The worst about the SpaceX IPO is Nasdaq changing their inclusion rules for the Nasdaq 100. The index fast-tracked SpaceX stock for inclusion 15 days after the IPO, instead of the normal three-month seasoning period. They also changed its 10% minimum float rule to a 3x weighting boost for low-float stockss.
So many people will unwillingly and prematurely invest into SpaceX, before it has any chance to discover its real price.
IE: The floating, 5% at launch, could attain 30% end august, if Nasdaq didn't change their rules it would have included SpaceX after this..<p><a href="https://finance.yahoo.com/markets/stocks/articles/nasdaq-cheated-changed-laws-fit-193113947.html" rel="nofollow">https://finance.yahoo.com/markets/stocks/articles/nasdaq-che...</a>
[delayed]
nah the very worst thing about the spacex ipo is that schwab won't allow me to short it. has nothing to do with the recency of the issue. today i shorted some skhy when i realized it's trading about 30% over the Korean share price (I could be wrong about that)
I'm not an investor in SpaceX but I don't think shorting stocks at IPO should be allowed. The market should be given time to settle on a price, and it's unlikely that anyone needs to short it on day 1 for hedging. It's purely price speculation.<p>Yeah, I know why people _want to_ (betting), but it doesn't serve a broader economic purpose.
You can short it elsewhere.<p>Schwab won't let you, because even if you're 95% right, you'll still probably lose 95% of your money...
The Nasdaq is a shit index to begin with. There are so many other options.
I can't comprehend for the life of me that people put their life savings in what Elon Musk is doing. Are people not seeing how he's lying about the future all the time?<p>He said he aimed to have 5000 Optimus robots out by end of 2025, 50000 by 2026 and 10 times that in 2027.<p>He promised in 2015 that full autonomous driving would arrive in 2 years and we aren't there yet 11 years later. He even said in 2016 that there would be coast-to-coast autonomous driving in 2017.<p>He promised manned missions to Mars by 2024-2025 in multiple interviews between 2011 and 2016.<p>He promised in 2016 that there would be solar roofs expansions by 2017 that didn't pan out, he promised AGI by 2025 in 2024.<p>Elon Musk has repeatedly lied about outcomes of his ventures, gotten crazy valuations based on those exaggerations and now people are starting to finally wake up that he isn't as good as his ego.
Isn't it realistically only worth talking about SpaceX stock a few years out? The random walk the stock will do after an IPO seems very uninformative.
How often do companies issue a $25B bond the same month that they IPO?
I honestly don't understand the Elon obsession on HN. One thing is for sure, you'll never miss a piece of news.
A stupid/naive question. Why does this affect SpaceX? They have their money(The IPO) Any third party trading value does not change that. Sure there may be individuals, officers of SpaceX who hold these instruments who will be negatively affective, but the company itself?<p>My best guess, it makes it harder to get loans in the future.
<a href="https://archive.is/tnSeY" rel="nofollow">https://archive.is/tnSeY</a>
Article needs registration.
> has now widened from the initial +175bps to a whopping +231bps doing more than two-thirds of the work.<p>2.31% spread over treasuries is heading for junk bond status?
No, but the fact that they're the worst-performing BBB bonds, the company is burning cash, and the equity being down 38% since its peak after 1 month of trading is indicative of the market's…suspicions.<p>We'll see what ratings agencies think of the health of the company.
Hey, didn't you get the memo? We hate Elon now, and everything he touches.
I'm impressed with the general public. I thought these guys would get away with their hype train. Nice surprise.
A much larger percentage of bond traders are institutional, compared to equities, where retail is very active in some names.<p>So I wouldn't really give too many points to "the general public" for this one.
Don't worry, they made plenty with the pump-and-dump.
The thing that propelled Tesla to ridiculous heights was the massive shorting (and eventual covering). This should just drop and drop (I hope).
Good thing there's a strong corporate governance model at SpaceX where the c-suite is fully accountable to an independent board of directors, who could use their majority voting power to remove that c-suite at will.<p>Could you imagine the abuse of power that could happen if one person held over 50% of the voting power at such a company?
Is it abuse of power or company success? Wouldn’t shareholders vote out any crazy successful ideas Elon had? Likely bankrupting companies at their early stages?
Are super shares like Zuckerberg's and Musk a new thing? Genuinely curious if they're a recent invention or something that's quietly happened for a while because it seems like a large inversion of the deal of going public, lose some control of the company in exchange for a large amount of cash but these nonvoting/supervoting share splits seem to completely upend what I understood to be part of the deal for access to the stock market.
The New York Times Company operates under a dual-class stock structure where the Ochs-Sulzberger family holds roughly 95% of Class B shares. This family control allows them to elect 70% of the company's Board of Directors.<p>Copied from google's response to "new york times governance"<p>Google's AI also says that the NYT has had that structure since 1957.<p>Ford has something similar from the 1930s. (Dodge did too until it was bought.) Raylon (synthetic textiles) did it in the 1920s and the company behind Jack Daniels did it right after Prohibition.<p>Google says that the NYSE banned dual-class between 1926 and 1986; I don't know how to reconcile that with Ford.
Ford has them. What it has meant for Ford-- and will probably mean for Facebook-- is that Zuck's heirs will control the company, for better or for worse.<p>The common justification for this is that for a media company (NYT) you want a person or family to take responsibility for the editorial content, not a pure profit seeker. Facebook has it both ways and typically denies it has editorial control.<p>IMO, the flaw of markets is that they are short sighted. Sometimes this allows states to outmaneuver them with a longer view. Current exhibit A: China. Historically state intervention has been worse in the long run. But who knows. If we went into a depression a lot of people may think state intervention is a better system, as many admired the USSR during the Great Depression.
Some media companies had them before the 1980s. New York Times issued dual class in 1969 so that the owning family maintained editorial control.<p>Berkshire Hathaway is possibly the most famous from the 80s/90s. The class A shares are significantly more expensive and proportionately even more powerful than the class B shares. The lower price version was important back when physical exchanges didn’t support fractional shares as they do today.
<a href="https://en.wikipedia.org/wiki/Ivar_Kreuger#B-shares" rel="nofollow">https://en.wikipedia.org/wiki/Ivar_Kreuger#B-shares</a>
No. Google has them too.
That's absolutely still "recent" when discussing corporate governance.
Google is also pretty new in the terms I was talking about only slightly older than Facebook. I mean going back to the 80s/90s or earlier, pre current FAANG at least.
You dropped your "/s".
Quite honestly IPOs and the stock market in general is a Ponzi scheme. This is something I would never have said before. I am not a skeptic. I invested in the markets for years and made money on Amazon, Google, twilio, and so many others. But I also lost a lot of money buying near or after the IPO. The game is rigged. Those who put money in post IPO in the 12 months after are left holding the bag for years. It takes 10+ years to recover that. The people who invested pre IPO, the VCs, the bankers, etc. they are getting a good deal. In the case of VCs they are taking early risk. Not at the late stage. But earlier. In many cases it's been a long hold. Again 10+ years. But anyone coming in at the IPO you are buying at a peak when someone decided that's the perfect time to hype it. We're all catching a falling knife. Doesn't matter if the business fundamentals are sound. They become disconnected from realities of the market when it all gets tulip crazy.<p>These things have a way of working themselves out. But look at almost all IPOs and the next 12 months the stock is down 50+% so I'd rather wait. And honestly when I buy, it's to hold 10+ years, not make a quick buck and it's because I believe in the value. You can believe in SpaceX but also still believe the market and the dynamics of IPOs is almost criminal for retail investors.<p>It's almost as bad as crypto token sales tbh.
This isn't backed by any evidence though. Jay Ritter maintains an extensive amount of data on IPOs here:<p><a href="https://site.warrington.ufl.edu/ritter/ipo-data/" rel="nofollow">https://site.warrington.ufl.edu/ritter/ipo-data/</a><p>And his data shows that IPOs for the most part perform about as well as their respective market. That is large multi-billion dollar IPOs perform about as well as the broad market, and smaller IPOs (which constitute the vast majority of IPOs) perform about as well as other small-cap companies.<p>In other words, investing in IPOs doesn't give much of an advantage or disadvantage compared to investing in other similarly sized companies.<p>What's true is that most stocks, including IPOs, don't do well in the long run. The half-life of a publicly traded company is something like 10 years.
Also, the OP just does not understand how the market works anyway. Surely if it was obvious that investing in fresh IPOs is a bad move, all of the big boys (banks, hedge funds etc) would short them to the point of equalising anyway. Maybe not to the absolute efficient point, but still, why do people think they can see such a huge obvious trend, and also assume that other people cannot see it?
>Doesn't matter if the business fundamentals are sound.<p>The business fundamentals are rarely sound for modern IPOs, especially anything Elon adjacent. His companies are just as bad as crypto token sales in terms of their hype. Heck, some of the stock price appreciation of Tesla _was_ driven by their ownership of crypto for a year or two.
Stocks, especially without dividends and negligible voting rights, are basically baseball cards for companies.
Warren Buffett famously said IPO stands for “It’s Probably Overpriced”.
It’s been true for over twenty years that the majority of IPOs drop below their IPO price and stay there. <i>Maybe</i> your brokerage has some shares before IPO day that they’ll let you buy, but you’re still taking a big risk. Buy shares on the open market? Yeah, you’re the sucker they were looking for.
What you’re saying is entirely vibes-based. The actual data utterly contradicts your claim (see sibling).
There's been a massive change to public markets in the last decade and the retail path to making money seems to have closed. I made a some money on IPOs using a laughably simple heuristic:<p>"Is the company market cap low? Do they have a decent product? Is it plausible they'll 10x? Yes -> Buy some amount I can afford loosing"<p>For example, Tesla IPO'd at $5B cap, it was perfectly plausible to believe they'd be worth $50B some day. Shopify IPO'd at $1.3B, Square at $3B, 10x was perfectly believable. Uber IPO'd at $75B, I did not believe they'd be worth $750B any time soon, or ever. Do I believe SpaceX will be worth 20T in like 10 years? Lol. Fmao even.<p>Today's IPOs at $1T+ means that private money figured this out and cut the retail public out, IPOs seems to be a really terrible deal these days.
[dead]
If only these people have been warned before....
</pretend_care>
Musk biggest mistake is that he wanted to start another bubble while the last bubble didn't pop yet. This is against the handbook of a Wall Street thief, bad, bad Elon.
Cheap capital masked a lot of risk. The current rate environment is exposing it.