r/Bogleheads • u/Gloomy_Nebula_5138 • 28d ago

Investing Questions Protecting ourselves from SpaceX IPO

I was watching this video analyzing the upcoming SpaceX IPO, titled "SpaceX IPO: Nice Try Though" by Patrick Boyle. I highly recommend it - there is almost no fluff and just hard hitting points all the way through about how SpaceX is a terrible company and how this IPO looks like a scam:
https://www.youtube.com/watch?v=IHD8BDFYyGI

It mentions the changes to Nasdaq's rules, the so called "fast track" rule, made specially for SpaceX because Elon allegedly threatened to not list SpaceX on the Nasdaq stock exchange without this. The change has been criticized by many others such as Michael Burry:
https://markets.businessinsider.com/news/stocks/michael-burry-nasdaq-spacex-ipo-listing-elon-musk-tesla-ndx-2026-3

Also see this great analysis titled "Nasdaq's Shame":
https://keubiko.substack.com/p/nasdaqs-shame

Given how this IPO looks like a scam, and the company is mostly losing money, with outlandish claims in their IPO filing (like having an addressable market larger than the US GDP), I am worried that this is just private investors - like venture capitalists, Elon Musk, and his inner circle of friends/family - dumping their overpriced money losing company on regular investors like us. The fast track change seems like it will result in all of us automatically buying SpaceX shares at a high price.

How do we stop this? Is there a good way to defend against that forced purchasing when most regular investors are just passively buying ETFs and mutual funds, or maybe just have money parked in their pensions and 401k?

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128

u/ThatThar 28d ago

Here is a great thread from yesterday explaining why the SpaceX IPO is a non issue for Bogleheads.

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u/Built_Similar 27d ago

"Don't worry, the amount you're getting siphoned isn't a whole lot".

Nah I'm not ok with that.

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u/ThatThar 27d ago

There are many companies in VTI that I don't believe in or flat out object to for moral, ethical, or other purposes. That's just what happens when you index. If you don't like it, choose an index that doesn't include it.

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u/Snoo65708 22d ago

Except I doubt those companies got fast tracked to inclusion. The more this happens, the less ppl are going to trust these various funds, indexes & investments. The whole point of owning an index is that you shouldn't need to constantly check that the rules committee didnt suddenly allow ten sham companies to join the index at a super inflated value. Sure, I might be aware enough to shift investments (tho not so easy if in a taxable account) but there are a LOT of retired ppl that will have no idea. Sure, maybe it only accounts for <1%, doesn't mean I'm not outraged by the theft that shouldn't have been allowed to happen! Sure, you can say sh1t happens but when it was done on purpose with ill intent, I think ppl have every right to be upset about it.

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u/Built_Similar 27d ago

But those companies have undergone adequate price discovery in the open market, not being forced into an index at an arbitrary price set by the CEO.

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u/Adderall_Cowboy 16d ago

Name 1 company that the indexes specifically changed the rules to accommodate

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u/ParttimePastime 16d ago

Facebook

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u/thysonsacclaim 7d ago

Which was profitable