It's really concerning given how the indexes are changing rules to fast-track SpaceX being forced into index funds. S&P is also working on updates to S&P 500 to force it down everyone's throats quickly and algorithmically.
Interestingly, these are the exact rules they're working to overturn: currently, no matter how many stupid accounting tricks you pull off, you need to actually be profitable to be included in the S&P 500.
Together they account for $65-75 billion in revenue annually. That's using existing hardware that they already have. Obviously they are spending to increase that hardware footprint. But they could just not do anything and continue raking in the money.
So in light of that. When you say stuff like "bleeding money". Do you know how to do basic math? Where are you getting these figures?
Because from where I'm sitting it seems like you're just operating on hopes and feels.
This is a fallacy. OpenAI and Anthropic would not continue to make money indefinitely by simply sitting still for the simple fact that their models can easily be distilled by competitors. Their value is contingent on sitting at the top of the leaderboards and staying there such that the marginal value of their AI is better than the mostly Chinese competitors.
And b/c these chinese competitors are open weight, the layer below frontier class AI is totally commoditized.
If there were a recession, the first thing enterprise customers would do is setup Kimi or Deepseek rigs. It would be a race to the bottom and no one would be profitable.
A similar phenomenon happened with rail lines in the 1850s where irrational exuberance led to a massive overbuild of rail lines, followed by a race to the bottom and the bankruptcy of almost all players. In the end, banks ended up absorbing the few companies that survived.
Because they're doing the fancy equivalent of selling $20 bills for $15 and chirping about how high their revenue is. You, me, and everyone else could generate $inf revenue with that strategy, but that doesn't make it a viable business model.
I have no doubt there are a handful of positive examples when we ignore the tens of thousands of failed companies along these lines.
I have no problem with money-furnaces trading publicly. If people want to invest in those, fantastic, power to them. But they absolutely should not be included in vehicles like pensions and indexes.
Really depends on the valuation and P/E they plan to list at, and some estimate of their future revenue story. I love Codex and Claude Code but OpenCode/Kimi is wildly cheaper and 90% as good.
Didn't we have a story just yesterday that Anthropic's run-rate now looks like $49 billion/ year and they might have their first quarterly profit? I would suggest if you have billions of dollars coming in the door and aren't breaking even, maybe you do have a small leak somewhere?
I buy 50 billion of hardware. Make 45 billion back in year 1. My losses are 5 billion. I Pay of all my creditors by year two. Then spend another 55 billion on hardware in the second half of year two. My profit is at this point zero.
In year three your competitors invest in making a better model and crush your business because you have no moat at all.
The entire business requires massive ongoing investment because getting massive investments is the only thing resembling a competitive advantage that you can get.
The equivalent to anything you can do will be available as an open weight set in six months to a year. Sink or swim.
It's not basic math when the numbers are this big. There's not going to be $50 billion coming in Year 3 if there's a market correction and lenders scale back financing. Borrowed money is how companies are paying for AI, and that's the first thing that disappears in a recession.
You can sidestep this entirely with a total-market fund like VTSAX/VTI, which hold the entire market and should be more resistant to being gamed.
They’re free-float adjusted so entities like SpaceX are valued only by what’s available on public markets. And Vanguard (and its funds) are owned by its investors, which makes it seem implausible that the rules would be rewritten in a way that would damage investors.
It may list fast, but it covers many more securities from what I understand so it’s insulated. I think the fact is that any broad market ETF is gonna own at least some piece of a $1 trillion company.
Any of the direct indexing providers will let you blacklist individual stocks from the index. The intended use is to exclude stocks you hold elsewhere (or receive as stock grants) to avoid causing wash sales, but it can also be easily used to make a custom "S&P 499".
The same rules are now affecting other big IPOs. I think Cerebras was confirmed as getting fast listing too even though they’re much smaller. It’s one big act of dumping on retail markets
It’s based on the total market and not artificially limited to a small number of large companies. Plus it’s free-float adjusted so only the publicly-tradable portion of SpaceX is considered when weighting its inclusion so it will constitute only a small portion of the fund. There is also a (small) mandatory delay period which I don’t recall between it going public and it becoming included in the index which should give time for the SpaceX valuation to stabilize on something notionally realistic.
Thankfully, Vanguard and its member funds are investor-owned so are likely more resilient against someone like Elon trying to change the rules.
The index they use is altering the rules. I complained to my account rep, he agreed it was not great and is asking the fund mgmt what the plan is. I doubt there is a lot they can do.
> The deal, with SpaceX, is that Elon Musk runs it however he wants, and he does weird stuff, and you have to trust him, and if you don’t like it you can’t complain.
> When SpaceX acquired xAI a few months ago, did a special committee of independent directors approve the transaction? Did Musk recuse himself from negotiations? Was the price set by independent valuation experts using a rigorous process? Did outside shareholders sue to block the deal? Stop. Musk wanted SpaceX to buy xAI, so it did.
> [...] Surely SpaceX has created all that shareholder value more because Musk does what he wants than in spite of Musk doing what he wants; it is hard to accidentally create $1.75 trillion of value. SpaceX’s shareholders signed up for this deal — letting Musk cook — and have been rewarded;
Facebook is still a Delaware company, with lots of established case law for what Zuckerberg can and can not do, voting majority or not. SpaceX is now some Texas corporation with a state legislature ready to enable whatever Musk wants.
It seems like a fine offer to have exist, but one that a pension fund with low risk tolerance wouldn't want to take. So everything seems reasonable with the world.
Similarly I don't understand why indicies are rushing to change their rules to allow SpaceX in. People accept a certain risk tolerance and changing the rules to ramp up the risk seems questionable at best.
the piece explains how modern finance is de facto built on the shoulders of the privatization of the welfare state. i find it particularly relevant here: the finance class - in this case musk - wants pensioners money via mutual funds, even modifying the rules of indexing...
Yeah, I also don't want to eat a tasty morsel if you roll it around in the dirt and serve it up covered in bugs and hair.
And that's basically what SpaceX is right now after you account for xAI and twitter in the mix.
So I'd love to own a piece of the SpaceX from a decade ago - but the current offering smells pretty bad.
Combined with the fact that at this point, Musk clearly isn't opposed to running a business with dramatically inflated valuations based on vaporware, lies, & hype (cough - Tesla - cough) it just makes me far more skeptical than I might otherwise be.
I think caution is warranted here.
Essentially - I want to own the SpaceX that could have been if we didn't end up with the shoddy k-hole version of musk in charge of things.
The current SpaceX is in a far better financial and operational position than 10 years ago. By an order of magnitude. 90% of all payload to orbit right now is SpaceX alone. Starlink is profitable all on it's own. Right now. And they are just now picking up steam. American Airlines just signed onto Starlink just last week. This company is most likely gonna be the Coca-Cola of transportation between celestial bodies in solar system for the next 500 years but people on here are arguing over peanuts. On HN of all places.
I'd love to own SpaceX - what I don't want to own is all the unprofitable, toxic dogshit its ketamine-addled CEO folded into it that has nothing to do with putting stuff into orbit or selling Starlink.
Imagine buying the most overvalued company of all time helmed by a crazy man who does Nazi salutes. Payback period? Who cares! Orbital class booster yayyyy
The part that gets me is that changing of the rules by exchanges and financial regulators to essentially force mass purchases on a small float. That's disgusting and in a just world, those people would go to jail.
The funny part of all this is that SpaceX has achieved a lot but what might break them, or at least weight them down heavily, is the impulsive and forced purchase of Twitter. Before anyone claims it was some kind of master plan, Elon went to court to get out of it but was forced into it [1].
What happened? Mass firings, pushing his own tweets because his fragile ego couldn't handle Joe Biden getting more likes [2] and Twitter opened the floodgates for hate speech [3] and worse [4]. Advertisers fled. Fidelity (who foolishly was part of the acquisition) massively wrote down the value [5]. Elon had used Tesla shares as collateral and was possibly facing a margin call.
How did he get out of it? Well, in 2023 Elon founded xAI to challenge OpenAI. People invested in this for some reason. And by 2025, Elon merged Twitter with xAI, overvaluing Twitter at $33 billion (which is still down 25% from the purchase) [6].
Now, I imagine the xAI investors were unhappy with Elon using xAI to bail out himself so what did he do? Easy. Make SpaceX acquire xAI of course [7].
Thing is, xAI and Twitter/Grok are a massive drain on SpaceX's finances, losing more than $10 billion annually allegedly [8].
Twitter did not have to end up as part of SpaceX. SpaceX would've been a better company without it. SpaceX already faces headwinds from the incredibly expensive and behind-schedule Starship program. Part of all of this regulatory fixing is to make sure the insiders (and Elon himself) get bailed out.
It’s obviously a scam. First xai acquires failing Twitter and then SpaceX acquires xai? At a made up valuation number that’s too high? The voting structure of SpaceX prevents Elon from ever being held accountable. Not to mention that the revenue and profits are simply not enough to justify the desired value.
Merging the failling companies into the other ones is the usual Elon thing, Solar City didn't get acqui-merged into Tesla for its great result.
It's not a "scam" in the traditionnal sense, it's riding the bubble while it's there, stock value is "supposed" to be about the company performance and potential but technically it doesn't have to be, it's about what some people are willing to pay for it (the stock, not the product the company sells) and that's all. That's also why tesla has such a valuation.
You can see it in the comments even here and other thread about this IPO, some people read the numbers, and some have just religious sounding comments about it being the biggest revolution ever or making the history book etc ...
And that's also why they need to keep elon as CEO because in the scenario where they remove it and get the best car company CEO and become a great regular car company that works and ships lots of great car ... Their valuation would be reduced a factor of ten
It's really concerning given how the indexes are changing rules to fast-track SpaceX being forced into index funds. S&P is also working on updates to S&P 500 to force it down everyone's throats quickly and algorithmically.
Add Anthropic and OpenAI to the list. Companies that are bleeding money.
Personally, a company should be making money before adding it to the index.
Interestingly, these are the exact rules they're working to overturn: currently, no matter how many stupid accounting tricks you pull off, you need to actually be profitable to be included in the S&P 500.
Together they account for $65-75 billion in revenue annually. That's using existing hardware that they already have. Obviously they are spending to increase that hardware footprint. But they could just not do anything and continue raking in the money.
So in light of that. When you say stuff like "bleeding money". Do you know how to do basic math? Where are you getting these figures?
Because from where I'm sitting it seems like you're just operating on hopes and feels.
This is a fallacy. OpenAI and Anthropic would not continue to make money indefinitely by simply sitting still for the simple fact that their models can easily be distilled by competitors. Their value is contingent on sitting at the top of the leaderboards and staying there such that the marginal value of their AI is better than the mostly Chinese competitors.
And b/c these chinese competitors are open weight, the layer below frontier class AI is totally commoditized.
If there were a recession, the first thing enterprise customers would do is setup Kimi or Deepseek rigs. It would be a race to the bottom and no one would be profitable.
A similar phenomenon happened with rail lines in the 1850s where irrational exuberance led to a massive overbuild of rail lines, followed by a race to the bottom and the bankruptcy of almost all players. In the end, banks ended up absorbing the few companies that survived.
Because they're doing the fancy equivalent of selling $20 bills for $15 and chirping about how high their revenue is. You, me, and everyone else could generate $inf revenue with that strategy, but that doesn't make it a viable business model.
Right.
At this point burying money in jars in the back yard and forgetting where some are has a much higher rate of return.
Using Google’s own IPO S-1 / SEC filings:
Year Revenue Net income / loss
1998 Not reported
1999 $220k -$6.076M
2000 $19.108M -$14.690M
Do you guys not know what a loss lead is?
I have no doubt there are a handful of positive examples when we ignore the tens of thousands of failed companies along these lines.
I have no problem with money-furnaces trading publicly. If people want to invest in those, fantastic, power to them. But they absolutely should not be included in vehicles like pensions and indexes.
You seem to be ignoring that a loss lead is supposed to lead people into doing something profitable.
Really depends on the valuation and P/E they plan to list at, and some estimate of their future revenue story. I love Codex and Claude Code but OpenCode/Kimi is wildly cheaper and 90% as good.
Didn't we have a story just yesterday that Anthropic's run-rate now looks like $49 billion/ year and they might have their first quarterly profit? I would suggest if you have billions of dollars coming in the door and aren't breaking even, maybe you do have a small leak somewhere?
> Because from where I'm sitting it seems like you're just operating on hopes and feels.
I hate these flippant comments. Similarly, from where I'm sitting it seems you're struggling to disentangle revenue from profit.
I buy 50 billion of hardware. Make 45 billion back in year 1. My losses are 5 billion. I Pay of all my creditors by year two. Then spend another 55 billion on hardware in the second half of year two. My profit is at this point zero.
<you are here>
By year three I am printing money.
It's not a flippant comment. It's basic math.
In year three your competitors invest in making a better model and crush your business because you have no moat at all.
The entire business requires massive ongoing investment because getting massive investments is the only thing resembling a competitive advantage that you can get.
The equivalent to anything you can do will be available as an open weight set in six months to a year. Sink or swim.
It's not basic math when the numbers are this big. There's not going to be $50 billion coming in Year 3 if there's a market correction and lenders scale back financing. Borrowed money is how companies are paying for AI, and that's the first thing that disappears in a recession.
Sorry that's confusing cash flow with profits, where things get amortized
" But they could just not do anything and continue raking in the money."
Hahaha what a fucking bozo.
Log out and dont talk about valuation again.
There is a market for an S&P 500 ETF without those companies. I'll immediately switch over
You probably want an ETF that follows something like the MSCI USA Ex Mega Cap index then: <https://www.msci.com/indexes/index/758086>
Let me know if you find one! I'm at a loss. (And even then, if I switch I have to pay $$$ taxes on capital gains)
You can sidestep this entirely with a total-market fund like VTSAX/VTI, which hold the entire market and should be more resistant to being gamed.
They’re free-float adjusted so entities like SpaceX are valued only by what’s available on public markets. And Vanguard (and its funds) are owned by its investors, which makes it seem implausible that the rules would be rewritten in a way that would damage investors.
VTI lists fast even before these recent changes as I recall. So it’s more vulnerable, not less.
It may list fast, but it covers many more securities from what I understand so it’s insulated. I think the fact is that any broad market ETF is gonna own at least some piece of a $1 trillion company.
Any of the direct indexing providers will let you blacklist individual stocks from the index. The intended use is to exclude stocks you hold elsewhere (or receive as stock grants) to avoid causing wash sales, but it can also be easily used to make a custom "S&P 499".
I'm looking at Schwab (and saw a few others) and couldn't find anything: https://www.schwab.com/learn/story/primer-on-wash-sales
I would assume this is not an ETF but sth else?
https://www.schwab.com/direct-indexing
And accelerating the schedules for insiders to dump shares.
Waiving profitability requirements to join the S&P 500 and trigger auto-buys from index funds is DEI for corporations.
The same rules are now affecting other big IPOs. I think Cerebras was confirmed as getting fast listing too even though they’re much smaller. It’s one big act of dumping on retail markets
How can I transfer my shares of VTI for an interest in this pension fund, before it’s too late?
VTI won’t really be affected by this.
It’s based on the total market and not artificially limited to a small number of large companies. Plus it’s free-float adjusted so only the publicly-tradable portion of SpaceX is considered when weighting its inclusion so it will constitute only a small portion of the fund. There is also a (small) mandatory delay period which I don’t recall between it going public and it becoming included in the index which should give time for the SpaceX valuation to stabilize on something notionally realistic.
Thankfully, Vanguard and its member funds are investor-owned so are likely more resilient against someone like Elon trying to change the rules.
The index they use is altering the rules. I complained to my account rep, he agreed it was not great and is asking the fund mgmt what the plan is. I doubt there is a lot they can do.
BY getting a job in Denmark in the sector that this pension fund covers. It's a "member-owned pension fund for academics."
is anyone surprised? the IPO documents are a disaster, and the finance-tube talking heads are all tearing it to shreds
Matt Levine described it well (https://www.bloomberg.com/opinion/newsletters/2026-05-21/spa...)
> The deal, with SpaceX, is that Elon Musk runs it however he wants, and he does weird stuff, and you have to trust him, and if you don’t like it you can’t complain.
> When SpaceX acquired xAI a few months ago, did a special committee of independent directors approve the transaction? Did Musk recuse himself from negotiations? Was the price set by independent valuation experts using a rigorous process? Did outside shareholders sue to block the deal? Stop. Musk wanted SpaceX to buy xAI, so it did.
> [...] Surely SpaceX has created all that shareholder value more because Musk does what he wants than in spite of Musk doing what he wants; it is hard to accidentally create $1.75 trillion of value. SpaceX’s shareholders signed up for this deal — letting Musk cook — and have been rewarded;
Isn't that how Facebook is ran too? Basically Zuckerberg's private company, that in theory is public?
Right, if Meta had good governance Zuck wouldn't have been allowed to invest so much in Metaverse.
Facebook is still a Delaware company, with lots of established case law for what Zuckerberg can and can not do, voting majority or not. SpaceX is now some Texas corporation with a state legislature ready to enable whatever Musk wants.
Tech bros reinvent autocracy
It seems like a fine offer to have exist, but one that a pension fund with low risk tolerance wouldn't want to take. So everything seems reasonable with the world.
Similarly I don't understand why indicies are rushing to change their rules to allow SpaceX in. People accept a certain risk tolerance and changing the rules to ramp up the risk seems questionable at best.
Should have renamed the company xGoodwill.
Wouldn't the same argument apply against Tesla?
https://akademikerpension.dk/nyheder/vi-ekskluderer-tesla/
prediction: SpaceX will not escape Earth's gravity. Meaning... what goes up will come down.
again, i’ve been posting this a lot recently, but i still think it’s worth sharing: it’s a summary of an academic paper i wrote, “it’s not finance, it’s your pensions” https://theloop.ecpr.eu/its-not-finance-its-your-pensions/
the piece explains how modern finance is de facto built on the shoulders of the privatization of the welfare state. i find it particularly relevant here: the finance class - in this case musk - wants pensioners money via mutual funds, even modifying the rules of indexing...
it’s not a great sight tbh.
Good. Would love to buy SpaceX stock at a 90% discount after the IPO and the next tech / AI correction.
Imagine not wanting to own a piece of the first company to make a re-usable orbital class booster.
> Imagine not wanting to own a piece of the first company to make a re-usable orbital class booster.
They didn't say they didn't want to own it, they said they wanted to own it at a : "90% discount after the IPO and the next tech / AI correction."
It is possible for a company to be both technically impressive and horrifically overvalued.
I think it's undervalued.
Yeah, I also don't want to eat a tasty morsel if you roll it around in the dirt and serve it up covered in bugs and hair.
And that's basically what SpaceX is right now after you account for xAI and twitter in the mix.
So I'd love to own a piece of the SpaceX from a decade ago - but the current offering smells pretty bad.
Combined with the fact that at this point, Musk clearly isn't opposed to running a business with dramatically inflated valuations based on vaporware, lies, & hype (cough - Tesla - cough) it just makes me far more skeptical than I might otherwise be.
I think caution is warranted here.
Essentially - I want to own the SpaceX that could have been if we didn't end up with the shoddy k-hole version of musk in charge of things.
The current SpaceX is in a far better financial and operational position than 10 years ago. By an order of magnitude. 90% of all payload to orbit right now is SpaceX alone. Starlink is profitable all on it's own. Right now. And they are just now picking up steam. American Airlines just signed onto Starlink just last week. This company is most likely gonna be the Coca-Cola of transportation between celestial bodies in solar system for the next 500 years but people on here are arguing over peanuts. On HN of all places.
I'd love to own SpaceX - what I don't want to own is all the unprofitable, toxic dogshit its ketamine-addled CEO folded into it that has nothing to do with putting stuff into orbit or selling Starlink.
This implies there's no price at which owning SpaceX is a bad idea, which is obvious nonsense.
Don’t make emotional investment decisions!
Imagine buying the most overvalued company of all time helmed by a crazy man who does Nazi salutes. Payback period? Who cares! Orbital class booster yayyyy
The part that gets me is that changing of the rules by exchanges and financial regulators to essentially force mass purchases on a small float. That's disgusting and in a just world, those people would go to jail.
The funny part of all this is that SpaceX has achieved a lot but what might break them, or at least weight them down heavily, is the impulsive and forced purchase of Twitter. Before anyone claims it was some kind of master plan, Elon went to court to get out of it but was forced into it [1].
What happened? Mass firings, pushing his own tweets because his fragile ego couldn't handle Joe Biden getting more likes [2] and Twitter opened the floodgates for hate speech [3] and worse [4]. Advertisers fled. Fidelity (who foolishly was part of the acquisition) massively wrote down the value [5]. Elon had used Tesla shares as collateral and was possibly facing a margin call.
How did he get out of it? Well, in 2023 Elon founded xAI to challenge OpenAI. People invested in this for some reason. And by 2025, Elon merged Twitter with xAI, overvaluing Twitter at $33 billion (which is still down 25% from the purchase) [6].
Now, I imagine the xAI investors were unhappy with Elon using xAI to bail out himself so what did he do? Easy. Make SpaceX acquire xAI of course [7].
Thing is, xAI and Twitter/Grok are a massive drain on SpaceX's finances, losing more than $10 billion annually allegedly [8].
Twitter did not have to end up as part of SpaceX. SpaceX would've been a better company without it. SpaceX already faces headwinds from the incredibly expensive and behind-schedule Starship program. Part of all of this regulatory fixing is to make sure the insiders (and Elon himself) get bailed out.
It's also not the first time [9].
[1]: https://www.pbs.org/newshour/economy/elon-musk-offers-to-end...
[2]: https://www.theguardian.com/technology/2023/feb/15/elon-musk...
[3]: https://www.nytimes.com/2022/12/02/technology/twitter-hate-s...
[4]: https://www.washingtonpost.com/technology/2023/07/27/twitter...
[5]: https://www.axios.com/2023/10/29/fidelity-twitter-x-value-el...
[6]: https://www.fintechweekly.com/magazine/articles/xai-acquires...
[7]: https://www.reuters.com/business/musks-spacex-merge-with-xai...
[8]: https://www.bloomberg.com/news/articles/2025-06-17/musk-s-xa...
[9]: https://www.theverge.com/2016/11/21/13698314/tesla-completes...
It’s obviously a scam. First xai acquires failing Twitter and then SpaceX acquires xai? At a made up valuation number that’s too high? The voting structure of SpaceX prevents Elon from ever being held accountable. Not to mention that the revenue and profits are simply not enough to justify the desired value.
Merging the failling companies into the other ones is the usual Elon thing, Solar City didn't get acqui-merged into Tesla for its great result.
It's not a "scam" in the traditionnal sense, it's riding the bubble while it's there, stock value is "supposed" to be about the company performance and potential but technically it doesn't have to be, it's about what some people are willing to pay for it (the stock, not the product the company sells) and that's all. That's also why tesla has such a valuation.
You can see it in the comments even here and other thread about this IPO, some people read the numbers, and some have just religious sounding comments about it being the biggest revolution ever or making the history book etc ...
And that's also why they need to keep elon as CEO because in the scenario where they remove it and get the best car company CEO and become a great regular car company that works and ships lots of great car ... Their valuation would be reduced a factor of ten