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This is shaped like more-or-less every IPO I've seen. I think you have to wait for more of a collapse to claim dispositive evidence of a scam (or widen your cla

This is shaped like more-or-less every IPO I've seen. I think you have to wait for more of a collapse to claim dispositive evidence of a scam (or widen your claim to 'almost all IPOs are scams').

lorecore 3mo ago
The valuation based on fundamentals is a scam, you can just look at the numbers. This is unlike any other IPO.
trescenzi 3mo ago
This is something you could empirically study. Looks like this NASDAQ study from a few years back has some numbers. At 3 months, that’s what’s in their chart, it’s still about 50/50. At 3 years it’s 29% with returns greater than 10% and 69% with returns greater than -10%. https://www.nasdaq.com/articles/what-happens-to-ipos-over-the-long-run-2021-04-15 https://www.nasdaq.com/articles/what-happens-to-ipos-over-th...
- JCW2001 3mo ago
  Most companies are not successful. That's all you need to know.
jmye 3mo ago
> (or widen your claim to 'almost all IPOs are scams') In a world where retail basically has no access to true IPO pricing, I don't think this is untrue for the majority of investors. Jamming SpaceX directly into a bunch of indexes just because Musk wanted it (and everyone is a coward or complicit) stunk of "scam" in a very different way, though.
oblio 3mo ago
SpaceX has a float of 5%. So only 5% of SpaceX shares have been released to the public. Slowly, starting in August, employees and investors will be able to sell their shares, about 45% more until December 2026 and another 45% until July 2027. What do you think will happen to SpaceX share prices when roughly 18x the number of shares at IPO are released? From a company that only made $18bn in sales last year and lost $5bn. For reference, Aramark, a company basically nobody has heard of made as much money and even turned a $0.5bn profit. SpaceX shouldn't be worth more than $30 in 1 year's time. Of course, irrationality can be an extremely strong force, so let's see.
- gwerbin 3mo ago
  Aramark is a horrible company for comparison. Maybe the only thing they have in common with SpaceX is that they are publicly traded companies. I'm not saying that SpaceX is a good investment or that Musk isn't trying to run a scam on index investors. But we also shouldn't be surprised that the financials of an incompetent commercial food service provider are a little different from those of a spaceflight company / data center real estate conglomerate / whatever else has been rolled into it.
  - nixon_why69 3mo ago
    Aramark is a specifically chosen insult for comparison. If spacex is less attractive than a mediocre food-service company (former employee for the record), what are they?
  - oblio 3mo ago
    LOL. I'm not American, I chose Aramark at random because... <drumroll>... Aramark has the same revenue as SpaceX: https://companiesmarketcap.com/largest-companies-by-revenue/page/7/ https://companiesmarketcap.com/largest-companies-by-revenue/... You've just told me that "the financials of an incompetent commercial food service provider" are better than those of SpaceX. Aramark is profitable and SpaceX is wildly unprofitable[1] :-))) * * * [1] Almost nothing SpaceX does points at SpaceX scaling to huge profitability. The rocket business is super capital intensive and losing money. And its biggest customer by far is Starlink. Starlink is profitable, but even so, if Starlink hiccups, SpaceX rocketry goes kaput. Oh, the second biggest customer is the US government, and you only need one hostile US administration for that business to go away. xAI is a 2-bit player in the AI space and it's losing money hand over fist.
    - gwerbin 3mo ago
      Lol I meant "incumbent", that was a STT typo. But yes I get the point. My own point is that even a good-faith honest IPO for a spaceflight company probably won't look anything like Aramark. It's always going to be a bet on technology, not a share in the predictable profit stream of a boring company that serves pizza in school cafeterias.
tw04 3mo ago
Really? Which other IPO involves a company acquiring a completely unrelated company just before IPO in order to bail the founder out of a bad investment? Can you name even one example in the last 50 years?
- taeric 3mo ago
  To be fair, I think they just meant the stock price shape post IPO. Jumped up, then fell back down. That said, I'm also not sure how accurate that is.
  - ToValueFunfetti 3mo ago
    Yes, thank you. The news story here is that it slipped below IPO price during intraday trading. In a perfect world, IPO price should equal the fair value; in our world, there are random-walk price variances moment to moment; in synthesis, briefly dipping below IPO price (and not even at close/open!) is not evidence of any wrongdoing. I was responding to the person pointing to this as confirmation of the long-running social-media-populist narrative surrounding this IPO. I consider that confirmation bias. I was not responding to the narrative itself, on which my only positions are: a prior against social media populism, a prior towards our financial institutions, a prior against trusting Musk, and a prior against trusting our current governance.
- sharpshadow 3mo ago
  SpaceX acquired Cursor after their IPO likewise did Facebook with Instagram in 2012. Since xAI was merged with SpaceX before it’s not really unrelated.
  - Zigurd 3mo ago
    Cursor investors and employees are the biggest winners of the SpaceX IPO, even if the IPO flops, they will still get much more out of their Cursor shares than they ever had a right to expect. Some SpaceX employees have been waiting over 10 years for liquidity.
therobots927 3mo ago
Most IPOs don’t put up 5% of the float for sale. Usually it’s closer to 30-60%.
soulofmischief 3mo ago
It's a scam because of the hype mind control and propaganda around it. Because Musk tried to force it into the NASDAQ and S&P 500 before the normal windows, attempting to bypass sensible regulations that protect investors.
- detourdog 3mo ago
  The governance of the company is also prone to scamming.
ncallaway 3mo ago
Many IPOs slide below their initial offering. Very few IPOs changed the rules to allow themselves to be incuded in significant indexes far faster than the rules previously allowed, and then slipped below their initial offering.
- EgregiousCube 3mo ago
  [flagged]
  - nixon_why69 3mo ago
    OP didn't arrange those goalposts, Musk and his friends did. It's the only company to get fast-tracked in this way while losing money.
    - EgregiousCube 3mo ago
      He did, by arguing that a company that is fast-tracked for index inclusion has an obligation to prevent its stock price from following common post-IPO price patterns; and using "the only company to do so" as an allusion to a false trend.
      - nixon_why69 3mo ago
        No, Musk did, by arguing for fast-track index inclusion. He wasn't saying "you all will eat shit on this deal", he was promising exceptional returns.
        Lerc 3mo ago
        I don't follow that logic, why does wanting something sooner imply higher expectations of results? Did musk explicitly claim he expected exceptional returns? I don't think I'd be surprised either way, but I'm not sure what he's actually said.
        3mo ago
Taronar 3mo ago
This is incorrect, the difference is that most IPOs do not have ETFs buying their stocks, meaning you have a institutional investor forced to buy your stock and keep the musical chairs game going even if your stock has an inflated price., hes robbing ETF owners of their hard earned money
melenaboija 3mo ago
This is not shaped like any other IPO. Objectively, it’s the biggest IPO in history and was included in the Nasdaq unusually fast. More subjectively, a significant part of its value is tied to the vision and credibility of a single person. Which BTW happens to be the first trillionaire in the world if things go well.
dkenyser 3mo ago
Yes, it's almost like that's why there _was_ a rule in place to prevent IPOs like this from being shoved down everyone's throats so quickly without further testing.
alsobrsp 3mo ago
This is the main point. I bought Backblaze too early in its post IPO phase. It's a good company and I am a customer, but I am down $15k on the buy.
8note 3mo ago
the scam here is knowing that the price will be lower, but forcing index funds to buy high
- JCW2001 3mo ago
  Precisely.
kmfrk 3mo ago
It got particularly bad with SPACs in the last few years.
jjav 3mo ago
> This is shaped like more-or-less every IPO I've seen. Not even remotely. Many startups IPO with no profit (though not all), but there is nearly always a credible business plan and a semi-rational valuation. None of this is the case for spcx. They claim their TAM is about the size of the entire GPD of the USA and that they'll soon have 1T/yr in profits. All based on... nothing. The numbers are wildly unrealistic by a multiple never before seen. Oh and full self driving will be here before end of this year, trust them.
JCW2001 3mo ago
Oh yes, I tell you're a real market analyst. SpaceX is exactly like every IPO ever. Except actually it's unlike just about every IPO there has ever been for so many reasons: The tiny float, special treatment, the intense lockups, valuation at 100x its revenue. No IPO has ever been like this.

This is shaped like more-or-less every IPO I've seen. I think you have to wait for more of a collapse to claim dispositive evidence of a scam (or widen your claim to 'almost all IPOs are scams').

lorecore 3mo ago

The valuation based on fundamentals is a scam, you can just look at the numbers. This is unlike any other IPO.

trescenzi 3mo ago

This is something you could empirically study. Looks like this NASDAQ study from a few years back has some numbers. At 3 months, that’s what’s in their chart, it’s still about 50/50. At 3 years it’s 29% with returns greater than 10% and 69% with returns greater than -10%. https://www.nasdaq.com/articles/what-happens-to-ipos-over-the-long-run-2021-04-15 https://www.nasdaq.com/articles/what-happens-to-ipos-over-th...

JCW2001 3mo ago
Most companies are not successful. That's all you need to know.

jmye 3mo ago

> (or widen your claim to 'almost all IPOs are scams') In a world where retail basically has no access to true IPO pricing, I don't think this is untrue for the majority of investors. Jamming SpaceX directly into a bunch of indexes just because Musk wanted it (and everyone is a coward or complicit) stunk of "scam" in a very different way, though.

oblio 3mo ago

SpaceX has a float of 5%. So only 5% of SpaceX shares have been released to the public. Slowly, starting in August, employees and investors will be able to sell their shares, about 45% more until December 2026 and another 45% until July 2027. What do you think will happen to SpaceX share prices when roughly 18x the number of shares at IPO are released? From a company that only made $18bn in sales last year and lost $5bn. For reference, Aramark, a company basically nobody has heard of made as much money and even turned a $0.5bn profit. SpaceX shouldn't be worth more than $30 in 1 year's time. Of course, irrationality can be an extremely strong force, so let's see.

gwerbin 3mo ago
Aramark is a horrible company for comparison. Maybe the only thing they have in common with SpaceX is that they are publicly traded companies. I'm not saying that SpaceX is a good investment or that Musk isn't trying to run a scam on index investors. But we also shouldn't be surprised that the financials of an incompetent commercial food service provider are a little different from those of a spaceflight company / data center real estate conglomerate / whatever else has been rolled into it.
- nixon_why69 3mo ago
  Aramark is a specifically chosen insult for comparison. If spacex is less attractive than a mediocre food-service company (former employee for the record), what are they?
- oblio 3mo ago
  LOL. I'm not American, I chose Aramark at random because... <drumroll>... Aramark has the same revenue as SpaceX: https://companiesmarketcap.com/largest-companies-by-revenue/page/7/ https://companiesmarketcap.com/largest-companies-by-revenue/... You've just told me that "the financials of an incompetent commercial food service provider" are better than those of SpaceX. Aramark is profitable and SpaceX is wildly unprofitable[1] :-))) * * * [1] Almost nothing SpaceX does points at SpaceX scaling to huge profitability. The rocket business is super capital intensive and losing money. And its biggest customer by far is Starlink. Starlink is profitable, but even so, if Starlink hiccups, SpaceX rocketry goes kaput. Oh, the second biggest customer is the US government, and you only need one hostile US administration for that business to go away. xAI is a 2-bit player in the AI space and it's losing money hand over fist.
  - gwerbin 3mo ago
    Lol I meant "incumbent", that was a STT typo. But yes I get the point. My own point is that even a good-faith honest IPO for a spaceflight company probably won't look anything like Aramark. It's always going to be a bet on technology, not a share in the predictable profit stream of a boring company that serves pizza in school cafeterias.

tw04 3mo ago

Really? Which other IPO involves a company acquiring a completely unrelated company just before IPO in order to bail the founder out of a bad investment? Can you name even one example in the last 50 years?

taeric 3mo ago
To be fair, I think they just meant the stock price shape post IPO. Jumped up, then fell back down. That said, I'm also not sure how accurate that is.
- ToValueFunfetti 3mo ago
  Yes, thank you. The news story here is that it slipped below IPO price during intraday trading. In a perfect world, IPO price should equal the fair value; in our world, there are random-walk price variances moment to moment; in synthesis, briefly dipping below IPO price (and not even at close/open!) is not evidence of any wrongdoing. I was responding to the person pointing to this as confirmation of the long-running social-media-populist narrative surrounding this IPO. I consider that confirmation bias. I was not responding to the narrative itself, on which my only positions are: a prior against social media populism, a prior towards our financial institutions, a prior against trusting Musk, and a prior against trusting our current governance.
sharpshadow 3mo ago
SpaceX acquired Cursor after their IPO likewise did Facebook with Instagram in 2012. Since xAI was merged with SpaceX before it’s not really unrelated.
- Zigurd 3mo ago
  Cursor investors and employees are the biggest winners of the SpaceX IPO, even if the IPO flops, they will still get much more out of their Cursor shares than they ever had a right to expect. Some SpaceX employees have been waiting over 10 years for liquidity.

therobots927 3mo ago

Most IPOs don’t put up 5% of the float for sale. Usually it’s closer to 30-60%.

soulofmischief 3mo ago

It's a scam because of the hype mind control and propaganda around it. Because Musk tried to force it into the NASDAQ and S&P 500 before the normal windows, attempting to bypass sensible regulations that protect investors.

detourdog 3mo ago
The governance of the company is also prone to scamming.

ncallaway 3mo ago

Many IPOs slide below their initial offering. Very few IPOs changed the rules to allow themselves to be incuded in significant indexes far faster than the rules previously allowed, and then slipped below their initial offering.

EgregiousCube 3mo ago
[flagged]
- nixon_why69 3mo ago
  OP didn't arrange those goalposts, Musk and his friends did. It's the only company to get fast-tracked in this way while losing money.
  - EgregiousCube 3mo ago
    He did, by arguing that a company that is fast-tracked for index inclusion has an obligation to prevent its stock price from following common post-IPO price patterns; and using "the only company to do so" as an allusion to a false trend.
    - nixon_why69 3mo ago
      No, Musk did, by arguing for fast-track index inclusion. He wasn't saying "you all will eat shit on this deal", he was promising exceptional returns.
      - Lerc 3mo ago
        I don't follow that logic, why does wanting something sooner imply higher expectations of results? Did musk explicitly claim he expected exceptional returns? I don't think I'd be surprised either way, but I'm not sure what he's actually said.
        3mo ago

Taronar 3mo ago

This is incorrect, the difference is that most IPOs do not have ETFs buying their stocks, meaning you have a institutional investor forced to buy your stock and keep the musical chairs game going even if your stock has an inflated price., hes robbing ETF owners of their hard earned money

melenaboija 3mo ago

This is not shaped like any other IPO. Objectively, it’s the biggest IPO in history and was included in the Nasdaq unusually fast. More subjectively, a significant part of its value is tied to the vision and credibility of a single person. Which BTW happens to be the first trillionaire in the world if things go well.

dkenyser 3mo ago

Yes, it's almost like that's why there _was_ a rule in place to prevent IPOs like this from being shoved down everyone's throats so quickly without further testing.

alsobrsp 3mo ago

This is the main point. I bought Backblaze too early in its post IPO phase. It's a good company and I am a customer, but I am down $15k on the buy.

8note 3mo ago

the scam here is knowing that the price will be lower, but forcing index funds to buy high

JCW2001 3mo ago
Precisely.

kmfrk 3mo ago

It got particularly bad with SPACs in the last few years.

jjav 3mo ago

> This is shaped like more-or-less every IPO I've seen. Not even remotely. Many startups IPO with no profit (though not all), but there is nearly always a credible business plan and a semi-rational valuation. None of this is the case for spcx. They claim their TAM is about the size of the entire GPD of the USA and that they'll soon have 1T/yr in profits. All based on... nothing. The numbers are wildly unrealistic by a multiple never before seen. Oh and full self driving will be here before end of this year, trust them.

JCW2001 3mo ago

Oh yes, I tell you're a real market analyst. SpaceX is exactly like every IPO ever. Except actually it's unlike just about every IPO there has ever been for so many reasons: The tiny float, special treatment, the intense lockups, valuation at 100x its revenue. No IPO has ever been like this.