Morningstar analysts believe SpaceX is “significantly overvalued” ahead of its blockbuster IPO.
The analysts say xAI poses a “material threat of value destruction” to the company, with its “economic moat indeterminate.”
Morningstar values SpaceX at $780 billion, which is roughly 48% below its private market valuation of $1.5 trillion.
Bros ! we are winning.
S&P will NOT be changing their inclusion rules for MegaCap IPOs like SpaceX
This means the earliest SpaceX could be eligible to join the S&P 500 is June 2027.
https://finance.yahoo.com/markets/stocks/articles/spacex-ipo-could-hit-popular-101500534.html?guccounter=1They were anticipated to pillage our 401k money.
Space x (xAi), openai and anthropic are about to raid your 401k retirement money though their IPOs. They rigged acceptance rules in march: learn more: https://finance.yahoo.com/markets/stocks/articles/spacex-ipo-could-hit-popular-101500534.html?guccounter=1
He rolled all his debt into it and now 401k holder are going to pay for it all.
Fraud. Right in front of our eyes.
I understand that one major relevant issue that’s been discussed is the impact of very large IPOs coupled with passive index funds and some changes to how indexing works.
A lot of people have money in index funds — these are funds that track a given index.
Traditionally, indexes tend to exclude very newly-listed companies, even if they are large, from being included in indexes. This gives the market time to place a value on the company.
Companies also not-infrequently drop in market capitalization from their IPO.
Recently, the NASDAQ-100 changed its rules so that companies are included much more quickly in the index, and are given a substantial amount of weight even if only a small portion of the shares are actually available for trading.
What this means is that SpaceX will IPO. SpaceX has a very large valuation. This will cause it to be included in the NASDAQ-100 index after 15 days, unlike the way that things had worked in the past. At that point, index funds that track the NASDAQ-100 index (e.g. QQQ or QQQM) will sell shares in companies like Apple and buy shares in companies like SpaceX. If its value drops after that, as is likely, then index fund investors will eat that loss. A lot of shares that are locked up and held by insiders will then unlock (I understand that 90 days and 180 days are significant), and so if those people then want to sell their shares, that will be likely to drive SpaceX shares down. Holders of index funds will lose some money, and pre-IPO holders of SpaceX equity will have made money.
https://www.fool.com/investing/2026/04/01/how-the-spacex-could-affect-these-popular-nasdaq/
The S&P 500 (SPY and VOO are major index funds that track the S&P 500 index) and Russell 1000/2000 index inclusion rules also changed, though I understand that the impact on index funds that track these indices is not as substantial as for the NASDAQ-100 index.
https://spotgamma.com/spacex-ipo-index-changes-spotgamma/
One concern I’ve seen is that if sufficient companies can be blown up to very large valuations and then IPO, operating under more-permissive index inclusion rules may degrade the returns on of index funds, since those index funds will keep buying into large IPOs and likely losing money on doing so. If this sort of thing becomes a major thing over time, it might cause investors to shift out of index funds and into active funds that merely use similar strategies (but avoid buying into IPOs).
SpaceX isn’t the only company that this would affect; some large AI companies like Anthropic and OpenAI, with very large valuations, will likely similarly be affected.
Some folks on Reddit were referencing a video Ben Felix did talking about the phenomenon:
https://www.youtube.com/watch?v=iOyFja87uyw
EDIT: The basic misincentive here would be that NASDAQ controls the NASDAQ-100 index, but their interest is in getting more companies to list on the NASDAQ; they aren’t interested in trying to maximize returns for index fund investors. Random company who might list on NASDAQ would actively like index fund investors to buy their IPO at a high price, since that transfers wealth from holders of index funds to pre-IPO equity holders. Operators of passive index funds (for QQQ/QQQM, Invesco) would like their passive fund to make solid returns, but they don’t get to set the rules for index inclusion; NASDAQ does.
This is very interesting. Would that not create demand for more passive funds / indices that actually keep avoiding this? What about all world indices like MSCI and FTSE? Are they vulnerable to this as well now or in the future?
I’m not the best person to ask about this; I read about this mostly because of the recent rule changes. I have seen a number of financial publications writing articles about it, though.
MSCI
I did read one article commenting that MSCI has not changed their rules and has less-permissive inclusion rules. If you have a lot of money on the line, though, I would not take my own understanding as being authoritative (I mean, even aside from the general principle of taking statements from random unknown names on the Internet with a grain of salt; I’m explicitly not claiming to have a lot of domain expertise here).
I think that the question is why some of the indices decided to change their rules, and whether the same logic might apply to other index operators, and I don’t know the answer to that. I’ve certainly seen many outraged people on Reddit saying that the driving factor is clearly some form of corrupt influence from company that might list on the index operator. An index operator might simply be concerned about keeping their index a useful metric that reflects market behavior — huge IPOs are market behavior. shrugs I don’t have the knowledge to say what’s a reasonable conclusion there, though I think that concern about misincentives is fair.
I do think that it might be worth looking into if it’s something that affects you, though. There are financial publications that have people writing about this, if you want to go digging up articles on it.
Indices that don’t include spacex can still be affected. As the major indices have to make liquidity available to purchase SPCX, that will suppress the value of everything else in their baskets to some extent. So the indices not including SPCX may be immune to direct SPCX volatility, but they won’t be immune to all the effects of rapid inclusion.
If you are invested, get your money out of these funds now. Buy small cap, mid cap and international funds. Don’t let them hand you the bag in the first place.
analysts believe SpaceX is “significantly overvalued”
So a perfectly normal US tech company, operating in a stock market that totally decoupled from economic reality quite some time ago.
It has a shitty LLM company attached, so that magically makes it one of the most valuable companies in the world!
And they’re going to launch those LLMs into spaaaaaaaace!
No, no, no. You see, it all makes perfect sense because economics is built on the nobility of the rational thinking person. SpaceX is worth $1,500,000,000,000 because they have VTVL rockets! It’s the future! Wait, what’s that you said? Honda also has VTVL rockets and their market cap is only $35,000,000,000? Also, NASA has VTVL rockets in the 90s but keeps getting their budget cut? Ok, but the xAI has got to be making [searching] negative several billion dollars a quarter. Nevermind- what about Starlink? They’re making money. Haha, check and mate. Adding in all the money Starlink has made puts SpaceX at [searching] just over negative one Honda in revenue. That… could be worse. Also, I mean, sure, satellite internet providers have been around for 30 years and each one had a period where the future looked bright before upkeep costs or technical issues hammered them into oblivion, but… mhhh…
Look, it’s a very real, very serious, very professional system that is very grounded in reality. This is definitely not a huge scam with several giant red flags of unethical and possibly illegal rule changes to weasel into the NASDAQ-100 to fleece index funds.
I agree with your overall point, but have one quibble:
Also, I mean, sure, satellite internet providers have been around for 30 years and each one had a period where the future looked bright before upkeep costs or technical issues hammered them into oblivion, but… mhhh…
Pre-Starlink satellite internet’s future never looked bright because the latency and upload speeds always sucked. Having a swarm of satellites in a low orbit constantly handing off the connections is genuinely a huge improvement compared to having a few satellites all the way out at geostationary. It’s just a shame that it’s got the deal-breaker of being run by a nazi.
I agree for the most part, but if instead of giving FCC money to a nazi billionaire scumbag we funded public utility fiber, we would have no need to ruin ground based astronomy and we’d have faster, more stable, lower latency connections. Switching to my county’s PUD fiber was huge. I pay $65/mo for gig up and down and get sub 15ms pings in most things.
The FCC should have never given money to any private company, and certainly not one owned by one of the richest scumbags around.
There’s no “instead of”. We already paid for that fiber, and need to start insisting we get what we paid for
… “in addition to” getting low latency high bandwidth satellite. There are many legitimate use cases for satellite internet, including astronomy
While I do see the loss to astronomy, they can filter it out most of the time, they have satellite options, and most importantly there are a lot more internet users than astronomers
The money is gone, because the FCC gave it to private companies. Unless the FCC stops giving grants to private companies, people will have to deal with spotty, unreliable internet that is overpriced. It was very much given to private companies (such as Comcast, Time Warner, and now SpaceX) in much more massive quantities than public fiber. There is definitely at least some “instead of”.
I didn’t say there weren’t legitimate uses, but fiber is more often a better solution and it doesn’t fall out of the sky in an unsustainable way. Once the fiber is there, it’s there, and unlike LEO satellites, it can be repaired. It also doesn’t create an ungodly amount of pollution every time they need to lay some more, no where near as much.
I’d be curious to know what the astronomical use you’re thinking of is.
They can’t always filter it out. A lot of times the satellite tracks are RIGHT in front of what they’re observing. If it weren’t a problem, why are astronomers speaking out about it? Space telescope time is priceless, and it takes years to even get the chance to have a window of time where you’re able to use it. Have you ever seen how booked up they are? Saying they have satellite options only serves to minimize the actual problem to those that have no idea what that looks like.
The point isn’t that there are more internet users than astronomers. The point is that we had a better solution, most of the grants for that solution were given to private companies, and now one of the private companies (owned by a nazi billionaire fuck) is exploiting that for financial gain, while astronomers are catching strays. The point, in the end, is that SpaceX, like other private companies, should have never been given a grant from the FCC, especially when the nazi owner is one of the richest people on the planet.
Promising from a business perspective. Hughesnet was looking at a having a billion customers. SES looked poised to be the internet provider for Europe. Echostar exploded onto the scene. Teledesic, who back in the 90s pioneered the low orbit constellation you mentioned (possibly sent up with NASA’s VTVL rockets?), had a business plan that looks eerily similar to Starlink (speaking of, read up on all the people the Muskrat met with who pitched satellite internet, then he ditched them and did it “”“himself”“”) and was off to a solid start until dot.com crash wiped its funds and it fizzled. Yes, a lot of this was hype or promises of tech was nowhere near ready- “the future LOOKED bright”, not necessarily was.
The whole company is basically a place to hide debt. One giant ponzi scheme.
And yet people think they could tax his wealth. It would pop the bubble
I buy a house, I set it on fire with my foolish ways, I then put it back on the market with a cartoon drawn facia placed in front, to make it look whole, priced at quadruple.
No, no the house is fine
Advertise a really nice house, post great pictures of it, Talk about how it’s the nicest house in the block ……. Then park a beat up RV and an old rusted out bus in the front yard
So, not even a pump-and-dump. Just a straight dump. Here’s a magic trick that turns $100 into $10 virtually overnight!
And thanks to Banksters all standard people will pay the bill. Through the ETF „we pay IPO price“ scam
Can you explain what you mean? Sorry I’m not familiar with how ETF relates to this news. I’m learning a lot in this thread…
Short: Hands off SP500 and Nasdaq ETF as they will buy the three mega IPO to list price, even though their guardrails say only stocks that are one year in market at least. For their uberrich buddies the bankster stretch the rules. Typically, the IPO list price is fantasy and the price goes down first months. In essence, all ETF holder gets a devaluation through this, meaning a money transfer from standard peole to the uberrich billionaires. I moved to SP500 small&med cap ETF.
End game for Twitter/X and xAI; SpaceX took on significant debt to give Elon billions for them, now they are dragging SpaceX value down before they are foisted onto the shareholders. How long after the IPO will xAI get dissolved?
They never gave elon billions.
Musk is running out of companies to merge so it may actually tank SpaceX, here’s hoping I the shockwaves ruin Tesla as well. Would be funny watching Musk shit himself when the banks start trying to collect loans where he used stock as collateral.
Morningstar gonna wished they got in on that sweet ass space gold
Sweet ass-space
almost every ipo in the millenia has been overvalued. All the value of stocks even actively is based on some actual future theoretcial value but once its on the books it just becomes the value. P/E and P/B be damed.
Sooooo, short the ever-loving piss out of the launch?
Serious question, what’s the best way to get rich of this? My understanding is you can’t buy options until few weeks after the IPO.
Don’t need call/put options, leveraged trades are available through most retail stock traders- looks like Coinbase is even already listing pre-IPO trading options with leverage.
don’t need options to short
