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.
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.
Matt Levine's take was essentially that if you're in the index fund game, you want the market. You don't pick and choose what parts of the market you want--that's active management. SPCX mostly isn't an issue because most indices include the float in the weight, so it isn't really even a $1T company.
The problem isn’t that you’re invested in the index. The problem is that the index decided it wanted to change its rules to include companies that are not profitable. I still remember the days when you needed to be profitable for x quarters and have a minimum amount of float to be listed in an index. That changed overnight and we all know why.
Except they did pick and choose SPCX and did special favors by giving them a multiplier on the float and an exceedingly short interval before including it in indices.
The only index that I know that float multiplied is Nasdaq which no one should even be investing in via their 401k anyway. Shitty index. Most consumers are utilizing some type of fund that tracks the CSRP, which float adjusts with no multiplier.
Everybody is upset about the rule change, but to be honest, they would’ve just ended up in the same position a few months later. Elon has kept Tesla’s market cap at 5-10x what any reasonable investor would think it should be for the better part of a decade. It’s not like SpaceX is going to tank in the next 3 months and they’ll be left holding the bag. It’s not like it wasn’t going to end up in every index in a year.
And to be clear, I’m not saying it’s a good thing. I just don’t think it matters so much.
Moving to have 401ks investing in it when 5% of the stock is publicly available versus 30-40%+ that would have been available on the previous timelines seems like it could have pretty dramatic effects on its price.
The relevant indices (S&P500, Vanguard) buy in proportion to available float -- i.e., its market cap is weighted by 5%. Only Nasdaq 100 ignores float, stupidly, but almost no money, especially 401(k) money, is in that.
This may be true (I'm sure it is, but I haven't verified) but the large majority of people do not know this, which is why hearing "my retirement account is going to be forced to by a bunch of spacex at a $2.5T valuation" makes them.... uneasy.
Musk tried mightily to get S&P to change their 12 month rule to 15 days but they refused. Nasdaq, however, caved to Musk and agreed to change the rules of its Index - from a 12 months wait to 15 days - in exchange for Musk agreeing to list SpaceX on Nasdaq's exchange.
There are ETFs that were issued tied to the Nasdaq 100 which are therefore legally bound to buy SpaceX. But the biggest immorality is the SEC allowing Musk's attempt to manipulate the market by:
1. Setting an IPO price for SpaceX (which absorbed xAi and its money guzzling losses) at unsustainable, incredibly inflated prices; and then
2. Putting incredible pressure on SP500 and other index makers to change their rules to force the purchase of SpaceX at those sky high prices (in an IPO, company gets to set the IPO price).
It's legal. At least in the eyes of the SEC which, of course, is an institution that is controlled by the wealthiest who control the markets, so of course it's legal.
But it is outrageous market manipulation that is fraudulent in its intent to enrich the wealthiest man on earth at the expense of ever wage earner putting her money into Index Funds.
Thank goodness the S&P and CRSP refused to change their rules. Otherwise the shifting of risk from Musk onto the shoulders of every working American would have been complete.
“In 2025, SpaceX generated $18.7 billion in revenue, with its Starlink satellite internet service accounting for $11.39 billion, or 61% of total sales.”
Tesla had higher revenue number in at the start of 2019, when it had a market cap of ~0.06 trillion. Further Tesla was highly volatile in 2021 despite huge earnings growth with some people bank when it fell from 1.2T to 0.34T before recovering.
The whole IPO was designed to be like a short squeeze where index funds have to buy soon but there's not enough shares. For the little float that's available they are weighting it significantly more than they should by previous rules. They need to have tens of billions worth of what was 70 billion by next week, and retail investors who got in on the IPO were told by their brokers if they sell early on they will not get to participate in future IPOs.
There were not enough shares actually trading for the index funds to fulfill their requirements that's why the price keeps going up
> It’s not like SpaceX is going to tank in the next 3 months and they’ll be left holding the bag.
A stock's value can disappear in a matter of days to a degree it leads to a complete collapse. It has happened before, see Enron or Wirecard.
> It’s not like it wasn’t going to end up in every index in a year.
Sure, but it's still not wise to let unripe stocks into most American and RoW retirement funds. There's a reason why many complex software projects keep some sort of "staging" tree, and the stock markets should do so as well.
What exactly can an individual do? For many their accounts have limited fund choices and if you don't want to pay high ER for fund manager's pedicures then you end up on an index, which (S&P500 excluded) have now bent the knee. Mine are on russel indexes so I have no choice.
Short spacex is the only answer I've heard but I'm wise enough to know I don't have the mentality for derivatives.
The vast majority of American employees are not maxing out every tax advantaged retirement account instrument, and putting everything in a 401(k) past the employer match level is not advisable exactly because of the limited investment choices.
except if you self-employed. I have maxed the shit out of my 401k (i401k, self-managed) and after 3 decade career have more saved than I can spend in 8 lifetimes
Shorting SpaceX when you own the same amount of SpaceX in an ETF doesn't require any derivatives and is a fairly safe play. The amount of interest you have to pay will vary a little bit, but it should cost a very small amount net.
The biggest issues are the effort and tax implications of balancing the SpaceX short.
Q: What is the purpose of modifying the liquidity and seasoning requirements? Could this change result in the inclusion
of illiquid securities in the index?
A: Most indexes require a liquidity threshold for new constituents, often as a minimum share count or average daily trading value.
For the Nasdaq-100®, securities must have a three-month average daily traded value of at least $5 million. Since only very large
companies – typically with full market capitalizations over $100 billion as of March 2026 – would have qualified for fast entry, they
are expected to easily and quickly meet this requirement. However, an average daily traded value of at least $5 million from the
time of listing will still be required for fast entry candidates.
Many indexes have included seasoning requirements to ensure that traditional IPOs undergo price discovery and stabilization
before being included. These requirements were originally intended to prevent small or little-known companies from entering too
soon. However, there is now a trend toward IPOs being larger and more mature than in the past. Companies expected to meet the
fast entry threshold are likely to be among the world’s most significant and well-known firms. High investor interest and trading
volumes should accelerate price discovery, further supporting a shorter seasoning period. Note that the seasoning period for
companies outside of the Top 40 remains at three months.
Several indexes have changed not just Nasdaq, but it’s one more people have heard about.
Sure but it’s not the only one. Add in SPY, QQQ, and IWM Force Index Funds and the percentage of Americans buying SpaceX early due to rule changes looks bad.
For others like qqq it has no bearing to be frank. It follows the nasdaq 100. Maybe an argument that the extra few months would have allowed more price discovery but I am not so sure.
float adjustment results in any CRSP tracking fund/etf having a $10,000 investment being approximately $17 worth of SpaceX. This isn't a real problem the media is trying to push it as.
SpaceX is being valued as an AI company and yet they don't have a frontier AI model. Goldman Sachs is predicting 100x growth in 4 years for xAI, but it is a failed company with no frontier model. Top employees have left, and the company is renting out datacenter capacity.
Satellite launch business has $4.1 billion in revenue, but only growing 8% annually. Most of the revenue is from Starlink. It has $11.4 billion in revenue, with around 50% growth. Blue Origin will offer them competition soon.
X, formerly Twitter, has around $2B revenue, limited potential.
The massive 2030 projections ($474B total, $144B Starlink, $322B AI) are Goldman Sachs' IPO roadshow model. The projections are so aggressive they feel scammy.
SpaceX's 2025 revenue is $18.7 billion. A typical premium valuation for a top-tier tech company might be around 10x to 14x revenue, which would imply a strong IPO valuation of roughly $187 billion to $262 billion.
The reason for the outlandish valuation is because of naive retail investors who believe Elon Musk has never failed at anything.
The recent AI craze is really just LLMs. I feel like finance was likely already the most AI-adopted industry without LLMs and their impact the last few years may have taken them from “80 to 100” where most industries are going “10 to 50.” Go back to 2022 for a moment and I think this article is identical.
Unfortunately most people won't do that, either from ignorance or fear of missing out. Sometime in the next few years the chickens are going to come home to roost on the infinibubble, and I'm not really sure if the US financial system will weather it.
This isn't investment advice etc etc but there are many options that can capture large sections of the stock market without being exposed to the tech bubble (assuming there is one).
Many people say you should stay invested in the SP500 anyway and I won't argue against that. But funds like VTV, DGRO, VIG, SCHD etc don't have the same level of exposure to tech, as well as international funds like VEA. Many 401ks allow you to invest in them through brokerage "link" options. Of course, do your research or talk to a pro before considering these.
I have a feeling the article and the comments on this trend would be very different if Elon Musk did not support Trump, even if he were still just as crazy and rich.
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.
[delayed]
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.
Matt Levine's take was essentially that if you're in the index fund game, you want the market. You don't pick and choose what parts of the market you want--that's active management. SPCX mostly isn't an issue because most indices include the float in the weight, so it isn't really even a $1T company.
The problem isn’t that you’re invested in the index. The problem is that the index decided it wanted to change its rules to include companies that are not profitable. I still remember the days when you needed to be profitable for x quarters and have a minimum amount of float to be listed in an index. That changed overnight and we all know why.
Okay then why is SPCX going to be weighted 3x its actual float in the Nasdaq? A rule made just for SPCX.
To the same point I also don't want the index itself picking and choosing which companies to apply which rules to.
Except they did pick and choose SPCX and did special favors by giving them a multiplier on the float and an exceedingly short interval before including it in indices.
Depends which index. S&P isn't giving them anything special. https://finance.yahoo.com/markets/stocks/articles/spacex-fac...
The only index that I know that float multiplied is Nasdaq which no one should even be investing in via their 401k anyway. Shitty index. Most consumers are utilizing some type of fund that tracks the CSRP, which float adjusts with no multiplier.
TIL about float for stock, thanks.
Everybody is upset about the rule change, but to be honest, they would’ve just ended up in the same position a few months later. Elon has kept Tesla’s market cap at 5-10x what any reasonable investor would think it should be for the better part of a decade. It’s not like SpaceX is going to tank in the next 3 months and they’ll be left holding the bag. It’s not like it wasn’t going to end up in every index in a year.
And to be clear, I’m not saying it’s a good thing. I just don’t think it matters so much.
Moving to have 401ks investing in it when 5% of the stock is publicly available versus 30-40%+ that would have been available on the previous timelines seems like it could have pretty dramatic effects on its price.
The relevant indices (S&P500, Vanguard) buy in proportion to available float -- i.e., its market cap is weighted by 5%. Only Nasdaq 100 ignores float, stupidly, but almost no money, especially 401(k) money, is in that.
This may be true (I'm sure it is, but I haven't verified) but the large majority of people do not know this, which is why hearing "my retirement account is going to be forced to by a bunch of spacex at a $2.5T valuation" makes them.... uneasy.
Oh there are ETFs that track Nasdaq 100.
Musk tried mightily to get S&P to change their 12 month rule to 15 days but they refused. Nasdaq, however, caved to Musk and agreed to change the rules of its Index - from a 12 months wait to 15 days - in exchange for Musk agreeing to list SpaceX on Nasdaq's exchange.
There are ETFs that were issued tied to the Nasdaq 100 which are therefore legally bound to buy SpaceX. But the biggest immorality is the SEC allowing Musk's attempt to manipulate the market by: 1. Setting an IPO price for SpaceX (which absorbed xAi and its money guzzling losses) at unsustainable, incredibly inflated prices; and then 2. Putting incredible pressure on SP500 and other index makers to change their rules to force the purchase of SpaceX at those sky high prices (in an IPO, company gets to set the IPO price).
It's legal. At least in the eyes of the SEC which, of course, is an institution that is controlled by the wealthiest who control the markets, so of course it's legal.
But it is outrageous market manipulation that is fraudulent in its intent to enrich the wealthiest man on earth at the expense of ever wage earner putting her money into Index Funds.
Thank goodness the S&P and CRSP refused to change their rules. Otherwise the shifting of risk from Musk onto the shoulders of every working American would have been complete.
Without rapid purchasing by indexes SpaceX’s stock would likely to tank as ever more people would be able to sell over the first year.
It’s a 24 year old company with a current high flying stock price based on very questionable numbers.
We all said that about Tesla for years, and a lot of people got burned on the trade. This time may be different, but it also may not be.
Tesla’s numbers looked vastly more reasonable.
“In 2025, SpaceX generated $18.7 billion in revenue, with its Starlink satellite internet service accounting for $11.39 billion, or 61% of total sales.”
Tesla had higher revenue number in at the start of 2019, when it had a market cap of ~0.06 trillion. Further Tesla was highly volatile in 2021 despite huge earnings growth with some people bank when it fell from 1.2T to 0.34T before recovering.
I also remember lots of people saying Uber wasn’t a $100B company.
With several large bets on the table with starship that have yet to play out.
Remember mars by 2024? I think that was around the time they started accepting deposits on tesla semi.
They shipped the Semi though. Yes the situation is bad but its not vaporware. Musk had to scam the markets to survive in late 2017/2018
Depends, they've gone to pains to ensure the indexes will buy as share lockups end. It's dodgy no matter how you look at.
The one saving grace is s&p isnt changing anything, and they were by far the biggest index.
The whole IPO was designed to be like a short squeeze where index funds have to buy soon but there's not enough shares. For the little float that's available they are weighting it significantly more than they should by previous rules. They need to have tens of billions worth of what was 70 billion by next week, and retail investors who got in on the IPO were told by their brokers if they sell early on they will not get to participate in future IPOs.
There were not enough shares actually trading for the index funds to fulfill their requirements that's why the price keeps going up
Bubbles always blow. Maybe not in 3 months but eventually someone will figure that those trillions can't possibly be made back ever again.
And then the fall down is hard.
They probably won't be on the S&P for years, because of profitability requirements.
If they can keep google and anthropic deals, they're already profitable.
I got a good investment vehicle for you. How would you like to purchase shares in the Brooklyn bridge? You could see returns in the form of tolls.
> It’s not like SpaceX is going to tank in the next 3 months and they’ll be left holding the bag.
A stock's value can disappear in a matter of days to a degree it leads to a complete collapse. It has happened before, see Enron or Wirecard.
> It’s not like it wasn’t going to end up in every index in a year.
Sure, but it's still not wise to let unripe stocks into most American and RoW retirement funds. There's a reason why many complex software projects keep some sort of "staging" tree, and the stock markets should do so as well.
China enters the chat https://spacenews.com/china-conducts-4-launches-in-3-days-bu...
What exactly can an individual do? For many their accounts have limited fund choices and if you don't want to pay high ER for fund manager's pedicures then you end up on an index, which (S&P500 excluded) have now bent the knee. Mine are on russel indexes so I have no choice.
Short spacex is the only answer I've heard but I'm wise enough to know I don't have the mentality for derivatives.
The vast majority of American employees are not maxing out every tax advantaged retirement account instrument, and putting everything in a 401(k) past the employer match level is not advisable exactly because of the limited investment choices.
except if you self-employed. I have maxed the shit out of my 401k (i401k, self-managed) and after 3 decade career have more saved than I can spend in 8 lifetimes
Shorting SpaceX when you own the same amount of SpaceX in an ETF doesn't require any derivatives and is a fairly safe play. The amount of interest you have to pay will vary a little bit, but it should cost a very small amount net.
The biggest issues are the effort and tax implications of balancing the SpaceX short.
You can buy the companies making up the index instead of the index itself.
It was proven to be a good strategy on the SP500 [1, 2]
With 500 companies, it's work. But you can probably approximate it with a top 100.
[1] https://rodneywhitecenter.wharton.upenn.edu/wp-content/uploa...
[2] https://www.tandfonline.com/doi/full/10.1080/0015198X.2023.2...
SpaceX has not been added to the S&P 500. They asked for the rules to be waived. S&P said no. I don't understand this article.
S&P 500 didn’t change their rules but other indexes have.
https://indexes.nasdaqomx.com/docs/2026_May_NDX_Changes_FAQ....
Q: What is the purpose of modifying the liquidity and seasoning requirements? Could this change result in the inclusion of illiquid securities in the index?
A: Most indexes require a liquidity threshold for new constituents, often as a minimum share count or average daily trading value. For the Nasdaq-100®, securities must have a three-month average daily traded value of at least $5 million. Since only very large companies – typically with full market capitalizations over $100 billion as of March 2026 – would have qualified for fast entry, they are expected to easily and quickly meet this requirement. However, an average daily traded value of at least $5 million from the time of listing will still be required for fast entry candidates. Many indexes have included seasoning requirements to ensure that traditional IPOs undergo price discovery and stabilization before being included. These requirements were originally intended to prevent small or little-known companies from entering too soon. However, there is now a trend toward IPOs being larger and more mature than in the past. Companies expected to meet the fast entry threshold are likely to be among the world’s most significant and well-known firms. High investor interest and trading volumes should accelerate price discovery, further supporting a shorter seasoning period. Note that the seasoning period for companies outside of the Top 40 remains at three months.
Several indexes have changed not just Nasdaq, but it’s one more people have heard about.
Nasdaq isn't super relevant.
Sure but it’s not the only one. Add in SPY, QQQ, and IWM Force Index Funds and the percentage of Americans buying SpaceX early due to rule changes looks bad.
Edit: Ops SPY didn’t change their rules.
SPYis sp500 is it not? Why would they include it?
For others like qqq it has no bearing to be frank. It follows the nasdaq 100. Maybe an argument that the extra few months would have allowed more price discovery but I am not so sure.
Also CRSP, which is the index used by US Total Market funds and many Target Date funds.
float adjustment results in any CRSP tracking fund/etf having a $10,000 investment being approximately $17 worth of SpaceX. This isn't a real problem the media is trying to push it as.
Firms or funds, don’t care, want to put money in anyway…
SpaceX is being valued as an AI company and yet they don't have a frontier AI model. Goldman Sachs is predicting 100x growth in 4 years for xAI, but it is a failed company with no frontier model. Top employees have left, and the company is renting out datacenter capacity.
Satellite launch business has $4.1 billion in revenue, but only growing 8% annually. Most of the revenue is from Starlink. It has $11.4 billion in revenue, with around 50% growth. Blue Origin will offer them competition soon.
X, formerly Twitter, has around $2B revenue, limited potential.
The massive 2030 projections ($474B total, $144B Starlink, $322B AI) are Goldman Sachs' IPO roadshow model. The projections are so aggressive they feel scammy.
SpaceX's 2025 revenue is $18.7 billion. A typical premium valuation for a top-tier tech company might be around 10x to 14x revenue, which would imply a strong IPO valuation of roughly $187 billion to $262 billion.
The reason for the outlandish valuation is because of naive retail investors who believe Elon Musk has never failed at anything.
You should short it then
The recent AI craze is really just LLMs. I feel like finance was likely already the most AI-adopted industry without LLMs and their impact the last few years may have taken them from “80 to 100” where most industries are going “10 to 50.” Go back to 2022 for a moment and I think this article is identical.
Half of the companies in the S&P 500 are trading at over 10x sales.
SpaceX is just another one on top of the pile, whenever it gets included.
Valuation multiples always mean revert on a long enough timeline... you can position for it today if you care to.
https://www.multpl.com/s-p-500-price-to-sales
You can opt to put some or all of your 401K into a "Value fund"
VVIAX (Vanguard) or FLCOX (Fidelity)
to reduce your exposure to the highest of high-flying stocks.
Of course, many small company 401Ks limit your investment options to a small family of high expense ratio funds...
Unfortunately most people won't do that, either from ignorance or fear of missing out. Sometime in the next few years the chickens are going to come home to roost on the infinibubble, and I'm not really sure if the US financial system will weather it.
This isn't investment advice etc etc but there are many options that can capture large sections of the stock market without being exposed to the tech bubble (assuming there is one).
Many people say you should stay invested in the SP500 anyway and I won't argue against that. But funds like VTV, DGRO, VIG, SCHD etc don't have the same level of exposure to tech, as well as international funds like VEA. Many 401ks allow you to invest in them through brokerage "link" options. Of course, do your research or talk to a pro before considering these.
> exposed to the tech bubble
Aside, I think many people forget to account for their own job/career when thinking about diversification.
Just working "in tech" means that industry is already an oversized part of my financial future by default, even before talking about investment stuff.
I have a feeling the article and the comments on this trend would be very different if Elon Musk did not support Trump, even if he were still just as crazy and rich.
Regardless of what you think of his politics, SpaceX is waaaay overvalued.