Americans express unease over SpaceX's influence on retirement savings
theguardian.com
theguardian.com
The consumer/ad tech bias of HN is really showing. The app I use to share photos of my kids with my elderly relatives is worth $1.45 trillion, but somehow companies that make freaking EVs, robots, and rocket ships, and AI can’t possibly be worth that much? I’ve been in HN for 16 years and heard so much breathless cheerleading for web apps “changing the world” but now we have companies that really might change the world and it’s a scam?
The sky-high valuation of SpaceX is almost entirely related to it's estimated TAM from AI entreprise solutions, not robots and rocketships. HN news comments have a similar bias against the sky-high valuations of OpenAI and Anthropic.
That’s not how TAM works. The valuation of each business unit isn’t just a simple proportion of its TAM like that. In the SpaceX/xAI merger, which was just a few months ago, the rocket company was valued at $1 trillion and the AI company at $250 billion: https://www.reuters.com/legal/government/how-math-works-175-...
EDIT: To elaborate: TAM is not a valuation for a specific business. It’s a ceiling in the size of the market the business targets. AI has an astronomical TAM because you can sell AI into almost every market. E.g. shipping and logistics is a $10 trillion business. You could sell AI into that market and capture some of that revenue. But if one business has a $10 trillion TAM and another is $5 trillion, that doesn’t mean the valuation of the first business is double the second one.
>Morgan Stanley projects a $25 trillion market for AI-powered robots alone by 2050,
It's about 10x current AI spend.
The cynical part (that they know the valuation is ridiculous) is supported by the structure of the IPO. A 4% float with a, what, 30% retail component is unheard of. NASDAQ QQQ admission rule-change is also unheard of. If SpaceX insiders actually thought their company was worth $2T or whatever, why make this highly suspicious changes?
This is irrespective of whether or not SpaceX will eventually be worth more. It definitely could be. But when you look at this IPO, you can't help but catch a smell that something fishy is going on.
Note the tide has changed considerably in the Ukraine war in Ukraine's favor once Starlink locked down access - this proves how vital internet access it was to both sides, as once Russia could no longer use stolen terminals their manpower advantage became moot.
So I simply don't get this manufactured outrage - the vast majority of US retirement savings are already tied to the military sector (RTX, Lockheed Martin, Boeing, and Northrop Grumman) via index funds. I personally would have more concern with those laggards in the new age of drone warfare vs the likes of SpaceX and Anduril (when they ipo).
No.
It's really helpful, but it's not vital.
WRT Ukraine - the drones are now (AIUI) flown with a tethered fibre connection (inside the Ukraine) - because jammers have made radio traffic with drones near impossible for operators
I don't hear any concern about SpaceX due to military ties, it's that it seems like financial tricks are being used and forcing it into the markets and it might be seriously unstable.
I think this is coincidental correlation. In the same period drone warfare was evolving until it reached some stalemate with an optic-fiber strewn killzone where none of the belligerents have an upper hand, and Ukraine's ballistic missile industry picked up pace, allowing Ukraine to hit far into Russia without relying on American long-range munitions, or needing American permission to use those munitions.
The deep attacks inside Russia would be significantly more difficult without starlink.
This is inaccurate: Starlink was geofenced to Ukrainian territory after Musk's World War III tweet. Deep strikes inside Russia are mostly missiles, but not even the deep-strike drones can use Starlink due to geofencing.
Does that justify the price?
Spacex price/sales: 100x-130x
RTX Corporation's (formerly Raytheon Technologies) Price-to-Sales (P/S) ratio currently hovers around 2.74 to 2.76. Boeing price-to-sales (P/S) ratio sits at 1.86, Lockheed Martin's (LMT) trailing twelve-month (TTM) price-to-sales (P/S) ratio sits at 1.64. Northrop Grumman's current Trailing Twelve Month (TTM) price-to-sales (P/S) ratio sits at approximately 1.76 to 1.89
So based on the peer comps you provided, SpaceX is overvalued by 50-100x. Your $185 shares are worth about $2.
Fine if you want to take that bet. Not fine if you force (via indexing) the majority of US pension savings to take that bet.
Their current valuation makes absolutely no sense given the size of their business and the next century of business unless they’re going to pull the rug on the US and its allies and increase costs 100x.
The combined market cap of those four companies is maybe $500-600 billion combined. The total S&P 500 market cap is roughly $45-50 trillion.
So defense contractors represent maybe 1-1.5% of a typical index fund portfolio.
The defense sector is 2% of the stock market. So if by majority you mean 2%, then that's a reasonable statement.
And to be clear, I’m not saying it’s a good thing. I just don’t think it matters so much.
It’s a 24 year old company with a current high flying stock price based on very questionable numbers.
“In 2025, SpaceX generated $18.7 billion in revenue, with its Starlink satellite internet service accounting for $11.39 billion, or 61% of total sales.”
Tesla had higher revenue number in at the start of 2019, when it had a market cap of ~0.06 trillion. Further Tesla was highly volatile in 2021 despite huge earnings growth with some people bank when it fell from 1.2T to 0.34T before recovering.
Toyota’s P/E is under ten. They’ll make more money selling cars this quarter than TSLA will in ten years.
TSLA prices have never been within an order of magnitude of reasonable. They’ve been publicly traded for so long that some of the people legally driving them weren’t born when they IPOed. They’re not a startup and haven’t been in a while.
My point is as a benchmark it still makes SpaceX look like a bad investment.
The reason for these rules is lockup periods. There’s presumably many people really want to sell significant SpaceX stock at the current price who can’t yet. Effectively August 2026 is going to add more stock to the market and that’s going to continue for a while.
Such post IPO volatility is the justification for indexes to wait, and honestly it’s a very good argument IMO.
Remember mars by 2024? I think that was around the time they started accepting deposits on tesla semi.
The one saving grace is s&p isnt changing anything, and they were by far the biggest index.
There were not enough shares actually trading for the index funds to fulfill their requirements that's why the price keeps going up
There are ETFs that were issued tied to the Nasdaq 100 which are therefore legally bound to buy SpaceX. But the biggest immorality is the SEC allowing Musk's attempt to manipulate the market by: 1. Setting an IPO price for SpaceX (which absorbed xAi and its money guzzling losses) at unsustainable, incredibly inflated prices; and then 2. Putting incredible pressure on SP500 and other index makers to change their rules to force the purchase of SpaceX at those sky high prices (in an IPO, company gets to set the IPO price).
It's legal. At least in the eyes of the SEC which, of course, is an institution that is controlled by the wealthiest who control the markets, so of course it's legal.
But it is outrageous market manipulation that is fraudulent in its intent to enrich the wealthiest man on earth at the expense of ever wage earner putting her money into Index Funds.
Thank goodness the S&P and CRSP refused to change their rules. Otherwise the shifting of risk from Musk onto the shoulders of every working American would have been complete.
That was Musk's plan. It failed because he couldn't get the major indexes to cow tail to his pressure and demands.
Edit: My reference to the SEC is that they are charged with investigating market manipulation. And Musk was involved in the biggest attempt at market manipulation probably in history - trying to pressure private indexes used by almost every ETF in the world (S&P and CRSP) to change their rules which would have legally obligated those ETFs to purchase SpaceX within 15 days.
However, the SEC cannot investigate it because no laws would be violated despite the fact it would have been an incredible market manipulation.
In fact, the change in rules by Nasdaq 100 is a huge market manipulation that has taken place exactly as I describe - it's simply not as catastrophically large as it would have been had all the major indexes succumbed to Musk's demands.
That means Vanguard VTI tracks the stocks that are contained in the CRSP US Total Market Index. So, if CRSP adds a new holding to its US Total Market Index, Vanguard VTI is legally bound by its prospectus to add that stock to VTI and to do so in a manner that assures VTI returns track the CRSP US Total Market Index returns as closely as possible (meaning they own every stock CRSP does and in the same proportion that CRSP does).
This is not just a 'good idea'. It is legally binding upon Vanguard by virtue of the VTI prospectus.
I spent quite a lot of time before the SpaceX IPO learning how a change in Nasdaq 100 rules regarding adding a new company to its index, would impact ETFs whose prospectus tied them to the Nasdaq 100. The information I reviewed indicated the ETFs would add all of the new purchases immediately (within a matter of days following the addition of a new company to the tracking index).
That's rich in view of the fact you are the one who is expressing aggressive ignorance. The truth is:
1. An ETF tracking a specific passive index is legally obligated to purchase the shares of a new company added to that index with zero discretion allowed no matter how irrational the pricing might be.
2. Contrary to what you've been spewing about ETFs adding the stock gradually over time, the truth is all ETFs make their full purchases BEFORE the company is actually even added.
Doubt it? Do a quick google search: How soon do ETF's tracking a specific index buy the stock in a new company added to the index they track?
So stop being a jerk with your personal attacks - especially when you don't know what you are talking about.
The aggressive ignorance (not my term, I’ve got a better one) is that multiple times this guy just didn’t even respond to the actual point. See his first response to me where he just restated the thing I was clearly replying to, rather than addressing my actual argument, which is that all those people would’ve ended up with the same amount of SpaceX shars at the same time, even if the rules had not changed. He just restated the argument I had already just rebutted, then he did the same thing in this branch.
It does not matter that SpaceX is in the index sooner. The future in six months or 12 months would look the same in either case.
CRSP did change their rule earlier in Feb, where they added a clause that later allowed SPCX to be included, despite having <10% float.
Source: https://www.crsp.org/crsp-market-indexes-changes-to-float-sh...
The idea you wanted is "kowtow" not "cow tail". The "kowtow" is a Chinese gesture of submission to power, in practice it might be a large formal gesture like European bowing, but it can be something much more subtle, like the knuckle tap in the tea ceremony, the observer knows what is signified. The submission to power rather than a particular gesture is what's retained in English.
"Cow tail" does exist as an actual idea in baseball, as a particular type of long swing which is said to resemble how cows twitch their tails but here that doesn't make sense.
Those deals are doable because xAI failed and SpaceX has a bunch of spare compute lying around they can rent out. However, SpaceX doesn't make the hardware or software so moat is nonexistent.
If compute capacity increases or AI demand decreases, Google/Anthropic will likely skip SpaceX and just buy their own hardware in their own datacenters or go back to their own datacenters.
A stock's value can disappear in a matter of days to a degree it leads to a complete collapse. It has happened before, see Enron or Wirecard.
> It’s not like it wasn’t going to end up in every index in a year.
Sure, but it's still not wise to let unripe stocks into most American and RoW retirement funds. There's a reason why many complex software projects keep some sort of "staging" tree, and the stock markets should do so as well.
And then the fall down is hard.
Think of the generic which cup has the ball scam? Like no American sailor falling for that overseas is going homeless from that event.
But I mean do you want to live in a neighborhood with only broken windows?
Will they... that's a different question
Feel like many of these articles were either prewritten, lazy, or have intentionally omitted the non-impact that S&P opting to not change its rules has had, just so the headline and lede could be as sensational as possible.
1) Index funds and ETFs are highly active.
They're just low-cost due to largely algorithmic decisions but at all of the edge cases manual _active_ decisions are made.
IIRC, in this podcast Vanguard goes into detail about all of the active decisions they do [1]. It's long because uh, they do a lot.
2) You're in the index fund game because "you liked that index". There are literally thousands of ETFs. Saying "you want the market" is just wrong, you wanted a specific slice of the market and if the ETF changes the slice under you then that feels like a bait and switch.
Short spacex is the only answer I've heard but I'm wise enough to know I don't have the mentality for derivatives.
This largely being my gripe about the Trump accounts in that you're allocating funds into them that can't be touched without penalties until like 50 years later. And for most people this probably isn't even a benefit because you can lifetime gift ~$15 million so like unless you're Bezos just invest the money yourself and gift your kid whatever large value item they wanted.
That said, if somebody is say counting the days until 55 so that they can retire then it's likely they also wanted to retire pre-55. If the money is "stuck" in a 401k and so they are unwilling to retired beforehand then it probably would've been better for them to have stuck some portion of their 401k contributions into a taxable brokerage account and then retired pre-55.
But in this specific example, the guy I responded to was self-employed I'm kinda guessing their "hobby" is their job and so they kept working despite not needing to.
The biggest issues are the effort and tax implications of balancing the SpaceX short.
It was proven to be a good strategy on the SP500 [1, 2]
With 500 companies, it's work. But you can probably approximate it with a top 100.
[1] https://rodneywhitecenter.wharton.upenn.edu/wp-content/uploa...
[2] https://www.tandfonline.com/doi/full/10.1080/0015198X.2023.2...
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...
https://indexes.nasdaqomx.com/docs/2026_May_NDX_Changes_FAQ....
Q: What is the purpose of modifying the liquidity and seasoning requirements? Could this change result in the inclusion of illiquid securities in the index?
A: Most indexes require a liquidity threshold for new constituents, often as a minimum share count or average daily trading value. For the Nasdaq-100®, securities must have a three-month average daily traded value of at least $5 million. Since only very large companies – typically with full market capitalizations over $100 billion as of March 2026 – would have qualified for fast entry, they are expected to easily and quickly meet this requirement. However, an average daily traded value of at least $5 million from the time of listing will still be required for fast entry candidates. Many indexes have included seasoning requirements to ensure that traditional IPOs undergo price discovery and stabilization before being included. These requirements were originally intended to prevent small or little-known companies from entering too soon. However, there is now a trend toward IPOs being larger and more mature than in the past. Companies expected to meet the fast entry threshold are likely to be among the world’s most significant and well-known firms. High investor interest and trading volumes should accelerate price discovery, further supporting a shorter seasoning period. Note that the seasoning period for companies outside of the Top 40 remains at three months.
Several indexes have changed not just Nasdaq, but it’s one more people have heard about.
Edit: Ops SPY didn’t change their rules.
For others like qqq it has no bearing to be frank. It follows the nasdaq 100. Maybe an argument that the extra few months would have allowed more price discovery but I am not so sure.
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.
Plus, terafab and merging with Tesla is a pretty big forward looking narrative.
Arbing tokens instead of selling them to the consumer turned out the be the better business model. Turns out you don't need to have a frontier model and is actually the worse business model and letting everyone else burn the energy to compete.
In short, there is nothing to explain the massive overpricing of SpaceX stock, it will come down to earth at some point. Don't be left holding the bag at that point.
Where are you getting the 15% margin from? Can you provide any sources where thats the case? Because all the neo clouds are making insane amounts of money from what i can see.
Also, Terrafab is not about margin but access. TSMC is perpetually booked out for 2-3 years in advance.
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.
Aside, I think many people forget to account for their own job/career when thinking about diversification.
Just working "in tech" means that industry is already an oversized part of my financial future by default, even before talking about investment stuff.
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.
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.
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