well in this and it was a good bet then.
However it is hard to see why rest of us should get in at $1.5T, the downside risks are far more than upside potential at this price .
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Not one more cent should be given to that man.
I think you have to temper the glazing a bit though.
These people and their endeavors are thoroughly, irredeemably corrupt. It’s nice you got a taste, but their impact on society has been calamitous, and will take decades to recover (if at all).
>There is a good chance this one becomes the Wework of this decade.
It's very different from WeWork which was basically just subletting office space with beer taps. At least SpaceX had done significant stuff with the rockets and Starlink.
The comparison was not about the strength of the business, it was about how the attempt to IPO and the original S-1 was the trigger for more realistic price discovery for Wework
My comment was that it is possible that by trying/becoming public SpaceX also will go through that same process once their numbers become available.
> excellent salesman of vision when fundamentals are weak
Wow that was a polite way to say that
Only NASDAQ so far; S&P 500 is apparently "reviewing its rules" but hasn't changed them yet.
So you've got a full year to wait on that index fund, assuming they don't cave.
Also, would individual funds that track the S&P have left themselves some wiggle room to delay this if they wanted?
I am not an expert, but my understanding is most funds don't change allocations immediately, but it would be part of normal rebalancing, e.g. VOO and other indexes that track the S&P500 do it quarterly
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They all smear the purchases and sales from index changes, but I don't think they publish on what timescale. Most funds try to minimize tracking error. There are funds that take this to a different level. When a stock is added to the big indexes, it tends to do poorly over the next year, and on the flip side when a stock is removed it tends to perform well. Dimensional funds have automatic rules to take advantage of this type of thing. There are other companies that have funds of this style, but overall they are much less widely used than the big index funds from vanguard, blackrock, state street, etc.
Didn’t Sp500 drag their feet for a long time before adding Tesla?
S&P500 held fast to their rules on consecutive quarters of profitability and forced TSLA to meet them (must be profitable in qX + sum to net profit over the past year). If they hold to them this time, SpaceX would need to be profitable over a year while public to enter the index.
They have instituted rules and gone back on them eventually (most notably for several years they had a "no going public with different classes of voting shares designed to allow control forever, if IPO is after today" rule that they eventually dropped) but they are generally pretty good about following rules.
Cave? That’s the boring company, this is the space company.
> If you have a 401k you will be an investor 15 days after launch
You will be an investor in spacex and xai which it bought.
Fun fact, Xai net loss 6 billion dollars per year and SpaceX net profit 8 billion on a good year (https://www.reuters.com/technology/musks-xai-posts-net-quart... https://www.globalbankingandfinance.com/spacex-registers-tak...)
If you remember xai, it's that company currently being sued for the undressing kids feature (https://www.theverge.com/ai-artificial-intelligence/895639/x... https://en.wikipedia.org/wiki/Grok_sexual_deepfake_scandal) in its flagship product. By the way the feature is still enabled apparently
Is there something about why spacex wants to go public ? if not then this is definitely about xai... to hide unprofitability and offload it on general public ASAP.
The SpaceX profit is EBITDA, not real. And presumably includes massive starlink depreciation and stock based comp.
Serious question: Is there some ETF that is "Index of S&P500 minus anything that smells like Musk"?
If you have $100k, you can do it with direct indexing at Schwab. The management fee is 0.40%.
I looked into it, but there are gotchas with wash sale rules and taxes. You really need $500k-$1M to avoid tracking errors. End of the day, the overhead seemed more problematic than the problem, so I ended up increasing my global allocation instead.
Could you emulate this by instead shorting thr stock in question? I suppose it would be hard to limit the risk of a short squeeze?
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Yes, kinda. Goldman Sachs launched that under the symbol SPXXAI last month. I'm not totally sure how to actually invest in it yet though.
https://www.axios.com/2026/02/20/ai-goldman-sachs-stocks-ind...
That isn't non-Musk. I also wonder where Google and Microsoft and Facebook fit in to the index (each isn't AI but have AI correlated exposure?)
If you have a big enough portfolio, direct indexing (using something like Frec or Wealthfront) could be an interesting option, and weighting the companies that you don't want at 0.
Wealthfront offers the ability to blacklist stocks in your account (the feature is meant for people legally prohibited from investing in certain tickers).
It won’t exclude from regular indexes, but it will exclude from the direct indexing. I’ve been using it to exclude NVDA ever since it peaked (or at least reached the peak valuation I’m comfortable with)
Wealthfront’s portfolio minimum used to be $100k, but I think they have a new direct indexing product with a $5k minimum.
The cheapest option might be to buy the index and sell short the appropriate amount of Musk companies.
There is XMAG, but beware the expense ratio is much higher than the mainstream indices.
Direct indexing is pretty easy these days.
Uter and complete corruption: https://news.ycombinator.com/item?id=47389233
"The secret of greath wealths with unknown causes is a forgotten crime, because it was properly done" for those who don't speak french.
Ever since SNAP the whole IPO show has been a transparent scam to game the index funds.
The market simply doesn’t have enough people actively investing because it rewards mass stupidity over generating meaningful returns.
Based on the list of businesses at the top, the stock market seems like it rewards profit margin and profits, by businesses that sell meaningful products and services.
https://companiesmarketcap.com
Can you provide an example of any of the businesses on that are on that list due to "mass stupidity"? They all seem to operate factories, employ many highly qualified people, and make a material difference in many or even most people's lives around the world.
Meanwhile, SNAP has returned -14.98% per year to its shareholders since it IPO'd (Jun 3 2017), and at an $8.27B market cap, it makes up a negligible portion of any broad market index fund, so not sure how SNAP's shareholders have been rewarded by mass stupidity, especially given that the founders still own half of the business. They would have been far better off liquidating their shares and investing in SP500.
https://dqydj.com/stock-return-calculator/?ticker=SNAP
Tesla is a great example. It’s 30% retail, 25% elon and insiders, and the remainder institutional, mostly index funds.
The investment thesis for Tesla is absurd. They built the market cap on hype and it got big enough that it remains a force. It’s a flailing company, kept afloat by bullshit.
The bigger issue is the death of small cap. Massive venture, sovereign wealth and PE funds don’t need the public market capital anymore, so they harvest the vslue and spit out the company late in the value cycle.
Snap, cool as it is, is a social media loser. The investors cashed out their shares to the public, who took the loss.
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I mean, that list has Tesla, which is overvalued by any plausible valuation approach.
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The flaw is the limited float. Indexes will be forced to buy a huge number of shares which don't exist, driving up the price.
For general investors if this is going to eventually happen, the earlier the indexes buy in the better. Otherwise more sophisticated investors will buy ahead of the indexes and grab the profit.
if they weighted (fully) by float (perhaps the average float from the trailing 90 days to the re-balance) it would not be as easy to game. The Nasdaq is accounting for float, but not completely.
Aren't basically all the huge serious index funds float weighted?
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Initial public offerings whose market capitalizations rank within the Nasdaq 100’s top members will normally be eligible to be included after 15 days of trading, Nasdaq said in a statement. The timeline is shortened from at least three months currently.
“Industry professionals, including asset managers and institutional passive portfolio managers, were mostly supportive of the Fast Entry proposal and proposed timing,” Nasdaq said in the statement.
15 days vs 90 days isn't some huge shift nor is it inherently some "flaw." These changes have been asked for long before Elon entered the White House.
ok so it seems pretty bad that they changed the index rules both to allow spacex in early and the wonky weighting stuff. But if one already has index-based things that are likely to be captive on the wrong side of this, and one wanted to benefit or at least balance out, to confirm my limited understanding the goal would be:
- buy shortly after the IPO, ideally less than 15 days
- and sell less than 6 months later when lockups would end and insiders are set to cash out?
Most people don’t have their money in the NASDAQ. They have it in the S&P 500. SpaceX hasn’t been fast tracked into it.
Thank you for posting that. I also read that on some less authoritative source I don't remember. It's truly scandalous. I wish ETFs will revolt and apply the old rule for inclusion, but I have no illusion it will happen.
Why do people keep claiming that every 401k invests in the NASDAQ 100? Few do, and you probably have a choice of a couple of 401k plans, at least one of which will not include SpaceX.
Do the ETF managers have no discretion in determining when to buy? I was under the impression that they usually handle these changes to indices gradually even under normal circumstances.
The operators of the fund are allowed to do whatever they outlined in the prospectus to track the index, some funds allow futures, options, and swaps along with equity shares to maintain parity with the index.
There are ways to gain exposure to a single stock without directly purchasing shares, options and swaps being the most common. Owning the actual shares makes things easy for the fund operators, but there are other ways.
They do, but one performance metric for these ETFs is tracking error. So they want to try to match the index closely.
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of course they do. read any prospectus for a FUND and funds track INDEXES using rules. inclusion in some index doesn't hamstring anyone.
blind purchases are not going to happen. people assume passive indexing is brainless, but it isnt.
I can see both sides of it though. The old rule made more sense when companies ipo’d at small valuations. It could be argued it’s wrong to keep one the top five market cap companies off the sp500 for a year.
They’re notably going for a large issuance.
But a low stock float. I once had a meeting with a guy who said his company was worth $100m. How did he get that valuation? He sold 0.4 % of stock to friends and family at $400k.
SpaceX will not be part of the S&P 500 when it lists, so you can avoid owning SpaceX for now by sticking with non-NASDAQ funds. IIRC it would take about a year for SpaceX to qualify for the S&P 500, four consecutive profitable quarters is needed I believe.
If you own a NASDAQ fund or total US stock market fund, you will have exposure to SpaceX.
"If you have a 401k you will be an investor 15 days after launch."
This is not a given.
Many people have many different kinds of investments inside a 401k. Your 401k can own a rental property. Or gold. Or, in a more mundane scenario, the Russell 2000.
If it weren't for the glacial pace of plan administrators and plan holding companies there would be an opportunity for a fund provider to offer "S&P500exSpaceX". It's just another index, after all ...
The indexes buy based on market cap or float?
Most serious index do float, nasdaq has somewhat different rules (but it's a weird index...)
My 401k has BrokerageLink set up and invests in VT/VTI. It takes less than 15 days so if your company offers BrokerageLink, you can avoid investing in SpaceX.
This is absolutely vile. The xAi merger made no sense and this is forcing working class people into purchasing risky assets from a known scammer.
It does when you look at it with a few less zeros… it’s like a broke person floating checks for payday loans.
So that’s what he’s been busy with. I was hoping it was Ketamine.
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My dude(ette):
This place discusses SpaceX technical things all the time. But SpaceX is not a research lab. It's a company. That does business. And is going public. Taking a little time off from arguing about thrust and payload to talk about their business paratices, lobbying and late-stage capitalism is not only appropriate here...
Look around you. This may be called "Hacker News," but it is run by and for the benefit of a business, YCombinator. Speaking bluntly, if you come here only to talk tech, you're only getting half of the HN value proposition. The value of HN is that it mixes business with pleasure, so to speak. Many people here will either work for a tech business or found one. You can find technical discussions everywhere. Business discussions tailored for tech? That's actually very, very valuable.