4 ms·

The market is more unpredictable than it’s been in a long, long time so I hesitate to make a firm prediction but to me the odds that SpaceX will be a successful

The market is more unpredictable than it’s been in a long, long time so I hesitate to make a firm prediction but to me the odds that SpaceX will be a successful IPO over a 3-6 month window are significantly lower now. S&P inclusion basically requires funds to hold a position by default, and per their own estimates $20tn of assets are indexed/benchmarked to the S&P.

riffraff 4mo ago
They'll still be included in total market indexes (FTSE, MSCI, CRSP). As I understand it, VTI will be a major thing. Still, they're float adjusted (for the most part?).
- dangus 4mo ago
  I think total market indexes are outside the scope of concern. They are buying SpaceX regardless of IPO rules.
nsoonhui 4mo ago
Not to say I have an opinion one way or another, but why do you think that SpaceX odds to have a successful IPO is lower now?
- BLKNSLVR 4mo ago
  Not to whom you're replying... Depends what you mean by successful. If you mean "the IPO goes ahead" then I don't think this makes a difference (unless Elon cracks the shits at this decision and pulls out, which I'm not sure is an option). If "successful" equates to number-go-up, then my understanding is that Fast Index Entry would have resulted in, effectively, forced purchase of shares by various funds. When Fast Index Entry (FIE) was a chance of being introduced, the odds of number go up were higher. Now that FIE has been ruled out, there's a lower chance of number go up because there's no "forced blind purchase" group.
- HerbManic 4mo ago
  Not OP but I will weigh in. The numbers for SpaceX were not looking great, they are burning cash faster than Starship crashing into the Indian ocean. The idea was that with a fast indexing, this would be mostly irrelevant as retirement funds would automatically buy into the IPO after 15 days thus bolstering the company before any sanity would prevail on the markets. Now that they have to wait a year for that point, that cash burn is going to work against them fairly heavily. There is also something like $20 billion of debt they have to pay back in the next 12 months that might not be covered over so easily now. That said, SpaceX and a lot of Elons companies have had figures that look terrible for ages, and yet they keep manage to pull rabbits out of the hat. So who knows. Maybe they sell a bunch of assets, they have more than enough to cover the gap.
  - Panzer04 4mo ago
    The real issue is that existing shareholders will all be eyeing each other wanting to exit at the highest price it'll ever be. That's a lot of selling pressure. I can't imagine many people seriously believe SpaceX is a business worth 1.75T.
    - expedition32 4mo ago
      Satellite internet is not a new invention- Iridium already did it and they went under. Nice for war zones and remote areas but not much else. Besides the Chinese are launching their own network which will mean a price war. And the Chinese tend to win those.
      - dangus 4mo ago
        Well, let’s not pretend like Starlink is the same as previous satellite internet providers. No previous providers were anywhere near as fast or low latency. The use cases for Starlink are a lot wider than previous solutions and it can even compete directly for customers who have cable existing service. I still agree that the company is disastrously overvalued. Even if we consider Starlink to be just as valuable as a telecom like Verizon, that’s only a $190 billion dollar company.
      - 4mo ago

riffraff 4mo ago

They'll still be included in total market indexes (FTSE, MSCI, CRSP). As I understand it, VTI will be a major thing. Still, they're float adjusted (for the most part?).

dangus 4mo ago
I think total market indexes are outside the scope of concern. They are buying SpaceX regardless of IPO rules.

nsoonhui 4mo ago

Not to say I have an opinion one way or another, but why do you think that SpaceX odds to have a successful IPO is lower now?

BLKNSLVR 4mo ago
Not to whom you're replying... Depends what you mean by successful. If you mean "the IPO goes ahead" then I don't think this makes a difference (unless Elon cracks the shits at this decision and pulls out, which I'm not sure is an option). If "successful" equates to number-go-up, then my understanding is that Fast Index Entry would have resulted in, effectively, forced purchase of shares by various funds. When Fast Index Entry (FIE) was a chance of being introduced, the odds of number go up were higher. Now that FIE has been ruled out, there's a lower chance of number go up because there's no "forced blind purchase" group.
HerbManic 4mo ago
Not OP but I will weigh in. The numbers for SpaceX were not looking great, they are burning cash faster than Starship crashing into the Indian ocean. The idea was that with a fast indexing, this would be mostly irrelevant as retirement funds would automatically buy into the IPO after 15 days thus bolstering the company before any sanity would prevail on the markets. Now that they have to wait a year for that point, that cash burn is going to work against them fairly heavily. There is also something like $20 billion of debt they have to pay back in the next 12 months that might not be covered over so easily now. That said, SpaceX and a lot of Elons companies have had figures that look terrible for ages, and yet they keep manage to pull rabbits out of the hat. So who knows. Maybe they sell a bunch of assets, they have more than enough to cover the gap.
- Panzer04 4mo ago
  The real issue is that existing shareholders will all be eyeing each other wanting to exit at the highest price it'll ever be. That's a lot of selling pressure. I can't imagine many people seriously believe SpaceX is a business worth 1.75T.
  - expedition32 4mo ago
    Satellite internet is not a new invention- Iridium already did it and they went under. Nice for war zones and remote areas but not much else. Besides the Chinese are launching their own network which will mean a price war. And the Chinese tend to win those.
    - dangus 4mo ago
      Well, let’s not pretend like Starlink is the same as previous satellite internet providers. No previous providers were anywhere near as fast or low latency. The use cases for Starlink are a lot wider than previous solutions and it can even compete directly for customers who have cable existing service. I still agree that the company is disastrously overvalued. Even if we consider Starlink to be just as valuable as a telecom like Verizon, that’s only a $190 billion dollar company.
    - 4mo ago