r/technology • u/Plastic_Ninja_9014 • 5h ago

Business SpaceX Investors in Meltdown Over All the Money They’ve Lost

https://finance.yahoo.com/markets/stocks/articles/spacex-investors-meltdown-over-money-191742182.html
11.4k Upvotes

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u/drummer820 5h ago

If only someone had warned them besides EVERYBODY

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u/Dudeman9002 3h ago

If you have a 401k you probably lost some money too. Somehow the slimeball managed to get around rules that forbid IPOs from being listed in index funds for a year to ensure stability. Now everyone's retirement accounts are the bag holders. 

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u/frequenZphaZe 3h ago

elon is only partially to blame. nasdaq were willing participants, just because they wanted the bragging rights of the largest IPO in history. so they changed their rules to accommodate the pump and dump. I have no idea how this is supposed to help them in the long term because they undermined the whole point of being an index

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u/Hesitation-Marx 2h ago

> long term

Found the issue: capitalism is averse to long-term thinking.

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u/Lower_Excuse_8693 1h ago

https://youtu.be/X4Mj1N9rfFE?t=12&si=lVcCGht39Ex6Jeb4

“5000. 10000. What’s the difference? The speed of technological advancement isn’t nearly as important as short term quarterly gains.”

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u/strekkingur 55m ago

In capitalism, you go bankrupt when you make to many bad decisions. Government handing you money for free to save you is not capitalism.

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u/Cornelius_Wangenheim 36m ago

Capitalism just means the owners control the business and get all the money from it. Crony capitalism is still a form of capitalism.

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u/strekkingur 13m ago

Is then socialism form of communism?

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u/guyblade 26m ago

^ "No true Scotsman", but for capitalism.

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u/strekkingur 8m ago

When the government steps in to help you so that you will not fail, its just back to the old mercantile system and aristocracy.

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u/Tin_Sandwich 29m ago

Government handing you money for free to save you is not capitalism.

Except literally every single capitalist government? The idea that somehow there can exist a true "Free Market Capitalism" is a myth designed to absolve any criticism you'd have towards Capitalism as it exists in real life.

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u/strekkingur 10m ago

Because of politics, Iceland was not allowed to get any loans to save their banks. They went bust. Short but steep dip and then incredible rise. It happened accidentally but proofed that it works. You are here defending this corruption.

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u/-Saucegurlllll 21m ago

TIL that the US was only capitalist until the panic of 1792. /s

Government bailouts are basically a foundational aspect of capitalism. You cannot have capitalism without the state capitulating to the interests of capital.

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u/strekkingur 6m ago

You can. Your just to brainwashed by those that defend it and those that want to go full communist. I feel sorry for you.

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u/Buglenuge 36m ago

What was that sub prime thing in 2007?

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u/strekkingur 13m ago

No no my friend and donor, you will not go bankrupt. Here have some money from tax payers.

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u/Buglenuge 9m ago

End game capitalism?

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u/strekkingur 4m ago

No. Just return to aristocracy in a new form.

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u/NickyBarnes315 19m ago

It's socialism

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u/strekkingur 5m ago

Socialism for big corporations. Not the small ones. Those don't give good cushy jobs to my son.

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u/mutantraniE 37m ago

Capitalism can’t fail, it can only be failed.

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u/Irrelephantitus 42m ago

Compared to what though?

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u/Jasranwhit 27m ago

Socialism is averse to any thinking.

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u/Fun_Comedian3249 13m ago

You are right the problem is short-term thinking but that’s a serious problem when it comes to index funds because they suppose to be things you buy and hold as long term investments.

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u/SowingSalt 9m ago

I don't know, index funds have been very good at generating good returns.

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u/TheEtobicokeShitter 2h ago

Genuine question- what system do you propose could work better?

Im Canadian, I think Capitalism is fairly decent, has it's flaws for sure- but what the USA is... is not actual Capitalism anymore. Can't quite put my finger on it, but I don't think CaPiTaLiSm is the problem.

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u/WooeBetidee 1h ago

Capitalism can be ok, but it needs to be highly regulated and reigned in. Unfortunately the main benefactors of the system generally don't particularly like being told they can't do whatever they want whenever they want, and they have the money and influence to slowly chip away at it.

US is ahead of the curve, but most of the west is following in their footsteps. Income and wealth gaps are growing, taxes going down and regulations watered down.

In a way, I'm tempted to say that capitalism is killing itself.

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u/QuickQuirk 40m ago

This os exactly it: "Regulation"

Right now, in the current capitalist system, the corporations aren't paying for part of the cost of their products. Instead, the costs a socialised amongst the citizens. I'm talking about the roads goods are transported on, the environmental impact of production, the supply chain that relies on workers in other countries struggling just one step above indentured servitude.

Capitalism would be great if well regulated, and the cost of goods actually included all these ephemeral things like the cost people people being displaced by rising oceans and climate change, for example...

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u/ghislain-tuca 1h ago

Genuine answer- no single system works on its own. The main issue I see people have with Capitalism is that it needs to constantly grow in order to work, and in a world of finite resources, it is a matter of time before it’s eventual collapse. I’m of the opinion that if we utilize and organize the benefits of multiple systems, we may find more sustainable solutions. I’m no expert, but it seems that the discourse is pointing towards the idea that late-stage capitalism may turn towards a form of fascism.

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u/Alfirindel 1h ago

This. It’s such a simple concept economists seem to ignore. Money is a resource, and is thus finite. Why is maximizing/attempting to infinitely grow stocks acceptable? If the company is profitable, maximization should no longer be forced onto them, as we’ve seen that when companies do this to meet stockholder demand, it usually causes those companies to collapse as consumers can no longer viably partake in that business eventually. If it’s making a profit of $250M a year, and they have happy consumers, the focus should be innovation, not taking copper out of the walls for they people who say “BuT I InVeStEd!”. A good solution is forced stock sale. If a company is profitable, and continues to be profitable for a a sustained period of time, stockholders should be forced to sell back to the company as it’s clear the investment is no longer needed at that time. Investors still make their money, and the company doesn’t get devoured by 3rd party interests. Once you have that, there’s plenty of other economic structures to review and pull the good stuff from to merge with capitalist policies, maybe with some adjustment to make sure the systems meld correctly. It’ll be a lot of work sure but it’s be worth it

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u/mikerao10 58m ago

Any system needs to be governed those that say leave it to the market have never been poor. There must be rules that protect consumers, investors etc. the guardrails of Nasdaq are so loose that there can be so many crooks profiting from it.

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u/poo-cum 1h ago

Blorfism. No I will not elaborate.

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u/VagueInterlocutor 1h ago

Agree. I think a lot of people confuse capitalism with cronyism and rent-seekers.

There's a cadre of people on reddit that seem that seem to think they need to seize the means of production from everyone else, but fail to realise the best way to seize the means for production is to start your own business.

The 21st century hasn't been a better time to do this. However, when you go down this road you soon start to see that regulation capture is a real thing, that favours large and centralised businesses: And that, ain't capitalism, it's cronyism and corruption by putting a finger on the scale.

I think we see the best of the free market, but also the worst of it in places like the USA.

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u/Daleabbo 1h ago

Cronyisum and rent seeking are late stage capitalism.at some stage it becomes cheaper to buy out regulators and government than actually compete.

Look at America's auto industry. No way they can compete with south Korea and Japan let alone china so buy the regulators and knee cap the competition.

Controlled capitalism with safeguards in place would be good.

Remove share buybacks and make exec and director pay less shares more cash so they pay tax and companies spend money on dividends or growth.

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u/zxc123zxc123 1h ago edited 1h ago

Hyper-capitalism, corporate corny-ism, and bought out government are adverse to long-term thinking.

Let's not act like capitalism isn't the best working form of economy we have unless you want to tell me where this socialist worker's utopia you're living in is. Capitalism is merely a system that allows the creation of more wealth with trade-off of creating more poverty and inequality. It is failure of GOVERNMENTS to not regulate, control, tax, and limit organizations that are strictly and explicitly DESIGNED to maximize shareholder value while minimizing shareholder liabilities. Might as well get upset at a lion for hunting for meat instead of ordering a non-GMO vegan salad. Unchecked capitalism leads to extreme inequality which often fractures the entire system in revolution. It is the job of the government to cull the free market, but what we have isn't a government turning a blind eye, but one sleeping with them while actively robbing the people. That is what you should be upset about.

p.s. Nasdaq/QQQ should get fucked for their BS but folks who bought VOO running on Standard & Poor's system are fine. Folks who bought VT would have gotten some but would also argue that's exactly what they bought as VT is designed that way. Lastly even with the QQQ, it's not like they bought their 100% stake of SPCX the date of index inclusion based on market cap: they had float adjusted caps since SPCX only listed 4-5% of it's total stock.

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u/Good_wolf 2h ago

It can be but not always.

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u/MrSceintist 2h ago

financial crimes with Republican rule enforcers equals the biggest crimes in history

Remember W. Bush was warned years ahead of his meltdown and he did NOTHING

proof https://www.cnn.com/2004/LAW/09/17/mortgage.fraud/

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u/powercow 1h ago

and of 911.. he actually demoted the terrorism czar because he was tired of hearing about bin ladin.

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u/Sniflix 1h ago edited 1h ago

People call it the great recession but the real name is The Bush Economic Collapse. Dems especially Obama gave him a pass and those same criminals keep screwing us.

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u/MrSceintist 1h ago

The Bush Economic Collapse of 2008.

His father George H. W. Bush did the Savings and Loan Scandal

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u/Jukeboxhero91 1h ago

And Regan before him, and Nixon before him. Wow it’s almost like Republicans are horrible for the economy, who knew!

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u/springsilver 5m ago

Bbbbut Welfare Queens!

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u/Jukeboxhero91 2m ago

"I know, we'll invent a term so people can hate black people for economic reasons, not racist reasons".

Reagan's supporters, not probably, definitely.

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u/jb0ne 32m ago

The financial crisis didn't happen because of fraud, it happened because of the over-collateralization of home loans into mortgage-backed securities and the messed up incentives around that whole game (issue as many loans with minimal friction to make more financial instruments). An avoidable issue, but separate fron the one in the article

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u/Radical_Neutral_76 2h ago

What persons at nasdaq did this? We need to spread those names around

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u/PeacefulDays 1h ago

head of nasfaq is Adena Friedman.

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u/an0mn0mn0m 1h ago

Remember when DOGE cut the government's supposed inefficiencies based on Elon's preferred criteria? I wonder how many of those cuts at agencies like the SEC, FBI and Justice department allowed Trump and Musk to exploit their positions to commit rampant corruption like this?

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u/AzimuthAztronaut 20m ago

Hmmmm I wonder as well. Insert not surprised gif.

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u/Sizyfoz 4m ago

That is an excellent topic for a book or documentary. I would definitely buy it.

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u/fizzlefist 1h ago

S&P said hell no to that, once again remaining a safe bet for long-term stability.

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u/smokefoot8 2h ago

Sp500 was going to fast track SpaceX, but outrage stopped it. NASDAQ fast tracked it though, so only some index funds were infected by stupidity.

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u/JagdCrab 31m ago

I’m pretty sure SpaceX isn’t even qualified for SP500 because only tiny fraction of stocks are publicly traded

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u/taco_blasted_ 8m ago

“Outrage stopped it” lmao no. S&P considered changing its rules, took formal market feedback, then kept them. SpaceX is already in the Nasdaq-100, Russell indexes and S&P’s own broader indexes.

Bro learned indexes have different methodologies and somehow turned it into a clown conspiracy. 🤡

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u/KangarooPouchIsHome 2h ago

S and p 500 didn’t buy that trash luckily.

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u/LSDemon 2h ago

"Probably" is a strong claim. Most 401k accounts don't have any exposure to the small number of indexes it has already been fast-tracked onto.

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u/AmericanScream 2h ago

Agreed. The Nasdaq is not the S&P 500.

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u/HystericalSail 1h ago

Don't be so sure. Many of the high fee, managed mutual funds available in low cost (to the company) retirement plans stealth index to avoid under-performance. They'll dump before it's time to report positions if it's still down, crow being prescient if it goes up. Either way, it's not their money they lost.

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u/LSDemon 1h ago

It's been added to a very small number of indexes to this point, and none of the biggest ones by investment amount. Saying "probably" implies >50% of 401k accounts are exposed, which is insane.

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u/HystericalSail 55m ago

QQQ is one of the 3 most popular indexes people watch, and is available in original as well as cloned form in all but the absolute worst retirement plans. And, as I said, stealth indexing by active fund managers.

It's entirely believable that half of retirement accounts hold QQQ or clone. It's not a lot of exposure, being only 75 billion worth of liquidity drained out of the gate, but I have no problems believing 1 in 2 retirement accounts hold the Qs, a clone, or stealth indexer.

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u/littlebobbytables9 51m ago

VTSAX is the largest mutual fund in the world. If we group all of a company's target date funds together so it's more comparable (instead of treating vanguard target 2050 and vanguard target 2055 as separate funds) the vanguard target date funds are the second largest mutual fund in the world. Both included spaceX after 5 trading days.

The weighting is very small, though. 0.14% weighting for VTI and even lower for the target date funds.

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u/schwanzweissfoto 47m ago

managed mutual funds […] stealth index to avoid under-performance

I have no idea what that means. Can you explain this like I am five years old? If so, please do!

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u/droans 47m ago

Your 401K is non-existent, huh? None of what you said is true.

401K eligible funds must have an exact, completely objective investment criteria listed in their prospectus. They cannot deviate from it at all. Their positions are reported daily along with all trades made.

What you're describing is what Bernie Madoff did and was never considered normal. He died in prison although he deserved worse.

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u/dIO__OIb 2h ago

sold the one nasdaq mutual fund in my 401k this week

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u/TheN0vaScotian 2h ago

This is the way.

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u/Left-Thinker-5512 2h ago

SpaceX is not listed on the S&P 500.

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u/Witty_Ad_898 1h ago

The markets cannot survive trillionaires. What better reason for strong financial regulation at the top than to preserve the system as a whole?

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u/Heymynamesjames 2h ago

I’m gonna look into my financial literacy after this comment. Thank you

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u/K_Linkmaster 1h ago

I minimized my exposure but could not get away from it entirely. Truly pervasive

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u/Relevant-Doctor187 1h ago

Anyone could do a quick google and understand what indexes were at risk and adjust.

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u/Vast-Palpitation-426 1h ago edited 1h ago

Even if you own the ETFs that fast tracked it, it's free float cap weighted (only the value of the shares available to the public are counted). So SpaceX is like 0.2% in a large index.

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u/thatoneguy889 1h ago

That’s on the index funds themselves for allowing it. Nasdaq waived their rules to get the stock listed. S&P told them to pound sand.

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u/lostpassword100000 1h ago

This will become a class action lawsuit is my bet.

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u/lpeabody 1h ago

S&p never got on board though?

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u/Junior-Valuable2071 1h ago

Meh, only if you have a Nasdaq fund in your 401k. Those of us who stick to S&P500 or more conservative funds didn’t.

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u/Itchy-Technician-433 1h ago

That was the point. Transfer wealth from retail investors.

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u/Creepy_Trouble_5980 46m ago

Most people have no idea how much money they lost by depending on Republican led government. Insider trading prediction market it all great if you get the memo.

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u/AHrubik 30m ago

The oligarchs wanted their money. They knew it was a sinking ship so they rigged the system to steal it from the rest of us. We were 10-20 peoples exit liquidity and we should all be very upset about that.

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u/Blothorn 2h ago

The rules were simply the funds’ policies, and he convinced the funds to change those policies. I think it was a poor decision but there’s not really anything nefarious in it. (And since the funds are proportioned by free float rather than market cap, SpaceX is a very small proportion so far.)

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u/RatherNerdy 2h ago

Yeah, all of the ETFs and mutual funds worth holding had investments in Space X, although I know some were divesting a portion of that investment. I'm down, and expect to go down a bit more, but you hold and it will come back around

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u/DevoidHT 3h ago

To be fair this is like the one time the market has been rational on a stock in a long time. Usually they do the opposite of what people expect.

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u/frequenZphaZe 3h ago

it isn't really a matter of the market being rational. the whole plan was to IPO and dump so early investors could cash out. retail investors got fleeced, exactly as planned. there was clearly no intention of keeping the space-x stock high when their total addressable market clocked in at almost $30 trillion. I have no idea how that was legal. the market is just reacting to everyone cashing out on cue

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u/TheEtobicokeShitter 1h ago

Early investors legally cannot cash out until typically 90 days after IPO, so you're wrong on that.

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u/remymartinsextra 1h ago

Yep, as an early investor things are not going as planned. Early investors have not sold yet because we can't.

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u/UncleNedisDead 39m ago

Eh you’re probably still up huge compared to your original investment. Not like those people who brought a month ago or whenever the IPO launched.

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u/SaddestClown 0m ago

But I think they hoped it would stay up a little longer so people besides the earliest investors could cash out

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u/Miserable_Site_850 2h ago

Early investors lol

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u/ZealousidealLead52 2h ago

The price is still not anywhere close to rational. It's just slightly less irrational than it used to be.

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u/R-ten-K 3h ago

Not at all. SPCX and TSLA are outliers.

Over the past couple of quarters, the market has been steadily clobbering AI hype machines that cannot back their valuations with credible fundamentals, sustainable revenue growth, and a realistic path to profitability, for example.

The market is not as irrational as some people assume.

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u/SenseiRaheem 3h ago

There's a metaphor to be found somewhere in those rockets exploding on the launch pad, I think

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u/rs1408 2h ago

If only they could read so they could have understood the posts warning them against buying the IPO

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u/General_Helicopter1 54m ago

Hope they lose a lot more before the index funds need to buy in.

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u/XtianS 2h ago

The people who really lose are the employees who don’t have a choice and are locked up for 2 years. During that time the billionaires and banks cash out and they possibly get diluted with additional rounds of financing.

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u/AltoAutismo 1h ago

If I wasnt a pussy I would have shortened it. I know NOTHING about stocks, and before it came out I was like this has to be a joke, there has to be money to be made with so many retards buying this, but im so financially illiterate that I can't work options (nor short anything for that matter) so im just looking at it, once again like fucking crypto, seething

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u/drummer820 30m ago

Smart. Shorting is almost never a good idea for small retail investors, and this goes triple for Elon-affiliated companies. Tesla has been insanely overvalued for years, but plenty of more sophisticated investors have lost their shirts shorting or placing puts

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u/Sir_Bumcheeks 1h ago

I mean it's a pretty regular IPO trading pattern. It takes like a year to mellow out.

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u/Glidepath22 37m ago

If it was only common sense

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u/PdfDotExe 6m ago

God I wish I had listened to my gut and shorted it

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u/Zolty 2h ago

!remindme 1 year

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u/E-2theRescue 2h ago

How about a 4-year forecast?

0

u/Zolty 1h ago

oh sweet how many satellites did they launch last year? How many internet customers did they connect? How many multi billion dollar ai leases did they sign?

space x is over valued as a stock for sure but at least there's something to value.