Not convinced it means anything in one way or another.
I remember the same headlines right after Facebook's IPO. The discourse was very much that it was obvious that a website to connect with your friends wouldn't make money.
The IPO price for SpaceX was _delusional_. The price now is delusional. Especially since it's so dependent on the US government for revenue and he's done everything possible to irritate the party that's about to take over the federal budget.
It was insane to me that a company that had less than thirty-billion in revenue was valued at more than a trillion. I'm not sure how the People in Charge didn't call bullshit.
The way exponential maths works, if a company really can grow at (for example) 10% per annum then it can grow into what looks initially like a very high PE multiple on current earnings surprisingly quickly.
This is why people sometimes use forward P/E but that does have the obvious drawback of the denominator not actually existing yet.
However with SpaceX the valuation is extreme and also can they grow at that rate for years on end? Potentially not
One thing I learned recently is that Vanguard Total Stock Market Index (VTI) is float-weighted. That means that SpaceX's percentage in the index is based on the value of the floating shares, not the total market cap. As a result, a fund like VTI, for now, doesn't have that much SpaceX. It will add more as the lockup periods expire and the float increases, but increasing float might also drive down the price.
Do 401k's know about pump-and-dump, but think they can time it to make profit? Or are 401ks "bound" to buy stocks?
It feels like a lot of retail buyers know the emperor is naked, but are still acting on greed, thinking they can "catch the falling knife" and time the market departure to profit from the hype...
I think it's much simpler. A lot of funds are tied to things like the NASDAQ-100, which SpaceX figured out how to get fast-tracked for. Once it's officially on the NASDAQ-100, stuff like QQQ has to buy it, whether or not people like the idea of it.
Of course active investors could do something like short Space X by exactly the amount that their funds have to more or less "cancel out" their investment, but most people aren't active investors.
The big indexes have a cooldown period before buying, which these scam artists attempted to radically shorten before the IPO, but they failed (at least partially). The S&P500, for example, will delay a year before adding it to the index. Nasdaq 100 was talked into reducing it to 15 days, so you might want to get out of the Nasdaq 100.
I got rid of all my QQQ, which was substantial, but I didn't convert all my vulnerable portfolio because I wanted to minimize how much I pay in taxes.
I now use the Interactive Brokers MCP to make a "pseudo QQQ" which has all companies except Tesla and SpaceX in there, and I otherwise use the same weights as the official QQQ. In order to avoid tax overhead, my rebalancing is buy-only, no selling, so it's not a perfect analog to QQQ but it's close enough and I at least got some of my capital out of SpaceX.
S&P still requires one year(?) profitability, which SpaceX has yet to achieve. The recent datacenter rentals might have pushed it into a profitable quarter.
Notably, today was the first batch of additions, which really does lend credence to the idea that it's just about people getting out after the forced buying. We'll see what happens in early July when it makes it into the Nasdaq 100.
I remember the same headlines right after Facebook's IPO. The discourse was very much that it was obvious that a website to connect with your friends wouldn't make money.