WisconsinWildcard
The plural of anecdote is not data
I suspect this will be another example of market irrationality>>solvency
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Investing
- Thread starter Kepler
- Start date
ticapnews
Never graduate.
The stock is way too volatile to try to short it. The fanboys will drive the price up on any given day, plus it's bound to be manipulated by the child rapist war criminal. The fees to short it make it too risky and the premium you would pay for buying put options means it would have to absolutely crater to be profitable.
now, now - it was only 485.
Kepler
Si certus es dubita
Is your 401k going with it?
Nope. I IPO-proofed my holdings so nearly all this theft by passive investment will miss me.
When it busts the whole market I go too, of course.
Kepler
Si certus es dubita
George Noble
@gnoble79
The largest IPO in history is also shaping up to be the largest exit liquidity operation in historySpaceX went public at more than 90x revenue, and the insiders who bought in at a fraction of today's price are about to start selling their shares to you.Let me walk you through why this IPO is built to separate retail investors from their money:SpaceX has NEVER turned a profit and lost close to $5 billion last year.At the offering you were paying more than 90x revenue and at the peak the market briefly valued it near 140x.30 years ago the head of Sun Microsystems explained in detail why paying even 10x revenue almost always ends in tears, and he was right.But listen closely, because the valuation is not even the real story.The scarcity is what CREATED this valuation in the first place, and the calendar that kills the scarcity is what kills the price.Less than 5% of SpaceX shares were actually available to trade at the IPO. Then the index committees REWROTE their own rules to fast track the stock into the Nasdaq 100 just 15 trading days after listing, which forced every passive fund and index ETF in the country to buy at the exact moment the float was at its tightest. The Nasdaq inclusion alone forced an estimated $4.3 billion of buying, and the Russell reweighting added roughly $3 billion more.The supply was minuscule and the buying was mandatory. That's a manufactured squeeze, and it is why the stock went above $225 in its first week.Now watch what happens next, because this is the part they ain't explaining to you:The lockup was staggered on purpose, and the entire schedule is sitting in the prospectus for anyone who bothers to read it.In early August, right after Q2 earnings, 20% of the locked shares come free. Another 10% unlocks early if the stock trades 30% above the $135 IPO price going into the report.Then tranches of 7% hit the market at 70, 90, 105, 120 and 135 days after the IPO, which means fresh insider supply lands roughly every 2 to 3 weeks from late August through late October.Q3 earnings triggers the single biggest release of all, another 28%, roughly 1.3 billion shares. On December 8 the 180 day lockup expires entirely. And on June 12, 2027 comes the final wave, when Musk's own 6.4 billion shares, 42% of the whole company, become sellable for the first time.Add it all up and insiders could be free to sell as much as 44% of the company by early September, which would balloon the tradable float by roughly 900%. All of that supply lands on a stock the company deliberately packed with retail, because SpaceX reserved close to 30% of the offering for individual investors vs the usual 10%.This deal created over 4,400 paper millionaires inside the company. You think none of them are looking to cash out? Early holders are already loading up on puts to lock in what they have.First they keep the float tiny. Then they let the index rules force the world to buy at the top. Then they release a flood of insider stock into a crowd of retail buyers who were handed the shares up high.When the price finally breaks the offering level, the people who got in years ago at pennies on today's dollar will hit the bid, and the exit liquidity is your retirement account.And what are you actually left holding? Strip away the science fiction and the only business inside SpaceX that reliably earns money is Starlink, which produced $1.2 billion of operating income last quarter. A wonderful business worth hundreds of billions on its best day. NOT $2 trillion. Serious fair value work lands around $30 a share. Nobody has been a bigger bear on this deal than me. I called it out the moment it started trading, and it is already playing out on schedule as the shares have given back the entire squeeze and slipped below their opening print.I was Peter Lynch's auto analyst back in 1981 and I have watched every disaster since, and I am telling you this is one of the great wealth transfers of my lifetime packed into a fancy narrative.Tesla was the biggest misallocation of capital in the history of stock markets. SpaceX may have just surpassed it. SPCX goes straight onto my short list, and the beauty of this setup is that the catalyst is not a guess or something, it is literally a PUBLISHED CALENDAR. This is the most grossly overpriced stock at scale that I have ever seen.
RaceBoarder
Waiting for the Snow to fly...
I'm in need for something to be explained like I'm 5....
I've seen it mentioned a lot recently is how the Ultra-Wealthy don't spend any of their own money to live their day-to-day life. Instead of pulling funds out of their investments/assets and being taxed on the money taken out, they take out loans using said investments as collateral. From there, they pocket the loan cash, which is tax free, and then use that to fund their lifestyle...
So how do the Ultra-Wealthy settle up on these "loans"? Do they just pass off a ludicrous amount of stock to whatever bank loaned out the cash and the banks just say "ok"? I guess I'm missing the part on how things are paid off if they never have to withdraw funds that are taxable. How do the taxes get indefinitely side stepped in this scheme? Or is this just an infinite shell game with where the "liquid" value sits in relation to all the "paper" value?
I've seen it mentioned a lot recently is how the Ultra-Wealthy don't spend any of their own money to live their day-to-day life. Instead of pulling funds out of their investments/assets and being taxed on the money taken out, they take out loans using said investments as collateral. From there, they pocket the loan cash, which is tax free, and then use that to fund their lifestyle...
So how do the Ultra-Wealthy settle up on these "loans"? Do they just pass off a ludicrous amount of stock to whatever bank loaned out the cash and the banks just say "ok"? I guess I'm missing the part on how things are paid off if they never have to withdraw funds that are taxable. How do the taxes get indefinitely side stepped in this scheme? Or is this just an infinite shell game with where the "liquid" value sits in relation to all the "paper" value?
Russell Jaslow
Registered User
If you owe the bank $100,000, the bank owns you.
If you owe the bank $100,000,000, you own the bank.
ticapnews
Never graduate.
Bank A - let's abbreviate it BoA - loans a wealthy man - let's just call him Elmo - $10 billion at a generous 0% rate. Elmo turns around and finances a deal through his company - let's call it SpaceY - for $200 billion through BoA for which they receive 5% interest for 30 years. Over the life of the loan SpaceY will pay BoA $186,511,568,568.74 in interest. So the executives at BoA are more than happy to write off that measly $10,000,000,000 loss and report a profit of $176,511,568,568.74 to the shareholders. The bank will have already made back the $10B loan via interest in month 13 of the business loan.
RaceBoarder
Waiting for the Snow to fly...
Banks are using the "lifestyle loans" to generate business the same one would take a client out to a big game in a luxury suite... Got it...
ticapnews
Never graduate.
Yes. Plus they have the added benefit of being in Elmo's network with an in with his friends and their businesses, and they get the prestige of putting their logo next to SpaceY everywhere. Everyone wins. Well, everyone important.
aparch
Acetaminamerican
Just got a letter today from "Potemkin Limited" wanting to buy my 10 shares of Prudential at roughly 50% of their current value.
Did some Googleing of the company and they apparently have a reputation for trying to back door their way into companies by buying stock this way.
I promptly shredded the offer letter.
Did some Googleing of the company and they apparently have a reputation for trying to back door their way into companies by buying stock this way.
I promptly shredded the offer letter.
unofan
Well-known member
When you die, your estate gets a stepped up basis for all assets. So your executors can sell what they need to pay off your outstanding debts without any capital gains taxes.
So you own 1,000,000,000 in investments. The bank loans you 10,000,000 at 1% secured by some fraction of your investment. You can live off of that without paying taxes (loans aren't income) and your investments keep growing without incurring taxes cause they aren't realized gains (you haven't sold them yet).
So long as your investments grow, you can continue to take out more loans as necessary without paying taxes. The interest rate you get for a secured loan like that is going to be lower than even the capital gains tax rate.
When you die, the bank gets repaid with tax free money from the sale of stepped-up assets, and your heirs collect everything else tax free because there's no longer a federal inheritance tax.
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