Americans express unease over SpaceX's influence on retirement savings

mattmaroon

Everybody is upset about the rule change, but to be honest, they would’ve just ended up in the same position a few months later. Elon has kept Tesla’s market cap at 5-10x what any reasonable investor would think it should be for the better part of a decade. It’s not like SpaceX is going to tank in the next 3 months and they’ll be left holding the bag. It’s not like it wasn’t going to end up in every index in a year. And to be clear, I’m not saying it’s a good thing. I just don’t think it matters so much.

anotherhue

What exactly can an individual do? For many their accounts have limited fund choices and if you don't want to pay high ER for fund manager's pedicures then you end up on an index, which (S&P500 excluded) have now bent the knee. Mine are on russel indexes so I have no choice. Short spacex is the only answer I've heard but I'm wise enough to know I don't have the mentality for derivatives.

glimshe

This isn't investment advice etc etc but there are many options that can capture large sections of the stock market without being exposed to the tech bubble (assuming there is one). Many people say you should stay invested in the SP500 anyway and I won't argue against that. But funds like VTV, DGRO, VIG, SCHD etc don't have the same level of exposure to tech, as well as international funds like VEA. Many 401ks allow you to invest in them through brokerage "link" options. Of course, do your research or talk to a pro before considering these.

fortran77

You can opt to put some or all of your 401K into a "Value fund" VVIAX (Vanguard) or FLCOX (Fidelity) to reduce your exposure to the highest of high-flying stocks. Of course, many small company 401Ks limit your investment options to a small family of high expense ratio funds...

eagerpace

The recent AI craze is really just LLMs. I feel like finance was likely already the most AI-adopted industry without LLMs and their impact the last few years may have taken them from “80 to 100” where most industries are going “10 to 50.” Go back to 2022 for a moment and I think this article is identical.

ggm

An interesting variant of "privatise the profits, socialise the losses" played wholly in the private sector capital investment space. "When you're rich they let you" is big in this because a functional board of a company about to be vested with a massive debt overhang from a serial offender (X and xAI) would surely have said "could we NOT" about this and the whole model including A and B class voting shares suggests this is a control issue: given proper control models none of this could happen.

4fterd4rk

SpaceX has not been added to the S&P 500. They asked for the rules to be waived. S&P said no. I don't understand this article.

adam_arthur

Half of the companies in the S&P 500 are trading at over 10x sales. SpaceX is just another one on top of the pile, whenever it gets included. Valuation multiples always mean revert on a long enough timeline... you can position for it today if you care to. https://www.multpl.com/s-p-500-price-to-sales

dehrmann

Matt Levine's take was essentially that if you're in the index fund game, you want the market. You don't pick and choose what parts of the market you want--that's active management. SPCX mostly isn't an issue because most indices include the float in the weight, so it isn't really even a $1T company.

tlogan

I have a feeling the article and the comments on this trend would be very different if Elon Musk did not support Trump, even if he were still just as crazy and rich.

petilon

SpaceX is being valued as an AI company and yet they don't have a frontier AI model. Goldman Sachs is predicting 100x growth in 4 years for xAI, but it is a failed company with no frontier model. Top employees have left, and the company is renting out datacenter capacity. Satellite launch business has $4.1 billion in revenue, but only growing 8% annually. Most of the revenue is from Starlink. It has $11.4 billion in revenue, with around 50% growth. Blue Origin will offer them competition soon. X, formerly Twitter, has around $2B revenue, limited potential. The massive 2030 projections ($474B total, $144B Starlink, $322B AI) are Goldman Sachs' IPO roadshow model. The projections are so aggressive they feel scammy. SpaceX's 2025 revenue is $18.7 billion. A typical premium valuation for a top-tier tech company might be around 10x to 14x revenue, which would imply a strong IPO valuation of roughly $187 billion to $262 billion. The reason for the outlandish valuation is because of naive retail investors who believe Elon Musk has never failed at anything.

t1234s

Expect more of this type of crap in the media now that SPCX is public. The guardian is notoriously anti-Musk and used to mention him by name in the article footer begging for money.

awinter-py

yes I am concerned about my downside puts

keernan

I have to say it is incredibly annoying that the wealthiest man in the world is so thin skinned that every post on Hacker News that talks about him in ways he doesn't like gets flagged. Of course Musk isn't doing it himself. He already bought Twitter so he could control what is said about him. And, as the wealthiest man in the world, he'd be stupid if he hasn't hired tens of thousands of people to monitor posts about him or his concerns and to downvote them (or whatever he wants). The cost to him for doing that would be similar to us spending ten cents.