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lucd | on: SpaceX bond worth 10% less than issue price – heading for junk bond status
The worst about the SpaceX IPO is Nasdaq changing their inclusion rules for the Nasdaq 100. The index fast-tracked SpaceX stock for inclusion 15 days after the IPO, instead of the normal three-month seasoning period. They also changed its 10% minimum float rule to a 3x weighting boost for low-float stockss. So many people will unwillingly and prematurely invest into SpaceX, before it has any chance to discover its real price. IE: The floating, 5% at launch, could attain 30% end august, if Nasdaq didn't change their rules it would have included SpaceX after this..

https://finance.yahoo.com/markets/stocks/articles/nasdaq-che...

tavavex | parent | next
So, the inclusion rules are basically "these are the hard limits that specify which stocks are eligible, unless someone really big and lucrative comes along, in which case it's whatever and we'll just adjust the rules to make them eligible"?
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Retric | root | parent | next
Not quite, you can get them changed if you’re willing to announce to everyone that your stock is wildly overvalued and is going to crash.
Obscurity4340 | root | parent
Less of an issue in fascistic dictatorships—time will tell
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bix6 | root | parent | next
Isn’t that how capitalism works in general?

Edit: thanks for the downvotes. Defenders of capitalism unite!!! lol. Free market right?

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phil21 | root | parent | next
No. This is how crony-capitalism works.

You could make a decent argument that capitalism will very likely end-game devolve into crony-capitalism as it's typical failure mode, but I don't think it's written in stone.

It's funny to me. Everyone rails about Atlas Shrugged being some libertarian fantasy story. I always read it as an allegory warning about crony capitalism and how it ruins society along with a story about trains and magical perpetual motion machines.

timacles | root | parent
Socialism capitalism, history shows basically all human systems devolve into corruption regardless of how sound the underlying concepts are.

Which I’m surprised people don’t point out more. What does it matter which system is the best when at the end of the day the powerful people are going to make back room deals to subvert it and that always leads to a feedback loop

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nDRDY | root | parent
Can this be called "Capitalism" when SpaceX is now a public company?
qeternity | root | parent | next
Public in this context just means publicly listed on a stock exchange.

It does not mean it is state-owned.

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randallsquared | root | parent
The word "public" doesn't mean that in this case. It's still a private company.
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formvoltron | parent | next
nah the very worst thing about the spacex ipo is that schwab won't allow me to short it. has nothing to do with the recency of the issue. today i shorted some skhy when i realized it's trading about 30% over the Korean share price (I could be wrong about that)
onlyrealcuzzo | root | parent | next
You can short it elsewhere.

Schwab won't let you, because even if you're 95% right, you'll still probably lose 95% of your money...

It's quite difficult to be 100% right...

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dheera | root | parent | next
You can synthetic short if you have options level 4
chasd00 | root | parent | next
> nah the very worst thing about the spacex ipo is that schwab won't allow me to short it.

there are easier ways to make money than betting against Elon Musk. See Tesla and how well it worked out for short sellers there.

I like SpaceX as a company (especially Starlink) but it's over valued in my opinion. In about a year when there's a little bit of public financial history and the dilution is over i'll probably buy in.

mlinhares | root | parent
The illusion isn't over for Tesla, not a chance it will be over for SpaceX in a year.
runarberg | root | parent | next
I for one am glad that you were not allowed to short SpaceX. People gaming the market for their own profits are the worst kind of exploiters and swindlers. You contribute absolutely nothing while siphoning the profits that workers make, lowering the salaries of everyone that actually works for a living.

Note this has nothing to do with my feelings about SpaceX. I am Elon hater nr. 1 and hope SpaceX burns to dust, I only hope speculative investors burn down with it.

EDIT/CLARIFICATION: This post is fundamentally anti-capitalist. You may feel like I am mis-informed or misunderstanding. I am both of theses things if and only if Capitalism truly is self-evident.

z2 | root | parent | next
Putting one's money where their mouth is in expressing that a company's stock appears overvalued is very low on my list of "things that exploit the proletariat."
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rurp | root | parent | next
What a weird misunderstanding. Shorting reduces fraud in the market, and making it harder to short increases it. There's a reason shady managers had shorts, it increases the chances their bad behavior will be uncovered and punished financially.
positr0n | root | parent | next
How is shorting a stock gaming the market?

You feel a stock is overvalued and you short it. You feel a stock is undervalued and you buy it. What's the difference?

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| root | parent | next
{"deleted":true,"id":48921936,"parent":48921673,"time":1784127769,"type":"comment"}
m000 | root | parent
God forbid an individual makes a profit from shorting. What would be left for hedge funds then? /s
tyre | root | parent
I'm not an investor in SpaceX but I don't think shorting stocks at IPO should be allowed. The market should be given time to settle on a price, and it's unlikely that anyone needs to short it on day 1 for hedging. It's purely price speculation.

Yeah, I know why people _want to_ (betting), but it doesn't serve a broader economic purpose.

reactordev | root | parent | next
Going long or going short is your bet on the market. If you can go long, you should be allowed to go short. Restrictions on any trading means you don’t have confidence in the price in which case it shouldn’t be available for trade.
tclancy | root | parent | next
Betting is what everyone who jumped into retail investing and meme stocks does with it, but shorts are a valuable tool in the economy for hedging risk. It also is a good indicator for fraud too.
clickety_clack | root | parent | next
The market “settling on a price” includes the actions of short sellers.
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shermantanktop | root | parent | next
“Broader economic purpose”?

It’s all betting.

If someone wants to dress it up in jargon or talk about beneficial second order effects, they can. But if putting money on an outcome you can’t control isn’t gambling, I don’t know what is.

names_are_hard | root | parent | next
Is buying insurance gambling? Is giving your second cousin 100k some money so he can open up is restaurant gambling if you expect a percent of the profits but won't actively be involved in advising him on running the business?
KellyCriterion | root | parent | next
Mh.... is there a difference between "betting" and "gambling" from wording here?
quickthrowman | root | parent
Gambling is placing a wager with a negative expected value. If you can gain an edge and have positive EV, it’s not gambling. That’s the distinction between poker and slots. A skilled poker player can take advantage of positive EV positions while slots are programmed to have negative EV. There are traders that have positive EV bets.
lordnacho | root | parent | next
To settle on a price, you need smart investors to be able to push it either way, which they need shorting and leverage for.

Plus there's option traders who naturally need to go short sometimes.

positr0n | root | parent | next
The market will more efficiently settle on a price if market participants can push the price up (buying) and push the price down (shorting).
wredcoll | root | parent | next
I'm not certain you're right, but I think this opinion deserves considerably more (fair) discusson than it's getting.

Lots of replies either personally benefit or just assume the "way things are" is the best, but the stock market has gotten highly abstracted from the original intention of providing capital to grow companies via means other than bank loans.

I get the argument that shorts and friends help make the price the stock is being sold at more accurate, and I believe there's some truth there, but also we constantly see stock prices fluctuate by 10+% in a single day and I have trouble believing the actual value of all these companies changed that much in a single 24 period.

names_are_hard | root | parent
Well the idea that the price of a stock represents the actual value of the company can be complicated but the realization that it's super hard to figure out what the actual value of a company really is, because figuring that out really requires a crystal ball, because you need to know exactly how much money the company will earn in the future, among other things.

None of us have that crystal ball, so market participants try to guess at the future. It's not difficult to believe that those guesses can swing a lot in a single day. Just trying to figure out whether or the Hormuz will be open next week can give you whiplash.

8note | root | parent | next
the company manipulates itself to look its best possible, taking long term bad decisions in order to juice the value, and wont have more immediate items to juice the share price again for a while

its a reasonable expectation that 3 months after an IPO the price will be lower than it was at IPO

not really a bet so much as that on average the prices at IPO are a local maxima

toomuchtodo | root | parent | next
Why is line go up price discovery acceptable, but line go down price discovery not? If the shares are trading, you should be able to short, it’s arbitrary to disallow it. It is quite literally a part of the market settling on a price.

(under the assumption your broker is managing their risk if your losses from a short position potentially exceeds capital available for liquidation if the trade moves against you)

fastball | root | parent | next
Line go down discovery is acceptable (that is what selling a share is). The reason you might not want options trading very early after an IPO is because the market is frothy enough without the additional layer of complexity.
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somenameforme | root | parent
Because lines tend to trend up over time. You're betting on lines going down, and paying rent while doing so as shorting requires you to rent/borrow shares from somebody else. It's an extremely high risk activity that can easily result in an investor losing a very large amount of money.

Elon Musk is politicized so you're going to have people wanting to short against him, for reasons other than it being seen as a rational and sound investment strategy. This is one reason brokers tend to restrict this activity to certain types of investors who are more able to appreciate the risks, to say nothing of baseline necessities like needing a margin account to cover potential losses. Shorting is just very different than buying a stock.

wat10000 | root | parent | next
Borrowing and selling are both pretty straightforward financial actions. It seems strange to say you're not allowed to combine the two.
shafyy | root | parent
Isn't it all speculation always though? That's why stock picking doesn't work and ETFs are popular.
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richwater | parent | next
The Nasdaq is a shit index to begin with. There are so many other options.
dehrmann | root | parent | next
What you didn't elaborate on is that it's a poor investment thesis, so while the association is Nasdaq == tech, it's not entirely true, and it missing things if what you really want is tech. It also penalizes small floats less than S&P 500, enabling these shenanigans.
tyre | root | parent | next
The NASDAQ is up 27% in the past 1 year. S&P 500 up 21%, DOW +20%.

So, it's doing pretty well!

mattkrause | root | parent | next
If the argument is that it's being manipulated, I'm not sure these stats help.
tyre | root | parent
That's fair! I didn't read the comment I was replying to as being about the manipulation but, if so, I agree with their opinion.
hn_go_brrrrr | root | parent
I didn't read it about the manipulation either, but neither did I read it as a criticism of the returns.
staticman2 | root | parent | next
I'm sure people planning to invest for only 1 year of their lifespan and began their investment journey exactly 1 year ago and who are in the process of selling everything they own today never to invest in stocks ever again will find that Nasdaq one year performance very useful information!
jrflo | root | parent | next
NASDAQ is famously overweighted in tech. It saw an 80% drop in the aftermath of the dotcom bubble, while the S&P500 only had a 40% drop. It's a double edged sword, with the AI boom it's benefiting, if that reverses it will fall proportionally to those gains.
groundzeros2015 | root | parent
Yes. A strategy with tradeoffs does not make it a “shit index”.
wildzzz | root | parent | next
And a big chunk of that is the AI bubble. How are the rest of the non-AI industries doing?

https://www.spglobal.com/spdji/en/indices/equity/sp-500-ex-i...

inigyou | root | parent
Interesting, so a shit index is whichever goes down and a good index is whichever goes up?

Does the same rule work in crypto?

tclancy | root | parent
Always a FTSE truther.
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