I'm more worried about the early inclusion into the Nasdaq 100 index and if other indexes will follow. I don't want my retirement to be passively buying Elon's latest shell game.
Yeah this is pretty shady. The S&P 500 in particular has fairly strict criteria (e.g. 4 consecutive quarters of profitability) and those criteria exist for a reason. They made me more comfortable buying the S&P 500 knowing I'm not buying pre-revenue companies. This is a bad precedent to set just to please Elon.
This is why he (and other billionaires) are pining to get Social Security replaced with an indexed based retirement fund?
> Social Security replaced with an index<p>Yes please!<p>I learned just how bad of a deal Social Security is when an employer (a bootstrapped startup) offered a predatory 401k plan. It was free for my employer to setup but the employees were stuck with extremely high fees. It was so bad that John Oliver made an episode[0] about it!<p>Yet, even for the worst 401K plan in America, the projected retirement returns were 1600% of the Social Security returns. Even America's worst 401K would be better for the average consumer than the federal debacle<p>Uncle Sam should sunset SSI and allow citizens to select from and move freely between a number of accredited funds.<p>[0]: <a href="https://www.youtube.com/watch?v=gvZSpET11ZY" rel="nofollow">https://www.youtube.com/watch?v=gvZSpET11ZY</a>
Pretty much everyone already has an index based retirement fund.
Absolutely, that's the main reason there's been a push for that for decades. It's a giant pile of poor people's money that rich people can't easily skim from, and they'd really, really like to. Once it's "in the market" they gain all kinds of options for turning some of that money into their money, some immediately, some with tweaks to laws or policy.
I am a non billionaire and I would prefer Social Security to go away.<p>Mathematically, there is no alternative to the purchasing power of my Social Security benefits being reduced, simply due to the changes in the population age histogram.<p>It has to become more and more of a wealth transfer from the working to non working, which means my kids will benefit less and less from their work.
Who knows, I mean it would certainly make it easier for them to turn the entire population into their bag holders. Don't even have to hype the company any more or spin up a bunch of bullshit about space.
Not to mention that they always harp on it being supposedly unsustainable and insolvent, while deliberately not mentioning that it is solely because the social security is the most regressive tax in the country, the more you earn the lower your rate.<p>If it was a flat tax where everyone payed the same percentage of instead of a regressive tax where only working people pay the rate, then social security would be well funded.<p>Obviously they don’t want to pay the same tax rate as working people, so theyd rather get rid of it instead.
Not sure why you are getting downvoted. This is exactly right. They want a constant source of buying that they can steer investments into.
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I made a ton off of Tesla, expecting to do the same with spacex.
> Elon has control and optimizes for cool shit and going to Mars<p>This trope needs to die. SpaceX has <i>no</i> plans to go to Mars. <i>Elon</i> meanwhile regularly says forward looking stuff to attempt to justify the lofty valuations of his companies. Let's just say there is a ... mixed track record on these proclamations (Full self driving, Hyperloop anyone?)
This trope has to die. SpaceX Starship design is optimized for Mars (instead of Blue Origin NG) and the gigantic Starship Factory and multiple launch pads under construction in Texas, Florida and Louisiana (plus potentially foreign countries) only make sense with Mars.
Musk just tied his compensation to having 1 million people on Mars.<p><a href="https://www.reuters.com/sustainability/boards-policy-regulation/spacex-ties-musk-compensation-mars-colonization-goal-2026-04-28/" rel="nofollow">https://www.reuters.com/sustainability/boards-policy-regulat...</a><p>Do explain to me his evil plan of becoming rich by lying about going to Mars and yet agreeing to only get paid when he does go to Mars.
> yet agreeing to only get paid when he does go to Mars.<p>He already owns hundreds of billions of dollars worth of SpaceX. He "gets paid" whether or not these goals are achieved (a million people on mars definitely won't be achieved this century, as the place is fucking awful; one thousand is vanishingly unlikely, one million is flat-out not happening). In fact, hyping the company up ahead of IPO gets him paid, to the tune of thousands of working people's lifetime earnings.
Sure, until he changes that plan to something else that is 5 years out in the future next year.
*part of his compensation<p>The rest of his compensation isn't tied to that, but is tied to the bubble and hype that the lie of Mars living helps prop up.
Does Elon need the money though or does Elon need the valuation? Do you think he actually needs that paycheck to actually happen?
Elon put out a musing akin to a blog post on Hyperloop.
good, pensions should not go into companies where you have no control.<p>That's not an investment, it's a wealth transfer to original investors at a price they dictate.<p>without control you can get original founder deciding to build cybertrucks and associating your brand with nazis.<p>These should not be included in indexes either.
> <i>would constitute the most management-favorable governance structure ever brought to the U.S. public markets at this scale</i><p>The "at this scale" is doing a lot of work here. The SpaceX IPO will be $1.5T to $2T, and the next highest IPO ever on the US public markets was Alibaba at $231B. This is so far outside the previous scale that their statement would be true even if EVERY other public company was structured in the same way.<p>Worldwide, the five highest have been Saudi Aramco, NTT, Alibaba, Facebook, and Uber, at 1.7T, 300B, 231B, 104B, and 75B. Note the outlier, here, which was not on the US public market, AND has a very similar tiny float.<p>If you go by capital raised, it's not quite as stark, but it's still quite different in the US market: 25B raised by Alibaba, the previous high, compared to 75B expected for SpaceX according to the article. The point that SpaceX isn't at the same scale regardless of governance is still pretty good, I think.
It's interesting how Musk has engaged in such a distracting lawsuit against openai while he also prepares for the largest deal of his life, and the largest IPO in history. Exceedingly generous of him.
The SpaceX IPO may go down as one of the most manipulated in US history. I'd actually like to see the likes of Vanguard and Blackrock do is ignore the rules that will force passive funds to invest in SpaceX on a small float, creating passive funds with their own rules that won't invest in small floats. I know I'd move my money to more "total market" type funds that required their investments to be sufficiently liquid.<p>It may not even come to that. I think if large pension funds and the large mutual fund managers coming out and saying "we don't trust this process" will probably be sufficient pressure to change it.<p>There are two other issues with SpaceX in particular that kind of show just what a house of cards the Elon Empire is:<p>1. The whole xAI bailout. This isn't a new tactic. Elon did it with SolarCity where one of his companies bought another of his companies who owed a lot of money to yet another of his companies. Elon way overpaid for Twitter. Fidelity had slashed the valuation by as much as 80%. Elon rescued himself from a margin call on his Tesla shares by raising money for xAI and using that to buy Twitter. But now the xAI investors who (IMHO) felt fleeced had to be rescued and so SpaceX "bought" xAI.<p>So the problem is that I've seen reports that xAI is losing >$1B/month. That's a huge drain on SpaceX's estimated ~$15B of annual revenue where it's already losing money due to the Starship program cost and delays;<p>2. Allegedly, one of the biggest buyers of Cybertrucks is (drum roll please) SpaceX. So, again, one Elon company is rescuing another.<p>I have huge respect for what SpaceX achieved with Falcon 9 but honestly, I wouldn't touch any of this, as an investor, wtih a 10 foot barge pole. At least, not until the SpaceX float gets sufficiently large and the lock ups on selling expire so you get a true market picture of its value.<p>And I think passive investors need to rewrite their rules to do this too.
Option 1: Elon has control and optimizes for cool shit and going to Mars, and maybe abuses the corporate entity a bit, as a piggy bank, or whatever.<p>Option 2: the market has control, and optimizes for short term starlink revenue and the launch business.<p>I prefer Option 1.
Option 3: Elon takes over the Federal government, causes some major security incidents, and cuts off USAID stranding a number of Federal employees and cutting off short term food support for hundreds of thousands of people depending on it.<p>Option 4: Elon takes over a social network and tries to Orbanize the West with it.
If you want Option 1, then stay a private company.<p>Don't ask the public for money and then not provide any of the corporate requirements under the SEC for the proper operation of the markets.<p>You can't have both.
You can, e.g. Zuck/Meta. (I understand you are making a moral argument, not a legal one, I understand it, I disagree, courts disagree too)
Tesla is already publically traded. It's valuation depends on investors buying into Musks vision.<p>As a rule, investors optimize for long term growth since that's what maximizes valuations. All the megacap companies are judged by future growth.<p>The effect is companies tend to exaggerate and lie about what they can achieve in the long term to juice their own stock. Elon's def got the juice.
Investors should optimize for long term growth, yes. The problem is Management (CEO, etc.) will get fired if things look bad. So the incentive for management, if they can get fired, is to ensure monotonic increase. Sometimes — especially for a rocket company! — you should be allowed to fail for a few years. You should be allowed to take big swings, without risk of getting fired. If Elon knows he is in control, he can think long-term. If he's at risk of being let go if things look bleak, his optimization function will be different (and, IMO, net worse for society).
I prefer Option 2 as musk has an alleged track record of trading things between his companies with no oversight, and how sAfE cybertrucks are
I suspect that the set of interested investors would look very different in both cases. Maybe even with an empty intersection.
You must be living under a rock if you think all super rich billionaires like Musk are doing is "abuses the corporate entity a bit, as a piggy bank, or whatever"
You can either concentrate power or disperse it. NASA, Boing, etc. is what happens when you disperse it. Committees aren't bold. The reason SpaceX exists is because Elon willed it into existence.
Elon has control and optimizes for ability to abuse the corporate entity as much as possible. Expects other people to pay for issues he caused, causes as much harm as possible to feel as a manly man with no empathy and his friends in government and Epstein circles back all that up.
People raised on a diet of social democracy propaganda will kick and scream when you tell them people aren't equal and that decisions should be limited to exceptional individuals and not the mob. If you don't like the SpaceX structure don't invest. It's that easy. I'd rather give Elon the reins and see what happens. He managed to make electric cars viable and starlink is an incredible technical achievement. There's so much cool engineering to be done and only Elon seems to be capable of half of it. One person with a vision is more valuable than a million shareholders with a slight level of financial investment.
Same article syndicated on msn.com, without paywall:
<a href="https://www.msn.com/en-us/money/companies/new-york-california-pension-leaders-oppose-extreme-spacex-control-structure/ar-AA23aMe1?ocid=BingNewsVerp" rel="nofollow">https://www.msn.com/en-us/money/companies/new-york-californi...</a><p>The issues:<p>> The New York and California pension systems would become holders of SpaceX shares through their passive allocations if the company is admitted to major U.S. stock indexes.<p>> The officials… objected to the amount of power the board has given Musk over the company, including:<p>- voting control over the stock,<p>- veto power over his own removal as CEO, and<p>- protections from litigation, including mandatory arbitration for SpaceX shareholder claims.<p>> …<p>> In their letter, the pension leaders urged SpaceX to:<p>- adopt one-share, one-vote or sunset super-voting shares within seven years;<p>- install a majority-independent board and separate the CEO and chair roles;<p>- eliminate provisions protecting Musk from termination without his approval;<p>- scrap mandatory arbitration; and require independent approval of related-party transactions with Musk's other companies.<p>(Formatting mine; moved paragraph about becoming holders above the lists of concerns and recommendations.)
I’d love to hear one of you staunch capitalists tell me why the description of this persons control over 13,000+ employees is any different than a feudal “Lord”<p>Over the entire lifetime of SpaceX Nearly 100% of the revenue comes from the government<p>They pay gifts and tributes to the government<p>They spend an absurd amount of money on lobbying and writing laws to take monopoly control of the subsection of the market<p>What am I missing here? Pretty sure there’s Universal agreement that the feudal system is not something anybody should be promoting
Why lie about something that's easily proven false with a Google search?
Over last 5 years government revenue is under 25% and if you go off of last 2 years its closer to like 10-15% (and declining!) Starlink is the vast majority of spacex revenue
The company was entirely dependent on government funding for its first 17 years<p>that’s undeniable<p>Starlink would not exist if the government did not prop up the whole thing in the beginning<p>This is precisely how the Commons get privatized and your ignorance around this topic is unbelievable<p>Unreal how simplistic you people are
SpaceX had to literally sue the military to even be allowed to bid for projects. And won. And then won the contracts.<p>The guy who landed on the Moon testified in congress opposing giving SpaceX any money.<p>The government wanted nothing to do with SpaceX.<p>SpaceX won the contracts despite the government, not because. They won the contracts because they offered the best product at the lowest price.
> SpaceX had to literally sue the military to even be allowed to bid for projects. And won. And then won the contracts.<p>This is literally how government contracts work on massive multibillion dollar systems.<p>Palantir famously did this with the Army: <a href="https://www.defensenews.com/land/2019/03/29/palantir-who-successfully-sued-the-army-just-won-a-major-army-contract/" rel="nofollow">https://www.defensenews.com/land/2019/03/29/palantir-who-suc...</a><p>Every gov-tech company on the planet has a team of people hired and dedicated to suing the government via a well understood process that is intended to filter out organizations that do not have the financial capacity to deal with the government.<p>As an AF SES I owned $300 million worth of contracts for the Air Force starting in 2020 and by 2022 my acquisition portfolio for AFLMC was $6B yearly. Guess how many of those contracts had actual competition despite months of solicitation? Almost none because the FAR is written/updated by corporations such that the barriers to entry are impossible to meet.<p>Go tell me how quickly you can get a piece of software running on a govt network and come back to me and tell me that there’s equal competition.<p>You have no idea how much corruption is baked into the structure of government contracts.<p>The corruption is not that someone violated the acquisition system; the corruption is that the acquisition system legally converts concentrated contractor influence into unequal access, unequal rule-shaping power, and unequal probability of award.
You don’t need to accuse someone of lying when correcting them.
The vast majority of those 13k workers are highly skilled and in very high demand. They could work elsewhere or start their own company. In addition, they are far better educated and have more welfare options than anyone living under a feudal system.
Oh yes the classic “but the standard of living has gone up and now people have televisions” argument<p>They are living under a feudal system<p>Any one of the 13,000 could be fired on whim of Musk and even if it was in error they would have months if ever to get restitution. The employees describe him as a “tyrant” that fires people based on ego<p>The fact that people aren’t dying of scurvy is all you’re pointing to?<p><a href="https://www.businessinsider.com/tesla-employee-survey-elon-musk-leadership-culture-compensation-complaints-2022-11" rel="nofollow">https://www.businessinsider.com/tesla-employee-survey-elon-m...</a>
> The New York and California pension systems would become holders of SpaceX shares through their passive allocations if the company is admitted to major U.S. stock indexes.<p>If they have discretion, these pensions can replicate the S&P500 minus SpaceX if they don't like SpaceX's governance.<p>If they're forced to passively hold precisely the S&P500 then shaddup and stop active managing.<p>Next.
> If they have discretion...<p>True. But doing so would be a fair amount (by index standards) of overhead and hassle. Plus they'd get endless complaints any time the S&P500 was outperforming the "S&P 499" that they were using. Plus they'd put themselves in the crosshairs of a whole range of activists who wanted them to switch to an "S&P 498", or ...497, or ... - by excluding various other companies the activists didn't like.<p>> If they're forced to passively hold...<p>Their responsibility is managing their pension funds in the interests of their state, and their current & future retirees. Not pious adherence to passive indexing canon. Their calculus here might be to throw a small bone to the anti-Musk activists who are currently bothering them, while acquiring some "we tried!" butt-coverage for whenever Musk really goes off the rails. (And, obviously, trying to discourage other companies from using such control structures.)
This is subjective, there are companies that are mostly an investment vehicle and companies that have a strong motivation to make changes in the world. Investors, especially passive investors like pension funds that are only interested in returns, should know in advance what they are getting into and decide if they want to buy shares or not; it should not be "I will buy shares and try to change the company".<p>I worked for a company where activist investors bought enough shares to have influence, then practically messed up with the company in a way that today, 10-15 years later, the company is a shadow of what it used to be - fell from top positions in Fortune 500, share price is lower in inflation-adjusted money, management is extremely politized and unprofessional, most professionals left or retired. I don't think this is what we want from SpaceX, in the end this is the company that moved the needle in space launches and cost per launch/kg, it's not a ketchup company that not too many people will cry about.
> there are companies that are mostly an investment vehicle and companies that have a strong motivation to make changes in the world.<p>And there are companies that are mostly an investment vehicle whose leaders spin their self-serving decisions as necessary to make changes in the world. Some of them might even be right! (that their decisions are better in the long run, and that ceding more control to shareholders would lead to better short term outcomes but far worse long term outcomes).
As investors for other people, the pension funds, have a fiduciary responsibility to ask questions. I don't care if Space X is changing the world or making potato chips for consumers.<p>If you read the article, they have concerns about the governance structure of Space X and the ability of investors to question what the company is doing.
> it should not be "I will buy shares and try to change the company".<p>it should not be “I will go public and try to stop the public from exercising their rights as shareholders”...just stay private.<p>Or, if those business owners want to retain their right to make all the decisions, they should structure the shares like Meta or Alphabet.
Then don’t buy the stock