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.
I had completely forgotten they'd already wrapped xAI around Twitter. That's getting to turducken levels of nested bad companies.
There's also the Tesla (potential) self dealing where SpaceX bought a bunch of Cybertrucks and appears to be leasing them to employees for cheap as a perk.
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.
Lol I meant "incumbent", that was a STT typo. But yes I get the point. My own point is that even a good-faith honest IPO for a spaceflight company probably won't look anything like Aramark. It's always going to be a bet on technology, not a share in the predictable profit stream of a boring company that serves pizza in school cafeterias.
I would <<definitely>> agree with you if about 90% of their valuation wouldn't be based on them selling themselves as primordially as an AI company. "$28tn total addressable market", "data centers in space", etc.
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 shaped like more-or-less every IPO I've seen.
Not even remotely. Many startups IPO with no profit (though not all), but there is nearly always a credible business plan and a semi-rational valuation.
None of this is the case for spcx. They claim their TAM is about the size of the entire GPD of the USA and that they'll soon have 1T/yr in profits. All based on... nothing. The numbers are wildly unrealistic by a multiple never before seen. Oh and full self driving will be here before end of this year, trust them.
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
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?
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.
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.
Oh yes, I tell you're a real market analyst. SpaceX is exactly like every IPO ever. Except actually it's unlike just about every IPO there has ever been for so many reasons: The tiny float, special treatment, the intense lockups, valuation at 100x its revenue. No IPO has ever been like this.
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.
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.
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.
> (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.
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.