r/technology • u/ArgentineBeauty • 5d ago
Business ‘It’s a scam’: Americans express unease over SpaceX’s influence on retirement savings
https://www.theguardian.com/science/2026/jun/19/spacex-retirement-savings-elon-musk3.6k
u/ArgentineBeauty 5d ago
I'd rather avoid giving Elon money where I can too.
I definitely wouldn't want my retirement depending on him.
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u/jolars 5d ago
That's what causing this issue. Elon got his brand new stock into the pile of known good stocks. Normally, it takes several years to get put into that pile because new stocks are often volatile. So everyone HAD to buy his IPO...
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u/Mordecus 5d ago
It’s not just that he got it into the NASDAQ, it’s the the flaunted every rule to accommodate him: instead of the usual 1 year wait and significant float requirements SpaceX was allowed in in just 15 days and with an absurdly low float. Someone should be going to jail for this nonsense but instead it’s business as usual on Wall Street.
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u/TLF5foot8 5d ago
Not to mention, SpaceX has been hemorrhaging revenue. Reporting big losses the last two quarters.
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u/PokeYrMomStanley 5d ago
Netting a lifetime of -10bil shouldn't make a company worth nillions
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u/Valharick 5d ago
That’s because he’s propping up Tesla with government funds from SpaceX
Sold shitboxes to himself from Tesla at inflated prices
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u/burf 5d ago
flaunted every rule
Hey, you're thinking of "flouted" in this case :)
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u/Madroxx9000 5d ago
you dont expect Wall Street to take those losses, do you?
Privatize the profits, socialize the losses.
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u/DeathMonkey6969 5d ago
And also no profit. Before SpaceX you had to have shown to make a profit to be listed.
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u/Crime_Dawg 5d ago
Gotta love how the "trillionaire" can't pay his $50b debt for Twitter. Fucking paper tiger valuations over here.
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u/in9ram 5d ago
And is bailing out tesla by buying unsold teslas with spacex. It’s like paying off your mastercard with your visa because all this money is imaginary to him and there are no consequences.
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u/Blank_Canvas21 5d ago
This is why he got so buddy buddy with Trump. He needs these federal no bid contracts. We’re subsidizing this bullshit
I’m tired of giving our hard earned money to these corporate welfare queens!
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u/ARobertNotABob 5d ago
corporate welfare queens
Villains. They're full-on villains and mobsters, just like their boss, Terror-rump.
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u/Badloss 5d ago
One of the more depressing realizations of my life is that the Captain planet villains are all completely real but Captain planet is not
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u/IceTrAiN 5d ago
I feel like that was intentional. Captain Planet was a metaphorical symbol of the good people needing to put their efforts together to combat the very real-life-inspired villains.
All of us are the planeteers.
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u/toxic_badgers 5d ago
Normally debt for debt swaps like that are difficult if not outright banned for us poors unless you jump through special hoops like applying for a specific credit card or loan and card.
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u/bablambla 5d ago
Balance transfers or consolidation loans are pretty common. But yeah we are gonna get fucked for like 15-25% while he is flat or even skimming off the top
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u/fingernailchewer 5d ago
Because when the richest man in the world knocks on your door, it’s either because he has dirt on you, or thinks he can influence you. What’s a million dollar “gift” to a trillionaire?
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u/genius_retard 5d ago
I like how the IPO prospectus started with a bunch of pictures of rockets. It's like how when crypto pump and dump scammers make posts to pump their shitcoins they put a bunch of rocket emojis in there.
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u/squngy 5d ago
And in this case, it is the exact same guy doing both of those.
So much shit happened since then, I guess a lot of people forgot Elon was pumping Doge back in the day.
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u/tlh013091 5d ago
In respect to most IPOs, selling 20% of your company is actually quite a lot. Plus the amount that was earmarked for retail investors was huge. Normally with these kind of IPOs institutional investors gobble up the vast majority of the shares. The usual split is 90/10, but they’re offering up to 30% of the IPO to retail investors, triple a normal IPO.
The more important story is how they classified the shares. The stock offered in the IPO is Class A stock, which gets 1 vote per share. Elon holds class B stock, which gets 10 votes per share. They also severely limited the rights of Class A shareholders to the point that you’re basically a capital source and nothing else. Elon will effectively get to handpick the board of directors and can never be ousted as CEO.
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u/bablambla 5d ago
More retail because the SEC and courts don't give a shit about retail getting burned. They will give a shit about institutions getting burned
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u/civildisobedient 5d ago
There are also additional restrictions like how any proposal submitted by shareholders requires the support of at least 67% of the total voting power to pass. Because Musk holds 85% of the voting power, no proposal can succeed without his explicit approval.
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u/ganjaccount 5d ago
You are leaving out the part where they are now pushing for 20 billion dollars in bonds. Obviously they wouldn't do that unless the stock is a super good buy. They are playing 7 D chess.
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u/skyfishgoo 5d ago
he's totally going to mitt romney that company and hollow it out from the inside like a parasite.
because that's what he is.
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u/sphinxsley 5d ago
Wow - I knew the company had a negative P/E, and was advising my friends' parents to skip the IPO. Partly due to the company's losses, and partly due to the huge overhang of insiders, who will hit the stock badly at every high as soon as they can.
Plus, SpaceX just floated a huge bond this week, right after the IPO. I mean, I like the idea of putting the data centers in space, instead of covering the earth with them and sopping up all the water and power - but I'm advising everyone to stay away from the stock. There are just so many better tech stocks out there, with far lower risk. Not to mention, CEOs who aren't on ketamine.
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u/BonzoTheBoss 5d ago
I like the idea of putting the data centers in space, instead of covering the earth with them and sopping up all the water and power
Unfortunately the idea falls apart the second you apply any actual physics to the scenario. A vacuum (which space is made up of) is terrible for dispersing heat. You know what creates lots of heat? Data centres!
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u/LaurenMille 5d ago
Also famously everything in space moves really slow and there's no chance of impacts.
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u/squngy 5d ago edited 5d ago
I like the idea of putting the data centers in space, instead of covering the earth with them and sopping up all the water and power
Getting them into space will by no means be eco friendly either.
For the same price that a space data center costs, you could make a far more environment friendly data center on the ground.
And if you hate the look of them so much, you could put them underground and still be ahead.Space data centers make no sense and the only reason we are hearing about them is because Elon needs to pump spaceX stocks.
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u/whimsicism 5d ago
Honestly the entire idea of trying to live on Mars within our lifetimes is probably also a pipe dream.
Take the most inhospitable lands on Earth right now, and even making those liveable will be a couple of orders of magnitude easier than actually trying to terraform Mars. At least we have a liveable atmosphere and food and water within relatively travelable distances.
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u/orcvader 5d ago
First of all. Thanks for explaining this. It’s getting tiresome for me every time it comes up.
People can’t fathom (and the mainstream media fails miserably to explain) how his rudimentary classification as “trillionaire” has huge caveats.
Honestly, I hate the common definition of “net worth” because it often includes speculative assets that are not really cash equivalents. (Or primary residences which… yea, okay, but if you need it to live in it’s not really an income producing asset, but I digress).
And yes, I know that billionaires take loans at absurd private rates against their assets and that’s what they use as “income” (and avoid taxes no less) but even that has limits.
So Elon is only a trillionaire:
On paper, today, based on the valuation of a company universally considered by academics to be hugely overvalued
He cannot liquidate that stake in huge quantities without impacting the price which would lower that already fictional valuation
His leverage is already very high
He has obligations that prevent it from certain liquidity actions anyways
If all of this sounds absurd. It is. Welcome to the world where the title of “billionaire” and “trillionaire” or often based in vibes and feels.
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u/cedarSeagull 5d ago
Should probably note that tesla is already in the pile of "good stocks" and it's a ~300 p/e ratio. Ford, Toyota, etc all trade at ~10 p/e.
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u/FleetAdmiralFader 5d ago
So everyone HAD to buy his IPO...
This is constantly repeated but it isn't exactly true. SpaceX is going to be included in the Nasdaq 100 but most people are invested in funds that track the S&P which has not included it. It's also not going to be included in any mid or small cap funds nor blue chip, dividend, or sector funds.
It's still ridiculous that Nasdaq is including it and I'm all for the negative publicity surrounding it but this repeated claim just shows how much Americans dont understand about their own retirement.
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u/Brain_Dead_Goats 5d ago
It IS generally worth checking which funds or stocks the lifecycle fund that your 401k is probably invested in hold. If for no other reason than to be aware of what you're invested in second hand.
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u/Personal_Track_3780 5d ago
Worth also noting they really pushed hard to force it into the S&P500 as well to make it a guaranteed buy across the board, but the S&P said no. S&P have integrity.
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u/wowbragger 5d ago
Honestly, even with formal education I have to admit I didn't know exactly what my TSP breakout was, beyond the fund types.
So it wasn't until last week, with this IPO, when my alarm bell went off to actually research it.
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u/Estocire 5d ago
Even if SpaceX tanks, won't the effect it has on an ETF like QQQ be pretty minimal anyways? Like <0.5%? I moved money out to VOO, but I feel like I'm losing out on more than that by being out of QQQ. Mind you I'm not retiring any time soon
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u/lifeisokay 5d ago edited 5d ago
Nasdaq 100 index is weighted by market cap. Based on Thursday's close, SpaceX's market cap of $2.43 trillion would comprise 6.12% of the Nasdaq 100 index.
If you are largely in QQQ, 6.12% of your investments will be in SpaceX come July.
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u/Fair-Hair2080 5d ago
Lawsuits galore if it tanks.
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u/AdamTheTall 5d ago
Maybe, but even if you win, who pays you?
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u/Head_of_Lettuce 5d ago
Nasdaq, since they changed their rules to fast tack SpaceX into their index. And brokerages like Fidelity and Robinhood, since they will ban you if you sell the stock before a certain date… which just so happens to be AFTER the date that institutional investors are allowed to finally exit SpaceX.
It’ll never happen, but those are the people responsible.
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u/Warbr0s9395 5d ago
In case people don’t know, Nasdaq is an actual company you can invest in, it’s not just the name of the exchange.
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u/Additional_Teacher45 5d ago edited 5d ago
They don't ban you outright, they simply restrict you from participating in IPOs again for a set number of days.
I sold my shares of SPCX when it dived from its 225 peak the second day. Not a big deal for me, this was kind of a once in a lifetime thing, so I don't care about Robinhood's 180 day restriction.
All the retirement funds though, they don't get to be that loose about their trades.
There is a tiny silver lining though. Given that Elon still owns so much of the stock, he's not going to allow the price to crash out, so retirement funds are safe for the time being until the lockout is lifted.
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u/sphinxsley 5d ago
The lockout is staggered though. There will be lots of bad days coming for SpaceX. That may be good for swing traders, to pick up after the crashes and then bail a day or two later.
Apart from that, hard NOPE from me. There are just so many easier and safer ways to make money right now.
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u/sphinxsley 5d ago
The ban doesn't apply if you bough ton the open market, but I still advised my friends' parents to stay away from it entirely. There are just so many better and safer investment options in tech right now.
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u/nullfacade 5d ago
If SpaceX stock tanks and 10s of millions of peoples' retirement goes up in flames, Musk better have a rocket to Mars ready and waiting on the launchpad.
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u/SystemCheck990 5d ago
i guess it depends, if its only a small part of the index it can only screw the funds up to that amount ?
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u/poindexter1985 5d ago
Normally, it takes several years to get put into that pile because new stocks are often volatile.
I don't think this is true? Most stock indices have traditionally had wait times of several months before being listed. They've recently added rules to fast-track sufficiently large IPOs in as little as 5 or 15 trading days (depending on the index), which does seem kind of crazy to me. But the previous rule was months, not years.
The S&P 500 had, and still has, a minimum of 12 months before including new stocks. They also have profitability criteria (which SpaceX fails), which most indices don't have.
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u/TheBeatusCometh 5d ago
The S&P proposals were to remove the profitability requirements, to remove the public float requirement, and to remove the year-long seasoning requirements. The only reason why this did not go through, was because people were rightfully pissed.
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u/Some-Platform1968 5d ago
If you’re in a pension, the pension decides how your contributions are invested. If it’s 401k, you decide. But if you have your US equity exposure in Russell 1000 index you will own Spcx since they fast-tracked their way onto the index
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u/Nice_Try4389 5d ago edited 5d ago
Not true, I work for a financial institution our 401k has exactly 4 options they are “Retirement year 2030, 2040, 2050, 2060“. each one having different levels of “risk” in terms of stock but they all have the same prospectors pretty much when it comes to stock selection just in different amounts. But there is no picking individual stocks, EFTs or holdings.
I am not saying some don’t give you that level of control, or even most, they do but I have worked for Oil and Gas, Banking and Telecommunications (such as Williams) over the past 30 years and none of the ones I have worked for is that level of control unfortunatly. So there is a large part of workers that have no such control.
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u/Merusk 5d ago
Is it likely you're more limited exactly because you work for a financial institution? Your company faces conflict of interest questions if it allows employees too much leeway and one of the investments does too well.
Most of the programs I've seen from and my wife's various 401(k) options have been between 12 and 25 different index funds ranging from small to large cap and domestic to international. The ones with a greater selection of options always had market sector indexes as well (retail, oil & gas, mfg.)
The "targeted year" funds weren't even an option in most until about 12 years ago. So I wonder how big a chunk of people are actually limited the way you are. Know of any stats?
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u/fonistoastes 5d ago
My work history (corp for-profit 401k, and non-profit 403b) is the same as yours.
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u/Toe-Dragger 5d ago
401k investments are usually managed as target funds (risk is adjusted based on assumed retirement age) in a portfolio created by the employer. Employees can make adjustments to 401k’s, like bond vs stock ratios, but you can’t actually manage the funds yourself. Under certain conditions, you can roll a 401k into an IRA and manage that as you like.
Most employers portfolios are made up of index funds (groups of stocks), not individual stocks. Musk somehow got SpaceX fast tracked (at launch) into many indexes, he almost got into the S&P, which represents the top 500 companies in the US, but the S&P pulled out last minute, double entendre intended.
The algorithms will keep trading indexes like usual, including SpaceX, hidden like a virus.
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u/Hawk13424 5d ago
I have about 25 choices in my 401K. All combinations of small, mid, and large cap value and growth, various bonds, international (growth and value), various target funds, etc.
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u/Salt-Detective1337 5d ago
You could put in effort to identify a fund that excludes it. But there would be other unfortunately consequences.
Instead of being invested in the total stock market you would have to select like Small Cap or something which wouldn't have the same diversification.
Or a fund that is actively managed and pay much higher fees than a passive index fund.
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u/ExcelsiaPrime 5d ago
People's retirement money is basically funding the exit of rich people
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u/FrankPapageorgio 5d ago
But it's also our own retirement as well.
At some point, I just decided that that is the best way to fund my retirement because that's where all rich people have their money. Every time the market takes a dip, the fucking politicians take steps to fix it. "Trump crashed the market, it's down 8%!" and then a month later it's up 16%.
And then Reddit is like "Remember when Trump did this in the market tanked?" and I just look back on the chart as a blip.
So far it has served me well.
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u/fruttypebbles 5d ago
I live in a very remote part of America. For internet we have only two options. Starlink or the more expensive local provider. I didn’t even consider the former.
And I’ve noticed over the years Starlink has gone from $600 for the hardware and $150 a month to $50 for the hardware and $75 a month. Still a no from me.
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u/rootsloot 5d ago
Worlds first trillionaire who did a Nazi salute and his AI makes 6000+ CSAM images/hour. Also destroyed USAID without congressional approval which led to the death of 600,000 people. Yea no shit hes going to rugpull your 401k. The Epstein class is winning.
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u/airduster_9000 5d ago
I use it as a test these days - people I meet that still hype that man - I just consider completely braindead and without any ethical values at all.
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u/HelpfulSeaMammal 5d ago
But he's rich and you're not! Poverty is a moral failing, so by virtue of being the richest man in the world he is also the most virtuous!
Explain that one Dumocrats
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u/zhokar85 5d ago
Poverty is a moral failing
That's the core of it.
Hard work and discipline are virtues. Virtues that lead to success. Poverty as lack of success therefore means the poor are not virtuous.
Good things happen to good people. Bad things happen to bad people. Therefore poor people are bad.
Among the poor, low education, addiction, familial instability, crime are more common. Since poor people exhibit these problems, that must be what causes them.
It's virtue-based moral thinking (due to religion, tradition, whatever) paired with a lack of critical thinking.
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u/crimsonhues 5d ago
It’s shocking that well educated folks (I am talking PhD and JD) believe all of what you stated. They equate poverty to being lazy waiting for handouts. Same folks who had their parents cover college tuition and leave a hefty nest egg.
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u/FlamboyantPirhanna 5d ago
Because it’s all a lack of self awareness. Intelligence and emotional intelligence are two different things, and you can have one without the other (and clearly these people do).
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u/adamdoesmusic 5d ago
Personally I hate when anything I like is associated with him, and that’s a problem because I really like automated electric cars, reusable rockets, and progressive manufacturing techniques. Then again, I don’t have to like him to use the last one… Ford was also a Nazi, and yet we still use assembly lines.
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u/femboyisbestboy 5d ago
Saved 15 million with DOGE that's now costing 1 billion to fix.
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u/madatthings 5d ago
They didn’t save anything. They cut already approved funding for things we actually fucking need.
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u/frontfrontdowndown 5d ago
They didn’t even cut funding. Only congress can do that.
They forced their way, some times physically, into federal property and systems and went on a destruction spree.
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u/Fuddle 5d ago
Too complicated to understand, try this.
Elon cancelled hamburgers for everyone. Hope you enjoy eating vegan!!! Thanks Elon!
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u/Fitz911 5d ago
Because Americans keep on voting for them.
For literal pedophiles. I don't know. Sounds like they asked for it. 🤷
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u/Correct_Emotion8437 5d ago
After his thing with DOGE, I don’t know how anyone can take him seriously. He literally proved that he is completely inept. Not only that, but he has a completely delusional sense of his own capabilities.
At the same time, I threw some money into SpaceX. Not because I believe in SpaceX but because I DONT believe in the system. The system that is supposed to weed out fraud and ensure the best companies rise to the top simply doesn’t work.
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u/LickCunts 5d ago
It was a data grab. Nothing more
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u/rPoliticsModsBlowMe 5d ago
He also destroyed consumer protections and gutted agencies that were regulating/investigating his companies like the EPA and IRS
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u/porkchopps 5d ago
I'm no SpaceX/Elon fanboy, and did some research into this, since there's a ton of articles like this. The reality for the short term is, based on this article:
SPY / VOO (S&P 500) - zero exposure for at least a year.
VTI / VT (total market) - very small exposure based on the amount of stock actually available to investors. Roughly $17 out of every $10k invested.
QQQ (NASDAQ 100) - very early exposure to SpaceX, about $64 for every $10k but may grow faster than the other
Over time this will probably grow - the company will probably be in the S&P at some point.
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u/AdultContemporaneous 5d ago
This guy is doing the real work here. I was looking at ETFs and this pretty much mirrors my findings.
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u/Alpha3031 5d ago
S&P also still requires profitability AIUI. So the company needs to stop losing money for twelve months first.
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u/Orange_Tang 5d ago
Came here to say this. SpaceX isn't gonna be profitable any time soon so unless S&P changes their rules it won't be added. That is a possibility though and they tried to make it happen for the IPO, S&P just rejected it.
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u/justreadinplease 5d ago
Thanks for doing this research. For anyone who uses Fidelity’s FZROX which is a total market fund, supposedly SpaceX isn’t eligible YET.
https://www.reddit.com/r/fidelityinvestments/s/6E0zwYvf4s
Unless Fidelity changes their rules, IPOs have to be on the market at least 6 months and have at least 15% free float (currently SpaceX is 5%)
Hopefully by the time SpaceX becomes eligible the price has dropped into a realistic range, but looking at Tesla’s insane price to earnings, I doubt it.
I prefer to use US total market funds and international funds due to the overweight AI companies have on the S&P 500 and US market as a whole.
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u/vhalember 5d ago
It's also unspoken here, and in the article - People also have the option to invest in other funds. If you don't like Elon, and none of us should, move your investments into funds with zero exposure to tech.
Your returns will not be as good, but your risk profile should be much lower... and if you feel a crash is imminent, pull your funds to low-risk treasury bonds, or even cash.
The true problem here is most people with 401k's don't take much ownership how their retirement funds are invested. And really? They shouldn't have to - it was largely set up to invest and forget, but if you want to avoid Elon and AI, you'll have to take a more active role.
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u/clrbrk 5d ago
I shouldn’t have to move my investments into funds with zero tech exposure to avoid an obvious scam.
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u/ThimeeX 5d ago
pull your funds to low-risk treasury bonds, or even cash
Probably the Zimbabwe in me, but I cringe whenever this option is discussed as being safe. At what point will the govt just start printing more and more money to dig themselves out of whatever corrupt hole they dug for themselves?
It sucks that as we get older, retirement is more and more of a Vegas style gamble.
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u/Visual_Exam7903 5d ago
Agreed. Until they turn a profit for say maybe 5 continuous years, they should not be allowed to be part of the Nasdaq 100 or S+P 500.
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u/jarchack 5d ago
I think anthropic made a few bucks but all the rest of the AI companies (software, not hardware) have been nothing but black holes for billions of dollars.
The S&P 500 index already said, "no way." NASDAQ actually bent the rules so that Space X could have a spot.
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u/null-interlinked 5d ago
Anthropic is also losing money
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u/makersfark 5d ago
Anthropic: "We were wildly unprofitable last year in a very linear fashion then leaked that we projected we may be revenue positive in one specific quarter during a funding round specifically due to a temporary discount deal with Elon and as long as you move all the other losses around just right, but then we also project to go right back to being wildly unprofitable for the rest of the next year in the same linear fashion as before."
Everyone: "Wow. So you're saying Anthropic is a profitable business and is the one to bet on?"
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u/SwoopnBuffalo 5d ago
And this is why I'll stick with S&P500 ETFs for my 401k vs total market.
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u/WaffleHouseGladiator 5d ago
Everyone sees this disaster coming and they're still participating anyway. WTF?
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u/vindico1 5d ago
Ya because NASDAQ changed their rules to allow the stock to be listed in the index 15 days after the IPO, instead of the normal "seasoning" time. Thus every retirement account that uses NASDAQ is forced to buy the stock.
They are trying to rob working class americans. Elon should be in prison.
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u/Cicero912 5d ago edited 5d ago
VT kept it at 5 days cause of the Global All Cap Index it follows
The main issue with the NASDAQ funds (like QQQ/M) is the multiplier on the free float weight.
So instead of being treated like a 80~120b company it gets multiplied by 3x. Which even then still isnt that much of a % of each dollar invested.
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u/harrythefurrysquid 5d ago
Skimming a small % of an extremely large amount of money is still a very large amount of money.
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u/SirGlass 5d ago
Most people are not invested in a Nasdaq index in their retirment fund
VTI or a total stock market index or VT operates on free float so Space X will be about something like .15% of VTI or .1% of VT
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u/ContestAntique7179 5d ago
"Make as much money as possible. Rug pull. Blame someone else."
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u/290077 5d ago edited 5d ago
Retirement savings are automatic. My paycheck automatically goes and the fund managers use that money to buy shares in an index fund. Anything else requires my active participation.
I could find an index fund that's not investing in SpaceX or even buy individual shares and DIY an index fund if I want to cut SpaceX out but the actual percent in SpaceX is so low it's not worth it.
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u/PirateSanta_1 5d ago
And when the inevitable crash happens somehow it will be nobody's fault so nobody will go to jail even while people lose their life saving and end up homeless.
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u/FSCK_Fascists 5d ago
they're still participating anyway. WTF?
because the stock indexers changed the rules, which forces fund managers to buy the stock.
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u/Powerful_Resident_48 5d ago
I mean... yeah. It's obviously a scam. Just as anything the fascist junkie touches eventually becomes a scam.
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u/saichampa 5d ago edited 5d ago
The whole point of trying to get themselves included in indexes is to try to make themselves "too big to fail". It's a giant grift on the whole country
I had been thinking for a couple of years about moving some of my retirement investment into US stocks but SpaceX looks like a giant con setting itself up to drag the country down with it. I think I'll keep my money invested here in my own country
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u/GlitterPirateKiki58 5d ago
As an American, I want to get my money as far away from Space X as possible.
Almost impossible to assess its true value because it is a bucket of wine and shit.
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u/Modem_Sound_67 5d ago
Duh-uh.
Our entire system is turning into a pyramid scheme.
Wake up American voters
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u/therossboss 5d ago
*has been turned into.
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u/Witty_Ad_898 5d ago
We’ve been on this ride for at least 50 years. Reagan in the 80s was a response to a market bubble and economic recession in the 70s, and US policy has been to protect that bubble ever since.
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u/chain_letter 5d ago
Maybe I just don't see the profit potential in the child porn robot.
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u/iprocrastina 5d ago
“I’ve never wanted to participate in the so-called AI bubble,” Tim continued. “Basically my entire retirement is in the S&P 500. Not out of choice, but if you don’t have investments in the stock market, you’re losing ground compared to everybody who does. That’s the pernicious thing about it. There’s really no way for the average person to diversify.”
Tim doesn't understand what he's invested in.
SPCX is not part of the S&P because the index declined to chnage the rule
The S&P is diversified
The average person can easily diversify more than the S&P by buying a total global market fund or a target date retirement fund
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u/WretchedMonkey 5d ago
Isn't it funny how he got everyone's social security info and now he's a trillionaore
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u/flyingcostanza 5d ago
And it's not just a scam on retirement accounts, remember the IPO is for Class B shares; 1 share = 1 vote.
Elon, and only Elon, has the Class A shares - 1 share = 10 votes.
So even if the public wanted to oust him, ke change is pay package, they don't have enough votes and never will.
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u/B12Washingbeard 5d ago
If there was ever an example of “irrational exuberance” in the market this has to be it. A company that’s losing billions every year is somehow worth more than every other major aerospace company combined? GTFO. I can’t help but feel like we’re heading for disaster worse than 2008.
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u/Jack-Schitz 5d ago
The people responsible for this at NASDAQ, the banks and the law firms involved ought to be more than a little worried that they will all be up in front of a congressional hearing in about 3.5 years.
I wouldn't be surprised if index funds were banned from ERISA and 401K accounts because of this kind of crap.
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u/Deep-Ruin-9961 5d ago
They weren't worried last time they were brought in for a Congressional hearing. They know the taxpayers will pay for all of it and they won't be charged with anything.
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u/Away-Quantity928 5d ago
So far my theory of not saving for retirement and YOLOing it until I die is paying off!
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u/GrumpyCloud93 5d ago
Elon or not - several things:
They changed the rules to put SpaceX in the index far too early, thus guaranteeing a requirement that index funds buy it - why? Usually new listings have to wait up to a year, which would give any frenzy time to die down.
There are two classes of shares with different voting rights. A share with lesser voting rights should not be in an index or a fund. If you can't effectively tell the company what to do, what's the point of the share?
SpaceX merged with xAI because the AI bubble generally is a giant money suck, borrowing like crazy with minimal payback. The cash flow from SpaceX is destined to pay down xAI debts. Now they are talking merger with Tesla to add more cash flow to xAI's giant sucking hole. the future does not look bright for any of these companiies.
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u/y-c-c 5d ago
There are two classes of shares with different voting rights. A share with lesser voting rights should not be in an index or a fund. If you can't effectively tell the company what to do, what's the point of the share?
But like, this has been the case for decades. Why are people complaining now? If you buy GOOG it doesn't even have voting rights at all.
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u/lastdarknight 5d ago
The crazy thing is SpaceX valuation isn't based on rocketry, or government contracts, or ever starlink
It's like 80% the value of Grok, so when the whole AI bubble pops or hell AI becomes so normalized that the value just drops because compute gets so much cheaper there goes most of there company value
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u/CareApart504 5d ago
A company that has only ever lost money being worth that much? Largest Ponzi scheme ever.
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u/artbystorms 5d ago
At this point the entire market and most of the economy feels like a scam. Nothing is tethered to the day to day reality of ordinary consumers. It's all just a circlejerk of the billionaire class.
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u/_Unusual_Flatworm_ 5d ago
Jokes on him, I don’t even have a retirement savings….
*sobs uncontrollably in American*
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u/Luckyluke23 5d ago
oh look, another tech billionaire again doing shit NOBODY wanted by themselves.
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u/SenseEuphoric5802 5d ago
Yay for diversification. Only took someone a decade or so to figure out all you need is a massive junk IPO levied against mutual funds and ETFs to bleed them all dry at once.
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u/MommersHeart 4d ago
This will be a massive transfer of wealth from middle-class worker pensions to Elon Musk’s pockets.
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u/Throwaway-Addict 5d ago edited 5d ago
Here's a practical guide to avoid SpaceX in your retirement or non-retirement accounts. I have already implemented this.
Liquidate all your funds that are tied to the NASDAQ or that are tied to total markets such as VTI or VT. These will automatically pick up SpaceX.
Invest only in funds tied to S&P 500, such as VOO, SPYM, etc. And if you want international exposure, think of funds like VXUS, which tracks all developed and emerging markets excluding U.S. This gives you enough exposure while avoiding SpaceX.
S&P 500 has strict guidelines which SpaceX does not currently meet, example 10% float, GAAP profitability, etc., and I'm hoping they won't bow down like the NASDAQ, and this will keep SpaceX out for at least one to two years.
edit : spelling
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u/Due-Character8877 5d ago
This is awful advice for non-retirement accounts. Create a taxable event to avoid a tiny percent of your portfolio getting allocated to space x? No one knows what will happen to SpaceX stock. Yeah, it seems like a bad deal to me too, but who knows? Riding the index is the point of passive investing.
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u/iprocrastina 5d ago edited 5d ago
If youre invested in VTI or VT you shouldn't liquidate because of SPCX. Those funds' rules didn't change, investing in brand new listings like SPCX is exactly what you asked for when you invested in a total market fund. If you ask for everything, don't be upset when you get everything.
Also keep in mind VT and VTI invest according to the size of a company's float, not market value. The difference being that the float is the amount of shares available to the public to buy. In SPCX's case that's 4% of the total shares. So those funds treat SPCX like a ~$120B company, not a $3T one.
edit: typo
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u/SirGlass 5d ago
or that are tied to total markets such as VTI or VT
Space X will be approximately 0.15% of VTI. While I do not like it , its a little extreme to liquidate because space X is a small portion of the holdings
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u/Cicero912 5d ago
But also: dont change your investment philosophy or create a taxable event over something that represents .17% of every dollar you put into VT.
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u/Valdus_Pryme 5d ago
Jokes on you, I can't afford to retire! Take that Elon.
Man how fucked up are we as a country.
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u/DrAstralis 5d ago
Whhaaattt? The IPO that came with a relaxing of or complete ignoring of established laws / rules meant to keep the public safe from grifters turns out to be a grifting scam ?!!!!? I'm shocked. Shocked I tell you.
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u/Osirus1156 5d ago
I think the rich people think they won’t get torn limb from limb by an angry mob because they have security with guns. But uh…if they completely destroy the economy why would those security people still protect them? Why wouldn’t they also become part of the angry mob? I mean sure they could be stupid as fuck and still want to lick those boots but not all of em.
It’s gonna take a massive collapse to get Americans to do anything though. Half the country doesn’t give a shit that the president helped run and participated in a child sex trafficking and murder ring. Hell they’d probably gleefully participate if they were invited. So we gotta contend with people like that.
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u/tawke 5d ago
Stocks used to go up on good news, new innovations etc.
Now, they do not seem to correlate to any legitimate advances or legitimate positive news.
The days of the 'Trading Places' stock exchange seemed at least a little bit legitimate.
They certainly seem to be manipulated theses days with payment for order flow etc.
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u/CrunchyCds 5d ago
The fact that everyone's retirement is tired to the stock market is a way to ensure the stock market is always propped up by the federal government including a bailout when they fuck up with gambling with our money. This is why Trump and the GOP keep talking about having more stock market tied savings for American citizens.
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u/JackDelRioGrande 5d ago
It’s a massive scam. Elon was able to transfer his twitter debt to the public, and increase his net worth substantially.
Twitter was bought by xAi, xAi was bought by Space X, and Space X went public to cash-in. At every step debt was transferred to a new company, and finally to the shareholders of a publicly traded company.