People are doing so because the math is not mathing.

Assuming that all the claims are true, this would lead to a collapse under its own weight, because at that point, supposedly, most people won't be needed in the jobs they currently occupy.

Assuming the claims aren't true, there will be a reckoning where all the glitter thrown will hit the ground and people that invested would like to have their marbles back at whatever the cost.

I'd be betting on the latter rather than the former. BECAUSE all those companies are RUSHING for an IPO because none of them want to be left with the bag.

Just for the sake of comparison and to put things in perspective, just for the spaceX situation, running a datacenter is no easy task and require significant maintenance and supporting infrastructure, now you're going to tell me that you can achieve the same and even more in space where virtually everything is more complicated to achieve? And you're telling me that your entire business, or at least a big majority of it, will be this entirely unproven infrastructure? Seems like a bit of a stretch to me...

Now this being said, somehow some things may lie in the middle, but people seem to be a bit either too fond of the claims or too aggressive towards some part of the tech stack.

AI can still have a massive impact while these three companies go nowhere.

Same as the dotcom and same as the railroads.

Yeah like Cisco in 2000

Have you heard of the dot com bubble?

> the S&P 500 also has never allowed entry of companies that may never become profitable

Yup. Which is why it was always a long shot. I personally thought they'd adopt some of the seasoning rules, but they were more conservative than even that.

> if you had seen it what would have that pricing looked like?

Look up rebalancing trades, or, less graciously, rebalancing front running. If the index is going to rebalance to include a new entrant, you'll see the other components trade down in anticipation. It's a very tight signal, and it wasn't present to any measurable degree for the S&P 500.

> why does it matter what the percentage is

This percentage directly determines the influence on SP500 index funds holders (SPY, VOO, etc.).

The outcome could have been:

1. not included (0%)

2. included, weight by free float (0.3%) --- 54th in the list between $AXP and $MCD

3. included, weight by free float x 3 (0.9%) --- 19th in the list between $ORCL and $JNJ

4. included, weight by market cap (1.75 trillion / 67 trillion = 2.6%) --- 8th in the list between $AVGO and $META

https://www.slickcharts.com/sp500

#2 is _much_ closer to #1 than #3 (let alone #4), meaning that had an exemption been made to allow SpaceX in, given the rest of the existing rules, at least the impact to ETF holders would not be outblown. The same could not be said for NASDAQ , which was the main source of all the debate.

> That is essentially a wealth transfer to the rich. They don't need it.

These are not valid arguments. The companies that get added to the S&P are always owned in some fraction by rich people.

SpaceX is obviously majorly owned by Elon, but it’s also owned by regular employees, a bunch of private investors and other funds that regular people invest in.

> They're not profitable.

Right

> When they prove they're worth the dollars,

Profitable isn’t related to “worth the dollars”. You need to look at income and how much is being reinvested into growth. Amazon famously remained unprofitable due to reinvestment and waiting for them to become profitable before investing was a bad bet.

> Wasn't this after their entry into the index?

Yes. Then rules were changed. Then they were unchanged.

S&P is explicitly a committee-based index. It's not hard and fast rules driven. (Russell markets itself as being super duper rules based. It's a good niche. It's also so wildly complicated as to be, in practice, at least to me, indistinguishable from the committee-based method.)

Elon undoubtedly tried to corrupt this process. But there were loads of non-corrupt reasons to look at a few trillion dollars of market cap hitting the market and ask how that should impact how various indices are calculated. The answer we've come to, that the tech and total-market indices should reflect the change while large caps should not, is a pretty good one.

> What was unlikely to happen?

S&P adopting the rule changes.

> It already happened in Nasdaq

NASDAQ 100 is marketed as a tech-focussed fund. It's also way smaller. And it makes sense for it to include new issues. Total-market funds are also being adapted to include these, and again, that makes sense.

> for most investors it already did happen

What do you mean? For the vast, vast majority of investors, nothing happened. If S&P had adoped these rules, the majority of investors would still be unaffected.

> when is it appropriate/intellectually OK to respond to allegations of corruption by saying ‘stop freaking out, it’s only a small amount of corruption PER PERSON’

I'm saying the allegations of corruption were misplaced. The rule changes have been mooted for years. Did Musk et al try to put their thumbs on the scale? Sure. That should be called out.

But the scaremongering that followed was full of factual misrepresentations. Moreover, it presumed corruption across the board versus certain actors trying to corrupt a process, all for the purpose of getting views.

It was unlikely to happen anywhere but the Nasdaq-100, because only Nasdaq has the incentive to do it: https://news.ycombinator.com/item?id=48411713

> many pension funds are not sophisticated, they're small, underfunded, and getting taken for a ride by expensive advisors

Who tend to come up with bumfuck benchmarks other than the common ones. Sometimes for good reasons. Often to justify their own comp.

> Many would be better off using an S&P 500 index fund

Maybe. They would probably be better off with some total-market funds (instead of biasing towards large caps, especially if they're small). But my point stands: pension funds don't tend to automatically follow any major index, much less the S&P 500 proper.