The SpaceX IPO is a Trump-approved scam

I’m amazed that so few news organizations are talking about this. I mean, we shouldn’t be surprised that Elon Musk was going to get his “pro quo” at some point—but this IPO filing is just begging for SEC/SDNY attention that we can be sure will never come with Trump’s cronies in charge.
What are the issues? Let’s see—we should start with the fact that it isn’t a truly public company and Elon Musk will never be accountable to shareholders. Major red flags right there. Let’s also look at metrics SpaceX is applying for their internal valuation—like a total addressable market of $30 trillion dollars or a valuation of $2 trillion against $30 billion in total assets and equity. Here’s a good summary of the main issues: https://marketwise.com/investing/spacex-ipo-prospectus-outlandish-details-investors/

Oh…and speaking of those Trump cronies—at least 10 of Trump’s cabinet members or senior agency heads are holding personal stakes in SpaceX or xAI worth $10 million or more—so yeah they aren’t going to get in the way of sham IPO. No conflict of interest, right?

So why should we care—if we don’t want the stock, just don’t buy it…right? Except…we may not have a choice. Normally, these newly listed IPOs have to wait 6 months or longer before the major index funds even consider them for inclusion. Except, in this case, NASDAQ and others are changing the rules with the SEC’s blessing—and SpaceX will be listed on the NASDAQ 100 and FTSE within 2 weeks. They even eliminated the float requirement—meaning SpaceX is no longer obligated to make a minimum of 10% of shares available for the public. Instead, NASDAQ will apply a 3x weight and is essentially forced to buy *more* stock when the supply is constrained. In other words, the indexes along with all the funds and retail investors are going to be forced to prop up the share price and enrich the oligarchs and hedge fund managers at the top. That means casual investors—especially those with IRAs or 401Ks primarily invested in index funds—will be left footing the bill.

This becomes more of a concern when you notice that SpaceX is reducing the lock up requirements for major investors (those holding shares pre-IPO)—so essentially this looks like a massive pump and dump scheme. Speculation holds that Elon Musk will use the cash infusion to immediately have SpaceX swallow up Tesla at a premium —something that isn’t exactly made clear in their S10 filing. They also plan to issue more shares and dilute initial investors’ holdings significantly. These are concerns that aren’t going unnoticed by pension fund managers and major unions, who are begging the SEC to hire an independent auditor.

SpaceX isn’t all bad—the issue is that the good businesses like Starlink are being saddled with the debt of X, xAI/Grok, and probably Tesla in the near future.