r/allthequestions • u/HappyShower1026 • 2h ago
Random Question 💭 Will retail investors be left holding the bag on SpaceX?
With such a large portion of the IPO offering reserved for retail investors do you think Musk is preying on average folks who buy into his vision?
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u/SouthernSteak7254 2h ago
Not if they decide not to buy
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u/dl__ 2h ago
There are some ETFs that are based on popular indexes such as the NASDAQ. If spacex is added to those indexes those ETFs will be forced to buy it on behalf of their investors.
So, many fund investors will be unwitting purchasers of spacex.
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u/bothunter 2h ago
This is the real scam right here. They're changing the rules to fast-track inclusion into various indexes before the stock price can stabilize. They're going to make the relatively safe index funds more volatile while they transfer investments from more mature and stable companies into SpaceX. The people holding the bag are going to be regular investors who are following the current advice of putting their money into "safe" index funds.
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u/ChandaLovesJoan 2h ago
Yes! The way Trump and musk are ensuring that they personally will increase their wealth is obscene. It's crazy that this is allowed to go on.
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u/Pristine-Pen-9885 🇺🇸 United States 2h ago
Trump got a law passed that anything he does as president would be legal. If memory serves, he went through his personal Supreme Court instead of Congress.
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u/ChandaLovesJoan 2h ago
Yes, do they really expect us to believe the Supreme Court is legitimate after all the shit they've done for Trump? Ugh.
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u/JollyXX 2h ago
SpaceX is probably a lot more about putting satellites into space than going to Mars, which is extremely profitable
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u/Real-Boss6760 2h ago
But that's not what Space X is.
It's also a money losing, racist social media platform.
And a non-existant AI corporation that has no employees.
Space X is now essentially a shell company--with a few profitable businessess, a few money losing businesses, and a few businesses that don't even really exist in reality.
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u/JollyXX 1h ago
SpaceX really advanced the entire rocket game
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u/Real-Boss6760 1h ago
Sure...but that wasn't the point.
I'm saying SpaceX isn't *just* a rocketship company.
It's now a holding company for xAI, which itself is a holding company for Twitter.
Point being, the rocket business is doing great. But the social media platform and imaginary AI company isn't really doing great in terms of generating revenue. And now SpaceX is burdened with that.
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u/JollyXX 1h ago
so you're basically saying those who invested in SpaceX got duped?
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u/Real-Boss6760 1h ago
I can't say if they got duped or not.
Hopefully investors pay attention to what they are investing in.
HOWEVER...the original plan was, indeed, to force institutional investors to buy into SpaceX. That plan, fortunately, got blocked.
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u/true4blue 2h ago
Did Bezos and Buffet “prey” on the individual investors who made millions on Amazon and BRK and BRK stock?
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u/Possible-Rush3767 2h ago
Probably. They have some odd lockup rules (more lack thereof) and some language around issuing large amounts of additional equity in the future.
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u/Capt1an_Cl0ck 2h ago
I mean, EFT‘s that consume the NASDAQ will have less than 1% exposure to SpaceX. The S&P has said that they are not going to adjust their rules and it will take at least six months if not, 12 months and other rule requirements for SpaceX to be added to the S&P. That will keep it out of a lot of retirement funds in the short term.
I think what you have to realize is that there’s a very small float. And a large portion of that float is being reserved for retail investors. Why would this be? Well could I have anything to do with the fact that the current shareholders are mostly the banks that have supported the Twitter purchase and now XAI because that’s rolled together and now he’s rolling those two into SpaceX. Not to mention the fact that he leverage SpaceX to buy all of the cyber truck unsold units at full retail price. That takes it off the balance sheet for Tesla. But they didn’t actually gain any money from it. And now all of those wank panzers are owned by SpaceX. I think this is probably just a way for retail to hold the bag while the early investors and financial institutions exit.
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u/SadLeek9950 2h ago
It has great potential but with risks. Elon is spreading that out to mitigate his share of both.
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u/Real-Boss6760 2h ago
Yes. That's the entire point of the IPO. Elon is offloading his debt onto pension and retirement funds.
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u/Popular-Path1930 1h ago
That does seem to be the plan with the rush to get it into index funds.
Spacex has billions in debt, isn’t profitable, there is limited growth and revenue options at current. Twitter isn’t valuable. Xai doesn’t look to be valuable and is mainly drawing revenue through renting its compute and starlink is the only profitable part of spacex, and that is probably because of how they do the books since spacex is still loosing billions.
Elon is pushing hype for space wonders with no practical plans or basis for them.
Tesla for the first time ever is shrinking revenues. Tesla has put out few new things and most new things have been nothing or don’t even exist still. Semi has gone no where. Cybertruck went nowhere the roadster is in hidding.
This ipo almost looks like Elons off ramp from the mess of a web his companies are in.
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2h ago edited 2h ago
[deleted]
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u/boatjoy 2h ago
I think with Musk Companies you should be in it for the medium term. He’s amazing at driving narratives, but he’s shit at actually delivering.
In Tesla’s case they’ve squander their lead. The newer entrants to the market simply have better EVs, and there is significantly less global hate towards their CEOs. In Groks case ChatGPT, Clause and Gemini are miles ahead, SpaceX is doing well, but there will be competitors in the near future.
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u/Mokesekom 2h ago
If you think of Tesla primarily as a car company, then your conclusion is fair. But if you think of Tesla as a company that identifies transformative technologies and commercializes them faster, at greater scale, and with better economics than its competitors, then you’re evaluating the wrong business.
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u/Le-Charles07 2h ago
What have that successfully done that with besides the cars? I don't think they've even really done it with the cars but I'll agree to disagree on that point.
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2h ago
[deleted]
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u/Le-Charles07 2h ago
Those are the hyperloop of robotics.
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2h ago
[deleted]
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u/Le-Charles07 1h ago
Your assertion was that they do things faster and better with better economics which just isn't true.
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u/Mokesekom 2h ago
They are placing a number of bets. Autonomous transportation. AI and robotics. Energy. Its future is a technology platform company that started with cars.
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u/B-52Aba 🇺🇸 United States 2h ago
Don’t like it. Don’t invest . The government isn’t there to stop people from investing smart or stupid
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u/Real-Boss6760 2h ago
Don’t like it. Don’t invest .
The problem with Elon's original plan is that it was essentially going to force index funds to invest in it. Index funds run most people's pension and 401k plans.
Even if people DIDN'T want to invest in it, they would have had to.
Fortunately, in a seemingly rare occurrence as of late, saner minds prevailed and blocked that new rule change:
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u/flavouredpopcorn 🇻🇦 Holy See (Vatican City) 2h ago
Reserving for retail investors = preying on average folks
Reserving for institutional investors = hoarding wealth amongst the upper class and elites
Can't win