The "forced buyers" framing is exactly right, and a "the fix is in" analogy practically writes itself. Nasdaq didn't just bend its rules, it revealed what those rules actually were: Negotiable, for the right client. The seasoning period existed to protect passive investors from being force-fed freshly-priced shares before markets had time to discover a fair value. Waiving it doesn't just benefit SpaceX, it sets a precedent that OpenAI, Anthropic and every future mega-IPO will now expect as standard.
The circularity is the real scandal. SpaceX's $1.75 trillion valuation is partly justified by the near-certainty that tens of billions in passive money will flow in mechanically on listing day. The valuation inflates the index weight, the index weight triggers the forced buying, the forced buying supports the valuation. Retail index investors consented to none of it.
Some may call it "dumb money." The more precise term might be "captive money". Nasdaq didn't sell SpaceX to the public. It sold the public to SpaceX.
I only used a spell checker on my text. I have been writing for a living for 40 years https://substack.com/@gunnarmiller , so perhaps the question is whether I had enough of my work floating around such that AI LLMs trained up and started writing in a similar style.
Yeah this is why I don't buy index funds or mutual funds or even an IRA. Captive money is just a fancy word for somebody elses fee generating AUM or exit liquidity.I have complete control at all times.
"Elon negotiated a “fast entry” deal with Nasdaq so that SpaceX will be automatically included in the blue-chip index. That means billions of dollars of passive money will automatically flow into the company as soon as it lists."
It only means that if the mutual fund companies (Vanguard, Fidelity, Blackrock, etc.) that own every company in the NASDAQ decide to actually purchase shares in SpaceX. But mutual fund companies have agency! They can make choices! They could choose simply not to buy SpaceX.
How would they justify such a choice? Easily. Just say that you are only going to include companies in your NASDAQ index that would have been included in the index prior to the recent changes. Make clear that your company thinks the changes to the index are a bad idea and you're not going to waste your investors' money on bad companies.
I don't know what the exact rules are for the NASDAQ, but for the S&P they're pretty clear.
The rules include:
***Every company in the S&P 500 must report positive earnings in the most recent quarter and the sum of its earnings in the previous four quarters must be positive.***
That would exclude SpaceX.
So I feel like retail investors have a play here. If you own shares in a mutual fund indexed to the S&P or the Nasdaq, contact your mutual fund company and tell them that you are boycotting them if they buy the enshittified index.
“I will sell all my shares in your S&P 500 mutual fund (over time, perhaps, if such a sale will trigger tax consequences), and I will never buy another fund from your company again, if your S&P 500 index fund purchases any company that has never shown a full-year profit.”
The S&P can decide to include any company in the index, and individual investors probably don’t have much they can do about it … but if Vanguard, Fidelity, Schwab, and the rest hear from their investors, there will be blowback.
Have you ever heard of Index ETFs? They are more popular than mutual funds. They are based strictly on market caps. The ETFs will take a dive, no matter what.
The mutual fund companies already have invested in SpaceX at prior rounds and their cost is probably in the low single % of what the valuation is now. If anything they will be selling into this market to the retail investors.
The additions to the indexes are a joke. Go look them up they are put into your “target” funds at highs. EMH has gorged itself into stupidity. 38 trillion all in is my estimate . 9-10 years of flat return’s soon!
@Ed - just curous on your thoughts. What are the odds SpaceX/Musk may have pulled losses forward losses into Q1 2026, so that when they do go IPO, their first quarterly financials will appear to be much more positive ????
I used to think elon is the greatest mind ever, nope he isn't. He is the greatest marketer ever! A marketer who attracts talent, who gets valuation, marketer + executioner . But definitely not the greatest mind ever.
Everyone argued about the SpaceX IPO numbers. Almost nobody noticed the rule change behind it. The full investigation: how the S&P 500 is being quietly hijacked, what it means for your 401k, and why it would have made Jack Bogle furious.
“In the single week before the roadshow, the Space Force awarded SpaceX two Golden Dome contracts totaling more than $6 billion. The commercial valuation story for SpaceX asks you to believe in revenue that hasn’t materialized. The government revenue story asks you only to read the federal budget.
Taxpayer funds the program. Retiree buys the stock. Insider exits at the top.”
You doubt the marketing genius of a guy who gave Nazi salutes and trashed all his Tesla brand proselytizers only to try to replace them with MAGA buyers who have been force fed EV disinformation by proxies for fossil fuel billionaires? The glaring thing about this is how he officially establishes himself as a CEO tyrant…he can’t be fired…unless he agrees to it. What a capitalist and a sign of how far we have fallen as a nation. Oh, and Mars is completely toxic and uninhabitable.
The S-1 shows the massive capex to build the infrastructure, but completely leaves out the impending revenue from Anthropic using Cerberus + whatever is coming. SpaceX isn't just funding Elon's AI; they're acting as a hyperscaler to the rest of the market.
“Put another way, SpaceX is growing seven times slower while asking for a multiple ten times higher. Pass me the crack pipe.”
Brilliant Ed; however, I don’t think you’re thinking like a true capitalist or at least like this breed of capitalists (our minds aren’t as diabolically imaginative or morally bankrupt)!
Remember, Trump and Musk aren’t complete idiots! Think of the holy grail: NASA’s proposed 2026 budget is being cut by 24% — from $24.8 billion to $18.8 billion—which would be the agency’s smallest budget since before Apollo 11.
Moreover, nearly all parts of NASA faces deep cuts except human exploration, which gets a $1 billion boost specifically for Mars-focused programs—HELLO?????
In addition, the budget proposes canceling NASA’s own Space Launch System rocket and Orion capsule — while boosting Mars programs aligned with Elon Musk’s vision at SpaceX.
Get my point? Perhaps this is a deliberate attempt to starve the beast, making NASA fully dependent on SpaceX.
And let’s face it, privatization is the goal—and who do you think will get lions share of NASA (after Trump gets his cut-a piece of the deal); Blue Origin?—I think not!
Not to mention, they’ve already talked of dismantling the ISS and replacing it with a private consortium of commercial space stations—to be cost effective of course.
So maybe the valuation isn’t as bad as you think—once you consider the assets that will be given away in a fire sale. Just some thoughts…:)
Fair enough; however, It’s the 70 years of technology and institutional knowledge, plus the infrastructure that comes with it.
And you’re assuming NASA’s budget wouldn’t increase if it was dismantled and put in the hands of private companies.
Don’t forget that the military has a SPACE Force; you can be damned sure their budget will be bigger every year, and SpaceX will be a major supplier—if Musk stays on Trump’s good side.
My point, there are lots of ways contractors can make money once they’re approved for Top Secret projects—they’re black budgets—no bid contracts, that’s all I’m saying.
Ed’s analysis is brilliant, and if he’s right, and I think he is, the stock should fall on day one; no different than Facebook did when it went public and the price dropped in half before rebounding weeks later.
Although if history is an harbinger for Musk, then it may not matter. Tesla has a market capitalization of $1.63 trillion. Putting it into perspective that makes it bigger than the market caps of Toyota, BYD, GM, Ford, Hyundai, Kia, Mercedes-Benz, Stellantis, Geely, Ferrari, BMW, Volkswagen, Honda, Nissan, Renault, Xpeng, and NIO combined—yet still comes to roughly $1.16 trillion — about $130 billion less than Tesla alone.
So ask yourself why? It’s because of perception, not reality. Musk claims his company is less of an Innovative car manufacturer, and more of an innovative AI/tech/growth company—without the innovation and growth!
Look, I’m speculating, but each year SpaceX continues to get additional NASA contracts. All I am suggesting is that perhaps the business plan includes NASA down the road—or not!…:)
The fy2026 24% budget reduction for NASA was nixed by Congress this year.
They’ll try again for fy2027 but it’ll be a fight. If it doesn’t pass this year, and the Dems have Congress after the midterms, starting in January, hopefully it won’t pass at all.
Just this week Anthropic closed its funding round at 965bn, implying Price/ARR of 21x on 47bn of current ARR. Musk offers you to buy the future xAI turnaround at 56x revenue. (reported Goldman 2026 projection for xAI + Starlink 1Q revenue + Launch 1Q revenue).
Anthropic has 47B ARR, valued at 965B (round closed just this week!) P/ARR 21x. OpenAI ARR 33B, valuation 852B, P/ARR 26x, SpaceX 31B expected 2026 revenue, valuation 1.75T, P/Revenue 56x
To be clear, I am very bullish on AI, I believe it will transform our lives and economy. I would be all in in Anthropic and OpenAI rounds – they have proven great products, market fit and show real growth.
xAI price implies a premium, however the facts show that they deserve a discount so far.
In the ipo info does it break out what Starlink pays to get its satellites into orbit. Any idea if it is a reasonable price or a lowball price that lets them seem profitable
The "forced buyers" framing is exactly right, and a "the fix is in" analogy practically writes itself. Nasdaq didn't just bend its rules, it revealed what those rules actually were: Negotiable, for the right client. The seasoning period existed to protect passive investors from being force-fed freshly-priced shares before markets had time to discover a fair value. Waiving it doesn't just benefit SpaceX, it sets a precedent that OpenAI, Anthropic and every future mega-IPO will now expect as standard.
The circularity is the real scandal. SpaceX's $1.75 trillion valuation is partly justified by the near-certainty that tens of billions in passive money will flow in mechanically on listing day. The valuation inflates the index weight, the index weight triggers the forced buying, the forced buying supports the valuation. Retail index investors consented to none of it.
Some may call it "dumb money." The more precise term might be "captive money". Nasdaq didn't sell SpaceX to the public. It sold the public to SpaceX.
Well said! Bravo!👏
I don’t think I’ve seen a more obvious ai comment than this lol
I only used a spell checker on my text. I have been writing for a living for 40 years https://substack.com/@gunnarmiller , so perhaps the question is whether I had enough of my work floating around such that AI LLMs trained up and started writing in a similar style.
Yeah this is why I don't buy index funds or mutual funds or even an IRA. Captive money is just a fancy word for somebody elses fee generating AUM or exit liquidity.I have complete control at all times.
"Elon negotiated a “fast entry” deal with Nasdaq so that SpaceX will be automatically included in the blue-chip index. That means billions of dollars of passive money will automatically flow into the company as soon as it lists."
It only means that if the mutual fund companies (Vanguard, Fidelity, Blackrock, etc.) that own every company in the NASDAQ decide to actually purchase shares in SpaceX. But mutual fund companies have agency! They can make choices! They could choose simply not to buy SpaceX.
How would they justify such a choice? Easily. Just say that you are only going to include companies in your NASDAQ index that would have been included in the index prior to the recent changes. Make clear that your company thinks the changes to the index are a bad idea and you're not going to waste your investors' money on bad companies.
I don't know what the exact rules are for the NASDAQ, but for the S&P they're pretty clear.
The rules include:
***Every company in the S&P 500 must report positive earnings in the most recent quarter and the sum of its earnings in the previous four quarters must be positive.***
That would exclude SpaceX.
So I feel like retail investors have a play here. If you own shares in a mutual fund indexed to the S&P or the Nasdaq, contact your mutual fund company and tell them that you are boycotting them if they buy the enshittified index.
“I will sell all my shares in your S&P 500 mutual fund (over time, perhaps, if such a sale will trigger tax consequences), and I will never buy another fund from your company again, if your S&P 500 index fund purchases any company that has never shown a full-year profit.”
The S&P can decide to include any company in the index, and individual investors probably don’t have much they can do about it … but if Vanguard, Fidelity, Schwab, and the rest hear from their investors, there will be blowback.
Have you ever heard of Index ETFs? They are more popular than mutual funds. They are based strictly on market caps. The ETFs will take a dive, no matter what.
The mutual fund companies already have invested in SpaceX at prior rounds and their cost is probably in the low single % of what the valuation is now. If anything they will be selling into this market to the retail investors.
The additions to the indexes are a joke. Go look them up they are put into your “target” funds at highs. EMH has gorged itself into stupidity. 38 trillion all in is my estimate . 9-10 years of flat return’s soon!
SP500 is likely to change its rules as well....so much that that. Won't need 4 quarters if earnings. Passive doesnt exist.
https://www.businessinsider.com/spacex-ipo-index-investing-etfs-spy-vti-qqq-spcx-stock-2026-5
IPO = It’s Probably Over
(the easy gains for the exit-liquidity retailer)
Funny;
@Ed - just curous on your thoughts. What are the odds SpaceX/Musk may have pulled losses forward losses into Q1 2026, so that when they do go IPO, their first quarterly financials will appear to be much more positive ????
I used to think elon is the greatest mind ever, nope he isn't. He is the greatest marketer ever! A marketer who attracts talent, who gets valuation, marketer + executioner . But definitely not the greatest mind ever.
Everyone argued about the SpaceX IPO numbers. Almost nobody noticed the rule change behind it. The full investigation: how the S&P 500 is being quietly hijacked, what it means for your 401k, and why it would have made Jack Bogle furious.
https://wavesandpositions.substack.com/p/retirement-heist-trojan-horse-in
Great article thank you.
You wrote:
“In the single week before the roadshow, the Space Force awarded SpaceX two Golden Dome contracts totaling more than $6 billion. The commercial valuation story for SpaceX asks you to believe in revenue that hasn’t materialized. The government revenue story asks you only to read the federal budget.
Taxpayer funds the program. Retiree buys the stock. Insider exits at the top.”
⬆️Says it all.
You doubt the marketing genius of a guy who gave Nazi salutes and trashed all his Tesla brand proselytizers only to try to replace them with MAGA buyers who have been force fed EV disinformation by proxies for fossil fuel billionaires? The glaring thing about this is how he officially establishes himself as a CEO tyrant…he can’t be fired…unless he agrees to it. What a capitalist and a sign of how far we have fallen as a nation. Oh, and Mars is completely toxic and uninhabitable.
Wow. Smoke AND Mirrors.
Good thing we have regulators. No?
“skyrocketing expenses…”
Because they’re launching rockets into the sky? 😆
ISWYD
The S-1 shows the massive capex to build the infrastructure, but completely leaves out the impending revenue from Anthropic using Cerberus + whatever is coming. SpaceX isn't just funding Elon's AI; they're acting as a hyperscaler to the rest of the market.
“Put another way, SpaceX is growing seven times slower while asking for a multiple ten times higher. Pass me the crack pipe.”
Brilliant Ed; however, I don’t think you’re thinking like a true capitalist or at least like this breed of capitalists (our minds aren’t as diabolically imaginative or morally bankrupt)!
Remember, Trump and Musk aren’t complete idiots! Think of the holy grail: NASA’s proposed 2026 budget is being cut by 24% — from $24.8 billion to $18.8 billion—which would be the agency’s smallest budget since before Apollo 11.
Moreover, nearly all parts of NASA faces deep cuts except human exploration, which gets a $1 billion boost specifically for Mars-focused programs—HELLO?????
In addition, the budget proposes canceling NASA’s own Space Launch System rocket and Orion capsule — while boosting Mars programs aligned with Elon Musk’s vision at SpaceX.
Get my point? Perhaps this is a deliberate attempt to starve the beast, making NASA fully dependent on SpaceX.
And let’s face it, privatization is the goal—and who do you think will get lions share of NASA (after Trump gets his cut-a piece of the deal); Blue Origin?—I think not!
Not to mention, they’ve already talked of dismantling the ISS and replacing it with a private consortium of commercial space stations—to be cost effective of course.
So maybe the valuation isn’t as bad as you think—once you consider the assets that will be given away in a fire sale. Just some thoughts…:)
For a $2 trillion company, all of NASA's $18.8 billion budget is chump change.
Fair enough; however, It’s the 70 years of technology and institutional knowledge, plus the infrastructure that comes with it.
And you’re assuming NASA’s budget wouldn’t increase if it was dismantled and put in the hands of private companies.
Don’t forget that the military has a SPACE Force; you can be damned sure their budget will be bigger every year, and SpaceX will be a major supplier—if Musk stays on Trump’s good side.
My point, there are lots of ways contractors can make money once they’re approved for Top Secret projects—they’re black budgets—no bid contracts, that’s all I’m saying.
Ed’s analysis is brilliant, and if he’s right, and I think he is, the stock should fall on day one; no different than Facebook did when it went public and the price dropped in half before rebounding weeks later.
Although if history is an harbinger for Musk, then it may not matter. Tesla has a market capitalization of $1.63 trillion. Putting it into perspective that makes it bigger than the market caps of Toyota, BYD, GM, Ford, Hyundai, Kia, Mercedes-Benz, Stellantis, Geely, Ferrari, BMW, Volkswagen, Honda, Nissan, Renault, Xpeng, and NIO combined—yet still comes to roughly $1.16 trillion — about $130 billion less than Tesla alone.
So ask yourself why? It’s because of perception, not reality. Musk claims his company is less of an Innovative car manufacturer, and more of an innovative AI/tech/growth company—without the innovation and growth!
Look, I’m speculating, but each year SpaceX continues to get additional NASA contracts. All I am suggesting is that perhaps the business plan includes NASA down the road—or not!…:)
The fy2026 24% budget reduction for NASA was nixed by Congress this year.
They’ll try again for fy2027 but it’ll be a fight. If it doesn’t pass this year, and the Dems have Congress after the midterms, starting in January, hopefully it won’t pass at all.
But overall good comment.
Agreed and well said!…:)
Content aside, this was extremely well written. Bravo
At the public IPO, it will fleece retail investors.
The good private opportunities have passed.
Historically, like many IPOs, the public would be better off waiting a beat to see a better entry opportunity.
Just this week Anthropic closed its funding round at 965bn, implying Price/ARR of 21x on 47bn of current ARR. Musk offers you to buy the future xAI turnaround at 56x revenue. (reported Goldman 2026 projection for xAI + Starlink 1Q revenue + Launch 1Q revenue).
Anthropic has 47B ARR, valued at 965B (round closed just this week!) P/ARR 21x. OpenAI ARR 33B, valuation 852B, P/ARR 26x, SpaceX 31B expected 2026 revenue, valuation 1.75T, P/Revenue 56x
To be clear, I am very bullish on AI, I believe it will transform our lives and economy. I would be all in in Anthropic and OpenAI rounds – they have proven great products, market fit and show real growth.
xAI price implies a premium, however the facts show that they deserve a discount so far.
Blunt but I appreciate the honesty, thanks for sharing
In the ipo info does it break out what Starlink pays to get its satellites into orbit. Any idea if it is a reasonable price or a lowball price that lets them seem profitable