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The worst about the SpaceX IPO is Nasdaq changing their inclusion rules for the Nasdaq 100. The index fast-tracked SpaceX stock for inclusion 15 days after the
by lucd 3mo ago
The worst about the SpaceX IPO is Nasdaq changing their inclusion rules for the Nasdaq 100. The index fast-tracked SpaceX stock for inclusion 15 days after the IPO, instead of the normal three-month seasoning period. They also changed its 10% minimum float rule to a 3x weighting boost for low-float stockss.
So many people will unwillingly and prematurely invest into SpaceX, before it has any chance to discover its real price.
IE: The floating, 5% at launch, could attain 30% end august, if Nasdaq didn't change their rules it would have included SpaceX after this..
https://finance.yahoo.com/markets/stocks/articles/nasdaq-cheated-changed-laws-fit-193113947.html https://finance.yahoo.com/markets/stocks/articles/nasdaq-che...
- richwater 3mo agoThe Nasdaq is a shit index to begin with. There are so many other options.
- tyre 3mo agoThe NASDAQ is up 27% in the past 1 year. S&P 500 up 21%, DOW +20%. So, it's doing pretty well!
- mattkrause 3mo agoIf the argument is that it's being manipulated, I'm not sure these stats help.
- tyre 3mo agoThat's fair! I didn't read the comment I was replying to as being about the manipulation but, if so, I agree with their opinion.
- hn_go_brrrrr 3mo agoI didn't read it about the manipulation either, but neither did I read it as a criticism of the returns.
- wildzzz 3mo agoAnd a big chunk of that is the AI bubble. How are the rest of the non-AI industries doing? https://www.spglobal.com/spdji/en/indices/equity/sp-500-ex-information-technology/#overview https://www.spglobal.com/spdji/en/indices/equity/sp-500-ex-i...
- jrflo 3mo agoNASDAQ is famously overweighted in tech. It saw an 80% drop in the aftermath of the dotcom bubble, while the S&P500 only had a 40% drop. It's a double edged sword, with the AI boom it's benefiting, if that reverses it will fall proportionally to those gains.
- groundzeros2015 3mo agoYes. A strategy with tradeoffs does not make it a “shit index”.
- inigyou 3mo agoInteresting, so a shit index is whichever goes down and a good index is whichever goes up? Does the same rule work in crypto?
- staticman2 3mo agoI'm sure people planning to invest for only 1 year of their lifespan and began their investment journey exactly 1 year ago and who are in the process of selling everything they own today never to invest in stocks ever again will find that Nasdaq one year performance very useful information!
- tclancy 3mo agoAlways a FTSE truther.
- dehrmann 3mo agoWhat you didn't elaborate on is that it's a poor investment thesis, so while the association is Nasdaq == tech, it's not entirely true, and it missing things if what you really want is tech. It also penalizes small floats less than S&P 500, enabling these shenanigans.
- formvoltron 3mo agonah the very worst thing about the spacex ipo is that schwab won't allow me to short it. has nothing to do with the recency of the issue. today i shorted some skhy when i realized it's trading about 30% over the Korean share price (I could be wrong about that)
- tyre 3mo agoI'm not an investor in SpaceX but I don't think shorting stocks at IPO should be allowed. The market should be given time to settle on a price, and it's unlikely that anyone needs to short it on day 1 for hedging. It's purely price speculation. Yeah, I know why people _want to_ (betting), but it doesn't serve a broader economic purpose.
- toomuchtodo 3mo agoWhy is line go up price discovery acceptable, but line go down price discovery not? If the shares are trading, you should be able to short, it’s arbitrary to disallow it. It is quite literally a part of the market settling on a price. (under the assumption your broker is managing their risk if your losses from a short position potentially exceeds capital available for liquidation if the trade moves against you)
- fastball 3mo agoLine go down discovery is acceptable (that is what selling a share is). The reason you might not want options trading very early after an IPO is because the market is frothy enough without the additional layer of complexity.
- toomuchtodo 3mo agoCertainly, its reasonable for a delay in options being available while market makers prepare to make the market for those options. But shorting? Day 1, the shares are trading and available to borrow to sell to short.
- fouc 3mo agoNasdaq, FTSE Russell, and CRSP all implemented fast-track options. Fortunately S&P kept its 12-month requirement.
- lokar 3mo agoCRSP has always had a short waiting period, they did not change it. They did lower the free float rule
- dmoy 3mo agoFree float rule was pretty low already for ftse, yea? Like we went through this with aramco still has free float under 3%, yet it's in vxus.
- overlord1109 3mo agoCRSP did change their rule earlier in Feb, where they added a clause that later allowed SPCX to be included, despite having <10% float. The clause allowed SPCX to be included because of its market cap. The timing is also suspicious. Source: https://www.crsp.org/crsp-market-indexes-changes-to-float-sh https://www.crsp.org/crsp-market-indexes-changes-to-float-sh...
- infecto 3mo agoIs this really the worst thing? People keep bringing this up but it’s the Nasdaq 100. It would be shocking if we were talking about the SP500.
- baggachipz 3mo agoIt almost was. S&P decided against it at the last minute, despite saying they would initially.
- quickthrowman 3mo agoThe S&P committee never said they would. Space X asked and the committee said no. They should not have asked.
- groundzeros2015 3mo agoIt went through the formal process to adopt. Almost certainly public discussion online had an influence.
- quickthrowman 3mo agoThey don’t meet the inclusion criteria. The committee went through the motions to be diplomatic, not because there was ever a chance of it happening.
- rconti 3mo ago#1 rule of sales. If someone is trying to sell you something, you _probably_ don't want it. Eg, they need the sale more than you do. The very fact that they were asking the question is such a huge red flag.
- inigyou 3mo agoThem needing it more than you doesn't mean you don't need it too. Bought an air mattress recently. Way better than a sleeping bag on the ground, even though I can also manage that.
- dheera 3mo agoRule changes like this create market inefficiencies that can be exploited by retail; if everything plays by constant rules, the vast majority of alpha gets concentrated in the institutions. I love shaking up the firms. Gives normal people a chance to build wealth.
- eueie13 3mo agoMajority of alpha lol are you on drugs? Do you even know the risk adjusted rate of return most institutions earn…? Buzz word filled posts like this are the most annoying to read on here
- dools 3mo ago[flagged]
- inigyou 3mo agoThere is no evidence that Elon Musk is a Nazi.
- hansmayer 3mo ago[dead]
- GJim 3mo agoIf it walks like a duck, and quacks like a duck, then we may have to accept the fact it is a duck.
- deleted 3mo ago[deleted]
- inigyou 3mo agoThere is no evidence that Elon Musk quacks like a duck.
- root-parent 3mo agoA Nazi salute isn’t evidence of Nazism, just as smoke isn’t evidence of fire when you really like the building.
- deleted 3mo ago[deleted]
- tavavex 3mo agoSo, the inclusion rules are basically "these are the hard limits that specify which stocks are eligible, unless someone really big and lucrative comes along, in which case it's whatever and we'll just adjust the rules to make them eligible"?
- jgalt212 3mo agoreality distortion field in full effect.
- bix6 3mo agoIsn’t that how capitalism works in general? Edit: thanks for the downvotes. Defenders of capitalism unite!!! lol. Free market right?
- smallmancontrov 3mo agoYou're forgetting that whenever the incentives lead to bad places it isn't True Capitalism (tm).
- inigyou 3mo agoTrue capitalism has never been tried. This right now is crony capitalism.
- bmicraft 3mo agoAh yes, because capitalism in it's purest form would never have companies form monopolies and lobby governments for favorable legislation.
- pessimizer 3mo agoUnder True Capitalism™, cartels could do their price fixing on reality shows.
- 3mo ago
- michael1999 3mo agoWhat fraction of investors who chose Nasdaq100 over SPY wouldn't have also wanted SpaceX? The whole point is hot and tech-heavy speculation.
- _ink_ 3mo agoI am really curious for what reason they choose to do it? Like what is in for Nasdaq?
- Forgeties79 3mo agoI mean we know why
- throw1234567891 3mo agoThe president may throw a tantrum that “some crazy democrat throws stones under the feet of that beautiful Elon, the most beautiful Elon we ever had”. Better do what the new Tzar wants. Dude was sent here apparently by the God, don’t mess with the God.
- ar_lan 3mo agoI thought Elon and Trump broke up?
- throw1234567891 3mo agoHave they? Maybe some spacex investor is the “most beautiful we ever had”.
- e40 3mo agoPeople like that are never friends. It’s a relationship of convenience and power exchange. The public riff was because Elon got upset over something and threw a tantrum. Some think the index deal was in exchange for Elon helping fund the midterm battle. Scott Galloway, for example.
- riffraff 3mo agoMusk and Trump had a pretty public break up, I think this is one fuckup where we shouldn't blame him.
- CamperBob2 3mo ago
- inigyou 3mo agoWorst, if you're a Nasdaq 100 ETF investor. Best, if you were a SpaceX private investor. All a matter of perspective.
- root-parent 3mo ago[dead]
- tossandthrow 3mo agoIMHO it is prudent to allocate a bit more conservatively these days. I cut out my nasdaq100 and have generally allocated towards ex us
- qpricjalcbeu 3mo agoIdk, I kinda agree with Matt Levine. The purpose of these ETFs is conceptually to track the "largest X companies", so including SPCX is just staying true to that. If there's an issue I think it's earlier in the IPO pipeline.
- colechristensen 3mo agoThe indices driving the market are the problem. Index investing is too high a percentage of total investing so the rules matter to the whole market.
- danudey 3mo agoBut if SpaceX valuation drops by 2/3 before settling into a steady state, does that not mean that SpaceX is not one of the "largest X companies" but rather was overvalued? The entire reason for these seasoning periods is to give the market time to determine what the company is actually worth to the market itself. Bypassing those rules to get it in earlier says to me that they don't believe it will settle at a price near its start. If I IPO my lemonade stand at $1T valuation do I deserve to be in that "largest X companies" list? Or does it only make sense if I can maintain that valuation over time?
- qpricjalcbeu 3mo agoBut then you're trying to time the market which goes against the passiveness approach that most people sign up to when they buy these sort of ETFs.
- atmosx 3mo agoWell if you helped the US gov get elected than probably that lemonade “deserves” the valuation… if not, well, it’s just lemonade…
- scottyah 3mo agoIs your assertation that spaceX just valued themselves? If your lemonade stand gets underwritten by Goldman Sachs, Morgan Stanley, Bank of America, Citigroup, and JPMorgan Chase, and 18 other large banks then yeah, you belong on that list.
- AtNightWeCode 3mo agoAnnoying but not much more. It kinda makes sense too if the index is suppose to reflect the corps. The way SpaceX is set up from a governance point of view is a nightmare though. Also, data centers in space is just stupid. Now it seems like they already abandon it and are going for some kind of AI satellites. Still stupid. I should probably take a hyperloop over to US and ask Elon about it, oh wait, that was also garbage.
- ratelimitsteve 3mo agoSorta invalidates the whole market to know that they'll change the rules in order to manufacture the result that they have pre-ordained to be "correct". NASDAQ seems to have decided that they're in the business of picking winners and losers rather than simply providing people the mechanisms by which to decide for themselves.
- JumpCrisscross 3mo ago> worst about the SpaceX IPO is Nasdaq changing their inclusion rules Nasdaq 100 has always been marketed as a tech-forward index. It would be a bit ridiculous if they didn’t include the most value tech companies on the market. There was a potential scandal at S&P. But it didn’t happen. My personal guess is a lot of finance influencers latched onto this story. When it didn’t pan out they tried to maintain credibility by shifting it onto the Nasdaq 100, where it doesn’t make sense.
- yobutdude 3mo agoThey changed the rules for one person. You are the biggest simp for the rich. They pay you to post here in their defense? Discourse on this site is no better than Twitter or Reddit, just another flavor of stupid.
- JumpCrisscross 3mo ago> They changed the rules for one person The timing isn’t great. But this was being discussed for a while. If it were only SpaceX, I’m doubtful the rules would have changed. But a tech index not including SpaceX, OpenAI, Anthropic and SK Hynix is a bit silly. And in the end, on index inclusion, the stock still fell. > simp…Twitter or Reddit Mm hmm.
- yobutdude 3mo ago> A bit silly Mm hmm I mean the planets would fly off orbit ...such thoughtless justification is not really disproving comparison to "anything goes" discourse of other platforms with a nonsense appeal to empty normalization 100% designed to offload an empty bag onto retail investors SpaceX is propped up entirely by government subsidy It has no real sustainable business unlike SK Hynix, very much like OAI and Anthropic What's silly is propping up ephemeral companies that burn resources and produce nothing
- JumpCrisscross 3mo ago> offload an empty bag onto retail investors This was a popular meme on Twitter and Reddit and YouTube, granted. The math doesn’t make sense with an index like the Nasdaq 100. But I’ll admit it’s a good story. > SpaceX is propped up entirely by government subsidy This is also true of every defence contractor.
- hnburnsy 3mo ago>The worst about the SpaceX IPO is Nasdaq changing their inclusion rules for the Nasdaq 100 Why, no employer's 401K or retirement plan offers QQQ as an investment choice. Anyone buying the Nasdaq 100 is doing so by choice?