Investing

[romad1]

53 minutes ago, Screwball said:

The optics today can track a baseball to a few thousands of an inch from many feet away, and then digitize the trajectory in milliseconds. You ain't that good.

I’m definitely not.  It’s way more enjoyable to get a tight group while managing my breathing and the bolt.  

There is a place for analog. 

[Screwball]

This is a good read but you can't get all of it. Most, but not all, but enough. 

Monopoly Round-Up: After SpaceX Goes Public, Does the Stock Market Finally Fall?

FTA;

Quote

 

Here’s why. SpaceX is a bunch of real assets, but it’s also a holding company where Musk has stashed his less valuable stuff. Twitter is now part of SpaceX. So is xAI, which runs Grok.

Moreover, SpaceX released its financial data publicly so investors could analyze it before deciding to buy shares, and it was underwhelming. The investor documents are "a train wreck,” full of pie in the sky cult-style rhetoric about going to the stars, but the actual numbers show that only one part of the company - Starlink - is profitable. Beyond that, its numbers are just ok. The company lost $4.7 billion last year, its annual revenue rate is $18.7 billion, it is growing only modestly at 15% a year.

There is a lot of hair here. Its biggest revenue driver is not its rocket systems, but its ownership of Nvidia chips that it rents to Anthropic. That’s weird. At best, it is simply an AI commodity provider, no different than anyone else who owns a lot of chips. At worst, well, Michael Burry, the short-seller made famous in The Big Short, traced a complicated financial structure involving Grok taking part in a scheme to keep Nvidia’s AI chip sales numbers off-the-books, similar to Enron or special purpose vehicles during the financial crisis.

That’s not good. Moreover, Musk has also changed corporate governance rules so he is in total control, with no rights for anyone else.

This stuff wouldn’t be bad if SpaceX were a modestly valued company, but Musk thinks he can bring it public at a value of $1.8 trillion. And that’s a crazy valuation for a company with less than $20 billion of revenue that is losing money and growing slowly. So what gives? How can Musk think he’ll be able to get so much for so little?

Well, that’s where the seediness comes in. First, just 5% of shares outstanding will go on sale to the public, meaning that most of the stock will be held by insiders, and the “float” can be manipulated up or down as need be. Second, the company is planning to sell 30% of its floated shares to retail investors, versus 10% for normal IPOs. The reason is that sophisticated investors can see the numbers make no sense, but retail investors love Musk and will buy no matter what.

But most importantly, the NASDAQ stock market just changed its rules around how it organizes its index of important firms, the NASDAQ 100, to allow SpaceX to get in early. Many index funds automatically mimic the Nasdaq-100, which means that NASDAQ is ensuring that huge amounts of investor capital will flow into the company. Virtually every investor in America will end up owning a piece, whether they like it or not. Companies used to have to trade for three months, now it’s just 15 days. And the company had to have at least 10% of its shares publicly trade, but that’s no longer a requirement.

And what that means is that the insiders, the early investors like Google, Marc Andreessen, Peter Thiel, and various Arab sovereign wealth funds, basically Musk’s gang of allies, will be able to dump their shares at a high value on America’s retirement accounts, aka all of us. And they may not care if it crashes later on.

I don’t know if it’s the top of the stock market, but it sure seems like a lot of insiders are betting that it is.

 

It's almost like the casino is rigged so the pigmen win. No! Tell us it ain't so.

[romad1]

8 minutes ago, Screwball said:

This is a good read but you can't get all of it. Most, but not all, but enough. 

Monopoly Round-Up: After SpaceX Goes Public, Does the Stock Market Finally Fall?

FTA;

It's almost like the casino is rigged so the pigmen win. No! Tell us it ain't so.

one of the tech reporters was saying there was another rigged casino thing going where they put these super high valuation stocks on the index funds almost right away so the pain of the eventual crash of the thing is evened out across the market.  Sure helps the pigs who walk on 2 legs. 

[gehringer_2]

55 minutes ago, romad1 said:

one of the tech reporters was saying there was another rigged casino thing going where they put these super high valuation stocks on the index funds almost right away so the pain of the eventual crash of the thing is evened out across the market.  Sure helps the pigs who walk on 2 legs. 

Index funds have been a good idea for a lot of people for a long time now, made sense that eventually the bastards would find a way to ruin it for everyone else. I'm now out of indexed investments.

[Deleterious]

 

[Deleterious]

SpaceX insiders will get to sell shares earlier than usual after the IPO

Quote

When most companies go public, they follow a simple rule: insiders can’t sell their shares for 180 days after the IPO. SpaceX is taking an unusual approach that could allow pre-IPO investors to sell sooner.  

The company built in a series of release valves that allow insiders to sell portions of their stock in the weeks and months after the IPO. This phased approach to insider selling accomplishes a few things. It prevents potential pressure on the stock when a lock-up is lifted and everyone can sell at once. And perhaps, even more noteworthy: It also could increase the float – or shares available to trade – sooner, which has implications for faster inclusion in the Nasdaq 100. 

Here’s how SpaceX structured its lock-ups, according to the S-1 filling. After reporting earnings for the three months through June - the company’s first results as a public company – insiders can sell up to 20% of their eligible locked-up shares. If this stock is also trading at least 30% above the IPO price at that point, they can sell an additional 10%. 

Then there’s a rolling schedule, comprising 70, 90, 105, 120 and 135 days post-IPO, where another 7% unlocks at each of those interviews. Additionally, when SpaceX reports its second earnings as a public company – for the three months through September – an additional 28% can be sold. At the 180-day mark, whatever remains would be fully released. 

 

[romad1]

19 minutes ago, Deleterious said:

 

Well, eventually we will chop off Elon's head and that of Grimes. 

[gehringer_2]

1 hour ago, Deleterious said:

 

I wonder how much large funds buy index instruments - what would be the point for them? Laziness I suppose? 

I know I've gotten notices from Fidelity that the current market has put their S&P index fund bylaws into self contradiction as the bylaws have limits on how large a % of the index any stock can be. I don't remember if they said they were waiving the limit or just leaving some stocks capped and thus diverging from the index - that was the point I started getting out so I didn't care which.

Edited 36 minutes ago by gehringer_2

[Deleterious]

Oh lord

 

[gehringer_2]

9 minutes ago, Deleterious said:

Oh lord

 

LOL - DOA. Unserious legislator - as he has ever been.

[gehringer_2]

Anthropic has filed for an IPO