[hackernudes]

I didn't watch the whole video, but the quick summary is that because of passive investing (index funds in 401ks, etc...) lots of regular people will end up owning SpaceX stock even though they didn't explicitly buy it.

I think the hate about this idea is unwarranted.

[ameliaquining]

It also complains that the indexes changed their rules to make SpaceX eligible to join sooner than would otherwise be the case.

Critics who allege that SpaceX is overpriced complain that this effectively allows insiders to dump it on price-insensitive index investors. The indexes' defense is that their job is to give index investors exposure to a representative slice of the real economy, which includes big high-profile stocks like SpaceX whether anyone likes it or not; they're not in the business of guessing whether those stocks are overpriced.

[rstuart4133]

> I think the hate about this idea is unwarranted.

I doubt the hate is about passive investment funds owning SpaceX stock. If the rules weren't changed and the index funds ended up owning a lot of SpaceX anyway, no one would care.

The hate is because the index funds used those indexes because they avoided including partial IPOs like this, I guess because they could be prone to manipulation. The funds apparently never imagined the rules controlling how the indexes would be changed. The rage was triggered because not only were they changed, but how the change came about.

To wit:

- NASDAQ owns both an index and an exchange.

- SpaceX said "we will list on your exchange, if you change the rules of the index".

- The rule change they wanted looks allow the very manipulation the index funds were trying to avoid. The indexes aren't meant to be speculative, they are a way to follow the average of blue chip stocks.

- This is speculative, but it looks like SpaceX is hoping to manipulate the index funds into purchasing large quantities of their stock, in order to give the early investors a plump exit. If true, the stock would then crash, leaving the index funds holding the bag.

- The NASDAQ allowed themselves to be bribed.

It's possible of course the IPO won't go as planned, or the market will look at the 54 P/E and run away screaming in that initial 15 days, causing the price will plummet. Or it's possible the early investors will throw money at the stock until the 15 days it up to sustain the price. Who knows. Interesting times.

[SwellJoe]

The hate is far less than is warranted. This is purely a transparent transfer of wealth from working people to the richest people on earth.

Elon Musk demanded the right to dip into average folks retirement funds for himself and his investors as a condition for listing on the Nasdaq, and he got it. There's no innocent explanation for this rule change and it is not a coincidence that Elon Musk is the first beneficiary of the rule change.

No one who understands anything about the business honestly believes the valuation it's launching at is reasonable. The only way the investors will be able to cash out at a huge profit at the end of the lock up period is if it gets propped up by a massive investment by indexes soon after listing, before the hype wears off and people start realizing SpaceX revenue is comparable to companies valued an order of magnitude less and the realistic growth story is far more conservative than Elon Musk has pretended (data centers in space? c'mon).