No longer will there be a year of price discovery for index funds, 15 days. Meaning index funds have to buy it at the peak of the hype cycle. Will be a huge wealth transfer from mom and pop retirement accounts to the ultra wealthy.
They’re taking everything thats not nailed down. A wealth tax is the only way, it cannot continue like this.
There's no rule you have to own QQQ and indeed most people don't. There are thousands of low cost ETFs that provide passive exposure to the market. If this new rule bothers you, be like most people and buy one of those instead of QQQ. Problem solved.
Like sure, let's improve our tax systems (as an aside, I would say there are many more efficient and progressive options than a wealth tax, but whatever), but I don't see how there is even a tangential link between that topic and the NDX rule change.
After 20+ years in the market, today I learned: "The S&P 500 is a float-adjusted, market-capitalization-weighted index."
So presumably an S&P 500 index fund is not disadvantaged, since it is tracking a float-adjusted index, i.e. the weight of SpaceX will be tiny if its float is tiny.
Or, is there a nuance that I'm missing?
Nasdaq already caved. FTSE and S&P are supposedly considering it.
https://www.economist.com/leaders/2026/03/31/index-providers...
I don’t tend to let my emotions out this much here, but utterly fuck everything about this administration, and fuck anyone who voted in favor of it.
I’m genuinely confused how a passive investor winds up tracking the NASDAQ 100 versus a broader index.
Also, if you’re picking and choosing your exposures, you aren’t passive.
Or would you say that e.g. an ETF tracking MSCI ex-US is not a passive fund?
I’d consider someone that puts $50 into Coca Cola stock every paycheck a passive investor
Assets aren’t passive or not; investing styles are. The degree to which one’s returns earn from, or are expected to earn from, selection effects determines if you’re investing passively or actively. If I say trade SPYs, I’m an active investor. If I buy and hold a custom broad-market benchmark, I’m passive. Buying MSCI ex-US without a hedge is an active investment decision. If it’s bought and held it’s more like a passive strategy over time, provided the U.S. doesn’t dramatically over or underperform the global markets.
You buy VTI, you're impacted.
Seems like MSCI can add new large constituents very quickly as well [1], so to remain neutral to the frenzy until a price has been discovered, one might need to actively short.
[1] e.g. https://www.msci.com/eqb/methodology/meth_docs/MSCI_GIMIMeth...
The argument that Starship is somehow an experimental/unproven technology that might fail to materialise was absurd but plausible sounding before flight 1, there were many new technologies simultaneously being deployed to a single launch system in one go.
But after 3 tower catches of the booster demonstrating centimetres of guided precision of the entire stack, this is becoming a tired argument.
I know the author is not making that case at all here, but it seems like one the core reasons to undervalue SpaceX is that Starship might not work out, and this all sounds exactly like how reusability might not work out for the Falcon 9 from 10 years ago.
So what is the near-to-medium-term economic prospect of Starship? That's the question. You can't just say "bigger rocket make more money", because there exists a useful upper to the size of payloads that companies actually want to ship to LEO in practice. To use an analogy, we have jumbo jets, but most flights are not on jumbo jets.
It’s not really sensible to compare a single spacecraft with what is essentially a fleet of ships with an order of magnitude greater cargo capacity. It’s the possibility of refueling that unlocks the ability to push really large payloads beyond LEO, and many of the more audacious plans (like a Moon base) do require a lot of cargo well beyond LEO.
Well, they are going to live with multi-customer payloads if Starship can do it for a tenth of the price. There's already a large market for ride-sharing and it's only going to get bigger.
Except that at some point this stops being true. Induced demand is not infinite. There's no telling when we'll reach that point, or indeed if we've already reached it.
This is only true because we are so completely beholden to the tyranny of the rocket equation with the current status quo. With the $/kg (and payload volume) that Starship would unlock, the entire ELO/GEO/Interplanetary/Deep Space market looks very different.
Labs in space. Hotels in space. Weapons in space. Much more interesting satellites in space. More government science missions. Privately funded science/research missions. etc
My 50% CI on Starship's fair market value at IPO time is $123b - $227b, with a 80% CI even wider, not based on my own modeling, but based on anchoring to analysts that give credible arguments.
SpaceX has basically admitted as much by promising Starship 2 & 3 with larger payloads (that Starship 1 was already supposed to deliver).
[1] https://www.americaspace.com/2024/04/20/starship-faces-perfo...
I think a lot of it depends on whether they can make the reuse of the second stage work without having to redo stuff constantly like the shuttle. Reusing the booster will obviously save tons of money and make launches cheaper, but they're competing with themselves here. How big is the launch market with cheaper launches? We don't actually know.
The other core value generation product will be financial transactions. It is unproven whether X money will be adopted for friction free transactions across national boundaries and whether the company can compete in the financial services sector.
I missed 2 and 3 it seems.
net income probably: $1.5B – $3B
P/E:500-1000
Of course people will trip overthemselves to buy it up.
That's the thing about SpaceX, some businesses are real businesses that can be modeled in normal ways, like the government launch contracts, and to some degree starlink.
Others, like ~all of xAI, and the starship stuff, are being valued completely independent of revenue. I predict the IPO investors will generally follow the analysis consensus today with those eye-popping numbers.
It's 24 years old with 16 billion revenue. Suppose you had a warchest and had the option to buy SpaceX at 1750 billion, or to spend a fraction of that to replicate its technology. Could you?
I've seen estimates that SpaceX spent less than $50-60 billion in cash during its lifetime. That's in the range of its cumulative revenue + capital raised, too.
I just don't really see how this couldn't be replicated, if the market was big enough. But it seems to me that Space isn't that useful yet, and the market isn't that big yet, to the point that it doesn't warrant lots of competitors like the thinking on AI.
It's absolutely bonkers and wrong but it's unlikely to raise to the level of actual misrepresentation.
But as you say, going back to the xAI + SpaceX merger, analysts consistently seem to value it as if it is, so I predict the public will too, at IPO time.
I mean that Starlinks consumer broadband is valued at ~38x revenue, when other telcos are valued around 1.5x revenue. That revenue is 2533% more expensive, why pay such a big premium for something that's essentially the same?
Also, AT&T and Verizon customers don't love their provider. They despise them. I walked into a Verizon store last year and was outright scammed by the staff member into their insurance plan after explicitly declining it (they just added it to the bill anyway).
These legacy companies will be irrelevant.
1. Tesla was priced at $2.5b end of 2010. 2. Tesla started production that year of the model S, with nearly 500km range and 0-100 in 4.4 seconds, still competitive 16 years later. It was an obvious disruption of a proven market. 3. that car market was valued at half a trillion at the time.
So Tesla being valued at 0.5% of the market, with disruptive technology, seems fine. Of course it was a moonshot, but hindsight is 20/20.
But what is the total market here that it's stepping into? Seems like SpaceX is servicing the majority of the market for years, yet it just has 16 billion revenue. How that gets you to 1.75 trillion, I don't know.
For comparison, it is routine to see sale prices of 3x to 5x revenue for many, many kinds of everyday businesses that have much less potential than Tesla.
There are very, very few businesses whose shares one could have purchased in 2010 that performed better over the subsequent 15 years. That is about as objective as one can get about determining whether or not something was under or over valued (in 2010).
Any mid-sized country would have multiple cellphone and Internet providers with larger customer bases and less upkeep.
I mean if you value a company for its future cashflows, how long will Starlink be the only game in town? Will we not see other rockets/space-internet competitors in 2040 for example, in 15 years from now, from any other company (or even, any other state actor)? I think we will, and I think that timeline is generous. Without a monopoly you're competing the price towards marginal cost to cater to a tiny and shrinking fraction of the world that needs satelite internet. The vast majority of people live in urban environments, particularly among those who can afford internet in the first place, and it's only growing further in that direction.
I think Starlink is a wonderful product but there's a reason it has $10b revenue, while telecom companies around the world do more than $1.7 trillion in revenue.[0]
Starship: zero competitors & potentially makes humans inter-planetary.
Seems crazy if investors put more value on Grok.
What is the realistic, non-science fiction appeal of this?
Humans being interplanetary would be an amazing technical tour de force. But relatively speaking, there isn’t much revenue there.
European settlers being on the north american continent would be an amazing technical tour de force. But relatively speaking, there isn't much revenue there.
Check out Matt Levine commentary, which goes into more detail (SpaceX Indexing) https://www.bloomberg.com/opinion/newsletters/2026-03-31/are...
Wait for the lock-up terms.
Source: https://starlink.com/business/aviation ($250->$10k/mo)
https://starlink.com/business/maritime ($250/mo)
https://starlink.com/business/mobility ($65->$540/mo)
The point I have more issue with is that a 60 or 100 PE ratio only makes sense in a high-growth scenario. Telecoms are valued at 9x by comparison. 60 or 100 only makes sense if you expect it to grow by 10x from here, and face no competition and keep prices this high.
And that seems like a bit of a reach. The richest people on the planet live in urban environments in US/EU/Asia, with fast and widespread 5G.
Yes, rich people on boats in the pacific, hiking remote mountains, and researchers in Antartica exist, but they're not a market of 200 million people. And even if you get there, that's still just 120b, not 380b valuation.
I ended up largely deferring to them, e.g. predicting the public will value xAI at $258 billion ($222b - $310b) at time of IPO, even though I've elsewhere been skeptical that xAI should be valued like a frontier AI lab.
It's a keynesian beauty contest
The SpaceX IPO: retail investor notes
https://news.ycombinator.com/item?id=47612775
SpaceX files to go public
Of course once again, you are "not allowed" to be early into pre-IPO companies which is where the actual money is made.
The moment several companies start IPOing, you are already too late for those multiples and have to wait for a massive crash until these stocks reach all time lows after IPO.
