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SpaceX has to grow 60x in a decade to justify a $1.75 trillion valuation. It's an impossible bar | Fortune (fortune.com)
submitted 3 months ago by to c/technology@lemmy.world
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[–] 28 points 3 months ago (15 children)

This is nuts. Can someone explain this cos I just don't get it. Why would you invest in a company if its well established that its unlikely you'll ever make a profit or even get that money back??

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  • [–] 39 points 3 months ago* (last edited 3 months ago) (6 children)
    1. Buy stock when it's valued at $1.75 trillion
    2. Elon says on twitter he thinks it will be worth $3 trillion soon
    3. Some idiots buy stock, price goes up
    4. You sell
    5. Profit

    You can keep doing this as long as there's a bigger idiot down the line. If you're still holding the stock when it collapses you're the biggest idiot and you lose.

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  • [–] 26 points 3 months ago* (last edited 3 months ago) (3 children)

    SpaceXs initial valuation is so large it will distort the market, and they changed the rules so the index funds will all buy shares automatically to balance their portfolios, which will shoot the price up and balloon the valuation even further, then Elon and the investors that helped him buy twitter can sell at ludicrous prices at the expense of American 401ks and and passive managed pension funds.

    It's a trillion dollar rug pull in broad daylight.

    Edit- Nasdaq changed their rule, S&P has not.

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  • [–] 4 points 3 months ago

    The thing is, the bigger the amounts of money involved the more idiots you need to actually push the price up and keep the fleecing going.

    Mind you, the 5% float of SpaceX's IPO means you only need enough idiot money per cycle to move the price of $87 billion worth of stocks rather than the full $1.75 trillion, which is probably why they're rigging Indices to force Retirement Funds to be the idiots as it would be a lot harder to source enough idiot money out of Retail Investors.

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  • [–] 14 points 3 months ago (1 child)

    Tl;dr - Not a single person would be investing in SpaceX. Americans' retirement funds would be invested into it, without their knowledge or consent, regardless of how obvious the outcome is.

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  • [–] 9 points 3 months ago* (last edited 3 months ago) (4 children)

    they are forcing us to invest by stealing from our 401k.
    because nasdaw and russel rigged inclusion rules

    check your 401k people, you might need to move into other ETF to avoid AI companies and bubble

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  • [–] 1 point 3 months ago (3 children)

    check your 401k people, you might need to move into other ETF to avoid AI companies and bubble

    But if (when) the bubble bursts it will tank the market. There's so much riding on this that there will be no hiding. Unless you do a Ron Swanson and bury gold in your garden.

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  • [–] 1 point 3 months ago (2 children)

    You can't eliminate the risk, but you can ameliorate it. Yes, sectors like retail, construction, and even healthcare will take a hit during the AI bust. After a crash, there's much less money floating around. People are out of work. Asset prices are down. People spend less. So every sector gets hit.

    But there is a difference between a hit and a collapse. If you're invested in OpenAI, and the bubble bursts? Your investment is going to zero. The company is going to go bankrupt. Shareholders will be completely wiped out. If you're invested in say...Home Depot, well yes, in a crash, the stock will go down. With millions laid off, people will have less money to spend on home renovations, so demand for the Depot's products will decline. Their stock price will take a large hit.

    But, if you're smart, this won't hurt you. Eventually things will recover, the bubble will clear out, and demand for building products will return. At that point the Home Depot stock price will recover. As long as you don't sell during the crash, you won't see any losses.

    That is the key difference. An investment in any sector right now risks a decline and then recovery a few years down the road. An investment in the AI sector risks a complete collapse to zero.

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  • [–] 1 point 3 months ago (1 child)

    I dunno man. Whatever way it goes it doesnt look good for capitalism.

    Say its a huge success and they manage to achieve AGI - then comes mass unemployment, mortgage defaults, slow down in spending...

    There's also a lot of disgruntlement left over from the 2008 crash, and economies never really recovered from that. Climbing out of whatever comes next is going to be a much bigger challenge. It might be easier to start over.

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  • [–] 2 points 3 months ago

    Frankly, for investing, AGI shouldn't even be on your radar. AGI can only result in three outcomes - extinction, complete totalitarianism, or some sort of communist system. Most likely any AGI would just kill us, probably by accident. But even if they manage to control it, then what? You quickly end up with one or a handful of AI companies owning literally the entire economy, producing everything. At that point capitalism is done. Either we allow the new oligarchy to exist indefinitely (totalitarianism) or we nationalize the companies and go full Star Trek.

    What these AI companies miss is that true AGI is incompatible with capitalism. Capitalism doesn't work when only 1-3 companies make all the goods and services in the economy.

    Your point on 2008 is valid though. There's a lot we just swept under the rug instead of dealing with properly.

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  • [–] 1 point 3 months ago

    Because Elon said so, and a lot of these people are playing with other people's money, so it's worth a shot.

    Elon says:

    • SpaceX is really about xAI, and look how well regarded Anthropic is, we'll be even better than Anthropic because, welll I'm Elon and I said so!
    • All this AI stuff has to go to space because some company that makes a part for natural gas generators is backordered a few years, so we'll start having hundreds of Starship launches a month.

    Yes, he claimed that hundreds of Starship launches a month is a more realistic thing to pull off than making some parts of natural gas turbines...

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