The SpaceX Sham | Hacker News Reader

The SpaceX Sham

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39 pointscdrnsf50 comments

> Although SpaceX stock has since fallen far below its IPO price

I'm a skeptic on SpaceX but the IPO price was $135, low was $108 and current price is $130. I wouldn't say that's far below.

Worth noting that it actually opened at $150 on public markets. It's kind of funny how we call the $135 figure the "public offering" price when there is really nothing public about it. Maybe it made more sense in some past era when it was more difficult for third parties to make private pre-IPO investments.

Not that there's anything particularly unusual about this. High profile tech companies almost universally (actually I am not aware of any moderately recent exceptions at all) fall below the actual public opening price in the days or weeks following the IPO. I honestly don't know why anybody buys them.

All you had to do was put in an order with your broker (robinhood, E*Trade, etc). Some brokers did not get much allocation (Schwab) but this was not a hard stock to get at $135.

My understanding based on reading first hand accounts is that very few people who tried for a retail allocation got anything close to what they asked for. Total retail allocation was apparently around 20% of the IPO.

Hard to get a few shares so you can say you have some? Probably not.

Anyone could sign up for the IPO price. I’m a nobody and I was able to buy some shares at $135 on the opening day. You just had to sign up to participate before opening day.

https://news.ycombinator.com/item?id=49264831

Really? i got out of the crypto/finance bubble a few years ago, but that feels heavily like a crypto scam. You create a coin, you keep a few, sell another few to influencers cheaply, then ICO, then profit.

There's some real business there unlike crypto.

There are a lot of people who want to see them fail. Have some patience, it's not even been a year.

In retrospect it was a cunning plan to get $100B from the Musk-faithful to build Terafab. Intel is in, AmericaFirsters support it and Taiwan should feel less secure now.

The stock price is of course ridiculous: Intel lagged behind TSMC, but apparently Terafab has orders for ASML's latest gen machines (2nm). If Intel will manage to get a yield, we'll see.

All this space and AI stuff is marketing. The IPO was to get free money for a serious TSMC competitor.

Whether it's a good idea don't matter. Fundamentals don't matter. What matters is if enough investors think they can make a lot of money.

The bet is on a government bailout of some sort. SpaceX itself is now critical to national security, as is Starlink. Tossing every other Musk company into SpaceX means that when they fail SpaceX itself has to be bailed out. Probably safer than government bonds at this point if you can HODL.

Clearly logic doesn't matter if you'll say Treasuries are less safe than SpaceX because reasons.

Among people with a certain world view, the US government has been days away from defaulting on its obligations for decades on end. These sorts of people tend to like Elon Musk for some reason.

> Probably safer than government bonds at this point if you can HODL.

Not sure how you came to the conclusion that SPCX is safe because of the government backstop/bailout, but government bonds are less safe.

I'll take the other side of your claim here and say SPCX goes bankrupt before the US government does

SpaceX isn't more secure than the government because the government might bail it out in the future, that makes no logical sense. Obviously SpaceX is a higher default risk than the entity supposedly backstopping it.

Not to mention that stock holders are hardly guaranteed to be made whole if the company crashes hard enough to need a bailout.

Plus, couldn't a theoretical bailout come with pretty onerous terms and focus on just the actual space launch & starlink divisions? It isn't hard to argue that they are as critical of a defense contractor as Lockheed. However, supposedly ~80% of the value is AI and Twitter, which certainly aren't in the same category.

I agree that stockholders would likely not come out well at all in a theoretical bailout. A bailout would likely involve chapter 11 or something similar, and shareholders would be last in line behind other creditors. They might get additional protection if it looked like the collapse of the company would significantly affect retirement and pension funds, but that hypothetical certainly doesn't give me any additional faith in the stock.

"Gambling on a bailout" doesn't sound like an appealing investment prospect.

How many government bailouts, like GM for example, continued to trade at astronomical ratios of price to revenue, never mind earnings? Corruption can work miracles and we are in a Golden Age now, but still there are practicalities.

Beltway bandits have been at this game for 100 years, and look at their stock price.

> punitive capital gains taxation

A strange turn of phrase. What is the crime in view that's supposed to be punished?

Being rich. "Anti-oligarchy initiatives" as he puts it. Sounds a tad socialist.

I remember when a post of mine was flagged due to pretty obvious patent trolling against a cool FOSS project, but i made the critical error of 'crying' in my title. Maybe I should flag this to get it out of my system.

it's worse than a scam, he's doing real, permanent damage to the environment

* https://techcrunch.com/2026/07/31/spacex-wont-remove-all-of-...

and illegally, not sure how he's allowed to get away with it

and each starlink deorbit is putting toxic pollution into the atmosphere without penalty (launches too)

* https://www.bloomberg.com/graphics/2025-space-orbit-satellit...

How many satellites would it take burning up in the atmosphere to raise the aluminum content of the atmosphere by just 1 part per billion (not million)? Each satellite is 300kg, it would take 57 MILLION satellites. The cost to do that at current prices would be $138 trillion.

Airplane exhaust has a real measurable impact on the atmosphere, curious why people choose to target satellite debris instead of plane exhaust as their topic of environmental concern.

The article about atmospheric pollution from deorbiting satellites leaves out the biggest source of stratospheric aluminum oxide: Solid rocket boosters. A single Ariane 6 launch creates 100-200 tons of aluminum oxide in the atmosphere (depending on whether it uses 2 or 4 boosters). SpaceX doesn't use solid boosters, so it's a rounding error in terms of its contribution. Also SpaceX is switching to Starship, which uses methane instead of kerosene, drastically reducing the amount of soot produced.

Last year when this topic came up, I did the math for how long it would take before aluminum oxide from satellites was worth worrying about. If you assume the entire satellite is made from aluminum, and that aluminum oxide is as bad as the most potent ozone-destroying CFC, and that the particles stay in the atmosphere forever, it would take 5,000 years before atmospheric levels of aluminum oxide reached the same concentration as R-12.[1] So basically, it's not worth worrying about.

1. https://news.ycombinator.com/item?id=45493143#45494364

> and illegally, not sure how he's allowed to get away with it

The law's hold over you is inversely proportional to your net worth in the US.

> Negative coverage of the IPO was limited due to the participation of so many major banks in the IPO process; they don’t want to poison the cash cow they’re milking for underwriting fees.

WTF? Anyone willing to read this far knows that this is flat out false. The negative coverage was unrelenting, and largely driven by big players peeved by the unconventional process. Anyone who bothers to continue past that point is probably just looking for validation.

It's funny how our perceptions are driven by the source of our news. I generally perceived the positive coverage in regular news as unrelenting. I know the tech news sources I read were constantly complaining about rule changes and manipulations on the part of Spacex, but run-of-the-mill national news outlets seem to be endlessly hyping the stock to the point that a few of my non tech-savvy family members were asking if they needed to buy it as soon as they went public.

https://www.morningstar.com/stocks/why-we-think-spacex-ipo-i...

https://www.nytimes.com/2026/04/01/technology/spacex-ipo-elo...

https://montanaskeptic.substack.com/p/the-spacex-ipo-will-be...

https://www.youtube.com/watch?v=8rS3fTbC7TE

https://www.irishtimes.com/business/2026/06/03/heavily-in-de...

https://www.youtube.com/watch?v=-X6YzlY_8tM

https://jamesthomason.com/spacex-ipo-bagship-carries-full-pa...

https://www.theverge.com/ai-artificial-intelligence/940001/e...

It all seems pretty negative to me.

https://www.foxnews.com/video/6398250508112 "SpaceX makes its historic stock market debut today, set to be the largest IPO of all time with a $1.77 trillion valuation. Elon Musk, founder and CEO, anticipates becoming the world's first trillionaire. Shares will go live at $135 each, potentially surging immediately due to high demand"

https://www.cnn.com/2026/06/12/business/live-news/spacex-goe... "What we covered here • SpaceX soared Friday in its blockbuster stock market debut, with shares gaining 19% after Wall Street’s biggest-ever IPO. • The rocket and AI company, which Elon Musk founded in 2002, is now valued at over $2 trillion, joining Musk’s Tesla as one of the world’s top-ten most valuable companies. • Musk, who owns nearly half the company’s stock, has now made history as the world’s first trillionaire."

https://www.nbcnews.com/business/business-news/spacex-ipo-tr... "For now, investors appear eager to overlook Musk’s politics and focus on his company.

Dan Hanson, a senior portfolio manager at Neuberger Berman, which invested in SpaceX while it was still private said investors should think of SpaceX not just as a rocket company, but as a combination of its launch business, Starlink satellite internet network and artificial intelligence ambitions.

“This team is just getting started,” he said. “There’s a significant opportunity for them to create value as they execute.”

I suspect the vast majority of americans are getting their news from cnn, fox, nbc, abc, pbs.... And I doubt a ton of them are reading the irish times, montana skeptic, or the verge.

Fair enough. I grabbed the list above by searching HK.

The real sham has yet to materialize. You only get a single $1T IPO. For the AI labs, investors are tapped out, and the only thing left is a huge IPO. Google, Meta, Microsoft's cash reserves are drying up, they're squeezing operations for every cent, and sure they can issue some stocks to raise cash, but not $1T.

I think this bubble's failure mode matches that of a Ponzi scheme.

The Fed can still declare some kind of financial emergency and increase the money printing again. My guess is this is likely, given the sway that tech CEOs have over the White House, and the reality of overseas competition.

Not to imply that AI spending isn't a bubble, but there's a difference between cash rich tech giants going slightly free cash flow negative, and a company like Oracle that's all in.

Apple is sitting it out, Google and Microsoft are not taking existential risks relative to their resources, Meta is doing who knows what but it won't break them, and Oracle's fate couldn't happen to nicer people.

It's difficult to get past what comes across as an attempt to analytically substantiate moralistic reasoning. The contention that it's scandalous to raise capital to support an "automated future" then a dotted line to transhumanism and then the conclusion "it's a sham" feels shoddy.

To me, the bigger issue with SpaceX is that there's no real argument for how space exploration will benefit humanity in any tangible way. Humans cannot live sustainably on Mars or the moon -- that's just a straight-up lie. Satellites add some value for sure, but it's pretty limited, which helps explain why most of the launches just support StarLink (which itself is probably unsustainable financially). This whole thing is just a bunch of space nerds pushing society down a terrible cul-de-sac which will lower quality of life in meaningful ways in the coming century.

How is Starlink financially unsustainable? In 2025, Starlink generated $4.42 billion in income from $11.39 billion in revenue. Last quarter Starlink generated $1.6 billion in income from $4.3 billion in revenue.[1] So it's already a profitable enterprise, and their costs will likely go down over time as their launch capabilities improve.

1. https://s21.q4cdn.com/184289198/files/doc_financials/2026/q2...

Here's an OK article on the topic: https://archive.is/eKCJu

Starlink is almost certainly playing games with capex and depreciation to appear profitable when it is not. They're also using political patronage to get contracts from the government to do things that are probably worthless.

The income/profit numbers I used include depreciation, and even if you subtract all space capex from Starlink income, the program would still have a profit of $482 million last quarter. That's a very pessimistic estimate, as it includes costs for many things outside of what's necessary to build Starlink satellites and put them in orbit.

The post you linked to seems to be incorrect on matters of fact. For example, it claims that, "...a large portion of the Starlink constellation consists of V1 and V1.5 satellites...". But of the 9,200 operational Starlink satellites today, 8,000 are v2 minis. Over half of the older v1 and v1.5 satellites have been deorbited, so they don't seem critical to its continued operation. The post also claims that higher RAM and fuel prices will increase the cost of Starlink significantly, but neither are significant costs. It costs SpaceX around $1.4 million to construct a v2 mini and put it into orbit. Even if each satellite had 1TB of RAM, that's what, $50k at the most? And propellant is only a few percent of launch costs. The main expenses (besides satellite construction) are building second stages, refurbishing boosters, and vehicle integration.

If SpaceX is lying about Starlink's profitability, then it seems like the best way to show that is to focus on the numbers. They have 9,200 operational satellites and 12 million customers, meaning each satellite serves 1,300 customers on average. ARPU is $66/month, which means each satellite earns them $86k/month, or $5 million over a 5 year life. (And this is just consumer revenue, not B2B or government contracts.) Each Falcon 9 launch puts 24-29 v2 mini satellites in orbit, so each launch gets them $120-150 million in expected revenue. So the question is: is the cost to construct the satellites, launch them, and operate the network lower than that? SpaceX charges customers $76 million for a Falcon 9 launch, but their costs are much lower. (Probably around $20 million.) Even with pessimistic cost estimates, it's hard to find a way to make Starlink unprofitable without also making things like ISS missions or GPS satellite launches unprofitable. And if that's the case, then arguing over Starlink's profitability is academic, and the real issue is that SpaceX is blatantly lying in their SEC filings. I seriously doubt that is the case.

It doesn't require "lying," per se. It just requires hiding the truth, kind of like what Musk has done for dozens of his other ventures. You do know that SpaceX owns Twitter now, for example? You do know that he tricked his investors into giving his cousin a ton of money for his fake solar lease scheme? You do know that there's still no new roadster, something like 10 years after he accepted deposits for it?

Even if we assume the numbers you're citing are right and this business is insanely profitable, won't this just invite competition? Or are you assuming the government will make SpaceX a monopoly, as it did for Tesla via neverending subsidies?

I'm trying to address one very specific point: Whether Starlink is profitable. I'm not trying to litigate other business practices. The development timeline for a different's company's fancy car for the super-rich is not related to whether Starlink is profitable.

You can't hide the truth if you say you're following GAAP in your SEC filings, and then publish numbers saying that Starlink is making money. Doing so risks massive fines and even criminal penalties.

There are at least three other companies trying to build Starlink competitors (Amazon Leo, Guowang, & Qianfan). It's difficult for them to compete because unlike SpaceX, they don't have reusable boosters. Amazon is hoping that Blue Origin's New Glenn will be able to reduce their launch costs, but until their launch facility is rebuilt, Amazon has to rely on SpaceX, ULA, and Arianespace to get their satellites into orbit. The Chinese competitors also lack reusable spacecraft (and are also working to on that problem), so their launch costs are significantly higher. In the long term, whoever has the lowest launch costs will have the lowest prices, and SpaceX is betting that by the time others have reusable boosters (similar to Falcon 9), they'll have Starship operational. Time will tell if that works out for them.

When you say things like, "Or are you assuming the government will make SpaceX a monopoly, as it did for Tesla via neverending subsidies?" I'm not sure how to respond. First, SpaceX is practically a monopoly because their launch costs are so much lower than the competition. They were responsible for approximately 80% of all mass put in orbit in 2025 (over 2,400 tons). They needed subsidies and government contracts when the company started, but that is no longer their main source of revenue. Second, I don't see how Tesla is a monopoly (there are many competing car companies), nor how they're significantly subsidized compared to other US car manufacturers. How much in subsidies do you think Tesla has gotten compared to their revenue over the years, and how do you think that compares to say, Ford?

ChatGPT estimates Tesla has received $33B in government money directly and indirectly. My guess is it’s much more, since there are intangible benefits such as free marketing. For SpaceX the estimate is $35B+.

The reason no one else has lower launch costs is because no one else has a guaranteed customer willing to waste money on pointless rocket launches. SpaceX’s technology isn’t even particularly novel. If space nerds want Star Trek to actually come true, an actually novel propulsion system is needed, not just scaled up versions of the same thing that’s been done since 1957.

I am absolutely certain Musk has committed securities fraud, repeatedly. I hope that one day the US government returns to normal operations and he gets the Elizabeth Holmes treatment he deserves.

And this has nothing to do with DOGE and woke politics. That’s the one thing where I thought he was on the right side of things, more or less. The problem is straight-up low-interest-rate-enabled financial crime.

Has SpaceX committed fraud with respect to its Starlink numbers?

Starlink v2 satellites are 600k per IPO

Will is an idiot.

You can tell by reading SpaceX IPO docs

Ah yes... Critical Space Theory.

>The real scandal is how much capital the tech oligarchs have been able to raise on the promise of an automated, even transhumanist, future.

Dunno. Why shouldn't they raise money for that? People can always not invest if they think it's bunk.

SpaceX and Elon are the litmus test for the future. You're either with him, or your opinions are ignorant and irrelevant.

Sarcasm? Hard to tell.

They work for Gab, not sarcasm

@cdrnsf is posting negative articles all you do? isn't it exhausting to bathe in negativity all day long?

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