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Comment by mdorazio | Hacker News Reader

Title is somewhat misleading since this would be another tender offer to select investors, not a public offering. Which is disappointing to me since I'd really like to buy some shares myself. Starlink is perhaps overvalued, but their primary launch business is so far ahead of the competition already that it's kind of ridiculous. With the progress of Starship, I'm expecting another massive step ahead of everyone else within the next 3 years, which would in turn expand the launch market itself to people who couldn't afford it before.

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https://amp.cnn.com/cnn/2023/06/09/investing/premarket-stock...

Private wealth is so massive now that many companies don't need the public.

What this means for the future of investing for your retirement is unclear...

A lot of retirement funds invest in private companies.

Don't worry, you'll get a chance to buy in once all the private investors have made their killing.

Thank you SEC.

And in case people don’t know, this is referring to an accredited investor which is a government enforced way for the rich to get richer.

Well they try to justify it by saying that we unwashed masses don't have enough savvy to be investing.

Have you browsed through the Wall St Bets subreddit? Not that pre-IPO investing is any more reckless than throwing away money on naked options, but it gives a good sense for the savviness of the average investor.

The unwashed masses don’t have enough savvy. They’re gambling on crypto coins and 0DTEs. Or they’re dumping their life savings into crypto “earn” products where the yield is from a ponzi and they’re surprised when the whole thing vaporizes.

One thing ChatGPT taught me, is that it can reason and argue better than me about basically everything I'm not already an expert in.

If you don't trust ChatGPT to make investments, you shouldn't trust the masses (including me) either.

To be fair it is mostly a way to prevent scammers from fleecing the common man.

It is unfortunate that the laws also forbid many sound investments, but not as large a problem as you might think because most of the real oppertunities would never have been offered to random people anyway.

You can just self-claim to be an accredited investor. I did this for ages until it started becoming true.

But it's probably best they stay private. As you can see in these HN comments, public investors lack the ability to see the project through. i.e. there will be failures, planned and unplanned.

This is also why I think Kickstarter projects should be restricted to people who understand that they can end up with nothing.

I know of at least a couple low-profile high-value things that are invite-only and I'm only a part of because I'm in the network. This is probably the future of these things. Being able to constrain your audience to only somewhat wealthy people insulates you from the lumpenproletariat, perhaps at the cost of some smart and unwealthy.

And to be honest, the lumpenproles usually demand to be protected from these things, so it's a good idea to give them that since there's an easy way to segment the population.

More info on what counts as an accredited investor:

https://www.sec.gov/education/smallbusiness/exemptofferings/...

When the company is private; it's hard to get access even if you are accredited.

If the SEC was the only barrier then millions of private investors would own SpaceX shares right now. Turns out Elon just doesn't want to sell to you.

I think you mean "doesn't need to" and some see this as a problem. What happens over time to people's retirement funds as the real stock market shifts towards private investment.

Then we go back to pensions and social security instead of gambling. Things would probably be better off that way.

How does one convert a 401k into a pension?

pensions don't work with a collapsing population

"all the private investors"

AFAIK there is still some limit before the company is treated like a public one from various legal perspectives. Something like "no more than 2000 private investors"?

Given that there are probably over a million qualified investors in the US alone, that is just a very small fraction of those.

Accredited vs non-accredited is meaningless in the grand scheme of things. There are millions of accredited investors in this country would would love to invest in SpaceX (and OpenAI and the rest) if given the chance. Heck I bet most people reading this are accredited even if they don't know it ($200K annual salary isn't all that crazy in tech even at the entry level). The real barrier is always convincing someone to let you invest in their venture. And why on earth would they? What exactly does your dollar bring into the picture that they don't otherwise have already?

I‘ve read a lot of books about Buffett‘s strategy and the goal is to find as many investment opportunities as possible and then invest in the one which most likely has the best returns. For this strategy, it doesn’t matter so much whether there are many privately funded companies. There are tens of thousands of public market stocks, many of which are overlooked. Or, put differently, it doesn’t matter if a company is producing state-of-the-art technology or, say, building houses. If the price doubles in two years, then you‘ve made money.

>I'd really like to buy some shares myself ...their primary launch business is so far ahead of the competition already that it's kind of ridiculous. ... which would in turn expand the launch market itself to people who couldn't afford it before.

the breadcrumbs from SpaceX multi-trillion dollar business table will be at 100B-scale. I.e. one can start a small launch company to pick up those crumbs, or one can develop some tech that the SpaceX or their clients would find useful in a few years - like ionic drive fed from solar panels or nuclear drive for Earth-Mars ships (either way beating the chemical drive) - or just develop some business to utilize the coming huge Starship launching capacity ($500K/person weekend trips around the Moon anybody?). So, while more speculative, the upside of investing in such companies may be higher.

My understanding is that SpaceX will not IPO until they reach Mars. And I think most of the value in what they’re developing is going to be extracted after that point rather than before.

Still need retail suckers to buy shares so the rich private select investors can cash out.

> IPO until they reach Mars

So when the massively tank their valuation by spending an insane amount of money with no potential of any meaningful return?

Why would a private/commercial company ever go to Mars?

A money seeking company might not want to go. But there likely will be co-op based groups that would go. Similar to this project that helped develop parts of Alaska at a time where it was considered to be nothing but snow and ice:

https://en.wikipedia.org/wiki/Matanuska_Valley_Colony

https://www.nps.gov/teachers/classrooms/twhp-matanuska-colon...

All of these costs virtually peanuts compared to what a trip let a lone a colony on Mars would cost. It's inconceivable that any non-profit seeking non government organization/group could ever pool enough resources together for that (and if they could all of that energy/resources/money would be better spent on fixing more relevant problems back on earth)

Favorable labour laws (that is, a lack thereof)

Imagine the massive Tesla and SpaceX factory-sweatshops, cranking out cars and starships on a barren red planet.

It's a long flight home. We haven't had that kind of excuse for indentured servitude for centuries.

And at the bottom of a gravity well.

Even if we accept that SpaceX is going to Mars, wouldn't they want the IPO money to finance the Mars mission?

The goal of Starship is to make Mars missions significantly less capital intensive in the first place, and to make lift to orbit orders of magnitude less expensive. This is going to open up qualitatively different commercial markets that will bring tons of money into SpaceX. They don’t even need to make money off of Mars itself; it’s more that reaching Mars requires them to actually deliver on the other stuff.

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