The IPO was meant for the VCs to cash out as all fundamentals were completely irrational, but seems like no one cares about cash flow and profitability anymore during QE times. Dumb money will keep being dumb I guess
Many of those early investors would have invested in a rocket company, I doubt many of them were overjoyed to be saddled with all the debts from an AI company and Twitter.
Q2 call is expected in a month or so? But they also state Aug 21 is 37% of shares will go public.
SpaceX is a pretty important company not just for "the market" but also for many other things (see Russia/Ukraine war).
Fair warning: I know nothing about all this.
If you wait till the price comes down to its natural level, you'll be able to buy more of the company for less money.
When you buy equities, if the company turns out shockingly successful beyond most peoples probable expectations you dont simply want your investment to just stay flat, you want to make multiples of your money. In order to do this, you simply cant start from a 2T marketcap. No company worth 2T can make you 100x your money or even 10x or 5x your money in a reasonable amount of time given the overall size of the economy.
To hedge against the stock going up and making your buy in even more expensive.
> SpaceX is a pretty important company not just for "the market" but also for many other things (see Russia/Ukraine war)
Starlink, which was rolled in to SpaceX, is/was profitable and it is a factor in Ukraine.
The rocket division is not profitable, but I sense that there might be a path to a profitably operating business.
As for the X/xAI piece, who knows? Long-term it seems like a moon-shot. I appreciate the irony that it's in the wrong division.
True, if Twitter and xAI stopped existing, there would be an uproar from all the suddenly unemployed disinformation botters.
Usually the public starts buying IPOs in open market operations on the secondary market, which removes some of the shiny and "limited" factor.
Edit: why would this get flagged lol?
It all depends on your broker. My Australian broker gave everyone ~40% of their request and refunded the rest (typical Australian practice for IPOs). An American friend put in for >20x as much as I did with his US broker, they gave him nothing and refunded the full amount.
In addition to looking at the "fundamentals" of a company like cash flow and profitability, there is also a 'meta-game' that traders (as opposed to investors) have to look at:
> A Keynesian beauty contest is a metaphorical beauty contest in which judges are rewarded for selecting the most popular choices among all judges, rather than those they may personally find the most attractive. This idea is often applied in financial markets, whereby investors could profit more by buying whichever stocks they think other investors will buy, rather than the stocks that have fundamentally the best value, because when other people buy a stock, they bid up the price, allowing an earlier investor to cash out with a profit, regardless of whether the price increases are supported by its fundamentals and theoretical arguments.
* https://en.wikipedia.org/wiki/Keynesian_beauty_contest
"whereby investors could profit more by buying whichever stocks they think other investors will buy, rather than the stocks that have fundamentally the best value"
In normal inflation you can at least buy commodities. But the US economy is organized in a way that will concentrate the money on stocks, not commodities.
The Fed announced they will transition away from QE yesterday. When they did that 5 years ago, a lot of things happened and they completely gave up on the idea.