| ▲ | ncallaway a day ago |
| Many IPOs slide below their initial offering. Very few IPOs changed the rules to allow themselves to be incuded in significant indexes far faster than the rules previously allowed, and then slipped below their initial offering. |
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| ▲ | AbstractH24 26 minutes ago | parent | next [-] |
| My gut tells me most do, but would love for someone to do some actual analysis of it. |
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| ▲ | rtkwe a day ago | parent | prev | next [-] |
| Yeah that plus wrapping the xAI dogshit debt inside SpaceX is where it gets really scummy. At least the S&P500 didn't (yet) succumb and lower their requirements and that's where most of my investment money is parked. |
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| ▲ | rchaud a day ago | parent [-] | | not to mention hiding all the Twitter losses inside of xAI because AI in general loses lots of money. | | |
| ▲ | rtkwe a day ago | parent [-] | | I had completely forgotten they'd already wrapped xAI around Twitter. That's getting to turducken levels of nested bad companies. There's also the Tesla (potential) self dealing where SpaceX bought a bunch of Cybertrucks and appears to be leasing them to employees for cheap as a perk. |
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| ▲ | EgregiousCube a day ago | parent | prev [-] |
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| ▲ | nixon_why69 a day ago | parent [-] | | OP didn't arrange those goalposts, Musk and his friends did. It's the only company to get fast-tracked in this way while losing money. | | |
| ▲ | EgregiousCube a day ago | parent [-] | | He did, by arguing that a company that is fast-tracked for index inclusion has an obligation to prevent its stock price from following common post-IPO price patterns; and using "the only company to do so" as an allusion to a false trend. | | |
| ▲ | nixon_why69 a day ago | parent [-] | | No, Musk did, by arguing for fast-track index inclusion. He wasn't saying "you all will eat shit on this deal", he was promising exceptional returns. | | |
| ▲ | Lerc a day ago | parent [-] | | I don't follow that logic, why does wanting something sooner imply higher expectations of results? Did musk explicitly claim he expected exceptional returns? I don't think I'd be surprised either way, but I'm not sure what he's actually said. | | |
| ▲ | rtkwe a day ago | parent | next [-] | | Part of the reason for the long window before inclusion is so that the price is reasonably stable and the market has had a chance to do it's whole price discovery dance for a little while before index funds etc are forced to buy in. Part of Musks goal with lobbying for early inclusion was to prop up the price by requiring the index funds to buy and hold his stock which gives a larger market for the insiders to sell in to. He wanted to unlock that giant pool of passive investment without having to wait like everyone else had to and prove profitability over multiple quarters. | | |
| ▲ | Lerc a day ago | parent [-] | | That makes more sense. Over what period do the index funds have to meet the levels? It seems like any coordinated change caused by modifying the structure of an index would cause quite volatile behaviour unless it had specific mitigation mechanisms built in. | | |
| ▲ | rtkwe a day ago | parent [-] | | Part of it is the index percentage is tuned to the available shares so it didn't create an apocalyptic buying pressure. Plus he only got the Nasdaq to modify their rules which also tamped down the pop. As for timing there's no universal answer, stock changes are usually announced a few trading days before it's effective so funds can use that time to perform their rebalances. I presume most of the funds that needed to start tracking SPCX started buying pretty early so they were properly balanced on the day it took effect it might have even been part of the initial pop though they could have also waited for the first tranches of insider shares that were released (I think there were some relatively early releases as part of the IPO?). |
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| ▲ | nixon_why69 a day ago | parent | prev [-] | | If SpaceX followed the existing rules for index inclusion, after a year and profitable, nobody would have a problem. They managed to maneuver "immediately and with no profit" and now they're tanking. That's bad, all of us with a 401k are losing money because of it. The people pointing this out are not the problem, SpaceX's (or I should say xAI's performance) is the problem. | | |
| ▲ | Lerc a day ago | parent [-] | | I'm inclined to think that it would have been better that they followed the existing rules for inclusion, but I don't see how this is a cause of performance or an expression of performance. I understand that investments made during the short lived peak would have lost money and that some amount of 401k will have lost money, but only for the purchases of indexes made during the peak, that may be substantial however, I'm not sure how transitions that add or remove stocks from an index work, there must be some mechanism to soften the impacts of the change, but I'm not an expert in that field. Is it your contention that if they had have followed the standard path for inclusion, and then went on to have a similar share performance, then you would be OK with it? |
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