Hacker News

When index funds became such a default I knew they’d change the rules.

They’re taking everything thats not nailed down. A wealth tax is the only way, it cannot continue like this.

Wow! This comment inspired me to dig deeper.

After 20+ years in the market, today I learned: "The S&P 500 is a float-adjusted, market-capitalization-weighted index."

So presumably an S&P 500 index fund is not disadvantaged, since it is tracking a float-adjusted index, i.e. the weight of SpaceX will be tiny if its float is tiny.

Or, is there a nuance that I'm missing?

> An passive investors are going to get hosed by this thanks to NASDAQ cooking the rules

I’m genuinely confused how a passive investor winds up tracking the NASDAQ 100 versus a broader index.

Also, if you’re picking and choosing your exposures, you aren’t passive.

Now I need a fund that will honor a year of price discovery rather than 15 days. Any recommendations?

Huh, TIL, thank you.

Seems like MSCI can add new large constituents very quickly as well [1], so to remain neutral to the frenzy until a price has been discovered, one might need to actively short.

[1] e.g. https://www.msci.com/eqb/methodology/meth_docs/MSCI_GIMIMeth...

They’re also reducing the float requirements, which is absolutely insane. As a passive investor with significant assets outside of tax-protected retirement accounts, I am beyond livid. If I have to switch investments to move away from the rules being changed out from under me, it will result in enormous tax consequences.

I don’t tend to let my emotions out this much here, but utterly fuck everything about this administration, and fuck anyone who voted in favor of it.

Does the hype cycle even last 15 days in 2026? It seems like they stabilize after a day or two. Happy to be proven wrong here…

xAI's valuation comes from an internal transfer of Elon's. Elon has stated it's worth 258B and that's the only data point to go by.

It's absolutely bonkers and wrong but it's unlikely to raise to the level of actual misrepresentation.

As I wrote in the piece, I'm extremely skeptical that xAI should be valued as if it is a frontier lab.

But as you say, going back to the xAI + SpaceX merger, analysts consistently seem to value it as if it is, so I predict the public will too, at IPO time.

It’s absolutely ludicrous that xAI is thrown into the mix at that valuation. They’re not even a player in AI other than providing Grok slop for twitter.

Even if you think those are standard numbers and you're banking on growth, or whatever, I don't see any way anyone rational (or even a semi-rational AI bull) could convince themselves xAI isn't an absolute garbage company.

For $380B you can get both AT&T and Verizon and you pay ~1.55x the revenue. Why pay 38x for Starlink?

Yeah, it's wild. But it's not like the P/E should be 30, what do you think would be fair?

That's the thing about SpaceX, some businesses are real businesses that can be modeled in normal ways, like the government launch contracts, and to some degree starlink.

Others, like ~all of xAI, and the starship stuff, are being valued completely independent of revenue. I predict the IPO investors will generally follow the analysis consensus today with those eye-popping numbers.

It's hard to imagine this turn into 50-60% short term banger starting from a $1.75T market cap, I wonder if people will actually trip over themselves to buy. I had been thinking I wanted to jump on it to flip but at that price and the macro environment it may end up cratering before a pop. Seems like a sketchy buy.

I just don't think space is as useful or profitable as people think. Time will tell.

According to commentators on other threads people with any index funds will be automatically buying, no need to trip over ourselves

But consider that they will eventually own the entire observable universe excluding Earth! /s

> They’re only selling less than 5% of the company

Wait for the lock-up terms.

The booster is definitely looking good, just like the Falcon 9 booster is very reliable. The big question for me is the upper stage, and whether they will be able to reuse anywhere near as often as they claim. It is so much more complex than the Falcon upper stages, which aren't reusable very quickly. It seems they have a lot to learn about upper stage reusability.

The question is not even whether or not Starship works. Starship is, in theory, designed with the idea of getting many, many payloads to Mars. However, getting payloads to Mars is not currently something that anyone is paying for; even NASA isn't going to focus on Mars for at least another decade (likely more). And in the meantime, it's not like we don't have rockets capable of getting payloads to Mars (the Saturn V was fully capable of doing so in the 60s). Likewise in the meantime, the Artemis plans that look to require a dozen+ launches for a single moonshot aren't painting Starship in a favorable light.

So what is the near-to-medium-term economic prospect of Starship? That's the question. You can't just say "bigger rocket make more money", because there exists a useful upper to the size of payloads that companies actually want to ship to LEO in practice. To use an analogy, we have jumbo jets, but most flights are not on jumbo jets.

Yeah, I might have stated this poorly. In the forecast it's just a question of expected value, I don't give almost any probability to "Starship is worthless".

My 50% CI on Starship's fair market value at IPO time is $123b - $227b, with a 80% CI even wider, not based on my own modeling, but based on anchoring to analysts that give credible arguments.

> and this all sounds exactly like how reusability might not work out at all for the Falcon 9 from 10 years ago

I think a lot of it depends on whether they can make the reuse of the second stage work without having to redo stuff constantly like the shuttle. Reusing the booster will obviously save tons of money and make launches cheaper, but they're competing with themselves here. How big is the launch market with cheaper launches? We don't actually know.

The viability of direct to cell connectivity at scale is unproven. This is actually the core value of SpaceX in the next 3-5 years.

The other core value generation product will be financial transactions. It is unproven whether X money will be adopted for friction free transactions across national boundaries and whether the company can compete in the financial services sector.

How are they doing with their mass to orbit projections?

The tower catches are great, but the payload rating has been reduced several times now[1] and with it the economic argument for how Starship will make launching much cheaper than today as well as suitability for lunar/Mars launches. For Starship to be revolutionary enough for this kind of valuation it has to not just work, but outperform current solutions.

SpaceX has basically admitted as much by promising Starship 2 & 3 with larger payloads (that Starship 1 was already supposed to deliver).

[1] https://www.americaspace.com/2024/04/20/starship-faces-perfo...

Compared to Falcon 9 Starship has still more quality issues than the Falcon 9 at the same test stage

They caught it 3 times already!?

I missed 2 and 3 it seems.

“potentially makes humans inter-planetary”

What is the realistic, non-science fiction appeal of this?

These premises may or may not make sense, but the thing that matters is capturable revenue.

Humans being interplanetary would be an amazing technical tour de force. But relatively speaking, there isn’t much revenue there.

They are pushing business-to-business service too, like ships, airlines, and retail/office backup. Plus smartphones can talk directly to their satellites. A lot of countries will use them for military use. Whether it adds up to a reasonable IPO I can't tell - market irrationality is hard to measure.

It's the only ISP that reliably works globally but especially in war zones with zero competitors. How much is your life/sovereignty worth to you?

How much would it cost you to run wires to the northern tip of Greenland and Antarctica? How about the middle of the Pacific? All of Africa? At the end of the day, that is the alternative. If you think normal ISP ground stations don't need maintenance (especially power), you're missing a lot. Also I know people who have cell towers on their property, and they get paid over a hundred thousand a year just for that.

It was 1T post merger with xAI being 250B of it, SpaceX being 750B

Yes, and they still do

Starlink's maritime, roving, airplane, and military options are all much more than $100/mo/user. Not sure how much that closes the gap, but it's _something_.

Source: https://starlink.com/business/aviation ($250->$10k/mo)

https://starlink.com/business/maritime ($250/mo)

https://starlink.com/business/mobility ($65->$540/mo)

I read your comment as being glib, but in forecasting this I was really puzzled how much to anchor to how analysts tend to value these businesses.

I ended up largely deferring to them, e.g. predicting the public will value xAI at $258 billion ($222b - $310b) at time of IPO, even though I've elsewhere been skeptical that xAI should be valued like a frontier AI lab.

It's a keynesian beauty contest