It's really concerning given how the indexes are changing rules to fast-track SpaceX being forced into index funds. S&P is also working on updates to S&P 500 to force it down everyone's throats quickly and algorithmically.
I'm usually a Boglehead, with some exceptions, and one exception I'd love is some sort of trade that would eliminate my exposure to SpaceX for the next few years. I'm sure there's some combo of options that would do it.
Probably finding an ESG-focused ETF would do it. ESG basically meant "good governance, we follow laws" which translated into better governed public companies that therefore had better returns, as one would expect. Really weird how it was politicized into something entirely different...
There's an ETF for everything out there. (There are more ETF's than stocks). There'll be a large market for "S&P500 without SpaceX" et al, so it's seems likely somebody will fill it. It probably will have to use a worse name because of the S&P trademark.
> I'd love is some sort of trade that would eliminate my exposure to SpaceX
You can just short SpaceX of an amount equivalent to its share of your SP500 holdings. You will have to pay borrowing costs though, but on something that liquid it will be very small.
Yeah. For comparison, SpaceX will be maybe half the size of MSFT. MSFT is 7.4% of the SP500 index, so for a $1,000,000 portfolio if you were to short MSFT you'd pay 0.25% on the value of that 7.4%, or $185/year.
So eliminating SpaceX exposure will cost you $100 per million of your SP500 ETF per year, or so.
They're saying if the stock goes up and you get margin-called on the short, you have to sell index shares, you can't just annihilate the Tesla shares with the anti-Tesla shares and walk away.
I think most people trade synthetic, just because it's faster and you don't have to wait for settlements, but maybe that is different if you trade onshore (I am a foreign investor).
Anyway if you are synthetic your margin is most likely shared between shorts and long on the same instrument, so no, you wouldn't be called.
We aren’t talking about penny stocks we are talking about a tech giant. At the scales that any ordinary investor is operating at there will be no liquidity issues with shorting it and if it is in your index fund the short and long positions will directly offset if you size it correctly leading you to have net zero exposure to SpaceX.
Yeah you're not wrong. I didn't think about it that way because you can't really break something out of an ETF basket, and you also don't control the ETF basket, but if you think those risks are minimal it's probably fine to just compare dollars-to-dollars.
Personally I would still probably go with the long put strategy unless the price difference is exorbitant.
The ETF that seemingly arbitrarily changes its rules? In such a short time frame too? This change is going proposal to implementation in.. what, two weeks total? I don't know about you but I don't keep up on this stuff unless it hits the news like this one.
You are not entering a contract with a long put. You are buying a contract that, if you want, you can just let expire with no obligation to do anything. It's effectively simple insurance (as opposed to a short position, which is an actual liability, which will eat you alive in exceptional circumstances).
Yes you are, and options are complicated. Actually, the mere fact that you think they are "simple insurance" is enough proof to me that you probably don't understand it enough to safely buy one.
> You are buying a contract
Oh right, you've bought a PUT, now the fun part: you have to manage your position/exposure, could you enlighten me how you do that?
Could you explain me why buying a SpaceX PUT in a high IV regime (e.g. soon after IPO) will have it drop 40% when the IV decreases after 1 month, even though price moved in my favor? It should be simple, it's just a simple insurance product right?
Seriously. Someone, likely not super financially literate, ask a simple question about how to neutralize a stock exposure, and your answer is to advise buying options? Just stop.
Look, I think you're missing my point a little bit. Let's simplify it to risk, since that's what kicked off this conversation.
Your pension or whatever holds an ETF that (soon) contains some SpaceX shares. You buy a put option on SpaceX direct. What's the absolute worst thing that could happen?
Your pension or whatever holds an ETF that (soon) contains some SpaceX shares. You short sell a SpaceX share. What's the absolute worst thing that could happen?
Short term gains are hype and fomo, but if you're holding index funds long like I am, then returns have a lot more to do with performance. And given the lack of hype around ESG, it seems like an exceptional time to buy in to it.
That's also the kind of thing that pension funds should be investing in. They shouldn't invest in hypes as they're by definition in for the long haul and eventually hypes always blow.
Sure you can make a lot of money but only if you know when to get out before the crash. And that's something that doesn't gel well with long term investment.
I don't understand the lingo in your comment but my best possible guess is that I disagree vehemently with it.
Long term dollar cost averaging is not about hype and fomo. Overall pricing in equities does vary according to alternative investment routes, which is why I'm diversified into those as well.
Stonks go up. Stonks go down. Averaging over decades, ownership is about owning a share of productive output of a large portion of our entire economy, an amazing restructuring of social relations that presents an amazing opportunity for the common person, unseen throughout the history of humanity.
Interestingly, these are the exact rules they're working to overturn: currently, no matter how many stupid accounting tricks you pull off, you need to actually be profitable to be included in the S&P 500.
You can sidestep this entirely with a total-market fund like VTSAX/VTI, which hold the entire market and should be more resistant to being gamed.
They’re free-float adjusted so entities like SpaceX are valued only by what’s available on public markets. And Vanguard (and its funds) are owned by its investors, which makes it seem implausible that the rules would be rewritten in a way that would damage investors.
It may list fast, but it covers many more securities from what I understand so it’s insulated. I think the fact is that any broad market ETF is gonna own at least some piece of a $1 trillion company.
The additional securities it includes are weighted by market cap though. So a total market fund ends up being 80% S&P 500, and even if they add thousands more companies those all fit in the 20% slot.
well that's the problem, right? There is no justification for a trillion dollar Elon Musk valuation. And he and his investors know this. That's why they're trying to change the rules to dump the stock while it's irrational on every investor in the world. If they really believed in the value of the company, would they be bribing people to scam the index funds?
Indeed, it's like robbing a bank while the bank is holding a party. Except its everyone's portfolios who are invested in the index funds with potential exposure in scope.
High level, it's concerning to observe this unfold while almost every asset class is at its peak and there is no one willing to purchase (office real estate [1] [2], private equity [3], us equities [4], crypto, etc). Late Stage Capital Markets when you've exhausted greater fools available.
Any of the direct indexing providers will let you blacklist individual stocks from the index. The intended use is to exclude stocks you hold elsewhere (or receive as stock grants) to avoid causing wash sales, but it can also be easily used to make a custom "S&P 499".
you can buy S&P 500, and short the component companies you don't like, but caution, this will achieve the solvency you want, but you will likely remain irrational
In addition to covering the IPO in general last week, Matt Levine also wrote about this specific question Tuesday[1]:
> Historically index providers were in the business of making these sorts of quality decisions, so that index funds were not forced to buy stocks they didn’t like.
> These rules create some tension between the idea that an index is a list of all the stocks and the idea that an index is a list of all the good stocks. Historically, it didn’t matter all that much: The point of the stock market is to tell you which stocks are good, so a company with a high stock valuation should be a very good company, so it should get a high weighting in both the Index of Good Companies and the Index of All the Companies.
> But SpaceX — and also maybe OpenAI and Anthropic in their coming IPOs — will probably break that link. SpaceX will probably (1) do all sorts of stuff that index funds hate and that index providers have specifically tried to exclude and also (2) be gigantic, because the market loves it.
Apparently, the index funds are based on free float and since the number of free floating shares is limited, the total exposure to the index will be very small.
Almost all of the YoY growth in the S&P500 is in a very small number of tech companies. If one of those fast-growing tech companies isn't in the S&P500, the index as a whole becomes obsolete.
The same rules are now affecting other big IPOs. I think Cerebras was confirmed as getting fast listing too even though they’re much smaller. It’s one big act of dumping on retail markets
They will only be added to those indexes if they are actually trading at a value that places them in the top 100 or 500 companies in the US. If they fall below that price then they will be kicked out of the index just like any other company.
What exactly is the risk to normal investors if that’s the case? If it’s all a big scam then they will trade lower and they’ll naturally be kicked out of the index.
This is a rule that will apply to all new companies. When Anthropic and OpenAI go public they will also benefit from the rule. Do you think the media/public will be just as outraged when they do it?
The goal of the S&P 500 is to keep the index representative of the US market. They have in fact changed rules in the past when market conditions have changed. These mega IPOs are an entirely new market condition, as private companies have never been this big before listing in history. So large that they immediately fall into the top 100 or 500 largest companies in the country.
There’s also the fact that Nasdaq is a private company and it now has competition from the new Texas exchange. SpaceX is actually dual-listing on TXSE and Nasdaq. Nasdaq needs to keep these giant IPO companies happy because if they don’t they will list on the competitor exchange which would be disastrous for Nasdaq (supercharging their competitor).
These things affect each other as well. Nasdaq wants to make sure they get the IPO on their exchange, so they include them in the Nasdaq 100. S&P 500 doesn’t want to be outdated by missing a trillion dollar company from their index, while other exchanges like the Nasdaq 100 include them.
There’s a real case to be made that this is just self interest on the part of the exchange and the other index providers.
It’s based on the total market and not artificially limited to a small number of large companies. Plus it’s free-float adjusted so only the publicly-tradable portion of SpaceX is considered when weighting its inclusion so it will constitute only a small portion of the fund. There is also a (small) mandatory delay period which I don’t recall between it going public and it becoming included in the index which should give time for the SpaceX valuation to stabilize on something notionally realistic.
Thankfully, Vanguard and its member funds are investor-owned so are likely more resilient against someone like Elon trying to change the rules.
The index they use is altering the rules. I complained to my account rep, he agreed it was not great and is asking the fund mgmt what the plan is. I doubt there is a lot they can do.
Morningstar said its CRSP Market Indexes will "undergo enhancements to introduce an alternative liquidity screen", making it possible to add SpaceX and other giant IPOs to these benchmarks more rapidly. The funds that use the CRSP indexes as a portfolio benchmark include Vanguard's $607 billion Total Stock Market ETF.
NVDA is like 8% of SPY and 6.7% of VTI. So these mega tech stocks are less dominant in VTI, but it's not a night and day "won't really be affected" kind of difference.
And most index funds including Vanguard track an external index. So when the index changes the rules, Vanguard changes what it buys. Vanguard is also famous for always siding with the management, they take the activist side of any debate approximately 0% of the time, so don't expect them to be fighting this for you.
It’s obviously a scam. First xai acquires failing Twitter and then SpaceX acquires xai? At a made up valuation number that’s too high? The voting structure of SpaceX prevents Elon from ever being held accountable. Not to mention that the revenue and profits are simply not enough to justify the desired value.
Merging the failling companies into the other ones is the usual Elon thing, Solar City didn't get acqui-merged into Tesla for its great result.
It's not a "scam" in the traditionnal sense, it's riding the bubble while it's there, stock value is "supposed" to be about the company performance and potential but technically it doesn't have to be, it's about what some people are willing to pay for it (the stock, not the product the company sells) and that's all. That's also why tesla has such a valuation.
You can see it in the comments even here and other thread about this IPO, some people read the numbers, and some have just religious sounding comments about it being the biggest revolution ever or making the history book etc ...
And that's also why they need to keep elon as CEO because in the scenario where they remove it and get the best car company CEO and become a great regular car company that works and ships lots of great car ... Their valuation would be reduced a factor of ten
Not parent, but Tesla is currently worth more in the stock market than the ten biggest car seller combined
That's with falling sales, with no new product in sight and their latest release a big dud (despite SpaceX ordering massive amount of it to prop it up), and with a pricing and thus margin that is going to be massively lowered or beaten by Chinese ev. Protectionism by the US can only go so far, the US alone doesn't have a trillion dollar worthy car market.
They're also losing the race in self driving, and the biggest innovation in EV (semi instant charging) is coming from China not from them.
They had a lead and a massively advantageous legal situation and they squandered it, now you add the association of Elon to the brand making it toxic in many places and it's not looking rosy, the brand can be fine but it's valuation at one point or another will have a wake up day.
the piece explains how modern finance is de facto built on the shoulders of the privatization of the welfare state. i find it particularly relevant here: the finance class - in this case musk - wants pensioners money via mutual funds, even modifying the rules of indexing...
Why is it a good thing to buy something that is financially not well run up front, and usually things don’t get better as time goes on however, if you’re in first, you can just sell it down the road and let someone else hold the bag in time.
Tesla was a great ride if you got in early but long-term from this point on if you had any significant amount of money, why would you buy them now? Unless you like sleepless nights…
It’s a good thing because it’s definitely an interesting company worth investing into long term. But not at this valuation. 10% seems reasonable given the profits perspective.
Yeah, I also don't want to eat a tasty morsel if you roll it around in the dirt and serve it up covered in bugs and hair.
And that's basically what SpaceX is right now after you account for xAI and twitter in the mix.
So I'd love to own a piece of the SpaceX from a decade ago - but the current offering smells pretty bad.
Combined with the fact that at this point, Musk clearly isn't opposed to running a business with dramatically inflated valuations based on vaporware, lies, & hype (cough - Tesla - cough) it just makes me far more skeptical than I might otherwise be.
I think caution is warranted here.
Essentially - I want to own the SpaceX that could have been if we didn't end up with the shoddy k-hole version of musk in charge of things.
The current SpaceX is in a far better financial and operational position than 10 years ago. By an order of magnitude. 90% of all payload to orbit right now is SpaceX alone. Starlink is profitable all on it's own. Right now. And they are just now picking up steam. American Airlines just signed onto Starlink just last week. This company is most likely gonna be the Coca-Cola of transportation between celestial bodies in solar system for the next 500 years but people on here are arguing over peanuts. On HN of all places.
>The current SpaceX is in a far better financial and operational position than 10 years ago. By an order of magnitude. 90% of all payload to orbit right now is SpaceX alone. Starlink is profitable all on it's own. Right now.
I don't think anyone is really arguing these particular points.
>And they are just now picking up steam. American Airlines just signed onto Starlink just last week. This company is most likely gonna be the Coca-Cola of transportation between celestial bodies in solar system for the next 500 years but people on here are arguing over peanuts. On HN of all places.
This is speculation based on SpaceX's trajectory to this point, however we've seen Musk make some decisions that bring the long term future prospects of SpaceX into question. While Musk remains unbeholden to anyone else, which an IPO doesn't change, he's the biggest risk factor in the equation - and that's not speculation, it's an objective assessment of what's possible within the corporate structure of SpaceX.
What's subjective is whether you anticipate Musk will add more trash to the pile. Was the Twitter/xAI acquisition by SpaceX, with it's stupidly obvious fraudulent valuations, an outlier of some kind? Or was it a predictor of future actions that put similar economic strain on SpaceX, and would affect it's future stability and economic viability? Since Musk is capable of crashing and burning the whole of SpaceX by himself, without anyone legally capable of vetoing his decisions, it's a valid line of questioning.
Personally I feel I've seen enough of how Musk operates that I can be confident he'll make similar decisions in the future, and that makes me consider SpaceX a high risk investment. I'm also far from alone in this assessment, and there's a valid concern from investors of those index funds about being railroaded into adding SpaceX to their mix.
SpaceX is completely dependent upon the government. If said government decides to move on then what long-term and they will move on because of China, Russia and the EU but mostly because of China.
This brief dalliance in private enterprise in space will not last long-term.
shrug not interested in stock market speculation. That ⅕th figure is from 2025 actual revenue figures. The government percentage had dropped from 2024 where it was ¼.
It's variable though, and if DoD decides it wants a bunch of spy satellites or whatnot in orbit, you could see the percentage growing, along with their total revenue ofc.
It's just far from "completely dependent" which was my only objection.
Starlink obviously a huge part - $11½b revenue in 2025.
I guess I don't consider leadership integrity and honesty to be "peanuts".
If anything - as an investor I'd call those core concerns about how I'll make my money back.
Further... this company isn't actually making ANY DAMN MONEY. Of the bundled orgs, only Starlink is profitable, and not profitable enough to offset the losses on spaceX and xAI/Grok. (starlink +4b, spacex -700mm, xAI -6b = -2.7b..., with 30b in debt).
So... no... right now this company is not "Coca-Cola". And that delusional comparison is part of why I think it's correct to be wary right now. On a scale between Enron and Coke... I'd wager we're closer to Enron.
I'll pick up some shares by default given the ETFs I'm in anyways, and that's enough for me...
Have you looked at the S1? The valuation is not based on launchers, it's based on all the potential money they can make as an AI company. Given that they are probably not even in the top 10 in that business, it's just pie in the sky.
Imagine buying the most overvalued company of all time helmed by a crazy man who does Nazi salutes. Payback period? Who cares! Orbital class booster yayyyy
I'd love to own SpaceX - what I don't want to own is all the unprofitable, toxic dogshit its ketamine-addled CEO folded into it that has nothing to do with putting stuff into orbit or selling Starlink.
The part that gets me is that changing of the rules by exchanges and financial regulators to essentially force mass purchases on a small float. That's disgusting and in a just world, those people would go to jail.
The funny part of all this is that SpaceX has achieved a lot but what might break them, or at least weigh them down heavily, is the impulsive and forced purchase of Twitter. Before anyone claims it was some kind of master plan, Elon went to court to get out of it but was forced into it [1].
What happened? Mass firings, pushing his own tweets because his fragile ego couldn't handle Joe Biden getting more likes [2] and Twitter opened the floodgates for hate speech [3] and worse [4]. Advertisers fled. Fidelity (who foolishly was part of the acquisition) massively wrote down the value [5]. Elon had used Tesla shares as collateral and was possibly facing a margin call.
How did he get out of it? Well, in 2023 Elon founded xAI to challenge OpenAI. People invested in this for some reason. And by 2025, Elon merged Twitter with xAI, overvaluing Twitter at $33 billion (which is still down 25% from the purchase) [6].
Now, I imagine the xAI investors were unhappy with Elon using xAI to bail out himself so what did he do? Easy. Make SpaceX acquire xAI of course [7].
Thing is, xAI and Twitter/Grok are a massive drain on SpaceX's finances, losing more than $10 billion annually allegedly [8].
Twitter did not have to end up as part of SpaceX. SpaceX would've been a better company without it. SpaceX already faces headwinds from the incredibly expensive and behind-schedule Starship program. Part of all of this regulatory fixing is to make sure the insiders (and Elon himself) get bailed out.
Yeah, for all the technical excellence by Shotwell and the team ... I don't want my ETF's and pensions buying into that piece of shit CEO and his corrupt 'at a whim' entity manipulation.
Now are we going to bomb Denmark? Or Venezuela style? Greenland of course is part of Miami anyway so that needs to be regaineed ASAP which is another top priority.
> The deal, with SpaceX, is that Elon Musk runs it however he wants, and he does weird stuff, and you have to trust him, and if you don’t like it you can’t complain.
> When SpaceX acquired xAI a few months ago, did a special committee of independent directors approve the transaction? Did Musk recuse himself from negotiations? Was the price set by independent valuation experts using a rigorous process? Did outside shareholders sue to block the deal? Stop. Musk wanted SpaceX to buy xAI, so it did.
> [...] Surely SpaceX has created all that shareholder value more because Musk does what he wants than in spite of Musk doing what he wants; it is hard to accidentally create $1.75 trillion of value. SpaceX’s shareholders signed up for this deal — letting Musk cook — and have been rewarded;
Though (at least to my knowledge) Zuckerberg doesn't have a history of abusing his authority to make deals that advantage other companies he owns at the expense of Facebook.
E.g. SpaceX buying up large numbers of Cybertrucks Tesla couldn't sell at MSRP, not even negotiating a good fleet sale deal.
Facebook is still a Delaware company, with lots of established case law for what Zuckerberg can and can not do, voting majority or not. SpaceX is now some Texas corporation with a state legislature ready to enable whatever Musk wants.
It seems like a fine offer to have exist, but one that a pension fund with low risk tolerance wouldn't want to take. So everything seems reasonable with the world.
Similarly I don't understand why indicies are rushing to change their rules to allow SpaceX in. People accept a certain risk tolerance and changing the rules to ramp up the risk seems questionable at best.
It's really concerning given how the indexes are changing rules to fast-track SpaceX being forced into index funds. S&P is also working on updates to S&P 500 to force it down everyone's throats quickly and algorithmically.
I'm usually a Boglehead, with some exceptions, and one exception I'd love is some sort of trade that would eliminate my exposure to SpaceX for the next few years. I'm sure there's some combo of options that would do it.
Probably finding an ESG-focused ETF would do it. ESG basically meant "good governance, we follow laws" which translated into better governed public companies that therefore had better returns, as one would expect. Really weird how it was politicized into something entirely different...
There's an ETF for everything out there. (There are more ETF's than stocks). There'll be a large market for "S&P500 without SpaceX" et al, so it's seems likely somebody will fill it. It probably will have to use a worse name because of the S&P trademark.
P.S. Here's an example of S&P500 without the magnificent 7 https://www.defianceetfs.com/xmag/
> I'd love is some sort of trade that would eliminate my exposure to SpaceX
You can just short SpaceX of an amount equivalent to its share of your SP500 holdings. You will have to pay borrowing costs though, but on something that liquid it will be very small.
Yeah. For comparison, SpaceX will be maybe half the size of MSFT. MSFT is 7.4% of the SP500 index, so for a $1,000,000 portfolio if you were to short MSFT you'd pay 0.25% on the value of that 7.4%, or $185/year.
So eliminating SpaceX exposure will cost you $100 per million of your SP500 ETF per year, or so.
Shorts have unlimited risk. Buying a put is risk-defined and probably a better strategy.
No, because the unlimited risk of shorting is balanced (hedged) by the unlimited upside of holding the same number of shares via the ETF.
You cannot however sell only SpaceX shares from your ETF to cover your short's losses. So due to liquidity issues I wouldn't recommend your strategy.
What are you talking about? You don't need to touch anything about your ETF. You just have to short a single name on the side.
Also there is no liquidity issue, we're talking SP500 names here, you'll pay GC, which should be around 25bps as the other comment mentions.
They're saying if the stock goes up and you get margin-called on the short, you have to sell index shares, you can't just annihilate the Tesla shares with the anti-Tesla shares and walk away.
That depends if you trade cash or synthetic.
I think most people trade synthetic, just because it's faster and you don't have to wait for settlements, but maybe that is different if you trade onshore (I am a foreign investor).
Anyway if you are synthetic your margin is most likely shared between shorts and long on the same instrument, so no, you wouldn't be called.
We aren’t talking about penny stocks we are talking about a tech giant. At the scales that any ordinary investor is operating at there will be no liquidity issues with shorting it and if it is in your index fund the short and long positions will directly offset if you size it correctly leading you to have net zero exposure to SpaceX.
Yeah you're not wrong. I didn't think about it that way because you can't really break something out of an ETF basket, and you also don't control the ETF basket, but if you think those risks are minimal it's probably fine to just compare dollars-to-dollars.
Personally I would still probably go with the long put strategy unless the price difference is exorbitant.
> also don't control the ETF basket
The ETF is this case follows the index, so there's really no surprise.
> I would still probably go with the long put strategy
Just, don't. There is a world of complexity between a simple short, and entering an option contract with non linear pnl.
The ETF that seemingly arbitrarily changes its rules? In such a short time frame too? This change is going proposal to implementation in.. what, two weeks total? I don't know about you but I don't keep up on this stuff unless it hits the news like this one.
You are not entering a contract with a long put. You are buying a contract that, if you want, you can just let expire with no obligation to do anything. It's effectively simple insurance (as opposed to a short position, which is an actual liability, which will eat you alive in exceptional circumstances).
> You are not entering a contract with a long put
Yes you are, and options are complicated. Actually, the mere fact that you think they are "simple insurance" is enough proof to me that you probably don't understand it enough to safely buy one.
> You are buying a contract
Oh right, you've bought a PUT, now the fun part: you have to manage your position/exposure, could you enlighten me how you do that?
Could you explain me why buying a SpaceX PUT in a high IV regime (e.g. soon after IPO) will have it drop 40% when the IV decreases after 1 month, even though price moved in my favor? It should be simple, it's just a simple insurance product right?
Seriously. Someone, likely not super financially literate, ask a simple question about how to neutralize a stock exposure, and your answer is to advise buying options? Just stop.
Spicy.
Look, I think you're missing my point a little bit. Let's simplify it to risk, since that's what kicked off this conversation.
Your pension or whatever holds an ETF that (soon) contains some SpaceX shares. You buy a put option on SpaceX direct. What's the absolute worst thing that could happen?
Your pension or whatever holds an ETF that (soon) contains some SpaceX shares. You short sell a SpaceX share. What's the absolute worst thing that could happen?
It's not just a short, it's a portfolio of X short + X long. It's effectively canceling perfectly.
I've sold all my stocks. My reasoning is that if AI stocks go bust, they will take the global stock market with them.
> some sort of trade that would eliminate my exposure to SpaceX
I think it's less complicated than you'd think.. just buy LEAPS puts proportional to your exposure.
LEAPS are very expensive.
Because they're long-term, yes. It'll really come down to how much you're willing to pay for monthly Elon-shenanigans-insurance.
I'm very interested in seeing how the market prices these options after the IPO.
One annoying thing is that those "non-standard" ETF variants have much higher management costs than basic S&P500 / All World ETFs.
Dimension funds aren’t bad
Stock markets are ruled by hype and fomo. Good corporate governance has little to do with returns, unfortunately.
Short term gains are hype and fomo, but if you're holding index funds long like I am, then returns have a lot more to do with performance. And given the lack of hype around ESG, it seems like an exceptional time to buy in to it.
That's also the kind of thing that pension funds should be investing in. They shouldn't invest in hypes as they're by definition in for the long haul and eventually hypes always blow.
Sure you can make a lot of money but only if you know when to get out before the crash. And that's something that doesn't gel well with long term investment.
Bro the index is about riding the hype and fomo and when the phenomenon progressively loses track it gets less and less quota
I don't understand the lingo in your comment but my best possible guess is that I disagree vehemently with it.
Long term dollar cost averaging is not about hype and fomo. Overall pricing in equities does vary according to alternative investment routes, which is why I'm diversified into those as well.
Stonks go up. Stonks go down. Averaging over decades, ownership is about owning a share of productive output of a large portion of our entire economy, an amazing restructuring of social relations that presents an amazing opportunity for the common person, unseen throughout the history of humanity.
Add Anthropic and OpenAI to the list. Companies that are bleeding money.
Personally, a company should be making money before adding it to the index.
Interestingly, these are the exact rules they're working to overturn: currently, no matter how many stupid accounting tricks you pull off, you need to actually be profitable to be included in the S&P 500.
There is a market for an S&P 500 ETF without those companies. I'll immediately switch over
You probably want an ETF that follows something like the MSCI USA Ex Mega Cap index then: <https://www.msci.com/indexes/index/758086>
Let me know if you find one! I'm at a loss. (And even then, if I switch I have to pay $$$ taxes on capital gains)
You can sidestep this entirely with a total-market fund like VTSAX/VTI, which hold the entire market and should be more resistant to being gamed.
They’re free-float adjusted so entities like SpaceX are valued only by what’s available on public markets. And Vanguard (and its funds) are owned by its investors, which makes it seem implausible that the rules would be rewritten in a way that would damage investors.
VTI lists fast even before these recent changes as I recall. So it’s more vulnerable, not less.
It may list fast, but it covers many more securities from what I understand so it’s insulated. I think the fact is that any broad market ETF is gonna own at least some piece of a $1 trillion company.
The additional securities it includes are weighted by market cap though. So a total market fund ends up being 80% S&P 500, and even if they add thousands more companies those all fit in the 20% slot.
well that's the problem, right? There is no justification for a trillion dollar Elon Musk valuation. And he and his investors know this. That's why they're trying to change the rules to dump the stock while it's irrational on every investor in the world. If they really believed in the value of the company, would they be bribing people to scam the index funds?
Indeed, it's like robbing a bank while the bank is holding a party. Except its everyone's portfolios who are invested in the index funds with potential exposure in scope.
High level, it's concerning to observe this unfold while almost every asset class is at its peak and there is no one willing to purchase (office real estate [1] [2], private equity [3], us equities [4], crypto, etc). Late Stage Capital Markets when you've exhausted greater fools available.
[1] Office Real Estate Is Facing ‘a Year of Reckoning’ in 2025 - https://www.bloomberg.com/news/features/2024-12-18/commercia... | https://archive.today/fTPSY - December 18, 2024
[2] Blackstone Is About to Take a 54% Loss on Iconic Seattle Tower - https://www.bloomberg.com/news/articles/2026-05-29/blackston... | https://archive.today/fcA8W - May 29, 2026
[3] https://news.ycombinator.com/item?id=47049024 (citations)
[4] BlackRock Scales Back Equities After ‘Generational’ Earnings [Peak S&P] - https://www.bloomberg.com/news/articles/2026-05-29/blackrock... | https://archive.today/lMIcH - May 29th, 2026
Any of the direct indexing providers will let you blacklist individual stocks from the index. The intended use is to exclude stocks you hold elsewhere (or receive as stock grants) to avoid causing wash sales, but it can also be easily used to make a custom "S&P 499".
I'm looking at Schwab (and saw a few others) and couldn't find anything: https://www.schwab.com/learn/story/primer-on-wash-sales
I would assume this is not an ETF but sth else?
https://www.schwab.com/direct-indexing
you can buy S&P 500, and short the component companies you don't like, but caution, this will achieve the solvency you want, but you will likely remain irrational
In addition to covering the IPO in general last week, Matt Levine also wrote about this specific question Tuesday[1]:
> Historically index providers were in the business of making these sorts of quality decisions, so that index funds were not forced to buy stocks they didn’t like.
> These rules create some tension between the idea that an index is a list of all the stocks and the idea that an index is a list of all the good stocks. Historically, it didn’t matter all that much: The point of the stock market is to tell you which stocks are good, so a company with a high stock valuation should be a very good company, so it should get a high weighting in both the Index of Good Companies and the Index of All the Companies.
> But SpaceX — and also maybe OpenAI and Anthropic in their coming IPOs — will probably break that link. SpaceX will probably (1) do all sorts of stuff that index funds hate and that index providers have specifically tried to exclude and also (2) be gigantic, because the market loves it.
[1]: https://www.bloomberg.com/opinion/newsletters/2026-05-26/ind...
Apparently, the index funds are based on free float and since the number of free floating shares is limited, the total exposure to the index will be very small.
And accelerating the schedules for insiders to dump shares.
Almost all of the YoY growth in the S&P500 is in a very small number of tech companies. If one of those fast-growing tech companies isn't in the S&P500, the index as a whole becomes obsolete.
The same rules are now affecting other big IPOs. I think Cerebras was confirmed as getting fast listing too even though they’re much smaller. It’s one big act of dumping on retail markets
They learned from the failure of crypto and have found their bag holders.
We're going to witness bigger blast than the great depression, dot com bust and 2008 crisis combined.
These greedy capitalists are after the pension funds + retail investor (ETFs in particular) through IPOs but there's no profitability in sight.
Waiving profitability requirements to join the S&P 500 and trigger auto-buys from index funds is DEI for corporations.
They will only be added to those indexes if they are actually trading at a value that places them in the top 100 or 500 companies in the US. If they fall below that price then they will be kicked out of the index just like any other company.
What exactly is the risk to normal investors if that’s the case? If it’s all a big scam then they will trade lower and they’ll naturally be kicked out of the index.
This is a rule that will apply to all new companies. When Anthropic and OpenAI go public they will also benefit from the rule. Do you think the media/public will be just as outraged when they do it?
The goal of the S&P 500 is to keep the index representative of the US market. They have in fact changed rules in the past when market conditions have changed. These mega IPOs are an entirely new market condition, as private companies have never been this big before listing in history. So large that they immediately fall into the top 100 or 500 largest companies in the country.
There’s also the fact that Nasdaq is a private company and it now has competition from the new Texas exchange. SpaceX is actually dual-listing on TXSE and Nasdaq. Nasdaq needs to keep these giant IPO companies happy because if they don’t they will list on the competitor exchange which would be disastrous for Nasdaq (supercharging their competitor).
These things affect each other as well. Nasdaq wants to make sure they get the IPO on their exchange, so they include them in the Nasdaq 100. S&P 500 doesn’t want to be outdated by missing a trillion dollar company from their index, while other exchanges like the Nasdaq 100 include them.
There’s a real case to be made that this is just self interest on the part of the exchange and the other index providers.
is anyone surprised? the IPO documents are a disaster, and the finance-tube talking heads are all tearing it to shreds
How can I transfer my shares of VTI for an interest in this pension fund, before it’s too late?
VTI won’t really be affected by this.
It’s based on the total market and not artificially limited to a small number of large companies. Plus it’s free-float adjusted so only the publicly-tradable portion of SpaceX is considered when weighting its inclusion so it will constitute only a small portion of the fund. There is also a (small) mandatory delay period which I don’t recall between it going public and it becoming included in the index which should give time for the SpaceX valuation to stabilize on something notionally realistic.
Thankfully, Vanguard and its member funds are investor-owned so are likely more resilient against someone like Elon trying to change the rules.
The index they use is altering the rules. I complained to my account rep, he agreed it was not great and is asking the fund mgmt what the plan is. I doubt there is a lot they can do.
VTI
> Seeks to track the performance of the CRSP US Total Market Index.
The index that is changing its rules is the NASDAQ100, commonly referred to as the NASDAQ, although NASDAQ is also the name of the exchange.
https://www.reuters.com/legal/government/morningstar-conside...
Morningstar said its CRSP Market Indexes will "undergo enhancements to introduce an alternative liquidity screen", making it possible to add SpaceX and other giant IPOs to these benchmarks more rapidly. The funds that use the CRSP indexes as a portfolio benchmark include Vanguard's $607 billion Total Stock Market ETF.
Well shit.
NVDA is like 8% of SPY and 6.7% of VTI. So these mega tech stocks are less dominant in VTI, but it's not a night and day "won't really be affected" kind of difference.
And most index funds including Vanguard track an external index. So when the index changes the rules, Vanguard changes what it buys. Vanguard is also famous for always siding with the management, they take the activist side of any debate approximately 0% of the time, so don't expect them to be fighting this for you.
BY getting a job in Denmark in the sector that this pension fund covers. It's a "member-owned pension fund for academics."
It’s obviously a scam. First xai acquires failing Twitter and then SpaceX acquires xai? At a made up valuation number that’s too high? The voting structure of SpaceX prevents Elon from ever being held accountable. Not to mention that the revenue and profits are simply not enough to justify the desired value.
Merging the failling companies into the other ones is the usual Elon thing, Solar City didn't get acqui-merged into Tesla for its great result.
It's not a "scam" in the traditionnal sense, it's riding the bubble while it's there, stock value is "supposed" to be about the company performance and potential but technically it doesn't have to be, it's about what some people are willing to pay for it (the stock, not the product the company sells) and that's all. That's also why tesla has such a valuation.
You can see it in the comments even here and other thread about this IPO, some people read the numbers, and some have just religious sounding comments about it being the biggest revolution ever or making the history book etc ...
And that's also why they need to keep elon as CEO because in the scenario where they remove it and get the best car company CEO and become a great regular car company that works and ships lots of great car ... Their valuation would be reduced a factor of ten
It’s a scam and the party will be over when Tesla finally bites the dust, and it will. The worldwide trajectory is not in their favor.
What makes you say that? Chinese EVs?
Not parent, but Tesla is currently worth more in the stock market than the ten biggest car seller combined
That's with falling sales, with no new product in sight and their latest release a big dud (despite SpaceX ordering massive amount of it to prop it up), and with a pricing and thus margin that is going to be massively lowered or beaten by Chinese ev. Protectionism by the US can only go so far, the US alone doesn't have a trillion dollar worthy car market.
They're also losing the race in self driving, and the biggest innovation in EV (semi instant charging) is coming from China not from them.
They had a lead and a massively advantageous legal situation and they squandered it, now you add the association of Elon to the brand making it toxic in many places and it's not looking rosy, the brand can be fine but it's valuation at one point or another will have a wake up day.
There was Cursor somewhere in the mix too.
Should have renamed the company xGoodwill.
again, i’ve been posting this a lot recently, but i still think it’s worth sharing: it’s a summary of an academic paper i wrote, “it’s not finance, it’s your pensions” https://theloop.ecpr.eu/its-not-finance-its-your-pensions/
the piece explains how modern finance is de facto built on the shoulders of the privatization of the welfare state. i find it particularly relevant here: the finance class - in this case musk - wants pensioners money via mutual funds, even modifying the rules of indexing...
it’s not a great sight tbh.
Any chance of bypassing the paywall? Does someone have a archive link perhaps?
Just prepend url with archive.is/ if you want to check
Pay perhaps?
Or do you work for free?
You don't subscribe to twenty five news outlets, what are you, a freeloader? /s
Wouldn't the same argument apply against Tesla?
https://akademikerpension.dk/nyheder/vi-ekskluderer-tesla/
Good. Would love to buy SpaceX stock at a 90% discount after the IPO and the next tech / AI correction.
Why is it a good thing to buy something that is financially not well run up front, and usually things don’t get better as time goes on however, if you’re in first, you can just sell it down the road and let someone else hold the bag in time.
Tesla was a great ride if you got in early but long-term from this point on if you had any significant amount of money, why would you buy them now? Unless you like sleepless nights…
It’s a good thing because it’s definitely an interesting company worth investing into long term. But not at this valuation. 10% seems reasonable given the profits perspective.
Imagine not wanting to own a piece of the first company to make a re-usable orbital class booster.
Yeah, I also don't want to eat a tasty morsel if you roll it around in the dirt and serve it up covered in bugs and hair.
And that's basically what SpaceX is right now after you account for xAI and twitter in the mix.
So I'd love to own a piece of the SpaceX from a decade ago - but the current offering smells pretty bad.
Combined with the fact that at this point, Musk clearly isn't opposed to running a business with dramatically inflated valuations based on vaporware, lies, & hype (cough - Tesla - cough) it just makes me far more skeptical than I might otherwise be.
I think caution is warranted here.
Essentially - I want to own the SpaceX that could have been if we didn't end up with the shoddy k-hole version of musk in charge of things.
The current SpaceX is in a far better financial and operational position than 10 years ago. By an order of magnitude. 90% of all payload to orbit right now is SpaceX alone. Starlink is profitable all on it's own. Right now. And they are just now picking up steam. American Airlines just signed onto Starlink just last week. This company is most likely gonna be the Coca-Cola of transportation between celestial bodies in solar system for the next 500 years but people on here are arguing over peanuts. On HN of all places.
>The current SpaceX is in a far better financial and operational position than 10 years ago. By an order of magnitude. 90% of all payload to orbit right now is SpaceX alone. Starlink is profitable all on it's own. Right now.
I don't think anyone is really arguing these particular points.
>And they are just now picking up steam. American Airlines just signed onto Starlink just last week. This company is most likely gonna be the Coca-Cola of transportation between celestial bodies in solar system for the next 500 years but people on here are arguing over peanuts. On HN of all places.
This is speculation based on SpaceX's trajectory to this point, however we've seen Musk make some decisions that bring the long term future prospects of SpaceX into question. While Musk remains unbeholden to anyone else, which an IPO doesn't change, he's the biggest risk factor in the equation - and that's not speculation, it's an objective assessment of what's possible within the corporate structure of SpaceX.
What's subjective is whether you anticipate Musk will add more trash to the pile. Was the Twitter/xAI acquisition by SpaceX, with it's stupidly obvious fraudulent valuations, an outlier of some kind? Or was it a predictor of future actions that put similar economic strain on SpaceX, and would affect it's future stability and economic viability? Since Musk is capable of crashing and burning the whole of SpaceX by himself, without anyone legally capable of vetoing his decisions, it's a valid line of questioning.
Personally I feel I've seen enough of how Musk operates that I can be confident he'll make similar decisions in the future, and that makes me consider SpaceX a high risk investment. I'm also far from alone in this assessment, and there's a valid concern from investors of those index funds about being railroaded into adding SpaceX to their mix.
SpaceX is completely dependent upon the government. If said government decides to move on then what long-term and they will move on because of China, Russia and the EU but mostly because of China.
This brief dalliance in private enterprise in space will not last long-term.
Only a fifth of spacex revenue is currently from government contracts, a percentage that they forecast will continue to trend downwards.
(not to say that isn't a huge risk if it disappeared, it's just far from "completely dependent")
How much of their projected revenue is from AI that will never materialize?
shrug not interested in stock market speculation. That ⅕th figure is from 2025 actual revenue figures. The government percentage had dropped from 2024 where it was ¼.
It's variable though, and if DoD decides it wants a bunch of spy satellites or whatnot in orbit, you could see the percentage growing, along with their total revenue ofc.
It's just far from "completely dependent" which was my only objection.
Starlink obviously a huge part - $11½b revenue in 2025.
I guess I don't consider leadership integrity and honesty to be "peanuts".
If anything - as an investor I'd call those core concerns about how I'll make my money back.
Further... this company isn't actually making ANY DAMN MONEY. Of the bundled orgs, only Starlink is profitable, and not profitable enough to offset the losses on spaceX and xAI/Grok. (starlink +4b, spacex -700mm, xAI -6b = -2.7b..., with 30b in debt).
So... no... right now this company is not "Coca-Cola". And that delusional comparison is part of why I think it's correct to be wary right now. On a scale between Enron and Coke... I'd wager we're closer to Enron.
I'll pick up some shares by default given the ETFs I'm in anyways, and that's enough for me...
> Imagine not wanting to own a piece of the first company to make a re-usable orbital class booster.
They didn't say they didn't want to own it, they said they wanted to own it at a : "90% discount after the IPO and the next tech / AI correction."
It is possible for a company to be both technically impressive and horrifically overvalued.
I think it's undervalued.
Have you looked at the S1? The valuation is not based on launchers, it's based on all the potential money they can make as an AI company. Given that they are probably not even in the top 10 in that business, it's just pie in the sky.
Welp, if enough people think like the other fella, line will go up and money will be made
Something about finding out who's swimming naked once the tide goes out
Great, you have an opportunity to make bank, then, no?
If Musk thought that, why would he need to have all the rules changed?
SpaceX is now an AI company with a rocket side hustle. At least that’s how the S1 looks.
With this governance structure, you won't actually own anything. Ownership implies that you have a say as a shareholder.
This implies there's no price at which owning SpaceX is a bad idea, which is obvious nonsense.
Imagine ignoring actual financial reality because Wow Big Rocket Go Up!!!
To be fair, they're ignoring reality because the big rocket comes _down_ :P
Don’t make emotional investment decisions!
Imagine buying the most overvalued company of all time helmed by a crazy man who does Nazi salutes. Payback period? Who cares! Orbital class booster yayyyy
Say what you want about nazis, but they are good at rockets.
I'd love to own SpaceX - what I don't want to own is all the unprofitable, toxic dogshit its ketamine-addled CEO folded into it that has nothing to do with putting stuff into orbit or selling Starlink.
prediction: SpaceX will not escape Earth's gravity. Meaning... what goes up will come down.
The part that gets me is that changing of the rules by exchanges and financial regulators to essentially force mass purchases on a small float. That's disgusting and in a just world, those people would go to jail.
The funny part of all this is that SpaceX has achieved a lot but what might break them, or at least weigh them down heavily, is the impulsive and forced purchase of Twitter. Before anyone claims it was some kind of master plan, Elon went to court to get out of it but was forced into it [1].
What happened? Mass firings, pushing his own tweets because his fragile ego couldn't handle Joe Biden getting more likes [2] and Twitter opened the floodgates for hate speech [3] and worse [4]. Advertisers fled. Fidelity (who foolishly was part of the acquisition) massively wrote down the value [5]. Elon had used Tesla shares as collateral and was possibly facing a margin call.
How did he get out of it? Well, in 2023 Elon founded xAI to challenge OpenAI. People invested in this for some reason. And by 2025, Elon merged Twitter with xAI, overvaluing Twitter at $33 billion (which is still down 25% from the purchase) [6].
Now, I imagine the xAI investors were unhappy with Elon using xAI to bail out himself so what did he do? Easy. Make SpaceX acquire xAI of course [7].
Thing is, xAI and Twitter/Grok are a massive drain on SpaceX's finances, losing more than $10 billion annually allegedly [8].
Twitter did not have to end up as part of SpaceX. SpaceX would've been a better company without it. SpaceX already faces headwinds from the incredibly expensive and behind-schedule Starship program. Part of all of this regulatory fixing is to make sure the insiders (and Elon himself) get bailed out.
It's also not the first time [9].
[1]: https://www.pbs.org/newshour/economy/elon-musk-offers-to-end...
[2]: https://www.theguardian.com/technology/2023/feb/15/elon-musk...
[3]: https://www.nytimes.com/2022/12/02/technology/twitter-hate-s...
[4]: https://www.washingtonpost.com/technology/2023/07/27/twitter...
[5]: https://www.axios.com/2023/10/29/fidelity-twitter-x-value-el...
[6]: https://www.fintechweekly.com/magazine/articles/xai-acquires...
[7]: https://www.reuters.com/business/musks-spacex-merge-with-xai...
[8]: https://www.bloomberg.com/news/articles/2025-06-17/musk-s-xa...
[9]: https://www.theverge.com/2016/11/21/13698314/tesla-completes...
Good for Denmark.
Yeah, for all the technical excellence by Shotwell and the team ... I don't want my ETF's and pensions buying into that piece of shit CEO and his corrupt 'at a whim' entity manipulation.
Sorry, fuck SpaceX
Now are we going to bomb Denmark? Or Venezuela style? Greenland of course is part of Miami anyway so that needs to be regaineed ASAP which is another top priority.
Matt Levine described it well (https://www.bloomberg.com/opinion/newsletters/2026-05-21/spa...)
> The deal, with SpaceX, is that Elon Musk runs it however he wants, and he does weird stuff, and you have to trust him, and if you don’t like it you can’t complain.
> When SpaceX acquired xAI a few months ago, did a special committee of independent directors approve the transaction? Did Musk recuse himself from negotiations? Was the price set by independent valuation experts using a rigorous process? Did outside shareholders sue to block the deal? Stop. Musk wanted SpaceX to buy xAI, so it did.
> [...] Surely SpaceX has created all that shareholder value more because Musk does what he wants than in spite of Musk doing what he wants; it is hard to accidentally create $1.75 trillion of value. SpaceX’s shareholders signed up for this deal — letting Musk cook — and have been rewarded;
Isn't that how Facebook is ran too? Basically Zuckerberg's private company, that in theory is public?
Right, if Meta had good governance Zuck wouldn't have been allowed to invest so much in Metaverse.
Though (at least to my knowledge) Zuckerberg doesn't have a history of abusing his authority to make deals that advantage other companies he owns at the expense of Facebook.
E.g. SpaceX buying up large numbers of Cybertrucks Tesla couldn't sell at MSRP, not even negotiating a good fleet sale deal.
Where did that $70B from the metaverse go to?
As far as I know, he lost that value with honest bad decision making.
Facebook is still a Delaware company, with lots of established case law for what Zuckerberg can and can not do, voting majority or not. SpaceX is now some Texas corporation with a state legislature ready to enable whatever Musk wants.
Tech bros reinvent autocracy
It seems like a fine offer to have exist, but one that a pension fund with low risk tolerance wouldn't want to take. So everything seems reasonable with the world.
Similarly I don't understand why indicies are rushing to change their rules to allow SpaceX in. People accept a certain risk tolerance and changing the rules to ramp up the risk seems questionable at best.