Danish Pension Blacklists SpaceX over 'Catastrophic Governance'

https://www.bloomberg.com/news/articles/2026-05-29/danish-pension-fund-blacklists-spacex-citing-governance-issues

by leopoldj • 2 months ago

286 478 2 months ago

bloomberg.com

red-iron-pine• 2 months ago

is anyone surprised? the IPO documents are a disaster, and the finance-tube talking heads are all tearing it to shreds

rvz• 2 months ago

Good. Would love to buy SpaceX stock at a 90% discount after the IPO and the next tech / AI correction.

hparadiz3• 2 months ago

Imagine not wanting to own a piece of the first company to make a re-usable orbital class booster.

horsawlarway2• 2 months ago

Yeah, I also don't want to eat a tasty morsel if you roll it around in the dirt and serve it up covered in bugs and hair.

And that's basically what SpaceX is right now after you account for xAI and twitter in the mix.

So I'd love to own a piece of the SpaceX from a decade ago - but the current offering smells pretty bad.

Combined with the fact that at this point, Musk clearly isn't opposed to running a business with dramatically inflated valuations based on vaporware, lies, & hype (cough - Tesla - cough) it just makes me far more skeptical than I might otherwise be.

I think caution is warranted here.

Essentially - I want to own the SpaceX that could have been if we didn't end up with the shoddy k-hole version of musk in charge of things.

bix6• 2 months ago

Imagine buying the most overvalued company of all time helmed by a crazy man who does Nazi salutes. Payback period? Who cares! Orbital class booster yayyyy

Octoth0rpe2• 2 months ago

Imagine not wanting to own a piece of the first company to make a re-usable orbital class booster.

They didn't say they didn't want to own it, they said they wanted to own it at a : "90% discount after the IPO and the next tech / AI correction."

It is possible for a company to be both technically impressive and horrifically overvalued.

petesergeant2• 2 months ago

This implies there's no price at which owning SpaceX is a bad idea, which is obvious nonsense.

twalla• 2 months ago

I'd love to own SpaceX - what I don't want to own is all the unprofitable, toxic dogshit its ketamine-addled CEO folded into it that has nothing to do with putting stuff into orbit or selling Starlink.

malcolmgreaves• 2 months ago

Don’t make emotional investment decisions!

rchaud2• 2 months ago

With this governance structure, you won't actually own anything. Ownership implies that you have a say as a shareholder.

wombatpm• 2 months ago

SpaceX is now an AI company with a rocket side hustle. At least that’s how the S1 looks.

mrhottakes2• 2 months ago

Imagine ignoring actual financial reality because Wow Big Rocket Go Up!!!

Danox3• 2 months ago

Why is it a good thing to buy something that is financially not well run up front, and usually things don’t get better as time goes on however, if you’re in first, you can just sell it down the road and let someone else hold the bag in time.

Tesla was a great ride if you got in early but long-term from this point on if you had any significant amount of money, why would you buy them now? Unless you like sleepless nights…

fguerraz• 2 months ago

It’s a good thing because it’s definitely an interesting company worth investing into long term. But not at this valuation. 10% seems reasonable given the profits perspective.

SilverElfin3• 2 months ago

It’s obviously a scam. First xai acquires failing Twitter and then SpaceX acquires xai? At a made up valuation number that’s too high? The voting structure of SpaceX prevents Elon from ever being held accountable. Not to mention that the revenue and profits are simply not enough to justify the desired value.

nolok2• 2 months ago

Merging the failling companies into the other ones is the usual Elon thing, Solar City didn't get acqui-merged into Tesla for its great result.

It's not a "scam" in the traditionnal sense, it's riding the bubble while it's there, stock value is "supposed" to be about the company performance and potential but technically it doesn't have to be, it's about what some people are willing to pay for it (the stock, not the product the company sells) and that's all. That's also why tesla has such a valuation.

You can see it in the comments even here and other thread about this IPO, some people read the numbers, and some have just religious sounding comments about it being the biggest revolution ever or making the history book etc ...

And that's also why they need to keep elon as CEO because in the scenario where they remove it and get the best car company CEO and become a great regular car company that works and ships lots of great car ... Their valuation would be reduced a factor of ten

Danox3• 2 months ago

It’s a scam and the party will be over when Tesla finally bites the dust, and it will. The worldwide trajectory is not in their favor.

wg03• 2 months ago

There was Cursor somewhere in the mix too.

thesimon• 2 months ago

Matt Levine described it well (https://www.bloomberg.com/opinion/newsletters/2026-05-21/spa...)

The deal, with SpaceX, is that Elon Musk runs it however he wants, and he does weird stuff, and you have to trust him, and if you don’t like it you can’t complain.
When SpaceX acquired xAI a few months ago, did a special committee of independent directors approve the transaction? Did Musk recuse himself from negotiations? Was the price set by independent valuation experts using a rigorous process? Did outside shareholders sue to block the deal? Stop. Musk wanted SpaceX to buy xAI, so it did.
[...] Surely SpaceX has created all that shareholder value more because Musk does what he wants than in spite of Musk doing what he wants; it is hard to accidentally create $1.75 trillion of value. SpaceX’s shareholders signed up for this deal — letting Musk cook — and have been rewarded;

vondur• 2 months ago

Isn't that how Facebook is ran too? Basically Zuckerberg's private company, that in theory is public?

grassfedgeek• 2 months ago

Right, if Meta had good governance Zuck wouldn't have been allowed to invest so much in Metaverse.

jdgoesmarching• 2 months ago

Tech bros reinvent autocracy

stefan_• 2 months ago

Facebook is still a Delaware company, with lots of established case law for what Zuckerberg can and can not do, voting majority or not. SpaceX is now some Texas corporation with a state legislature ready to enable whatever Musk wants.

zardo2• 2 months ago

Though (at least to my knowledge) Zuckerberg doesn't have a history of abusing his authority to make deals that advantage other companies he owns at the expense of Facebook.

E.g. SpaceX buying up large numbers of Cybertrucks Tesla couldn't sell at MSRP, not even negotiating a good fleet sale deal.

nicole_express• 2 months ago

It seems like a fine offer to have exist, but one that a pension fund with low risk tolerance wouldn't want to take. So everything seems reasonable with the world.

Similarly I don't understand why indicies are rushing to change their rules to allow SpaceX in. People accept a certain risk tolerance and changing the rules to ramp up the risk seems questionable at best.

lokar3• 2 months ago

How can I transfer my shares of VTI for an interest in this pension fund, before it’s too late?

tgv• 2 months ago

BY getting a job in Denmark in the sector that this pension fund covers. It's a "member-owned pension fund for academics."

stouset3• 2 months ago

VTI won’t really be affected by this.

It’s based on the total market and not artificially limited to a small number of large companies. Plus it’s free-float adjusted so only the publicly-tradable portion of SpaceX is considered when weighting its inclusion so it will constitute only a small portion of the fund. There is also a (small) mandatory delay period which I don’t recall between it going public and it becoming included in the index which should give time for the SpaceX valuation to stabilize on something notionally realistic.

Thankfully, Vanguard and its member funds are investor-owned so are likely more resilient against someone like Elon trying to change the rules.

lokar3• 2 months ago

The index they use is altering the rules. I complained to my account rep, he agreed it was not great and is asking the fund mgmt what the plan is. I doubt there is a lot they can do.

svachalek2• 2 months ago

NVDA is like 8% of SPY and 6.7% of VTI. So these mega tech stocks are less dominant in VTI, but it's not a night and day "won't really be affected" kind of difference.

And most index funds including Vanguard track an external index. So when the index changes the rules, Vanguard changes what it buys. Vanguard is also famous for always siding with the management, they take the activist side of any debate approximately 0% of the time, so don't expect them to be fighting this for you.

fluidcruft• 2 months ago

It's really concerning given how the indexes are changing rules to fast-track SpaceX being forced into index funds. S&P is also working on updates to S&P 500 to force it down everyone's throats quickly and algorithmically.

aNoob7000• 2 months ago

Add Anthropic and OpenAI to the list. Companies that are bleeding money.

Personally, a company should be making money before adding it to the index.

parliament327• 2 months ago

Interestingly, these are the exact rules they're working to overturn: currently, no matter how many stupid accounting tricks you pull off, you need to actually be profitable to be included in the S&P 500.

mohsen1• 2 months ago

There is a market for an S&P 500 ETF without those companies. I'll immediately switch over

zzleeper2• 2 months ago

Let me know if you find one! I'm at a loss. (And even then, if I switch I have to pay $$$ taxes on capital gains)

rlkf• 2 months ago

You probably want an ETF that follows something like the MSCI USA Ex Mega Cap index then: <https://www.msci.com/indexes/index/758086>

fsckboy• 2 months ago

you can buy S&P 500, and short the component companies you don't like, but caution, this will achieve the solvency you want, but you will likely remain irrational

SilverElfin3• 2 months ago

The same rules are now affecting other big IPOs. I think Cerebras was confirmed as getting fast listing too even though they’re much smaller. It’s one big act of dumping on retail markets

radicalbyte2• 2 months ago

They learned from the failure of crypto and have found their bag holders.

rchaud2• 2 months ago

Waiving profitability requirements to join the S&P 500 and trigger auto-buys from index funds is DEI for corporations.

root_axis• 2 months ago

And accelerating the schedules for insiders to dump shares.

philwelch• 2 months ago

Almost all of the YoY growth in the S&P500 is in a very small number of tech companies. If one of those fast-growing tech companies isn't in the S&P500, the index as a whole becomes obsolete.

epistasis3• 2 months ago

I'm usually a Boglehead, with some exceptions, and one exception I'd love is some sort of trade that would eliminate my exposure to SpaceX for the next few years. I'm sure there's some combo of options that would do it.

Probably finding an ESG-focused ETF would do it. ESG basically meant "good governance, we follow laws" which translated into better governed public companies that therefore had better returns, as one would expect. Really weird how it was politicized into something entirely different...

xenospn• 2 months ago

Stock markets are ruled by hype and fomo. Good corporate governance has little to do with returns, unfortunately.

Galanwe6• 2 months ago

I'd love is some sort of trade that would eliminate my exposure to SpaceX

You can just short SpaceX of an amount equivalent to its share of your SP500 holdings. You will have to pay borrowing costs though, but on something that liquid it will be very small.

jakub_g• 2 months ago

One annoying thing is that those "non-standard" ETF variants have much higher management costs than basic S&P500 / All World ETFs.

parliament327• 2 months ago

some sort of trade that would eliminate my exposure to SpaceX

I think it's less complicated than you'd think.. just buy LEAPS puts proportional to your exposure.

bryanlarsen2• 2 months ago

There's an ETF for everything out there. (There are more ETF's than stocks). There'll be a large market for "S&P500 without SpaceX" et al, so it's seems likely somebody will fill it. It probably will have to use a worse name because of the S&P trademark.

P.S. Here's an example of S&P500 without the magnificent 7 https://www.defianceetfs.com/xmag/

joelthelion• 2 months ago

I've sold all my stocks. My reasoning is that if AI stocks go bust, they will take the global stock market with them.

wg03• 2 months ago

We're going to witness bigger blast than the great depression, dot com bust and 2008 crisis combined.

These greedy capitalists are after the pension funds + retail investor (ETFs in particular) through IPOs but there's no profitability in sight.

ngriffiths• 2 months ago

In addition to covering the IPO in general last week, Matt Levine also wrote about this specific question Tuesday[1]:

Historically index providers were in the business of making these sorts of quality decisions, so that index funds were not forced to buy stocks they didn’t like.
These rules create some tension between the idea that an index is a list of all the stocks and the idea that an index is a list of all the good stocks. Historically, it didn’t matter all that much: The point of the stock market is to tell you which stocks are good, so a company with a high stock valuation should be a very good company, so it should get a high weighting in both the Index of Good Companies and the Index of All the Companies.
But SpaceX — and also maybe OpenAI and Anthropic in their coming IPOs — will probably break that link. SpaceX will probably (1) do all sorts of stuff that index funds hate and that index providers have specifically tried to exclude and also (2) be gigantic, because the market loves it.

[1] https://www.bloomberg.com/opinion/newsletters/2026-05-26/ind...

daft_pink2• 2 months ago

Apparently, the index funds are based on free float and since the number of free floating shares is limited, the total exposure to the index will be very small.

Dig1t• 2 months ago

They will only be added to those indexes if they are actually trading at a value that places them in the top 100 or 500 companies in the US. If they fall below that price then they will be kicked out of the index just like any other company.

What exactly is the risk to normal investors if that’s the case? If it’s all a big scam then they will trade lower and they’ll naturally be kicked out of the index.

This is a rule that will apply to all new companies. When Anthropic and OpenAI go public they will also benefit from the rule. Do you think the media/public will be just as outraged when they do it?

The goal of the S&P 500 is to keep the index representative of the US market. They have in fact changed rules in the past when market conditions have changed. These mega IPOs are an entirely new market condition, as private companies have never been this big before listing in history. So large that they immediately fall into the top 100 or 500 largest companies in the country.

There’s also the fact that Nasdaq is a private company and it now has competition from the new Texas exchange. SpaceX is actually dual-listing on TXSE and Nasdaq. Nasdaq needs to keep these giant IPO companies happy because if they don’t they will list on the competitor exchange which would be disastrous for Nasdaq (supercharging their competitor).

These things affect each other as well. Nasdaq wants to make sure they get the IPO on their exchange, so they include them in the Nasdaq 100. S&P 500 doesn’t want to be outdated by missing a trillion dollar company from their index, while other exchanges like the Nasdaq 100 include them.

There’s a real case to be made that this is just self interest on the part of the exchange and the other index providers.

zerotolerance• 2 months ago

Should have renamed the company xGoodwill.

pu_pe• 2 months ago

Wouldn't the same argument apply against Tesla?

fuglede_• 2 months ago

https://akademikerpension.dk/nyheder/vi-ekskluderer-tesla/

kome• 2 months ago

again, i’ve been posting this a lot recently, but i still think it’s worth sharing: it’s a summary of an academic paper i wrote, “it’s not finance, it’s your pensions” https://theloop.ecpr.eu/its-not-finance-its-your-pensions/

the piece explains how modern finance is de facto built on the shoulders of the privatization of the welfare state. i find it particularly relevant here: the finance class - in this case musk - wants pensioners money via mutual funds, even modifying the rules of indexing...

it’s not a great sight tbh.

formvoltron• 2 months ago

prediction: SpaceX will not escape Earth's gravity. Meaning... what goes up will come down.

jmyeet• 2 months ago

The part that gets me is that changing of the rules by exchanges and financial regulators to essentially force mass purchases on a small float. That's disgusting and in a just world, those people would go to jail.

The funny part of all this is that SpaceX has achieved a lot but what might break them, or at least weigh them down heavily, is the impulsive and forced purchase of Twitter. Before anyone claims it was some kind of master plan, Elon went to court to get out of it but was forced into it [1].

What happened? Mass firings, pushing his own tweets because his fragile ego couldn't handle Joe Biden getting more likes [2] and Twitter opened the floodgates for hate speech [3] and worse [4]. Advertisers fled. Fidelity (who foolishly was part of the acquisition) massively wrote down the value [5]. Elon had used Tesla shares as collateral and was possibly facing a margin call.

How did he get out of it? Well, in 2023 Elon founded xAI to challenge OpenAI. People invested in this for some reason. And by 2025, Elon merged Twitter with xAI, overvaluing Twitter at $33 billion (which is still down 25% from the purchase) [6].

Now, I imagine the xAI investors were unhappy with Elon using xAI to bail out himself so what did he do? Easy. Make SpaceX acquire xAI of course [7].

Thing is, xAI and Twitter/Grok are a massive drain on SpaceX's finances, losing more than $10 billion annually allegedly [8].

Twitter did not have to end up as part of SpaceX. SpaceX would've been a better company without it. SpaceX already faces headwinds from the incredibly expensive and behind-schedule Starship program. Part of all of this regulatory fixing is to make sure the insiders (and Elon himself) get bailed out.

It's also not the first time [9].

[1] https://www.pbs.org/newshour/economy/elon-musk-offers-to-end...

[2] https://www.theguardian.com/technology/2023/feb/15/elon-musk...

[3] https://www.nytimes.com/2022/12/02/technology/twitter-hate-s...

[4] https://www.washingtonpost.com/technology/2023/07/27/twitter...

[5] https://www.axios.com/2023/10/29/fidelity-twitter-x-value-el...

[6] https://www.fintechweekly.com/magazine/articles/xai-acquires...

[7] https://www.reuters.com/business/musks-spacex-merge-with-xai...

[8] https://www.bloomberg.com/news/articles/2025-06-17/musk-s-xa...

[9] https://www.theverge.com/2016/11/21/13698314/tesla-completes...

amarant2• 2 months ago

Any chance of bypassing the paywall? Does someone have a archive link perhaps?

iso1631• 2 months ago

Pay perhaps?

Or do you work for free?

explodes• 2 months ago

You don't subscribe to twenty five news outlets, what are you, a freeloader? /s

mikeodds• 2 months ago

Just prepend url with archive.is/ if you want to check

frm88• 2 months ago

Here you go: https://archive.ph/dsVfR

amarant2• 2 months ago

Thanks! Looks like they have a rather reasonable take. I agree that spaceX has some very impressive capabilities and there is no doubt that their engineering talent is the best in the world in their field, but 1.8T is indeed a ridiculously high number!

I interpret their management risk analysis as being more about the buss factor of 1 than it being about not liking musk, which I also think is a reasonable take.

LightBug1• 2 months ago

Good for Denmark.

Yeah, for all the technical excellence by Shotwell and the team ... I don't want my ETF's and pensions buying into that piece of shit CEO and his corrupt 'at a whim' entity manipulation.

Sorry, fuck SpaceX

wg03• 2 months ago

Now are we going to bomb Denmark? Or Venezuela style? Greenland of course is part of Miami anyway so that needs to be regaineed ASAP which is another top priority.

mikewarot• 2 months ago

That's a great start, now they need to add pretty much anything swept up in the AI Ponzi scheme that NVidia and others are running. The circular money flows are astounding once on see them. LLMs and "AI" is great, until you actually have to pay for it an an un-subsidized price. I'm working to do that locally, on a machine I control, for my own personal uses. (I'm old, and retired)

The whole market is running on fumes, most of the actual value of the physical economy has been extracted by the Epstein class. It will not be pretty when it implodes, and people have to actually make things for a living again. (I've worked in a job shop, making gears, I know what its like).

throwfaraway135• 2 months ago

The criticism seems politically motivated. Considering what happened to Blue Origin, SpaceX's success is commendable. Although I agree $1.8T seems crazy.

gbil2• 2 months ago

Akademikerpension also said the governance structure of SpaceX was "extremely deficient", adding that Elon Musk is expected to control more than 80% of the voting rights while simultaneously serving as chief executive officer, chief technology officer and chair of the board.

Their skepticism seems pretty valid to me

adamiscool8• 2 months ago

Zuck was in roughly the same position and they didn’t put out a statement skipping that IPO. The valuation criticism is more valid but this line belies political motivation.

SwellJoe4• 2 months ago

The company is wildly overvalued. It'd be funny if Musk wasn't about to walk away with a bunch of money stolen from retirement accounts.

zamadatix• 2 months ago

Most of the 1.8T hype is not at all related to the rocketry business. Well, I suppose if you buy the "AI DCs in space" pitch they could be somewhat related.

johneth2• 2 months ago

If you buy the "AI DCs in space" pitch, you deserve to be parted from your money.

SwellJoe4• 2 months ago

What's political is a policy change to "fast track" companies into the Nasdaq 100. Spacex is the first to benefit from this loophole that allows them to be added to indexes almost immediately after listing, which likely is a license to steal a bunch of regular folks retirement money. Elon Musk doesn't need more ways to steal people's money.

The unfortunate thing is, a lot of people have no idea this rule change has gone into effect, and that they're about to get fleeced by a bunch of professional investors.

https://www.kiplinger.com/investing/what-the-nasdaqs-new-fas...

It's legalized theft, and the victims are people least able to defend themselves from it. Most people have no idea what's in their retirement accounts, or track very closely what's being tracked by the index funds they've been told for decades was the safest way to invest in the stock market for non-pros.

cryo32• 2 months ago

Not even remotely politically motivated.

It doesn't matter if it's successful or not. Their space business is worth virtually nothing on paper and the funding structures and profit/loss accounts are scary.

bluescrn2• 2 months ago

While the Starship project may be struggling, Falcon 9 is still a massive success, with a successful launch every couple of weeks, making up most of humanity's access to space/LEO right now.

And Starlink is a pretty big deal, particularly in a time of conflict where undersea cables are very vulnerable.

If Elon hadn't shifted so far to the right, these threads would be near-universally praising SpaceX despite Starship's struggles.

techpression• 2 months ago

But it’s at the whim of someone who I think nobody can describe as stable or trustworthy. Starlink the technology is great, Starlink the company has a massive weight attached to it.

Forgeties794• 2 months ago

If Elon hadn't shifted so far to the right

A symptom of his fickle nature and erratic behavior, as well as general poor impulse control, all of which rightfully make people skittish with their money and question his judgment.

pendenthistory• 2 months ago

Interesting definition of "struggling", as in "managed to catch the largest booster rocket ever built with by snatching it mid air, and land the largest space ship in the ocean using a belly flop maneuver that everyone said was crazy and would never work".

Zigurd4• 2 months ago

Falcon 9 is a serendipitous technical success for a rocket that wasn't designed to land and be reused. It is an operational success. Whether that makes it a financial success is very questionable.

Starship is meant to answer all those questions about design intent and financial viability and then some. It could readily turn out to be an example of second system syndrome.

whatevaa• 2 months ago

Elon achived this valuation by merging xAI into SpaceX. The future of xAI is questionable, and without it SpaceX is very overvalued.

MrBuddyCasino2• 2 months ago

SpaceX has the potential to be the most valuable company ever if the space economy expands. Starlink will be a tiny puzzle piece by then.

How is this even debatable.

YawningAngel• 2 months ago

I don't think it's politically motivated at all. My impression of this IPO is that it's designed to inflate SpaceX's perceived value by offering very limited float and aggressively seeking to capture passive money by bargaining for inclusion in indices it would not otherwise be eligible for. Speaking as a passive investor myself, I want my money nowhere near this company until it meets the old eligibility criteria.

turzmo• 2 months ago

[flagged]

Geezus_425• 2 months ago

They've been simmping for Musk for at least a decade. Doing it for AI is only few years old.

KingMob2• 2 months ago

Think so? I feel like HN has always had a high level of simping.

Zigurd4• 2 months ago

There's a lot of it. But I also see a lot more skepticism of Musk and the rest of the intellectual dork web. Flirting with fascism was edgy. Now it's just icky.

Hamuko4• 2 months ago

I've recently been thinking about pulling my money from all of the US funds that I currently have. I really don't want my investments to be in SpaceX, OpenAI or Anthropic.

andsoitis3• 2 months ago

been thinking about pulling my money from all of the US funds that I currently have

What’s holding you back? And what alternative investments are you considering?

I recently did homework to decide whether to double down on VOO (S&P 500 index) or to diversify via VXUS (ex-US index), and concluded VOO is better for my risk-adjusted ROI outlook and time horizon.

Hamuko4• 2 months ago

Momentum, really. I usually just buy more of a given fund and don't really take any out. My small portfolio is split across different funds, so I'd probably just split around the money I'd withdraw from the US-based ones into the other ones.

gigatexal2• 2 months ago

Same. Though I’m 85%+ VOOG

spacebanana72• 2 months ago

Why not Anthropic? They’re a very rare company capable of charging $200 per month per seat level fee across the corporate workforce.

Yes their compute costs are astronomical, but that can be managed down over time by more efficiency or mild enshittification that doesn’t create too much churn.

Hamuko4• 2 months ago

Because I don't really trust any of them, and I don't believe that the business is self-sustainable. At the moment we're in a phase where CTOs are able to withdraw money from the corporate bank accounts to be "on the cutting edge", but I don't think that's going to last. I'd rather have my money in something else.

100ms• 2 months ago

Chinese hardware and energy headwinds aren't going to be great for Anthropic, apparently not even over a 1 year time horizon.

originalvichy4• 2 months ago

You would think you’re investing in a software technology company, but after reading a bit of news stories, you realize you’re quite literally funding war crimes. If I invested in an arms company, I’d have reasonable expectations about what I invest in. Investing in Anthropic at surface level looks like investing in software for hobbies and business.

It’s pretty depressing to be honest. I don’t know how I could work in any of these military industry companies.

adammarples• 2 months ago

And they "only" need about 100 million recurring subscribers at $200 per month to make the profits that will justify their nearly $1 trillion valuation with almost no room for growth whatsoever, so who wouldn't want a chunk of that pie. (numbers calculated on back of imaginary envelope)

acdha2• 2 months ago

Why not Anthropic? They’re a very rare company capable of charging $200 per month per seat level fee across the corporate workforce.

Because no part of this statement is accurate. They’d like investors to believe it’s very rare but they have multiple strong competitors, most of whom have much better financials, and the entire sector is worried that the open models are going to effectively cap rates below what they need to pay off their massive investments. Lastly, they’re not universally must-have in software development which is one of the domains best suited for LLMs but most corporate work lacks similar correctness oracles and we’re already seeing major corporate customers reconsider the cost/benefit ratio.

None of that means they’re doomed but a lot of stars need to align for them to keep their valuation up. They don’t need to go out of business for investors to lose money buying in at the peak.

SwellJoe4• 2 months ago

With the new Nasdaq 100 fast track rule, I'd certainly get out of any index that tracks it, or any funds that are invested in it. I don't know if any other indexes have had similar policy changes...but, if it works this time, and insiders are able to steal a few billion dollars from retirement funds without people even realizing it, I'm sure it'll become more commonplace until we have a functional government that regulates this kind of crime.

https://www.kiplinger.com/investing/what-the-nasdaqs-new-fas...

gigatexal2• 2 months ago

I’m going to be selling out of my Nasdaq ETF too. Such a shame.

Buuut if Anthropic does the same and lists on the Nasdaq then I might reconsider.

Hamuko4• 2 months ago

Apparently my US index fund is based on MSCI, which is even worse: eligible after 10 trading days. Although the float-adjusted market cap calculation should lessen the blow.

jstummbillig• 2 months ago

I really don't want my investments to be in SpaceX, OpenAI or Anthropic.

This just being an incomplete list or is there another reason you name the last two but not Google?

nixon_why69• 2 months ago

Google being one of the most profitable companies on the planet might contribute? OpenAI and Anthropic don't seem to be profitable while SpaceX is weighed down by heavy losses on grok.

seydor• 2 months ago

I mean it isn't like it was automatically included.

jonasf1337• 2 months ago

hope my Danish pension fund PFA doesn't do the same

brikym5• 2 months ago

I really want a QQQ/VOO replacement that excludes these new rushed IPOs that are just exit liquidity. There are ETFs that exclude harmful industries like gambling, weapons and tobacco. How about an ETF that doesn't include IPOs for six months or until insider lock ups periods are over.

lain98• 2 months ago

VTI avoids these issues. It's float adjusted market cap weighted. More float allows better price discovery. So a company like spacex has negligible weight.

u1hcw9nx• 2 months ago

So are other major index funds. That's not the problem.

The problem is that the NASDAQ 100 and most likely also S&P 500, change their rules to permit SpaceX to be added early without traditional time for price discovery. It happens jsut five trading days before the major index rebalance.

After float adjustment SpaceX could be 1% of NASDAQ and 0.7% of SP500, but after full tranche escalation that takes over 130 days, SpaceX weight can be over 3% of NASDAQ and almost 2% of SP500 if the market cap stays near $1.5T.

(I think the price will decrease, so the weight will be smaller)

This is just a ploy to get exit liqudity as brikym, said. SpaceX collects enough capital to pay Twitter acquisition loans and then some, but the IPO not major boost for SpaceX finances. The coming merger with Tesla is clearly in the plans (C stocks).

wjnc2• 2 months ago

A long and a short cancel out. So you could construe this yourselves. (Recognise that this has a long tradition on HN ;)

brikym5• 2 months ago

Besides laziness being a tradition among programmers (in a good way), that kind of complex activity is going to generate tax in a lot of jurisdictions.

KerrickStaley2• 2 months ago

I think VGT is a good QQQ replacement. It is based [1] on the MSCI US Investable Market Information Technology 25/50 Index which is free-float adjusted [2] [3], meaning that SpaceX will have a lower weight due to its lower free float. Also, VGT has a substantially lower expense ratio (9 bps / year [4]) than QQQ (18 bps / year [5]). You can compare VGT and QQQ's holdings on these pages [6] [7].

[1] https://fund-docs.vanguard.com/F0958.pdf

[2] https://www.msci.com/indexes/documents/methodology/2_MSCI_25...

[3] https://www.msci.com/documents/10199/6bafd9e3-0474-f03b-16bd...

[4] https://investor.vanguard.com/investment-products/etfs/profi...

[5] https://www.invesco.com/qqq-etf/en/about.html

[6] https://stockanalysis.com/etf/vgt/holdings/

[7] https://stockanalysis.com/etf/qqq/holdings/

brikym5• 2 months ago

That's fantastic. Thanks! I actually use QQQM which has lower fees. Seems like Invesco pulled a trick from marketing and segmented the market to have it both ways. I also need to find leveraged ETFs that have float adjusted weights which is a bit trickier. I might just pull out of TQQQ until the dust settles.

kccqzy• 2 months ago

No it’s not. When the asset management industry says “information technology” they exclude the technology used for communication. That’s why VGT doesn’t invest in GOOG or META. AMZN is consumer discretionary so it’s also excluded.

bko3• 2 months ago

The point of these broad ETFs is that they include everything. Let the market decide. Of course they should own one of the largest public companies in the world. They're changing the rules on inclusion because the ipo is unprecedented and not owning it because [reasons] would be a dereliction of their duties.

You want an ESG fund

Also I dont see how weapons companies are harmful. Unless you're so naive to think defense is not a thing any person or country has to worry about in 2026

vibrio• 2 months ago

I think their point is not the ESG component, but firms with traditionally irrational valuations (à la GameStop) for which index inclusion exceptions have been made to facilitate short term liquidity for IPO participants. Seems as though one should be able to hold the broad market less that component.

sobiolite• 2 months ago

Let the market decide what, though? What the market cares about may be different from what you care about, if the average investor has a higher tolerance for risk that you do. For pension funds, long term stability is key. A wide spread of large companies has traditionally been a good way to achieve that, but that isn’t guaranteed.

myk90014• 2 months ago

Let the market decide... They're changing the rules on inclusion ...

You have the market deciding and the rules changing in the same paragraph and nothing's bothering you. I genuinely envy your peace of mind, my friend. Some of us are truly blessed.

ImPostingOnHN4• 2 months ago

Let the market decide. Of course they should own one of the largest public companies in the world.

The pension fund is the customer here. The market is already deciding. You're free to invest your own money as you see fit. The pension fund's money is not yours to decide what to do with.

pja3• 2 months ago

Dimensional runs a bunch of ETFs which are effectively US & world equity index trackers that don’t slavishly follow the indices & can therefore avoid being forced to buy into IPOs or index updates. E.g. DFUS is effectively VTI (IIRC) without the requirement to immediately buy into IPOs that are added to the index:

  https://www.dimensional.com/us-en/funds/dfus/us-equity-market-etf

I don’t think they have a QQQ equivalent but I haven’t looked at their entire ETF list.

(I have no relationship with Dimensional, nor do I invest in these funds - I just saw them mentioned in a YT video on this topic a few months ago: https://www.youtube.com/watch?v=mqIHa6URUPk )

brikym5• 2 months ago

I knew that would be a Ben Felix vid. He's awesome.

roysting2• 2 months ago

You are making a mistake in equating several things here. Not only is this SpaceX IPO that has latched itself onto pensions through accelerated inclusion in the S&P100 and other funds a different and rather unique matter, but excluding harmful industries is really rather stupid of people who oppose those industries.

If, e.g., all those who opposed those industries had instead bought the industry stock, the people with those ideals opposed to those industries could have at the very least profited from the sale of the stock...which the company itself basically does not see direct benefit from (you are not buying the stock from the company or giving the company any money in most case)...and used/committed that money to even greater opposition. If a catalytic number of those had formed, they could have also even made real impact through shareholder initiatives and actions demanding changes by pressuring board members who rely on votes, etc.

It's one of those nonsensical, moralistic and ...sorry... foolish mindsets that common people have, the idea that simply by not participating the King will leave them be. The psychopathic narcissists in control will never leave you be, no matter how much you virtue signal by not buying their stock from someone else that is not the company or no matter how much you ask or how far you run and beg and ask to be left alone.

Frankly, although I am not certain that it was done intentionally, if I were a major mover and more powerful person, I would propose the very kind of moralizing, self-righteous campaign that has shot the commoners in their feet by getting them to simply check out and not participate in things the could have otherwise controlled a lot more.

So instead of people who actually care...but are clearly rather foolish...all/a disproportionate amount of control and power and money is left to those who do not have those qualms. Hence why none of this "excluding harmful industries" has affected anything whatsoever and we now have square mile measured AI data centers and tens of millions of low climate impact people being moved into high climate impact countries, and we have more war and death and addiction than humanity has seen in 90 years.

In case it is not yet clear to some of us, a stock is like if you went to some second hand/thrift store and bought a brand of clothing that was reviled for some reason or another, i.e., use of child sex slave labor, you giving a thrift store money to wear the second hand clothing not only does not benefit the reviled company, but just alone wearing second hand clothing will likely have more a positive impact than guying some other company's clothing that will later turn out to have used regular child labor.

goobatrooba2• 2 months ago

While not wrong, your perspective is very simplistic. A company gains massively from strong stock performance - they can issue more shares to raise capital, give handouts, take loans at better rate, pursue M&A with stock payment, ... So anyone who buys stock they ethically disagree with is certainly supporting that company - and inversely not using those funds to the advantage of other companies that they find morally more appealing.

rsync• 2 months ago

"... a stock is like if you went to some second hand/thrift store and bought a brand of clothing that was reviled for some reason or another, i.e., use of child sex slave labor, you giving a thrift store money to wear the second hand clothing not only does not benefit the reviled company ..."

This is incorrect and, frankly, ridiculous especially in light of your own scoffing at the "foolishness" of others.

The secondary market value for company stock has a direct impact on current and sustained operations in areas including, but not limited to:

- the ability to sell debt and the interest rates at which it can be sold

- the ability to attract and retain executive "talent" with stock compensation

- the ability to attract - or ward off - takeovers and buyouts from other firms

- the ability to expand operations, or development, through follow-up offerings

Your observation of this basic truth (that company shares purchased by at-large market participants don't yield funds directly to the firm) is, of course, correct.

However it is not as profound a factor as you think it is.

ChoosesBarbecue• 2 months ago

If a catalytic number of those had formed, they could have also even made real impact through shareholder initiatives and actions demanding changes by pressuring board members who rely on votes, etc.

For SpaceX, from Matt Levine [0]:

SpaceX will have dual-class stock, with Class B shares getting 10 votes per share. Musk owns 93.6% of the Class B (and 12.3% of the low-vote Class A), for total voting power of 85.1%.[5] Tesla does not have dual-class stock, Musk is a minority owner, and he has worried aloud about the risk of losing control of Tesla’s robot army because he doesn’t have voting control of the company. Not a problem at SpaceX! Build all the robot armies you want!
Because of Musk’s voting control, SpaceX is a “controlled company” under stock exchange rules, so it doesn’t have to have a majority of independent directors or an independent compensation committee. So the board of directors can be made up of Musk’s buddies, and they can pay him whatever they want.
Even aside from controlling 85% of the voting stock, Musk gets to appoint a majority of the board of directors himself, without the Class A shareholders even voting.[6]

Does not sound like this is remotely true for SpaceX, then?

[0] https://www.bloomberg.com/opinion/newsletters/2026-05-21/spa... (the other footnotes are from the article itself)

goobatrooba2• 2 months ago

Well this used to be the rule until it was changed just a few months ago on anticipation of this very SpaceX IPO.

runeks• 2 months ago

I wanted to see how well Akademikerpension has done wrt. returns. This graph shows average yearly return from the financial crisis 2009 until 2021 and they are actually the best performing among other Danish pension funds [1].

[1] https://www.finanshus.dk/wp-content/uploads/2023/02/Pensions...

adamtulinius• 2 months ago

Ah, time to dump Velliv it seems.

hosteur• 2 months ago

Well, often you don't get to "dump" your pension fund. In Denmark, it is your employer deciding what pension fund to use, and you will then have to use it. It is kinda ridiculous.

NoahZuniga2• 2 months ago

Judging a pension fund by how it performs in a bull market seems wrong. Like their main job is to limit your downside from market crashes (if they're not doing that then they offer nothing compared to an index fund), so its strange to not include 2008 crisis (or .com bubble popping).

Checking this shows that the top 2 performers in this graph lost more money (~8%) in 2008 than the bottom 2 (~2%)

ImPostingOnHN4• 2 months ago

Judging a pension by how it performs in 2008 seems wrong. Like their main job is to perform well over long periods of time compared to other funds.

Checking this shows that 12 years is longer than 1 year, and thus is a better metric.

theptip• 2 months ago

You make a good point, but I think “lowest risk” is also not the metric either. You could buy 100% bonds and be even safer.

You want some risk-adjusted return metric parameterized by average returns and also volatility.

ksimukka3• 2 months ago

(Apologies for the bad grammar, my son was born a little over 24 hours ago. I’m choosing not to use a LLM, so you are getting the real me)

Even sovereign funds (example Norway) are invested in American tech, funds, and indexes.

It is interesting to think about (from the perspective of an immigrant to Norway) how I moved my life’s savings from the US to Norway.

I’m now fully invested into Norway (real estate, savings, and retirement).

My understand is that Norwegians (and the nordics) have historically looked up to the US as a world leader.

I think that is no longer true and maybe this decision by Denmark is a data point of how the Nordics are changing?

It kind of feels like we all have been caught holding the bag (US reserve currency) and now we have to carefully unwind our position.

I’ve lost my point. Maybe my goal here is to just contribute to this discussion to distract from the exhaustion.

l23k4• 2 months ago

I think that is no longer true and maybe this decision by Denmark is a data point of how the Nordics are changing?

No, this is just standard pension fund governance.

ksimukka3• 2 months ago

Right, that makes sense. I assume it happens often as part of the governance process. my original statement could have be better phrased as a question.

What are your thoughts on the general consensus of Nordics views and opinions about the US?

shivpat• 2 months ago

Get off your phone and enjoy the time lol - journal instead if you must write something

yokoprime• 2 months ago

Gatekeeping is never a good look.

pimeys2• 2 months ago

As a Nordic (Finland), I think this is true. In the history, US has been always admired and we've loved to travel there and cherish the culture. Damn, I was there when Conan O'Brien traveled to Helsinki, and greeting him with this massive crowd of people who really love him. I married an American, I've traveled through the country multiple times with my partner. Love the food, people, the nature, the cities.

But this has definitely changed for me now. The idea of crossing the border and having to flip a coin is the border control guy a nice guy or not is not appealing as a diabetic who needs his phone to be with him untampered and who doesn't want to sit in a cell somewhere for days/weeks because they posted a funny meme of a person you can't joke about. Or who just witnesses this absolute inequality happening, and who witnesses the leaders of this country coming to my country and giving their support for parties who want me to not marry and who doesn't want to see me existing.

I am just tired. And sad. I wish I could get our relationship back with the US but I don't know... Even if we backtrack from here, get back to the "olden times", it will take a moment until I can enjoy US again.

P.S. Conan is still a treasure!

ksimukka3• 2 months ago

Conan is great!

carlosjobim2• 2 months ago

The idea of crossing the border and having to flip a coin is the border control guy a nice guy or not

That is nothing new. It's how it's been forever. And not only arriving in the USA, but also Canada, Germany and other places.

simonjgreen• 2 months ago

Congratulations, and enjoy your time :)

pseudony• 2 months ago

Congratulations :)

As a Dane, I would say yes. Especially among boomers there was always a genuine appreciation of the US and its role as guardian of a rules-based international order and western civilization more generally.

I think that sentiment has gone, even as younger generations have increasingly incorporated English words, music, TV and more into their own, but you seldom hear the same genuine trust in the US as a force for good.

sgt5• 2 months ago

I'd say in Norway there's more inherent trust in America. People may appear a bit more critical, but by now it's part of the culture. Even though you have some regresion of that trust due to Trump and polarization, I'd say most people see the US as a core part of Western society, cultural and critical to defense.

arjie• 2 months ago

Realistically, as World War 2 demonstrated, Finland’s independence rests on America’s will to protect it. And after it, Norway and Sweden as well.

Strategically modifying one’s pension fund choices to prevent having sub-prime companies bundled into a possible success is not a sign of anything. The Nordic nations will attempt to stay allied to the US because survival depends on it. They are much closer to the frontier and Western Europe’s ability and desire to protect them is substantially weaker.

In the event of a fall of NATO far western countries like Spain or Portugal will likely free-ride by virtue of their geography. The Finns get no such benefit.

accidentally• 2 months ago

Congratulations on your newborn son! You must be on cloud nine (no pun intended).

swingboy• 2 months ago

Apologies for the naivety, but, why is SpaceX valued so high? Starlink? Are rockets really a lucrative business? Don’t get me wrong, being able to send objects up into orbit is cool, but is it $1.8T cool?

Hendrikto• 2 months ago

Because of the Musk reality distortion field. The claim is that all data centers will move into space, and that SpaceX will completely own that market.

Izmaki• 2 months ago

This sounds amazing until something needs replacement. Until data centers on earth has a 99.99% (or higher) level of autonomous operation with very minimal requirements to maintenance and part replacements, they're not sending anything into orbit...

sgt5• 2 months ago

Where did they say that all data centers will move into space? I thought the claim was that it's going to be more and more feasible and profitable to have DC's in space.

UltraSane2• 2 months ago

I truly do not understand why anyone believes anything Musk says anymore.

SlinkyOnStairs5• 2 months ago

The datacenter thing is mostly just a meme that billionaires say because it makes them feel smart and gets them media attention, it doesn't seem to move stock significantly.

The actual distortion field is around Starlink. Which is the main product and the only one that's (nominally) profitable. It's the one all the hype centers around. xAI is barely even notable in the AI space.

This also makes it possible to judge the size of the distortion field, as Starlink is just an ISP, for which we have accurate valuations. And for what it concerns shareholders, a strictly worse one than a conventional ISP. Space infra is much more expenive than putting some glass in the ground, once.

Comcast is a behemoth of a company doing far more than just ISP. Worth a "mere" $90 billion. Charter Communications is a similarly sized "pure" telecom. Worth $20 billion.

Both of the above ISP companies have roughly 30 million subscribers. Starlink has 10 million. Yet they want $2 trillion at IPO.

A 20x to 100x overvaluation. And what do you get beyond an ISP?

* A private aerospace company that's not doing notably better than the space divisions of old aerospace. (Remember: Starlink is already accounted for so doesn't count here)

* An AI company that has so little demand it's currently handing a bunch of compute to Anthropic for such a deep discount the latter has claimed to become profitable.

* Twitter. Which is worth either $33b if you count Elon's internal buyout valuation, or $10b if you count realistic valuations.

While there is some hype around "The future of space!", the reality is that the long term growth for that is fairly dead in the current geopolitical climate. Nobody's saying it out loud yet but US Aerospace is being replaced. Fewer and fewer US launches will be bought. The EU is even building their own Starlink equivalent.

bazodedo• 2 months ago

The earth is finite, and space, for all intents and purposes, is not, and expansion into it would thus be required to sustain any super linear growth of the economy. Well, and rockets are cool. Perhaps people would much rather invest in something with the veneer of furthering space exploration (and the promise of infinite riches) than buy into some crypto blockchain startup. And, its not as if other current valuations are sane.

Geezus_425• 2 months ago

SpaceX isn't opening space to everyone. They're are preparing for the select few to be able to escape once the earth is no longer sustainable due to their own efforts.

expedition322• 2 months ago

As long as you can offload your bag to the next sucker the value will be high.

Most shareholders don't really care about the company they have shares in.

Tepix• 2 months ago

We know that xAI (with X) is struggling.

SpaceX is growing quite slowly. You could argue that Starship is likely to somewhat accelerate growth.

Starlink is doing well but also growing somewhat slow.

A more rational valuation would be 900b-1000b.

The rest is Musk and FOMO.

UltraSane2• 2 months ago

Starship is currently a money pit.

mavhc3• 2 months ago

SpaceX already dominates the global industry, there's barely anything left to grow into at current $/kg, but of course reducing $/kg by 10x means 10x more cargo to launch

noutella• 2 months ago

One must also consider the proximity between musk and the trump administration, the market pricing this proximity is the market pricing power, access and aligning its interest with the blatant collusion between political power and business in the US.

That or the good ol’ « dump it on retail » scheme

bell-cot• 2 months ago

Big picture: Nice-sounding economic theories claim that stock market valuations are rational, but those theories are mostly bullshit. As soon as the actual humans in the real-world stock market get excited, or scared, or otherwise emotional, they mostly stop caring about all that stupid boring gotta-do-math "rational" stuff.

Yes, eventually, the humans have to sober up, and stock market valuations return to approximately what the economic theories say they should be. But the dangers of betting on that "eventually" are very well known: https://quoteinvestigator.com/2011/08/09/remain-solvent/

ifwinterco2• 2 months ago

Monetary policy in the US is too loose and has been for years

Zigurd4• 2 months ago

No. Space is not lucrative or profitable. The SpaceX profit story rests entirely on Starlink. Starlink has a plausible moat servicing ships at sea and extreme remote areas. The big problem for Starlink is that they are trying to grow into a shrinking TAM, as terrestrial wireless expands with ever cheaper equipment ever farther into the countryside that Starlink is counting on for their TAM.

Elon's visions border on self parody. If I told you that humanoid robots were going to be digging tunnels for the Boring Company you'd have to stop and think if I was pulling your leg.

dijit7• 2 months ago

No. Space is not lucrative or profitable

Yet.

To be clear, I don't support SpaceX specifically, but the amount of resources available to us from beyond our planet are quite literally infinite, only bounded by our ability to move fast enough to get it.

Comets that routinely pass by our planet have rare-earth metals in quantities that we don't even have on the planet at all. Hell, that's where our rare earth metals came from in the first place. Getting access to 100 million tonnes of platinum could totally change how we use the metal, right now it's most effective use is probably within catalytic converters to reduce emissions from cars.

Helium-3 and Deuterium in high quantities can be used as clean fusion fuel, basically clean atomic energy.

I struggle to see how these can't be lucrative in the long term.

mr_toad• 2 months ago

People betting that the price will go up because they think other people are doing the same thing.

Geee2• 2 months ago

Starship makes space access 1000x cheaper than before, with cost-to-orbit under $10 / kilogram. Also much larger payloads become possible. That's an insane economic unlock, because space contains unlimited amounts of resources and energy. Space-based manufacturing, building space hotels, mining asteroids etc. becomes viable. Larger satellites and probes for commercial or scientific use becomes possible.

All this might not make sense in a standard business sense. Real profits might be decades away, who knows. Anyway, people are willing to throw their money at it, because they think it's important.

If they succeed in the long term, it'll easily be the most valuable company on Earth.

ooterness• 2 months ago

Valuable, sure. Most valuable on Earth? Ridiculous.

HWR_143• 2 months ago

According to SpaceX's own documentation more than 80% of their value comes from xAI and their data centers. Starlink is where they are making the money, but they are pouring it into AI.

dbg31415• 2 months ago

Good move.

Elon is rigging the stock market and getting index funds to invest in companies that are over-valued and thus not stable.

https://m.youtube.com/watch?v=sYA-z0Y8WRQ

throw672• 2 months ago

American gov is gonna invade Greenland for sure for not cooperating with american conmen

zdc1• 2 months ago

With schemes like SpaceX, and the general number of large-cap-but-negative-earnings companies trading on the market, I feel like the conventional wisdom of DCA and chill / just passively buy the index will turn into an underperforming strategy vs a slightly more active or opinionated approach.

dools• 2 months ago

Just buy ETFs of index funds that only include dividend paying stocks

Npovview• 2 months ago

Another factor. TINA. There is no alternative.

sega_sai• 2 months ago

In my understanding some index funds i.e. FTSE Russel ones will include spacex with the weight based on the floated stocks, so in practice the weight in the index will be small enough in All Cap etc indices. So I decided for myself it is not a cause for concern. But I think now it is the time to look for index providers who do not decide to bend the rules for short term gain (i.e. S&P and Nasdaq).

HWR_143• 2 months ago

SpaceX is responded to the float issues by having a continuous increase in the unlocked stock available on the market. And NASDAQ was the first index to promise a quick inclusion of spacex.

alex_suzuki• 2 months ago

But isn’t “passively buying the index” still exposed to this, at least if you’re not buying “equal weight” version? Dividend stocks sounds even more appealing to me, I read that as “companies that are generating stable profits now”.

devlovstad• 2 months ago

I have AkademikerPension as my pension fund through work and this move suits me quite well. They've already excluded Tesla as well as a variety of companies that profit of weapon production, fossil fuel production or are suspected for human rights violations.

https://akademikerpension.dk/ansvarlighed/ekskluderede-selsk...

petterroea3• 2 months ago

In Norway the oil fund are actively arguing against boycotting these kinds of companies saying, and I paraphrase: "but our job is to earn money and we can't do that if you hippies keep standing in the way with your morals"

Good to see it isn't necessarily the case.

petesergeant2• 2 months ago

That’s exactly what you would want your money manager to say. It’s their job to turn a profit.

In turn you also want democratically elected politicians above that saying “yes, but the people want their money made ethically, so you can’t do that”.

petterroea3• 2 months ago

For some context, this Norwegian cartoon by a group that used to make satire for the government run news agency is a pretty decent summary of how things were discussed: https://www.youtube.com/watch?v=9mkuP6kQwNs.

The old man is a caricature of Jens Stoltenberg (who seems to be running the Norwegian economic machine rather well nowadays, controversial or not)

SlinkyOnStairs5• 2 months ago

It's maddening how quickly ESG and similar programmes have been thrown in the dumpster once the political climate in the US swung back to "anti-woke".

"but our job is to earn money and we can't do that if you hippies keep standing in the way with your morals"

What these clowns conveniently forget is that their job is not just "to make money" but to make money over a span of decades and centuries in the case of the sovereign funds. A long term investment fund that optimizes for the next quarter at the expense of the long term is a bad fund.

And so the ESG and woke "hippie bullshit" is nothing more than the basic capitalism of maximizing your gains by 2100 by not destroying the one planet all your companies are on.

Long term funds do not have the luxury of being passive owners. If they take no role in management, that role will instead by taken by whatever short-term owner walks in next. They don't care about the value by 2100, they just want the company to tear the copper out of it's own walls so they can sell with a profit by next quarter, retail even sooner.

jcoyne2• 2 months ago

our job is to earn money

Which is exactly why you wouldn't put it in a company with a ridiculous valuation.

mejutoco• 2 months ago

The sovereign fund of Norway also researches a lot of the state of the companies and then invests into the whole market vs the ones they dont consider good according to some metric. Sounds like this Danish example.

davedx• 2 months ago

If you want to make money, buying SpaceX stock isn't the way to do it

This is about valuation not ESG

__Joker• 2 months ago

Yeah, there is lot talking out of both sides of their mouth here.

If nothing else, at least these should be choice of users to let them choose based on their values and requirements.

scoofy3• 2 months ago

The secondary market isn’t where morally dubious choices get made.

There is a huge difference between funding oil extraction that is happening anyway, and funding a company to start extracting oil.

However, this is the intersection of consequentialism, deontology, and virtue theory.

ifwinterco2• 2 months ago

How does Tesla fit with the rest of those?

I'm not a huge fan of Elon Musk but Tesla is a company that produces electric cars (mostly in western countries with half-decent labour laws), it's not associated with any of those things.

I guess one could argue with some merit that the governance is bad enough to exclude it on that basis alone?

sgt5• 2 months ago

Agreed - Tesla has been an insanely good investment. I'm not sure about the next 10 years, but people have continuously underestimated them (and Elon Musk). The Norwegian so called Oil Fund owns more than 1% of Tesla.

Luc• 2 months ago

"Danish pension company Akademikir Pension has announced it will divest from Tesla due to ongoing concerns about labour rights, corporate governance, and Tesla CEO and co-founder, Elon Musk's behaviour."

https://www.europeanpensions.net/ep/Denmarks-Akademiker-Pens...

Matl• 2 months ago

Tesla is known for hazardous factory conditions, worker mistreatment etc.[1]

Then there's the autopilot misleading marketing, Cybertruck being glued together with spit glue and duct tape etc.

1 - https://en.wikipedia.org/wiki/Criticism_of_Tesla,_Inc.#Worki...

acdha2• 2 months ago

Tesla has a P/E wildly out of line with the rest of their sector and is facing strong competition with a largely absentee CEO who has a history of making very bad decisions over the objections of more skilled staff (politics, of course, but also things like how the Cybertruck is so expensive to make and own). At some point that bubble is going to pop so I can understand a pension fund being more focused on long term returns passing on them.

Gomotono14• 2 months ago

Europe is still a democracy and while its apparently not relevant in the US America, Elon Musk as the richest person on the planet directly tried to involve him in europe elections.

apexalpha• 2 months ago

Defensive weapons are very much needed in Europe…

embedding-shape2• 2 months ago

Indeed, hence most European defense companies experiencing somewhat incredible growth recently, with no signs of stopping.

Do we need Americans weapons? Unlikely and probably counter-productive long-term. Do we need European weapons? Hell yeah!

CuriouslyC• 2 months ago

The new asymmetric reality is mostly short/medium range drones, ECMs and hypersonic missles. Loitering munitions are going to make tanks mostly obsolete and Jets are too expensive to risk over enemy territory that still has working radar/anti-air except for large shock&awe actions.

A lot of this stuff is hard to stop and too cheap to effectively stop economically anyhow, the best solution is distance and preemptive strikes at staging areas.

Gomotono14• 2 months ago

No they are not.

The amount of military spending europe has, is already higher than russia.

Russia clearly showed how incapable they are, they are not even able to present modern war technology at their freedom parade.

And china we don't fight china.

tordrt13• 2 months ago

The fossil fuel part doesn't seem like a rational decision to me.

Why are we pretending that fossil fuels dont provide an immense amount of value for humanity, and that its horrible to invest or support building out any fossil fuel production whatsoever.

Lets not do produce it ourselves, lets just instead outsource it to the gulfs and Russia…

pietervdvn• 2 months ago

The fossil fuel industry is both the most subsidized industry worldwide (https://en.wikipedia.org/wiki/Fossil_fuel_subsidies) and the second most expensive source of energy (at least for electricity production). The only energy source that is more expensive is nuclear (!).

90d• 2 months ago

It is a tricky situation isn't it? We wouldn't have gotten where we are without fossil fuels, but now we realize they are not sustainable to be dependent on and we cannot continue this level of growth. I don't think it is actually possible using current means to power what we have come to know as a "first-world lifestyle" for the majority of the planet.

eigenspace6• 2 months ago

The slavery part doesn't seem like a rational decision to me.

Why are we pretending that slavery doesn't provide an immense amount of value for humanity, and that it's horrible to invest or support building out any slavery production whatsoever?

Lets not do produce it ourselves, lets just instead outsource it to Africa...

___________________________________

Snide comparisons aside, I'd just say that we can accept that fossil fuels played a gigantic and important role in getting us to where we are, and also acknowledge that we'll continue to need fossil fuels in the near future, but that does *not* mean that we need to accept that investment in even more expansion of the fossil fuel industry is a good idea.

i_cannot_hack2• 2 months ago

Nobody is pretending fossil fuels are not producing value, if they did not nobody would bother using them in the first place. The argument is about the fact that they produce relatively short term value for the person using them, at the externalized expense of polluting the atmosphere and causing long-term environmental instability and destruction for every subsequent generation for the foreseeable future. Coastal regions (and whole islands like the Maldives) disapppearing under the ocean is immense and ongoing value loss for humanity. Ocean acidification destroying marine ecosystems is an immense and ongoing value loss for humanity. More frequent and more extreme hurricanes is an an immense and ongoing value loss for humanity. And on and on...

ZeroGravitas• 2 months ago

If it's so valuable why don't you want to buy it from the Russians and the Gulf?

stingraycharles3• 2 months ago

It’s more about trying to help the cleaner energy sources get off the ground, rather than a purely financial incentive.

pipes• 2 months ago

Given the Russian threat to Europe and the fact that we are actively sending arms to Ukraine, investing in manufacturing arms doesn't seem like an imoral thing to do. Quite the opposite.

lukego• 2 months ago

IANAeconomist but may I ask, tongue firmly in cheek, if they also only pour water into the shallow end of swimming pools to avoid contributing drownings?

CamperBob2• 2 months ago

You might want some of those weapons, once our faithless, perfidious country (meaning the USA) decides to leave you to the Russian wolves. Don't depend too much on alliances.

And where would Norway be without fossil fuels, exactly? That's basically the sole source of your nation's wealth.

As for Tesla and other companies led by Elon Musk... well, yeah, F that guy. But don't throw the proverbial baby out with the bathwater.

thomasfl• 2 months ago

As a Norwegian I envy your ethical pension fund. Our Norwegian pension fund goes by the name the oil fund, and was financed solely by fossil fuel production.

andyjohnson03• 2 months ago

For those commenting that this decision may have a political element: Greenland is a part of the Kingdom of Denmark.

Musk is a prominent Trump/MAGA supporter, and Trump has threatened to annex Greenland by force. SpaceX is part of Trump's Golden Dome project, and one of the reasons that Trump wants Greenland is to site ICBM detection and interceptor systems.

johneth2• 2 months ago

All good points, but I think their main point of poor governance is still the pure motivation.

detourdog• 2 months ago

The governance issues seem much worse than the other issues with pricing and inclusion.

amelius• 2 months ago

Then why not hedge? If they take Greenland at least they have their pensions.

myk90014• 2 months ago

... part of the reasons that Trump wants Greenland is to site ICBM detection and interceptor systems.

Nothing is stopping the US from deploying those in Greenland right now.

The only reason Trump wants Greenland is he's not all there -- Greenland looks big on the map so he's fixated on it.

andyjohnson03• 2 months ago

Nothing is stopping the US from deploying those in Greenland

That would require the (politically unlikely) agreement of the Danish government. See article 2 of the relevant treaty [1]:

"...establishing and/or operating such defense areas as the two Governments, on the basis of NATO defense plans, may from time to time agree to be necessary..."

The only reason Trump wants Greenland is he's not all there -- Greenland looks big on the map so he's fixated on it.

I agree that that is part of it, but there is more to it than that.

[1] https://avalon.law.yale.edu/20th_century/den001.asp

paulbjensen• 2 months ago

The Financial Times' Unhedged Podcast covered the SpaceX IPO recently and highlighted the same issues that the Danish pension fund raised concerns about.

https://www.ft.com/content/a401b0c0-fcc0-4bae-9f57-e8d5c0957...

windexh8er• 2 months ago

I enjoyed this piece the most [0].

[0] https://www.profgmedia.com/p/spacex-stasy

Alifatisk2• 2 months ago

I am thinking of moving over my investments from S&P 500 to S&P 500 ESG, as they have excluded SpaceX and Tesla.

jcoyne2• 2 months ago

$XVV (iShares ESG Select Screened S&P 500 ETF) holds $TSLA

stkdump• 2 months ago

SRI and ESG advanced funds exclude Tesla.

Alifatisk2• 2 months ago

Damn you're right.

neonstatic• 2 months ago

I am waiting to see if the same outrage will be in place when Anthropic and OpenAI go public. This surely isn't just a dislike of a certain individual, is it?

noodlesUK2• 2 months ago

I think European countries need to get serious about investing money locally. The UK is a particularly egregious example but it’s taking begging and pleading with the mansion house accord to even convince pensions to try to invest in the UK economy. Every country should make a portion of local (at least within Europe) investment a prerequisite for whatever favourable tax treatment pensions and similar products get.

So much wealth is tied up in pensions and it’s folly to let it all go to supporting the U.S. and eschew local investment altogether.

OtherShrezzing• 2 months ago

I partially agree, but if my private pension needed to invest into the underperforming FTSE250 by law, I’d just opt out of that system and put my savings into a US/Emerging-markets index myself.

I’m not patriotic enough to spaff my compound interest opportunity on a bunch of dying tobacco, oil, & mineral extraction companies to put any of it to work in the FTSE250.

dijit7• 2 months ago

A lot of those investments are self-fulfilling though.

xyzsparetimexyz2• 2 months ago

I don't think regular people should have a say where their pensions are invested. It should automatically be in what's best long term for the country they live in.

noodlesUK2• 2 months ago

I don’t think it needs to be the FTSE and I don’t think it even needs to be all that much in UK funds but if you look at the default allocations of many large pensions it’s single digit UK equity exposure which I think isn’t really acceptable.

petra• 2 months ago

Does the EU has an index that is competitive with the SP500 over the long term?

nradov4• 2 months ago

Requiring local investing by pension funds would be rather like pushing on a rope. Until more European countries get serious about a growth agenda and reducing government interference in free markets there won't be many good investment opportunities.

sublimefire• 2 months ago

Everyone is serious about it but the problem lies in capital markets and investment funds and the fact that Europe is not a single country (multiple languages, slight difference in some laws). Banks tend to be too conservative and local investment vehicles are much smaller compared to what you can get in US. You are pretty much free to do anything you want otherwise, eg recent defense startups. What is more ageing population does not help and puts “a bit” of strain on the taxation.

bluecalm• 2 months ago

The issue is raised a lot but there is less and less time and I don't think it will hit mainstream before IPO is done and pension funds/passive investors will be forced to buy it.

It really does look bad: low float multiplier rule (that will overweight SpaceX) introduced very recently, fast inclusion mechanism, insiders being allowed to sell faster than usual etc.

It all looks like an orchestrated dump into passive investors/pension funds/other ETF holders.

Investing in IPOs is a terrible strategy historically. Here we have several mega IPOs incoming with rules being re-designed just for them to be included faster in your "passive" portfolio.

HWR_143• 2 months ago

It will overweight SpaceX less than the old rule which was binary and weighed at 100% as soon as the float passed 10%. Which based on rolling lockout periods will probably be in the fall.

whodidntante4• 2 months ago

If you do not like Elon, you can simply move your assets to a direct indexing fund, there are plenty of them at reasonable cost, including from the large brokerages.

If you believe SpaceX is overvalued or do not like the way it is being handled by the big index funds, again, use direct indexing.

akademikerpension is pretty decent fund, it is about 50/50 asset allocation, losing out by only .9% per year compare to a US equity/bond portfolio. Better than many active funds:

https://www.finanshus.dk/wp-content/uploads/2023/02/Pensions... https://testfol.io/?s=h8azNZvMICk

You do not like the valuation ? What should a company that launches 98% of the world's non government tonnage to space (80% if you include the Chinese government) be valued at ? The only company that has figured out how to very reliably launch at a sustained and rapid pace ? Pioneered and is perfecting rocket reuseability ? The only thing we can can say with a degree of certainty is that $2T is either very overvalued or very undervalued. If you believe that space will become a huge part of our economy in the future, and believe that SpaceX will play a significant role, $2T is cheap. Dirt cheap. The only way to prosper is to be bold.

For all those who come here to say that they do not like Elon or that the valuation is ridiculous, or that SpaceX will not succeed, that is perfectly fine - you are just a few clicks away from making it happen. Sell your assets and buy a direct indexing product, simply buy the stocks you want, buy ex-US, or any other number of options you can do on your phone with a few clicks. Less clicks than it takes to virtue signal on this forum.

wewtyflakes3• 2 months ago

That strategy would be a taxable event.

whodidntante4• 2 months ago

There is a high correlation between wealth and taxable accounts. For those that are not well off to have large taxable accounts and have most of their assets in retirement funds, this should not be an issue.

Eridrus2• 2 months ago

"Just" is doing a lot of work here.

Many people have appreciated gains locked into their indexing products such that changing is very expensive.

The biggest issue is not SpaceX/Elon per se, but indexes bending over backwards for him and changing their indexing rules to fleece index investors.

Most IPOs perform badly, to the point where the SP500 excludes all of them for a year, and I think that is actually appropriate for an indexing product. Though they're looking to change that and their float weighting for Elon.

Though after doing some digging I am not personally meaningfully impacted since Vanguard uses CRSP, which is float weighted, so only 0.1% of that is going to be SpaceX and I can live with that.

I short the stock on the actual financials if I was exposed to it (and it was actually possible), but it's a small float and there are apparently tonnes of Elon fanboys propping up Tesla beyond belief already so I expect this to be one of the hardest to predict stocks/IPOs.

whodidntante4• 2 months ago

I agree that the rule changes are bad and ill intentioned, but I am not sure what I can do about it. And, even if it was zero cost for me to move to an ETF without SpaceX, I would not do it. The market does what the market does, that is what I signed up for, it is a lot smarter than I am. It is not worth changing that for an insult to what will be a few percent of my portfolio. Even if SpaceX drops to 1/2 of its IPO, it will be like having a typical down day, and it will recover. I do want a piece of SpaceX, I just wish it would be at a better price.

As far as the appreciated gains go, I agree with you. However, there is a strong correlation between someones wealth and how much they have in taxable. For most people, especially those that are not wealthy, their equity investments are heavily weighted to retirement accounts,so I look at this as more a rich persons proble.

ajmurmann2• 2 months ago

"What should a company that launches 98% of the world's non government tonnage to space (80% if you include the Chinese government) be valued at ?"

The TAM of that is under $10 billion. So even owning that entire market shouldn't get you anywhere near a trillion. Then factor in the development cost of starship which has been going on forever and still hasn't even made it to orbit.

Even the IPO filing isn't claiming the value comes from the rockets but from data centers in space which seems questionable. The real cash cow right now is Starlink but they aren't leaning into that heavily because those numbers also indicate that revenue growth might be stalling out.

If you just look at the pure numbers the case is very weak. No reason to change the inclusion rules. In fact I'd argue they never should change the inclusion rules. Let the market find a price first. Index funds are supposed to be boring and track the market. Including any recent IPO just adds chaos beyond simply tracking the overall market. It's trivial to buy some SpaceX if one wants and unlike selling your entire fund holding either doesn't trigger a taxable event at all or it's a much smaller one if you cannot avoid it.

whodidntante4• 2 months ago

I am not looking at the "pure" numbers, and many investors do not, they look at potential. They look at what the possibilities are. If you believe that space will be a significant part of the economy in 20 years, and that SpaceX will be a large participant, the current numbers do not mean a lot, this is not a large established company in a static industry. In 20 years the market cap of just the US could very well be $200T, if space is only 10% of that, there is $20T of valuation for space, and that is just US.

Google when it ipo'd about 20 years ago had a market cap of $23B. It is now close to $5T. Even if it went over 10x overvalued at $230B when it ipo'd, it would still have been a good investment. That is because the internet became a large part of our economy, and Google is a major player.

If you really want to compare the two, Google had a market cap/revenue of $2B/$2.7B, SpaceX is currently $1.8T/$20B, or about 10x the ratio of Google back then.

Yeah, very pricey. Crazy ? Not sure. Do I like the valuation ? No. Would I buy more SpaceX than what will be in my equity ETF ? No. But I am not unhappy that I will own a piece when it comes out. Do I like the change in rules ? Absolutely not, but that is just the way it is. The market, over time, is, and always be a lot smarter than I am.

outside1234• 2 months ago

We need Calpers (California pension fund) and others to do this as well.

ornornor• 2 months ago

I wish they didn’t manage to change the nasdaq rules, forcing a lot of index ETFs to buy spacex at IPO, whatever the price.

Edit: glad to see vanguard VT tracks FTSE which isn’t impacted. The amount of overvalued spacex stock in VT will be minimal down the line as they use the amount of publicly available shares to calculate the weight in the index, which is the more sensible way to do it, Musk’s scam not withstanding.

sgt101• 2 months ago

Sgt101's pension fund has excluded SpaceX for similar reasons.

But, if the index funds don't then there are going to be quite a few shares dumped to make room for the SpaceX share. This could be interesting.

pickleRick243• 2 months ago

I'm just curious- how many of you changed your portfolio allocation last April because "obviously" the Trump tariffs would tank the market? If you had similar thoughts when TSLA joined the S&P 500, what are your thoughts on its performance since then?

You are welcome to your investment opinions, but just know the level of sophistication here is more or less comparable to a wallstreetbets thread telling people to diamond hand Gamestop. At least there, what they accomplished was surprisingly clever- force liquidating short hedge funds via a bunch of shitposting.

Danish Pension Blacklists SpaceX over 'Catastrophic Governance'

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