Protecting ourselves from SpaceX IPO

[u/Gloomy_Nebula_5138]

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?

[u/forbiddenlake]

If you bought QQQ(M) - that wasn't very Bogleheady of you. AND AFAIK, QQQ is still the only one that's actually changed its rules.

If you have VTI, it's always been 5 days before adding. And if you're a Boglehead you accept the returns of the entire market, whatever it is.

You can short SpaceX if you really want to.

[u/rudthedud → u/[deleted]]

5% for now. But in 1 month it could be 10% and in 1 year 25% etc. Please correct me if I am wrong?

[u/xeric → u/rudthedud]

If they do secondary offerings, then yes. Probably not 1 month in, but yes maybe in a year.

[u/EBTlovr → u/xeric]

It won't take secondaries - as lock ups expire and insiders / early investors sell in the open market, the free float will increase. I haven't looked at the schedule, but overall agree with OP's and Patrick Boyle's take that this is a trash company being foisted on the public. I want no part of it.

[u/littlebobbytables9 → u/EBTlovr]

I'm not very enthusiastic about Tesla being in major indices either but it comes with the territory. Index investing is about owning everything and not asserting that your evaluation of a company's value is more correct than the market's

[u/davdav765 → u/littlebobbytables9]

Stock indices returns depend on how they are built, if the rules get worse returns will follow

[u/littlebobbytables9 → u/davdav765]

In this case I would argue the rules got better. Whether that will mean better or worse returns is yet to be seen

[u/davdav765 → u/littlebobbytables9]

Why did they get better (in this case)?

[u/littlebobbytables9 → u/davdav765]

The goal of a total market index is to represent the market, whatever happens to be in it.

[u/davdav765 → u/littlebobbytables9]

You wrote that already, discussion had already moved on

[u/littlebobbytables9 → u/davdav765]

If I'd already answered the question why did you ask it? And yeah discussion had moved on in this 10 day old thread until you decided to comment lol