6 ms·

An interesting variant of "privatise the profits, socialise the losses" played wholly in the private sector capital investment space. "When you're rich they let

by ggm 4mo ago

An interesting variant of "privatise the profits, socialise the losses" played wholly in the private sector capital investment space. "When you're rich they let you" is big in this because a functional board of a company about to be vested with a massive debt overhang from a serial offender (X and xAI) would surely have said "could we NOT" about this and the whole model including A and B class voting shares suggests this is a control issue: given proper control models none of this could happen.

richwater 4mo ago
The SP500 (the index the article is using for their example) literally requires profitability. Tesla wasn't includes for years and years because of it.
rayiner 4mo ago
If SpaceX succeeds, the gains will go to the same people who will bear the losses if it doesn’t. Both the gains and losses are privatized. The consumer/ad tech bias of HN is really showing. The app I use to share photos of my kids with my elderly relatives is worth $1.45 trillion, but somehow companies that make freaking EVs, robots, and rocket ships, and AI can’t possibly be worth that much? I’ve been in HN for 16 years and heard so much breathless cheerleading for web apps “changing the world” but now we have companies that really might change the world and it’s a scam?
- drawnwren 4mo ago
  But if SpaceX does anything _other than become the most valuable company in history by delivering at least two technologies predicated on the largest stock rise in history based on a single technology (LLMs)_, the gains from zero to now will have been privatized and the losses will be born by the public. Which is what everyone is thinking about.
- sensanaty 4mo ago
  The difference being, of course, that the photo app actually earns a profit, whereas the "EVs, robots and rocket ships" and ESPECIALLY the AI so far do not, and most likely will not any time soon.
  - deleted 4mo ago
    [deleted]
  - ekianjo 4mo ago
    Valuation is based on future prospects. Investing 101.
- wasabi991011 4mo ago
  > but somehow companies that make freaking EVs, robots, and rocket ships, and AI can’t possibly be worth that much? The sky-high valuation of SpaceX is almost entirely related to it's estimated TAM from AI entreprise solutions, not robots and rocketships. HN news comments have a similar bias against the sky-high valuations of OpenAI and Anthropic.
  - rayiner 4mo ago
    > The sky-high valuation of SpaceX is almost entirely related to it's estimated TAM from AI entreprise solutions, not robots and rocketships That’s not how TAM works. The valuation of each business unit isn’t just a simple proportion of its TAM like that. In the SpaceX/xAI merger, which was just a few months ago, the rocket company was valued at $1 trillion and the AI company at $250 billion: https://www.reuters.com/legal/government/how-math-works-175-trillion-spacex-valuation-2026-04-08/ https://www.reuters.com/legal/government/how-math-works-175-... EDIT: To elaborate: TAM is not a valuation for a specific business. It’s a ceiling in the size of the market the business targets. AI has an astronomical TAM because you can sell AI into almost every market. E.g. shipping and logistics is a $10 trillion business. You could sell AI into that market and capture some of that revenue. But if one business has a $10 trillion TAM and another is $5 trillion, that doesn’t mean the valuation of the first business is double the second one.
    - jcranmer 4mo ago
      SpaceX's S-1 listed its expected TAM and did break it out by segment. $26.5 trillion to AI, $1.6 trillion to connectivity (Starlink), $0.370 trillion to space launch. https://www.sec.gov/Archives/edgar/data/1181412/000162828026036936/spaceexplorationtechnologi.htm https://www.sec.gov/Archives/edgar/data/1181412/000162828026...
      - deleted 4mo ago
        [deleted]
      - aftbit 4mo ago
        $26.5 trillion dollars. That's more than $3,000/yr from every single man woman and child on the planet. Another way to put it - more than 10x as much as all of the US spends on food every year. For Grok/xAI. That's bonkers.
- asdff 4mo ago
  There is no moat around what they are doing really and they have competitors in all these sectors. All it takes is another administration to come in with a brain and a spine to not just hand contract blindly to Elon.
  - grosswait 4mo ago
    Who do you think the viable alternatives are? Be realistic.
  - deleted 4mo ago
    [deleted]
  - nradov 4mo ago
    Which competitors? Blue Origin and Amazon are trying but they're way behind on space launch capability, and still using SpaceX to launch a lot of their TeraWave and Kuiper satellites. Arianespace and ULA seem to have given up and aren't even trying to compete.
  - WalterBright 4mo ago
    Blindly? SpaceX launches cost only 10% of what NASA was previously spending.
    - rayiner 4mo ago
      Not to mention it had to pay Russia $4 billion for seats on Soyez flights to ferry astronauts to the ISS.
  - loandbehold 4mo ago
    "No moat" are you serious? It took SpaceX 20 years to develop reusable rocket launch tech they have and everyone else who is working on it is decade behind. Falcon Heavy per kg cost to LEO is 25 times lower than what SLS can provide. Freaking 25 times!
  - satvikpendem 4mo ago
    No moat lol, hardware has much more of a moat than all these SaaS companies
- saagarjha 4mo ago
  There are a lot more consumers in the world willing to use the photo app than entities that do rocket launches. This isn't to say that it is changing the world more, it's just that it makes more money. That's how capitalism is set up right now.
- danny_codes 4mo ago
  I'm not sure I understand. The cynical analysis is that SpaceX insiders are dumping on retail at a high valuation. They know the valuation is ridiculous, but are relying on "dumb" retail (think wallstreetbeets level of gambling) and "forced" retail (your 401k) to create artificial demand so the valuation doesn't collapse until the insiders have sold. The cynical part (that they know the valuation is ridiculous) is supported by the structure of the IPO. A 4% float with a, what, 30% retail component is unheard of. NASDAQ QQQ admission rule-change is also unheard of. If SpaceX insiders actually thought their company was worth $2T or whatever, why make this highly suspicious changes? This is irrespective of whether or not SpaceX will eventually be worth more. It definitely could be. But when you look at this IPO, you can't help but catch a smell that something fishy is going on.
testaburger 4mo ago
Is spaceX absolutely vital for the US national security through Starlink as well as the launch of military satellites? Yes, and as a matter of fact this is also true for NATO allies, Japan, Taiwan, SK, etc in any future conflict for at least the next 5 to 10 years, just as it has been for the past 4 years in Ukraine. In addition to land based infrastructure that can be targeted in any future war -undersea cables are now under constant threat around the world (Baltic Sea, Straight of Hormuz, Red Sea, South China Sea, and the Taiwan Straight, etc). Which leaves Starlink as the last resort option should shit hit the fan. Note the tide has changed considerably in the Ukraine war in Ukraine's favor once Starlink locked down access - this proves how vital internet access it was to both sides, as once Russia could no longer use stolen terminals their manpower advantage became moot. So I simply don't get this manufactured outrage - the vast majority of US retirement savings are already tied to the military sector (RTX, Lockheed Martin, Boeing, and Northrop Grumman) via index funds. I personally would have more concern with those laggards in the new age of drone warfare vs the likes of SpaceX and Anduril (when they ipo).
- awesome_dude 4mo ago
  Is it *vital* No. It's really helpful, but it's not vital. WRT Ukraine - the drones are now (AIUI) flown with a tethered fibre connection (inside the Ukraine) - because jammers have made radio traffic with drones near impossible for operators
  - nradov 4mo ago
    Nope. The fiber optic drones are relatively short range, maybe up to 20km. And they can only work over land, not significant bodies of water. Ukraine is still using Starlink heavily for controlling longer range and naval drones. Starlink uses an ingenious phased array antenna system which makes it highly resistant to jamming. Recently Russia has been trying to overload Starlink satellite transceivers with powerful directional jamming but the huge size of the constellation limits how many birds they can effectively target.
- lokar 4mo ago
  It’s the absurd governance and obvious manipulation of inclusion rules and limited float.

by ggm 4mo ago

richwater 4mo ago

The SP500 (the index the article is using for their example) literally requires profitability. Tesla wasn't includes for years and years because of it.

rayiner 4mo ago

If SpaceX succeeds, the gains will go to the same people who will bear the losses if it doesn’t. Both the gains and losses are privatized. The consumer/ad tech bias of HN is really showing. The app I use to share photos of my kids with my elderly relatives is worth $1.45 trillion, but somehow companies that make freaking EVs, robots, and rocket ships, and AI can’t possibly be worth that much? I’ve been in HN for 16 years and heard so much breathless cheerleading for web apps “changing the world” but now we have companies that really might change the world and it’s a scam?

drawnwren 4mo ago
But if SpaceX does anything _other than become the most valuable company in history by delivering at least two technologies predicated on the largest stock rise in history based on a single technology (LLMs)_, the gains from zero to now will have been privatized and the losses will be born by the public. Which is what everyone is thinking about.
sensanaty 4mo ago
The difference being, of course, that the photo app actually earns a profit, whereas the "EVs, robots and rocket ships" and ESPECIALLY the AI so far do not, and most likely will not any time soon.
- deleted 4mo ago
  [deleted]
- ekianjo 4mo ago
  Valuation is based on future prospects. Investing 101.
wasabi991011 4mo ago
> but somehow companies that make freaking EVs, robots, and rocket ships, and AI can’t possibly be worth that much? The sky-high valuation of SpaceX is almost entirely related to it's estimated TAM from AI entreprise solutions, not robots and rocketships. HN news comments have a similar bias against the sky-high valuations of OpenAI and Anthropic.
- rayiner 4mo ago
  > The sky-high valuation of SpaceX is almost entirely related to it's estimated TAM from AI entreprise solutions, not robots and rocketships That’s not how TAM works. The valuation of each business unit isn’t just a simple proportion of its TAM like that. In the SpaceX/xAI merger, which was just a few months ago, the rocket company was valued at $1 trillion and the AI company at $250 billion: https://www.reuters.com/legal/government/how-math-works-175-trillion-spacex-valuation-2026-04-08/ https://www.reuters.com/legal/government/how-math-works-175-... EDIT: To elaborate: TAM is not a valuation for a specific business. It’s a ceiling in the size of the market the business targets. AI has an astronomical TAM because you can sell AI into almost every market. E.g. shipping and logistics is a $10 trillion business. You could sell AI into that market and capture some of that revenue. But if one business has a $10 trillion TAM and another is $5 trillion, that doesn’t mean the valuation of the first business is double the second one.
  - jcranmer 4mo ago
    SpaceX's S-1 listed its expected TAM and did break it out by segment. $26.5 trillion to AI, $1.6 trillion to connectivity (Starlink), $0.370 trillion to space launch. https://www.sec.gov/Archives/edgar/data/1181412/000162828026036936/spaceexplorationtechnologi.htm https://www.sec.gov/Archives/edgar/data/1181412/000162828026...
    - deleted 4mo ago
      [deleted]
    - aftbit 4mo ago
      $26.5 trillion dollars. That's more than $3,000/yr from every single man woman and child on the planet. Another way to put it - more than 10x as much as all of the US spends on food every year. For Grok/xAI. That's bonkers.
asdff 4mo ago
There is no moat around what they are doing really and they have competitors in all these sectors. All it takes is another administration to come in with a brain and a spine to not just hand contract blindly to Elon.
- grosswait 4mo ago
  Who do you think the viable alternatives are? Be realistic.
- deleted 4mo ago
  [deleted]
- nradov 4mo ago
  Which competitors? Blue Origin and Amazon are trying but they're way behind on space launch capability, and still using SpaceX to launch a lot of their TeraWave and Kuiper satellites. Arianespace and ULA seem to have given up and aren't even trying to compete.
- WalterBright 4mo ago
  Blindly? SpaceX launches cost only 10% of what NASA was previously spending.
  - rayiner 4mo ago
    Not to mention it had to pay Russia $4 billion for seats on Soyez flights to ferry astronauts to the ISS.
- loandbehold 4mo ago
  "No moat" are you serious? It took SpaceX 20 years to develop reusable rocket launch tech they have and everyone else who is working on it is decade behind. Falcon Heavy per kg cost to LEO is 25 times lower than what SLS can provide. Freaking 25 times!
- satvikpendem 4mo ago
  No moat lol, hardware has much more of a moat than all these SaaS companies
saagarjha 4mo ago
There are a lot more consumers in the world willing to use the photo app than entities that do rocket launches. This isn't to say that it is changing the world more, it's just that it makes more money. That's how capitalism is set up right now.
danny_codes 4mo ago
I'm not sure I understand. The cynical analysis is that SpaceX insiders are dumping on retail at a high valuation. They know the valuation is ridiculous, but are relying on "dumb" retail (think wallstreetbeets level of gambling) and "forced" retail (your 401k) to create artificial demand so the valuation doesn't collapse until the insiders have sold. The cynical part (that they know the valuation is ridiculous) is supported by the structure of the IPO. A 4% float with a, what, 30% retail component is unheard of. NASDAQ QQQ admission rule-change is also unheard of. If SpaceX insiders actually thought their company was worth $2T or whatever, why make this highly suspicious changes? This is irrespective of whether or not SpaceX will eventually be worth more. It definitely could be. But when you look at this IPO, you can't help but catch a smell that something fishy is going on.

testaburger 4mo ago

Is spaceX absolutely vital for the US national security through Starlink as well as the launch of military satellites? Yes, and as a matter of fact this is also true for NATO allies, Japan, Taiwan, SK, etc in any future conflict for at least the next 5 to 10 years, just as it has been for the past 4 years in Ukraine. In addition to land based infrastructure that can be targeted in any future war -undersea cables are now under constant threat around the world (Baltic Sea, Straight of Hormuz, Red Sea, South China Sea, and the Taiwan Straight, etc). Which leaves Starlink as the last resort option should shit hit the fan. Note the tide has changed considerably in the Ukraine war in Ukraine's favor once Starlink locked down access - this proves how vital internet access it was to both sides, as once Russia could no longer use stolen terminals their manpower advantage became moot. So I simply don't get this manufactured outrage - the vast majority of US retirement savings are already tied to the military sector (RTX, Lockheed Martin, Boeing, and Northrop Grumman) via index funds. I personally would have more concern with those laggards in the new age of drone warfare vs the likes of SpaceX and Anduril (when they ipo).

awesome_dude 4mo ago
Is it *vital* No. It's really helpful, but it's not vital. WRT Ukraine - the drones are now (AIUI) flown with a tethered fibre connection (inside the Ukraine) - because jammers have made radio traffic with drones near impossible for operators
- nradov 4mo ago
  Nope. The fiber optic drones are relatively short range, maybe up to 20km. And they can only work over land, not significant bodies of water. Ukraine is still using Starlink heavily for controlling longer range and naval drones. Starlink uses an ingenious phased array antenna system which makes it highly resistant to jamming. Recently Russia has been trying to overload Starlink satellite transceivers with powerful directional jamming but the huge size of the constellation limits how many birds they can effectively target.
lokar 4mo ago
It’s the absurd governance and obvious manipulation of inclusion rules and limited float.