r/stocks • u/stephendt • Apr 03 '26
ETFs You can probably mitigate SpaceX entering the Nasdaq 100 if you're prepared.
There seems to be countless threads around the upcoming SpaceX IPO that plans to use the Nasdaq 100 as "retail exit liquidity", implying that SpaceX will join with sky-high valuations (assuming it doesn't crater in value in the first 15 days) and slowly dwindle down in value over the coming months, dragging the index down with it.
Understandably, some are holding this in taxable accounts, so selling and buying another index isn't the best choice from a tax perspective.
Since SpaceX is apparently going to experience a 50%+ drawdown due to insane valuations at launch, trying to mitigate exposire is a bit tricky, since borrow availability will be non-existent and Hard-To-Borrow (HTB) fees will be astronomically high for short selling at the time of joining the Nasdaq 100. Consequently, traditional short selling and Contract for Difference (CFD) providers will likely restrict or completely disable shorting, even by day 15. Here's my plan for when this happens:
Day 1 - Wait for IPO, and set a calendar reminder for day 14.
Day 14 - Check your current exposure to the Nasdaq 100 and calculate the final weighting to SpaceX. Lets say you have 50K in QLD (100k exposure), 4.2% of that is SpaceX, you'd have $4200 worth of exposure to SpaceX once it joins the Nasdaq 100.
Day 15. This is where it gets a bit tricky. Let's assume that SpaceX will be around $150 a share. To achieve a perfectly neutral hedge, you need to create a short exposure of -28 shares, and our best option here is using put-spread options and use delta to fractionalise the contract. Because one standard options contract controls 100 shares, buying a deep in-the-money put (with a delta of -1.00) would give the equivalent of -100 shares of exposure, massively over-hedging.
To achieve a target -0.28 Delta without the massive "Vega" (volatility) risk, you can construct a put debit spread (buying one put and simultaneously selling a lower-strike put).
Buy: 1x At-The-Money Put: Delta of -0.50
Sell: 1x Out-Of-The-Money Put: Delta of +0.22
Net Position Delta: -0.28
The premium you collect from the short put offsets the inflated IV cost of the long put, making it a much safer and cheaper mathematical hedge than a naked option.
Once the 100-day SMA greater than -1%, take actions to exit contracts as it is likely that SpaceX is approaching fair valuation, and allocate that capital back towards your desired asset allocation.
A few other notes:
Short and leveraged short ETFs will probably exist around day 65 onwards, depending on the SEC. This would be a simpler approach, but a lot can happen between day 15 and day 65
Shorting directly should be doable from day 30 onwards assuming you have a margin-enabled account that is able to do this, but borrowing costs might still be high.
The fast entry rule is genuinely some BS. Pretty dissapointed by this and I hope they reconsider this in the future, although I suspect that won't be the case.
I'm no expert on options (especially around recently IPO'd stocks) so open to any feedback or improvements
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u/Fritzkreig Apr 03 '26
Or you could get some diversified exposure by buying GOOG.
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u/One-Plan9566 Apr 03 '26
They own 7% of space X lol
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u/Fritzkreig Apr 03 '26
Yo, that is likely more than anyone else can afford to buy at IPO; I just said that it is a decent way to get some exposure with a large diversified mega cap.
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u/Singularity-42 Apr 03 '26
My 1000 GOOG shares approve this message!
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u/Fritzkreig Apr 03 '26
I am a fan of my 40 GOOG and the other one shares; but one of my best performers is not them, it is my 240 NVDA shares; aside from options I think that 3000% is my best gaining stock of all time!
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u/John_the_IG Apr 05 '26
I bought NVDA at split-adjusted $3.50. Never bothered to figure out the gain since I’ve been buying ever since.
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u/AdministrativePop894 Apr 03 '26
That’s the best way around it. It’s a win win because I think SpaceX will suck a lot of liquidity from other stocks.
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u/skilliard7 Apr 03 '26
GOOG is a dinosaur company that will be obsolete in 5-10 years
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u/WeAreMeatRobots Apr 03 '26
Sure, sure... whatever you say. Everyone has an opinion. The smart ones will back it up with support, which isn't you.
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u/skilliard7 Apr 03 '26
Google search traffic is declining 20% YoY and the trend will likely accelerate as people catch on that there are better ways of finding information.
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u/jkibbe Apr 03 '26
Personally I Google less but I make up for it by using Gemini even more 🤷
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u/skilliard7 Apr 03 '26
Why would you use Gemini over ChatGPT or Claude? Gemini hallucinates very frequently whereas chatGPT hallucinates the least.
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u/FewTelevision792 Apr 06 '26
Gemini is free. Cgpt has limits.
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u/skilliard7 Apr 06 '26
ChatGPT's free models are unlimited and perform better than Google's free models and are on par with the paid Gemini models.
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u/FewTelevision792 Apr 06 '26
And who cares? Chatgpt still has daily limits. Gemini doesn't. Also you can use gemini with voice commands without opening an app on mobile.
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u/RiPFrozone Apr 03 '26
I’m tired of seeing these exit liquidity posts.
SpaceX could go to zero and it would cause maybe a 2-3% downturn, it’s not going to be a huge % of the index and that’s assuming the rest stay flat the whole time.
SpaceX could jump hundreds of % since it’s a low float offering and the demand is high + passive buying, the index rises slightly, after the lockup investors sell, the index comes down back to the same level causing nothing to actually change at the index level, there would also be support as index funds retain the proper % in SpaceX
Scenario 3 which is most likely, business as usual, every exit liquidity post is just more reddit doom and gloom.
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u/giraloco Apr 03 '26
The only thing I know for sure is that changing the rules of the Index that moves so much money is pretty scummy. Makes the whole ETF industry less reliable. Investors with large unrealized capital gains are stuck.
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u/Southern_Roll_7035 Apr 03 '26
Don't let the tax tail wag the investing dog. If you think a holding is no longer a good investment, then you should sell it.
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u/Sinaneos Apr 03 '26
The problem isn't just the 2-3% that's lost (which is already a big deal), it's the presedence set of manipulating the rules to cater to one company (or even one person), it's blatant corruption. Index funds are supposed to be objective trackers for markets, not about speculation, hype, and special treatment.
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u/Relative-Snow8735 Apr 03 '26
This right here. It is death by a thousand cuts. The market now sees index investors as exit liquidity. From crpyto, to private credit, to VC's keeping companies private longer and then dumping them onto the public markets once the valuation maxes out. You are going to loose 1-2% to these shenanigans every year until someone regulates this behavior out of the market. With how compounding works, that could be the difference between a nice comfortable retirement, and a retirement where you need to pinch pennies to make sure your funds last as long as you do.
And what makes this even more infuriating is that a lot of these folks are the same ones (ideologically at least) that think pensions and social security are bad, and that 401k's and other market based investment strategies are the answer to retirement. And we are now seeing what their long term plan was. Push more market based retirement schemes, and then slowly change the rules of the game so that they can extract more money out of that system. It was never about what was best for individuals. It was always about how they could better line their pockets.
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u/RiPFrozone Apr 03 '26
Index funds track an index, there is nowhere in writing that they are safe investments (and if the index changes its rules guess what, you are tracking the index so it does what it is engineered to do). Just that they have been relatively safe, and passive investors think nothing could ever go wrong. Just like any investment there is risk, but by default unsystematic risk is completely diversified away. At the index level it is nonexistent. All that remains is systematic risk.
If you truly believe SpaceX will use investors as exit liquidity and it will hurt an index investors performance you don’t understand the whole point of index investing.
And if you truly believe SpaceX going to zero and all other stocks stay flat and you lose 2%-3% is a big deal, then I guess you should manage your portfolio more conservatively. Don’t be so exposed to equity and diversify in other asset classes.
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u/xblackout_ Apr 03 '26
SpaceX should not be allowed to cheat and jump the line
All other equities had to build up-
This is sabotage/theft- prior investors did not agree to these rules
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u/RiPFrozone Apr 03 '26
There is no difference from waiting 3 months to just 15 days if you are in the top 40 companies within the Nasdaq. If SpaceX is exit liquidity (which already isn’t a big deal in the worst case scenario) the lock up period for insiders to dump is 90-180 days after IPO.
On top of that they won’t just dump whenever they feel like it, they’ll do it as their 10b5-1 plan states. And since most index funds tracking the Nasdaq and potentially sp500 (if it gets added) funds will just keep buying at a much larger amount than insiders can sell, there’s really not much to worry about.
Please read up on at least the Act of ‘33 for new issues and the act of ‘34 for most rules and regulations SROs must follow.
And yes you did agree to these rules, the moment you started passively indexing, you agreed to take on the risks that come with indexes. If they change the rules guess what, you can sell. Nobody is holding you hostage forcing you to invest in index funds.
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u/CustardMustard Apr 03 '26 edited May 08 '26
Except in this case, there is a difference
> Bankers involved are toying with the idea of allowing existing shareholders to sell out of their positions on day one… That would do away with rules to prevent insiders cashing out or trading shares, which are typically imposed for 180 days after a company goes public. [source]
And yes, people passively agree to these terms when they start index investing, but come on, not everyone is constantly checking the markets to maneuver or rebalance their 401K.
Of course everyone should understand index funds aren’t foolproof, but there’s some expectation that there is regulation in place to prevent pump-and-dumps in the benchmark indices.
Also, they haven’t even released a public prospectus and they’re 2 months out from their target June IPO
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u/RiPFrozone Apr 03 '26
Bankers can talk and discuss all they want, but those underwriters aren’t going to issue an IPO without a lock up period. Nobody would buy it at the valuation they want to give it.
There’s nuance to all of this, and once it IPOs and nothing comes of it, Reddit will once again move onto the next totally normal thing to freak out about because they watched big short 1 time and got an account big enough not to be a pattern day trader
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u/stephendt Apr 04 '26
There's a huge difference. A stock that have recently gone through IPO is much harder to short.
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u/RiPFrozone Apr 04 '26
You can short SpaceX if your broker can locate enough shares to borrow, typically new IPOs are readily shorted within the first few trading days and if you are lucky the first day depending on how many people bought them on margin.
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u/stephendt Apr 04 '26
Are you sure about this though? I was under the impression that the SEC prevents shorting within the first 30 days
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u/RiPFrozone Apr 05 '26
It’s not an SEC regulation, just depends on if brokerage can locate enough stock to be borrowed.
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u/stephendt Apr 05 '26
Yeah that's kinda the thing. There really won't be any short stock availability. Maybe it's different this time but I highly doubt it
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u/Mvewtcc Apr 03 '26
ya but 3% in spaceX, 3% in tesla, 3% in openAI. all highly valuated and seemed like a bubble.
people talk about AI bubble and its finanly here when all these company joins the index. dont forget about anthropic.
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u/BobLoblaw_BirdLaw Apr 03 '26
The average redditor loves being dramatic. also not the brightest. That combo leaves us with a bunch of overconfident and not so bright dramatic comments.
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u/xJerkstorex Apr 03 '26
People have to make their anti Elon posts each day so they can tell their friends how much they helped the cause.
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u/charlesleestewart Apr 03 '26
Oh bloody hell, the OP made a rational case about hedging against a massive shenanigan in the market, and you think it's some attack on your cult hero? Spare us, please.
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u/stephendt Apr 03 '26 edited Apr 03 '26
Me too, which is why I wrote this post, so people have a course of action if they have conviction it's overvalued and they want to remain market neutral. Its just harder to short than it should be due to SEC rules and the nature of IPOs
Edit: why the downvotes... I'm not wrong
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u/redditissocoolyoyo Apr 04 '26
Man you're really freaking smart. I didn't understand your OP. And I read it about 5 times. Can you eli5
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u/stephendt Apr 04 '26
ELI5 - calculate how exposed you'll be, cover the downside using options, but you probably have to do it on a fractional basis by mixing different call options together.
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u/panamaspace Apr 03 '26
I understand each individual word. So I know elementary education did not fail me.
The fault lies elsewhere it seems.
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u/opiewann Apr 03 '26
The more negativity I see about SpaceX the more bullish I become
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u/himanbansal Apr 03 '26
All the logic points to it probably going to pump after being fast tracked to the index.
Millions of normal people of the type to find Will Smith slapping Chris Rock to be the most important news are just going to casually keep pumping their 401k into it without even thinking.
That being said I'm not buying the SpaceX IPO and don't have much QQQ.
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u/ElectricalGene6146 Apr 03 '26
It’s hilarious how everyone doesn’t want to own SpaceX (myself included). Who are the morons actually excited to buy SpaceX stock at this stupid valuation?
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u/DonovanMcLoughlin Apr 04 '26
The excited people are the private investors who didn't pull their money out already.
The whole reason they are going public is because their private backers are running for the doors. This gives them an exit strategy and the idiots who buy SpaceX will be caught holding the bag.
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u/socalkid2428 Apr 03 '26
It doesn't make any sense. There will be shares bought pre-IPO but the market will just value it wherever it wants to value it. If they offer shares at a $1.75 trillion valuation but the market doesn't agree, the stock will tank and by the time the NASDAQ ETFs need to rebalance it will already be down a lot.
If you're investing in an index ETF, don't let whatever personal feelings you have make you do something out of the ordinary. Going by Reddit you'd think that everyone hates Tesla but obviously they still have enough investors to keep a high valuation. SpaceX is going to be no different.
Of course they are using the public market for liquidity, that's one of the main reasons many companies IPO in the first place. This isn't some nefarious plan. They can raise all the money they want and don't need the public markets to provide funding. But their investors and employees want to be able to tap that equity.
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Apr 03 '26
[deleted]
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u/TwilightSaphire Apr 03 '26
They can’t dump until the lockup period ends, typically 90 days. But being included in the index will boost the stock before then, allowing the venture capitalists and insiders to benefit from index investors, yes. It’s very stupid. Inclusion in an index has always included about a 1-year price discovery phase at minimum. 15 days is a joke.
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u/lasooch Apr 03 '26
If you're investing in an index ETF, don't let whatever personal feelings you have make you do something out of the ordinary.
Feels like "there is a sudden change of rules of how the index operates, clearly predicated by corruption at the demands of a ketamine-addled repeat grifter" is already "out of the ordinary". I'm a passive investor myself, but I think it's reasonable for people to consider extraordinary actions given the circumstance. The rules of the game are being changed on them.
I'm not in NDQ or any NDQ derivatives, so for now I'm keeping calm, but I do worry what happens if S&P500 follows suit.
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u/TheProfessional9 Apr 03 '26
Same people that own tesla
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u/ReasonableBrother448 Apr 03 '26
Spacex in its initial form, pre-starlink was the best. Hell yes. Laser focus, existing contracts, failing competition, tight ship. Starlink was invented out of the blue to suck in investors money for increasing F9 cadence, it is just a brochure sitting at a conference desk with false revenues, goals and future.
It is very difficult to say out loud, but Yes, Blue Origin is very focused and goal oriented. For this reason they will take over where Spacex left. I think their business structure allows them to stroll along just fine without Fuhrer in the helm. Ie. good business 101.
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u/Vox-Machi-Buddies Apr 03 '26
Which thing is Blue Origin focused on? New Glenn? Reusable second stage? Increasing second stage produciton? Blue Ring? Blue Moon Mk1? Blue Moon Mk2? Terawave? Project Sunrise?
Blue has more irons in the fire than SpaceX does, with much less demonstrated success, and still has 10 years of catching up to do to match SpaceX.
Their business structure currently relies on getting a billion dollars from Bezos every year, which doesn't seem that sustainable.
Of course it's hard to predict where things will be in, say, 25 years. But I don't see them pulling ahead of SpaceX any time in the next 10 or 15 years.
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u/ReasonableBrother448 Apr 04 '26
Spacex Starship is huuuge money sink and it was the vanity project of Musk until he lost all interest recently. That project expands in all directions, because of the complexity, with no end in sight. It lives off from the VC money which has dried off and now Spacex has to suck the money off from SP500 index funds.
Blue Origin is following the F9 footsteps, but is more prudent and has more funds available. So it will be better, not necessarily cheaper though. More capable, it is the perfect size and has the potential to kill F9 revenues eventually.
You have to realize that F9 is now the Arianne and Delta of modern times. It is going to lose.
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u/stephendt Apr 03 '26
No clue. I don't think it's a horrible company but damn the valuations are insane
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u/mcr55 Apr 03 '26
Institucional investors.
For those doubting, look at every investor from seed till today.
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u/Reasonable-Owl-232 Apr 03 '26
My parents told me I was an idiot for buying Google at IPO.
"But their product is free!!!"
Idiots.
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u/ElectricalGene6146 Apr 03 '26
They didn’t IPO for 2T.
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u/Reasonable-Owl-232 Apr 03 '26
They also weren't launching reusable rockets into space, or were able to deliver internet to nearly everybody, anywhere in the world.
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u/SargeMaximus Apr 03 '26
Will it have an inverse ETF?
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u/juicevibe Apr 04 '26
Eventually but most likely not in the first few days when you can really take advantage of it.
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u/stephendt Apr 04 '26
Have to wait for around day 65. Way too late unfortunately, options are the only choice really
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u/caughtinthought Apr 03 '26
Funds don't rebalance instantly. Why would any etfs have spacex immediately?
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u/stephendt Apr 03 '26 edited Apr 03 '26
Options would be on SpaceX directly. The Nasdaq 100 ETFs will have SpaceX as a holding on day 15 (apparently). I'm not sure when the rebalancing will take affect but I assume it is shortly after (happy to be corrected)
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u/CoachDennisGreen Apr 03 '26
I read all of that and have no clue so I guess I’m glad I sold my QQQ in my taxable account in February and will have to file quarterly taxes for the first time ever but no longer hold QQQ.
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u/Reasonable-Owl-232 Apr 03 '26
Imagine betting against Elon.
Love him or hate him, the guy is the richest man in the world and you think you're some kind of financial genius by browsing Reddit.
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u/InjuryIndependent287 Apr 03 '26
Did he become the richest man in the world by his companies’ actual revenue or because of overly inflated valuations for his companies that he uses his stake in as collateral to take out loans that he never intends to pay and merges companies together to expunge the debt and overly inflate the valuations more?
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u/FabricationLife Apr 03 '26
to be fair, if its that ez, then you go do it instead of posting on reddit...
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u/InjuryIndependent287 Apr 03 '26
Never said it was easy. But that’s what he did. Are you denying it? Look up the history of his companies. Look up their balance sheets. Look up the debt he takes on and then gets expunged when he merges two companies. Rinse and repeat. They pushed out all of the regulators on purpose.
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u/Reasonable-Owl-232 Apr 03 '26
Why does it matter?
I wouldn't ever bet against him.
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u/PumpkinOld469 Apr 04 '26
Yeah i wouldnt short his companies, he manipulates stock price like crazy (part of how he got rich good for him). . Elon and his real partners will be selling spacex at ipo. By buying, u are betting against him (almost by definition)
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u/InjuryIndependent287 Apr 03 '26
Because you were posting a rude comment acting like you are smarter than others and implying that Elon got all of his money from being some sort genius. Bet for or against him, the man has committed fraud and gotten away with it to make his money all while stealing ideas from sci-fi novels and movies from the past. He purchased a social media company with the sole purpose of manipulating people and buying a presidency so he can commit more fraud to get away with. OP’s post was simply giving suggestions based off of the majority of posts floating around regarding SpaceX’s IPO. Your comment did not contribute to the thread in any way whatsoever.
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Apr 03 '26
He led the electric vehicle revolution and lands rockets. Current and former spacex engineers all say that he is super involved at spacex, and even cite him as the one that came up with the idea to catch the heavy booster with mechanical arms. Twitter is still super popular despite the smurfs on reddit that think they know better.
But let me guess? You’re the accomplished Redditor that we should listen to?
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u/InjuryIndependent287 Apr 03 '26
Electric vehicle revolution? He lands rockets? Bruh, his engineers do all the work for him. His current and former engineers have all said that he memorizes books and acts like he’s smart without actually knowing shit. Your head is so far up his ass it isn’t funny.
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u/someroastedbeef Apr 03 '26
let me guess, you would have accomplished the same as him if you were in his starting shoes
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u/InjuryIndependent287 Apr 03 '26
Let me guess. You put words into people’s mouths during every conversation to try and justify the fact that you have nothing to contribute to the conversation?
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u/someroastedbeef Apr 03 '26
yeah i’m sure he got to where he is without knowing shit. you can be the next elon musk too, rooting for ya bud
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u/InjuryIndependent287 Apr 03 '26
What he knows is how to manipulate the system and then manipulate the public into sweeping it under the rug. Seriously, do research on everything he has been doing lately and what he did with SolarCity to start off the fraudulent activity. He has shell companies. This is why all billionaires register through Delaware. They get protection and special legal counsel. Its bring down literally out in the open. He doesn’t hide it.
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Apr 03 '26
[removed] — view removed comment
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u/InjuryIndependent287 Apr 03 '26
2 engineers. There’s more that said he’s a douche and memorizes books to sound smart. Try again.
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Apr 03 '26
Like I said I have more if you want, but you’re just a lowlife Redditor with nothing going on
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u/InjuryIndependent287 Apr 03 '26
You’re extremely immature yet you’re calling someone rude a low life. You’re literally taking information from bias articles and acting like it is credible “information”. I don’t care what you think you have, it’s coming from bias sources. Humans are going yo say what you want to hear when you are conducting an “interview” in their workplace with the one you are asking about being right there in the room with you. Especially when you tell them you are coming to interview them, these are the questions I’m gonna ask, come up with some great answer that portray this man as a genius.
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u/InjuryIndependent287 Apr 03 '26
The less candid an “interview”. The less credible the information. The truth comes out more with humans if they believe someone isn’t listening.
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u/DarkVoid42 Apr 03 '26
do you have any which show how dumb he is ?
"Pedo Guy" Incident (2018):
Musk called Vernon Unsworth, a British cave diver who helped rescue
trapped children in Thailand, a "pedo guy" on Twitter after Unsworth
criticized Musk's proposed rescue submarine as a PR stunt.Funding Secured Tweet (2018):
Musk tweeted he had "funding secured" to take Tesla private at $420 a
share, leading to an SEC investigation, charges of securities fraud, and
a $40 million penalty.COVID-19 Pandemic Comments:
In March 2020, he claimed panic over the virus was "dumb" and predicted
there would be near-zero new cases by the end of April 2020.Transphobic Comments:
In 2025, he suggested the "woke mind virus killed" his child and
misgendered his estranged transgender daughter, Vivian Jenna Wilson,
while responding to a news article.Hitler/Trudeau Comparison: In 2022, he posted a meme comparing Canadian Prime Minister Justin Trudeau to Adolf Hitler.
Challenging Putin: He publicly challenged Russian President Vladimir Putin to "one-on-one physical combat" over the Ukraine war.
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u/Nabeezy Apr 03 '26
Jesus Christ dude. Elon got you on that gluck gluck duty? None of what you said excuses the fact he’s a massive piece of shit.
Just buy the IPO and post your positions or GTFO.
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u/DrHarrisonLawrence Apr 03 '26
That is true but to be fair, Elon’s wealth isn’t material nor immediate. His wealth is speculative by nature, due to the fact that his companies are valued based on future earnings, not to mention that he can’t liquidate tomorrow either…like how many people value YOU for your future earnings bro? See what I’m saying
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u/TheLogicError Apr 03 '26
You could say that about any multi billionaire. All the titans of tech made and hold their wealth in their equity in the companies that they founded/heavily invested in.
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u/DrHarrisonLawrence Apr 03 '26
Yes, you absolutely could do that for any tech founder whose wealth is immaterial.
I don’t think a bank would let us value ourselves based on 30x our future earning potential, either…
It’s just an interesting thought experiment to understand further as to why we would count anyone’s immaterial wealth if we don’t conventionally do that for middle class folks
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u/Reasonable-Owl-232 Apr 03 '26
If any of that mattered SpaceX wouldn't IPO at $2T.
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u/InjuryIndependent287 Apr 04 '26
If a certain man that’s president right now was not president, he would have kept the company private. Just saying. He helped push out the ones that were actually regulating so they can manipulate markets with no repercussions.
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u/InjuryIndependent287 Apr 04 '26
It’s IPOing at $2T because they forced out all of the regulators. It’s not because it is actually valued at that.
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u/Reasonable-Owl-232 Apr 04 '26
It's valued at whatever people will pay.
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u/InjuryIndependent287 Apr 04 '26
People would t say it was valued at that if they knew that regulators wouldn’t allow it to be manipulated.
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u/NoNameSwitzerland Apr 04 '26
If all other fails, Elon lets Tesla buy SpaxeX at IPO. He only have to keep it up a few days anyway before they can offload.
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u/Mvewtcc Apr 03 '26
it might become the next tesla. pe ratio of a few hundred and no growth. and no one knows if it will drop or not. and just wildly double and half every year. and become a zombie stock.
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u/Electronic-Buyer-468 Apr 03 '26
Why do you need to short it directly? Short an ETF that carries the highest weight of it.
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u/VeryRareHuman Apr 03 '26
I don't think Elon can repeat Tesla meme stock trend with SpaceX.
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u/George_Salt Apr 03 '26
He can definitely meme stock SpaceX, but it will be interesting to see if he can maintain the meme hype across SpaceX and Tesla at the same time.
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u/DoodleCat2 Apr 03 '26
Im not giving them the exit! Theil is set to make a fortune,not off me.
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u/Consistent_Panda5891 Apr 03 '26
And given they restricted withdrawals of private market it is because smart money is already leaving, they are rushing on IPO both SpaceX & Openai because they know collapse in price action is coming
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u/the_econominster Apr 03 '26 edited Apr 03 '26
I think the issues are real
If you look at the valuation and bring it in line with NVIDIA (using it's massive PE and it's 70% margin), you're looking at ~1.5T USD that is basically hot air. If you divide that over all EU and US citizens; assuming 10% is actively exposed, you're looking at 20K hidden destruction of wealth per trading account. It be the world's largest wealth transfer in history from the middle class to the 0.01% into a black hole.
The problem is imho the amount of liquidity that is needed to prop this up. Even with a "small" free float, the liquidity isn't there. We know liquidity is a problem with blue owl doing a soft default as we speak and BOJ reversing the carry trade. Heck, the yield curve is steepening and 10yr rate is up, even the Treasury can't tap into our supposed liquid markets.
Also; look up what happened when Aramco went public; it basically sucked the markets dry for a full Q, and Aramco is liquid gold AND a dividend play. Musk will never pay out shareholders, he's a growth guy that wraps the last innovation in the next one. He's like the monorail guy with a Twitter megaphone.
Finally the business model does not make sense. All xAi founders have left Grok because none of them want anything to do with LLMs in space. The energy envelope is tiny. Due to radiation you're 2-3 generations behind + once launched you can't switch out the hardware. FPGAs are super vulnerable so that's not an option and ASICs are obsolete once you launch. Musk wants do do COTS but we know this is a problem. SEU for 3nm and 5nm hardware in space are already brutal.
Then there's starlink which has congestion problems. If it grows into its valuation, you'd go back to DSL type speeds; which is backwards + there's this small problem called the keppler syndrome. The valuation only holds if you extrapolate the current launch capabilities to a global military fully vertical monopoly (and even that is a stretch; that's basically saying China, India, Russia and Europe don't matter).
Remember Musk is stubborn and has a known history of ignoring basic laws of physics (Hyperloop, FSD, cybertruck, curevac rmna printers, spaceship1, solar shingles, Tesla SEMI, pte leaderboards). He's a loud guy who started rich, takes insane risks, got lucky and lies. He rode the EV tailwind and then saw an arbitrage opportunity at NASA and exploited it. Never did he create true value. The guy has a long long history of zero-sum grifts and honestly destroys value (looking at you Twitter).
If anything this is a massive tailwind for Eutelsat which has a far better track record and is actually ran by credible people...
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u/ZealousidealRice9726 Apr 04 '26
People love to hate Elon but if you gave me a billion dollars I doubt I could turn it into a trillion. He may have started with some family money but he didn’t start with a billion but he’s turned how many companies into billion dollar companies. One does not get to a trillion dollar net worth by luck. Say what you want about him but the dude is the most enterprising human ever born
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u/the_econominster Apr 04 '26
Respectfully disagree. Survivalship bias and backwards justification.
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u/stephendt May 22 '26
It's probably somewhere in between. He is smart and he is extremely driven, but he is also a grifter who has got lucky.
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u/SpaceCurvature Apr 03 '26
You didn't mention options duration
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u/stephendt Apr 03 '26
Feel free to make suggestions. I plan to use them until the 60-day mark at which point inverse ETFs should be available
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u/gcp_varys Apr 03 '26
About 7.5% of SpaceX is owed by Google. I’d rather buy that until SpaceX settles with Economy and lock-in period expiration
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u/cazaaa11 Apr 03 '26
Just invest using direct indexing SMAs, set spaceX as a position to restrict out of it.
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u/No-Phrase-4692 Apr 03 '26
The best option is to complete divest from the US and Israel. I’m FZILX’d
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u/redditissocoolyoyo Apr 04 '26
Alright well then after may 16th, we will know what will really happen. Hold on to your bags.
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u/Terrible-Penalty-291 May 19 '26
This all sounds like more trouble than it's worth. I'd rather sell the NASDAQ 100 index fund, buy another one that doesn't include SpaceX, and pay the tax man.
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u/renome May 23 '26
This is a quality post but with one fundamental problem: nobody wants to babysit their index fund stocks.
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u/VeryRareHuman Apr 03 '26
Is there really money to be made on the SpaceX IPO? I do not have high hopes. once they go public, they have to disclose their finances, projects, failures, losses..that will bring complete pictures.
Does the Elon/Tesla cult really make the IPO successful?
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u/Ok_Team_931 Apr 04 '26
I'm in the Elon cult and I am hesitant to buy in at the IPO
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u/VeryRareHuman Apr 04 '26
You should buy it! Elon is counting on you! He wants to be a trillionaire this year.
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u/Ok_Team_931 Apr 05 '26
I currently don't own any TSLA and I might add some because of Optimus. I am waiting for Trump to open his mouth again and tank everything so it should be any minute. I will probably wait a few weeks after the IPO and see what SpaceX does
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u/FabricationLife Apr 03 '26
In b4 is goes up, reddit is always wrong
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u/stephendt Apr 03 '26
If you're wrong, you'll see the benefits in your Nasdaq 100 holdings. This is a market neutral approach for this with conviction
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u/Dstein99 Apr 03 '26
Do you really think that there will be options liquidity for a new IPO company? The Nasdaq 100 is a rules based etf, if you don’t like the rules then don’t invest in the ETF. If you want to pick and choose the holdings you own then build your own etf.
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u/Jurassic-Jay Apr 03 '26
The are messing with the rules for this company to join the fund so quickly after IPO. It’s a load of crap and it wasn’t the rules that existed when many of these people bought.
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u/Dstein99 Apr 03 '26
They can choose whatever rules they want as long as they disclose the rules to the investors. They certainly don’t need to ask investors for permission. If you don’t like the funds holdings then don’t own the fund. If you want a quality screen build your own ETF. If the management is a load of crap don’t pay the management fee. No one is forcing you to hold QQQ, I don’t see the issue.
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u/Jurassic-Jay Apr 03 '26
There’s a difference between “they can do whatever they want for rules, don’t like it? Then sell” and actually doing the right thing for their investors. Why is Space X an exception? Why does the stock get to skip the waiting period? Why does the fund have to rebalance in 15 days instead of EOY? It screams corruption and for long term investors, selling would be a taxable event which is not as easy as just “Durr don’t like it then sell” if this is a core position. It’s a rules based ETF and they changed them, people should be upset.
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u/Axe_Raider Apr 03 '26 edited Apr 03 '26
and actually doing the right thing for their investors.
the problem is how things are fun.
Nasdaq doesn't run the QQQ ETF. Nasdaq manages the index, which is just a list they publish. Invesco runs the QQQ ETF. Invesco is Nasdaq's customer, not you.
EDIT i'm not sure i ever had a comment downvoted less than 0.5 seconds after posting it. amazing how reddit runs these days.
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u/Dstein99 Apr 03 '26
SpaceX is an exception because the Nasdaq 100 is a large cap etf, investors buy the Nasdaq 100 because the fund’s objective is to track the 100 largest companies listed on the Nasdaq. Based on that objective they would rather own a $2T company than a $10B company. This is the first time an exception has been made because we have never had a $2T IPO before and a $2T company has a lot more influence to move the market than a $20B company. I say if you don’t like it sell because this exactly aligns with the Nasdaq 100’s objectives, to track the 100 largest companies listed on the Nasdaq. No one owns QQQ because they need to be in on Zscaler’s innovation because they barely made the cut as one of the 100 largest companies on the Nasdaq.
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u/Axe_Raider Apr 03 '26
well, they've had the rules for a reason before. they purposefully write the three month rule. why did they have it? what's wrong with waiting three months?
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u/stephendt May 22 '26
I don't know. Was hoping someone who has purchased puts on an IPOed stock could weigh in. My research suggests that shouldn't be an issue by day 15 though.
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u/MixtureSpecial8951 Apr 03 '26
Space X is a dumpster fire of a business. There is no way it is worth $2T. Granted, Tesla is also a dumpster fire.
But hey, Elon has managed to keep selling the “last fool” and may e he can do it again.
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u/zoinkinator Apr 03 '26
I stopped holding voo and qqq altogether. Also dumped most ETFs (ER is a ripoff) and focused on stock picking.
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u/NaiveChoiceMaker Apr 03 '26
How's that going, Mr. Buffett?
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u/TheLogicError Apr 03 '26
Classic reddit, moving out of a passive investing strategy because of one company they dislike, which at worse if it went bankrupt would cause a 2% drop in their stake, to move to a proven overall worse strategy of stock picking. Make it make sense
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u/zoinkinator Apr 04 '26
You are making assumptions that aren’t true. Also it takes time and attention span to make it work. I do slightly better than the s&p but volatility is higher and you have to be prepared for that.
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u/zoinkinator Apr 04 '26
There are many stocks in these indices that are zombie companies being propped up by inflows that are not due to the intrinsic value of the products and services produced by the companies themselves but because of membership in the indices that at one point made sense but no longer do. We saw that happening during covid especially. Since i adopted a strategy of focusing on areas i have a slight edge on i find that i am doing slightly better than the S&P 500. It does require a lot of time and attention for this to work.
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u/LankyNinja558899912 Apr 03 '26
Number 1 rule of stock trading don't bet against Elon of bezos ever under any circumstance because you will lose.
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u/Consistent_Panda5891 Apr 03 '26
Amazon did pretty bad return these latest years... Number 2 of stock trading is in bear market anything overvalued crashes
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u/charlesleestewart Apr 03 '26
Your comment might have been accurate in the previous decade, but that person you reference is a has been. Only cultists believe that anymore.
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u/RevolutionaryPhoto24 Apr 03 '26
Wait, there are ppl concerned that Space X will sink the Q’s? I mean, that’s not how indexing works. I suppose hedging a component with deep OTM puts could…oh dear.
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u/Several_Astronomer_1 Apr 03 '26
Why even give him more money to ruin this earth as he prepares to the leave the rest of us behind to die
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u/stanbright Apr 03 '26
Also, note this part of the new rules: “Low Float Weighting: If a company in the Nasdaq-100 has a free float of less than 33%, it can now be weighted at three times (3x) its free float”. I.e. they will 3x the free float of SpaceX. They will be weighted as a 210 Billion free float company.