SpaceX sheds $400B in market value as debut rally hits reverse

If you add up GE Aerospace, RTX Corporation, The Boeing Company, Lockheed Martin, Northrop Grumman, and General Dynamics put together you get a market cap of about 1T btw.

jimmygrapes• 1 month ago

I know they broke up but I can't help but feel this is related: (Grimes - We Appreciate Power)

https://www.youtube.com/watch?v=gYG_4vJ4qNA

mgh2• 1 month ago

They are buying their time (6 months) before being included in the S&P500s, causing another inevitable surge in forced "demand".

Ancalagon• 1 month ago

Nit: the phrase is “biding their time” FYI

I agree with your statement overall.

opinion-is-bad• 1 month ago

It’ll be at least a year before they are eligible to join the S&P500. They also need to become profitable.

helsinkiandrew• 1 month ago

In the next 6 months another 45%-50% of Space X stock is unlocked, increasing the amount of shares on the market ~10 fold.

Although many will be long term believers who won’t sell. I can’t see how this couldn’t deflate the share price further

gymbeaux4• 1 month ago

The plan is simply for insiders to offload their bags (overvalued shares) to retail investors, like the folk who frequent the wallstreetbets subreddit and do all their “investing” on Robinhood. This speaks to the larger trend of the lower and middle class apparently giving up on any plans to retire- and it’s understandable as the federal minimum wage has never been so disconnected from the cost of living, plus inflation, plus the current job market being universally terrible (even for software engineers), et al.

It’s worth noting that this is nothing new. I’m reminded of Virgin Galactic, another “space company” that was heavily speculated on. Predictably, insiders like Richard Branson himself sold a large number of shares (well into the millions of dollars) ahead of the inevitable “dump” where the share price fell around 75% in a matter of weeks. Virgin Galactic (SPCE) entered the Nasdaq via SPAC - Special Purpose Acquisition Group - essentially a company whose sole purpose is to acquire a private company, thereby effectively making the company public. Why wouldn’t Virgin Galactic just go public? Why go through a SPAC? The short answer is “to bypass regulations.”

OpenInsider is an excellent website that makes it easy to see when insiders buy or sell a stock, and the most common pattern is insiders dumping their shares in overvalued companies. We saw it when Zoom and Crispr and a few others shot up several hundred percentage points during COVID. C-suite and board members made out like bandits. Those weren’t even SPACs, those were just companies that people were foolish enough to speculate on.

Finally I want to bring attention to Robinhood, the stock trading platform that eliminated commission on trades from all brokerages - Schwab, Fidelity, Merrill Lynch, et al- by making it incredibly quick and easy (and free) to buy and sell stocks. They opened this Pandora’s Box, though I suppose it was bound to happen eventually- brokerages charged $7 per trade (sometimes more) and obviously for the college student who wants to throw $20 at Amazon stock… losing $7 in and then $7 again on the way out makes no sense. Now for anyone giving Robinhood the benefit of the doubt- their evil was (I think) absolutely confirmed when they unveiled a new feature- you can now trade OPTIONS with your retirement account. Options are essentially gambling, so to enable people to throw away their retirement on gambling is truly vile.

OutOfHere2• 1 month ago

Options is gambling only for the vast majority who're inexperienced with them or don't have a sound theory for them. I can trade them in my setup with over a 95% success rate, perhaps even 99%. Of course I am not going to type out my theory here.

Such an overgeneralization ruined your otherwise reasonable comment. Always stop when you are winning.

TalkingCodeMonk• 1 month ago

Agreed. More importantly, this long documented history of massive recurring multi-billion dollar fraud and theft – mostly from domestic and international retirement funds – indicates that America is essentially, for all intents and purposes, a plutocratic dictatorship with the illusion of democracy. Ticking a box every few years, when all your options are pre-positioned to continue a criminal status-quo, is neither "democracy" or "by/for the people". This systemic corruption did not materialise out of thin air recently. It has arguably been present all of history (in every economy). It's just accelerated to psychopathic levels of obscene gratuity over the last 2 decades.

This is why I've voted with my wallet the only way I can, by moving all of my investments (including retirement) out of the American market. The rot is far too deep. The few bad apples have entirely spoiled the bunch. I'm not under any illusion other markets will be safe from the fallout, or that I'll make better returns long term, but I do not care. I'm voting the only way I can given the current system. If I'd moved my investments earlier, when I came to this conclusion, I would have actually made significantly larger gains over the last couple of years.

glimshe• 1 month ago

Gambling has always been a mechanism for transferring money from the poor to the rich. Platforms like Robin Hood just finished transforming the entirety of the stock market into a casino that preys on the poor (oh the irony about the company's name).

True investing, which in theory could be done even with Robin Hood, is boring and incompatible with gamification. Warren Buffett famously said that the reason people don't often become rich with stocks is because nobody wants to get rich slowly.

jjav• 1 month ago

Now for anyone giving Robinhood the benefit of the doubt- their evil was (I think) absolutely confirmed when they unveiled a new feature- you can now trade OPTIONS with your retirement account.

While I think robinhood has done some shady practices, this isn't one. I can trade options in a Fidelity IRA just as well.

potsandpans• 30 days ago

Most if not all brokerages allow you to do that. I just opened up my fidelity and etrade to check.

That doesn't make it right perse, but your moralisation at the end becomes more weak. Robinhood is only as "truly vile" as all of wall street.

And anyway, options can play a decent role in financial strategy, most retailers don't use these instruments appropriately. To quote The Big Short, "this is wall street dr bury, if you offer us free money we're going to take it."

darth_avocado• 1 month ago

Don’t talk about fair valuations. Some people will say “who decides what anything is worth anyway”? Let people do what they want. If they lose their money they signed up for it.

Grombobulous2• 1 month ago

I think the bigger issue is that oligarchs have gotten so powerful that they can just write down the valuation they want and the market will just agree with it blindly.

The issue isn’t that investors will lose their money, the issue is that in some cases like Tesla they never do. The oligarchs are propped up by their own power over the behavior or the market — a power which is disproportionally larger than the objective value their companies bring to the economy.

SpaceX is a company with the same revenue as Dick’s Sporting Goods.

jojobas5• 1 month ago

I don't think most people signed up for it by just having some money in their pension funds.

BobbyTables2• 1 month ago

That’s at least something to look forward to!

justanotherjoe• 1 month ago

Something like the plan in the anime Jormungand maybe? (https://jormungand.fandom.com/wiki/Jormungand)

qq66• 1 month ago

One theory is that Elon Musk ends up being able to build AI datacenters faster and more cost effectively than anyone else, which seems plausible given the success of Tesla Gigafactories.

dgellow3• 1 month ago

That doesn’t justify the valuation in any way

roryirvine• 1 month ago

Datacentres are close to being a commodity, though.

There's some stuff you can do with Combined Cooling & Power or other cogeneration schemes, and potential for cost-cutting: removing fire protection, doing without redundant power, reducing security, that sort of thing. But that's all fairly marginal in the grand scheme of things.

The more experimental stuff like running with extreme temperature gradients, extensive liquid cooling, or maybe using CO2 or He instead of air is certainly worth trying out, but unlikely to make much of a difference either.

SpaceX are claiming that they're making a big profit on their deals with Anthropic and OpenAI but that seems to assume that the cost of the compute is zero. I'm not a forensic accountant, so maybe it's okay to have written the value of that down already, but it's not a trick they'll be able to pull off more than once.

Really, the best thing you can say about them is that they've got a big pile of money so can finance capital expenditure cheaply. That gives them an edge of a few percentage points over the likes of Equinix (worth $14.2bn), but not much more than that.

tpm2• 30 days ago

A few Chinese companies build both batteries and cars faster and more cost effectively than anyone else including Tesla though.

bwhiting23562• 1 month ago

what's the point of being vertically integrated if they're just going to rent out their compute (https://www.reuters.com/business/media-telecom/ai-startup-re...). This signals to me they don't have an internal use for it

reverius42• 1 month ago

You could say the same about AWS circa 2011 though.

DoesntMatter223• 1 month ago

It signals to me that they like money and people are willing to give it to them at unprecedented levels, and probably still have plenty of capacity for themselves afterwards. Why would you not accept billions of dollars per month?

thewhitetulip4• 1 month ago

It's crazy that Musk is worth a trillion dollar and the 2nd richest person is just 200 Billion dollars.

What's more crazy is that the revenue in no way justifies the trillion dollars valuation of spaceX!

uberex2• 1 month ago

Chickens will roost when more of SpaceX is open to the market.

thewhitetulip4• 1 month ago

I doubt. Tesla is still so high!

stubish• 1 month ago

On paper. The actual number is how much cash banks will lend him using his SpaceX holdings as collateral. Maybe that is a trillion dollars. Smarter money though? They know that if things go south and they need to collect that collateral, in that situation SpaceX will be worth a lot less than a trillion dollars.

winfredJa• 1 month ago

Tesla being worth more than entire auto industry and PE ratio of 350+, i feel like spaceX will do fine in public market.

spwa43• 1 month ago

They know that if things go south and they need to collect that collateral, in that situation SpaceX will be worth a lot less

Yes, just look at the massive US commercial real estate bubble that could never have existed if banks and investors actually did that.

ChrisArchitect• 1 month ago

Earlier: https://news.ycombinator.com/item?id=48634931

moezd• 1 month ago

SpaceX + Twitter + XAi + Cursor is the perfect combo to collect government contracts. You want exposure in social media? Use Twitter. Civil servants want AI? Use Grok. Developers want AI? Use Cursor. All space heading business? Contact SpaceX. All under the polished (!), totally unblemished (!) PR image of Musk.

Someone please wake me up if this is a fever dream.

flowerthoughts• 1 month ago

I think this has been Musk's play for more than a decade. Except the Twitter purchase, which was just weird. It's possible the AI play is for data center subsidies/tax breaks. TBC didn't go too well in terms of California rail expansion contracts, I think, but perhaps he can get some Pentagon money for building military DCs.

ryandvm• 30 days ago

Yeah. I love how the guy behind DOGE has benefited more from US federal largess than any other person on Earth.

mikelitoris• 1 month ago

Why don’t they name it: SpaceX + X (twtr) + xAI = SpaceXXXAI

wmf• 1 month ago

Don't give him ideas.

sscaryterry• 1 month ago

I would not put it past Elon.

AndrewDucker• 1 month ago

Or combine the 3: SpAIceX

helpfulfrond• 1 month ago

https://archive.is/lqPsS

jojobas5• 1 month ago

Didn't even wait until the pension funds buy in?

z0ltan• 1 month ago

The U.S is nothing but an Oligarchy now.

Yizahi2• 1 month ago

Technically it never ceased to be an oligarchy just like all western countries are oligarchies too. People elect some a few of the people on top and then they act on their own absolutely unchecked, plus all those other unelected people ruling us with them. It's a definition of oligarchy. The only partially democratic country in the world is Switzerland, where people actually can vote on a country governance directly and government must comply with results (and not only take it into attention), which is a definition of democracy.

phyzix5761• 1 month ago

This is pretty normal for tech stocks. Most have a big pop on the first few days of IPO and then they drop. After 180 days, insiders can start selling shares so there's another drop around that time due to a higher supply for shares on the sell side.

carabiner• 1 month ago

It's Probably Overpriced

dlcarrier• 1 month ago

Most stocks are. The price to earnings ratio almost never justifies the value.

Yizahi2• 1 month ago

This happens witch such predictability and not only in IT stocks that I started to wonder, if that is not illegal? I mean, illegal in a spirit of insider trading laws, not literally illegal.

fsuts• 1 month ago

https://archive.ph/lqPsS

Or direct share price chart https://www.hl.co.uk/shares/shares-search-results/s/spacex-u...

Tl;dr it’s still above the IPO price so the favoured investors still at a profit and Musk is still a trillionaire.

As with Tesla, Musk will keep coming up with ‘profits suck but we are doing x new shiny project so don’t worry’ announcements to keep retail investors believing…

llmslave• 1 month ago

volatile asset is volatile

autophagian• 1 month ago

Newton’s third law. To get anywhere, you have to leave something behind (bagholders).

grebc• 1 month ago

Haha I like this!

Gud• 1 month ago

Personally I'm a big fan of Rocket Lab. Peter Beck is a once a generation engineer and is building an amazing company.

ghtbircshotbe• 30 days ago

RKLB has a price/revenue near 100, not much better than SPCX.

spwa43• 1 month ago

... and because Alphabet is a huge investor in SpaceX it was dragged down right along? Is that the story?

SpaceX sheds $400B in market value as debut rally hits reverse

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