So, ordinarily markets of supply and demand determine, on the margin (#1470476, #1486740, #1488323), what the price of anything/everything is.
Matt Levine walking us through pre-IPO shuffling behind the scenes:
The normal thing to say is that SpaceX’s initial public offering “is set to price June 11” — today — “and trade the following day.” SpaceX’s bankers have been marketing its shares to investors for the past week, and this afternoon, after the market closes, they will get together, review the demand for the IPO, and “price” the IPO, that is, decide the price at which SpaceX will sell shares to investors. Then they will decide how many shares each investor will get and tell the investors what they’re getting. Then, sometime tomorrow, the stock will open for trading
(headline says _pricing_, not value... plenty of other posts dealing with that #1506172, #1503733, #1496896)
Nothing about Mr. Musk is ordinaryNothing about Mr. Musk is ordinary
"SpaceX launched its IPO marketing by saying that it is selling 555,555,555 shares at $135 per share" -> i.e.:
Levine lays out the possibilities:
- Musk is stupidly off base, stock will drop 50% (or rally 300%)
- Musk is a generational genius and picked the exact correct price.
- "Musk picked an arbitrary price, but because of his reality-distortion powers, it became the precisely correct price." LOL
- There was a behind-the-scenes IPO pricing before Musk ostensibly stated what the IPO price would be.
"Obviously No. 1 is the funniest possibility, and No. 3 is most consistent with my Elon Markets Hypothesis, but my guess is that No. 4 is closest to being correct.""Obviously No. 1 is the funniest possibility, and No. 3 is most consistent with my Elon Markets Hypothesis, but my guess is that No. 4 is closest to being correct."
Naturally,
Elon Musk has a long history of (1) raising a lot of money from investors and (2) making a lot of money for those investors. Presumably he has good well-developed instincts for what sort of valuation he can get away with, and also, like, the phone numbers of investors he can call to ask.
Also, there have been private market trades of somewhat questionable credibility, and also prediction markets gambling outlets on what the price will be
Normally:
an IPO is a dramatic event, because it is a phase change in a company’s existence. Before the IPO, there is no real market price for the company. In the IPO, the company’s bankers conduct an imperfect price-discovery negotiation with select potential investors, getting a loose sense of how much the market thinks the company is worth, and using that sense to price the IPO. After the IPO, the stock starts trading and the market tells you how much it actually thinks the company is worth
... in SpaceX's world, not so much:
Possibly the giant private companies can go public without much drama, because their shares already trade, and because the modern merger of financial markets with betting markets creates efficient price discovery. If the market last week said that SpaceX was worth $135 per share, then it should go public this week at $135 per share, and there is nothing much to think about.
Also, the entire newsletter (and rest of fintwit and financial media today??) is just SpaceX.
Retail has apparently bid over $100bn in orders already. Bloomberg found a juicy quote from one Indianapolis dude:
“This feels like the appetizer. You have to believe in Elon,” he said. “I’m willing to overpay for it just to say I’m part of the thing.”“This feels like the appetizer. You have to believe in Elon,” he said. “I’m willing to overpay for it just to say I’m part of the thing.”
Yeah, uh, overpay is sort of the keyword here. Some regulators have opinions on such a scandalous IPO; Levine ridicules:
It would be interesting if the SEC was a valuation regulator, and prohibited companies from offering stock at 100 times revenue, but that is not the world we live in. As I wrote the other day, if you think SpaceX is overvalued, the solution is not to buy the stock. Oh, sure, you want to stop other people from buying the stock, but the market doesn’t work that way.
What do we think, den, did it turn out to be #2?
source
Yup, that's it. It's over.
yldate: no, #3. Musk speaks reality into being, and reality obeys.
https://twiiit.com/eastdakota/status/2065470506279571961
but, like, maybe stocks really can just keep going up forever? These stories of corrections or recessions or depressions (whatever that was) are things that don't happen any more.
The Indianapolis dude makes me feel like: he knows he's buying the top, but he's like maybe it won't be.
Nobody seems to be worried that Musk and other SpaceX owners are destroying the price of SpaceX by dumping stock.
Stocks have no top, bc fiat has no bottom!!
Actually companies go bankrupt all the time hahah
what?! Never heard of
Trying to get my share!!!
I’m with Shocknet! This is an amazing opportunity!! They launch rockets into space!!! Cheaper better and faster than anyone on the planet!! and everyone is so worried about rich guys dumping an retail.
I hope to buy and own this stock and never sell!!
This is why I don’t buy the nonsense that China and Russia are threats to America. Why ain’t they launching reusable rockets into space? @Solomonsatoshi
This alone is bringing the payload costs way down to make it economical to explore other space endeavors!!
Dunno, I'm not a rocket scientist, but I do know Chinas energy sector is way ahead of USA.
They absolutely lead in terms of energy production and efficiency.
USA may still lead in the highest tech sectors, but its utterly lost the trade war in terms of manufactured everyday goods, commodities and infrastructure.
USA clings to a few remaining high tech bastions while being increasingly surrounded by Chinas state capitalist economic bulldozer.
Completely ignoring the success of USA rocket program vs. China’s
USA may still lead in the highest tech sectors, but its utterly lost the trade war in terms of manufactured everyday goods, commodities and infrastructure.
Welcome back, sir. Missed your spam
You only call it spam because you are incapable of refuting it in any credible fact based manner.
Don't call me sir, you conceited, smarmy hypocrite.
Us Boomers still rule the world BTW and don't you forget it.
Thanks for continuing to buy Bitcoin and fiat debt leveraged property, equities and securities and supporting my retirement.
Got it!
#1506959
Incredible! That's like the best thing I've ever heard.
Gonna ditch all my orange boomer coins for this amazing opportunity (BTC isn't going anywhere anyway)!!
Only buy Bitcoin if you want to support a monetary protocol that provides an alternative to the fiat debt slavery Zionist bankers cartel that owns your government.
Clearly you never owned Bitcoin for this reason and so you sow the seeds of your own generations downfall, demise and ongoing servitude to genocidal Zionist war criminals.
Bonus Pro Tip - 4 year cycle!
DYOR!
Have you learned nothing from watching Bitcoin/Tesla bears midcurve trapped for years?
#1052773
#1490962
This is not dividend arbitrage on a dying company milking what little value it can out of a commodity product or service
Midcurves can't understand asymmetry, space-tech is going to touch almost every aspect of the economy in the coming years, as much if not moreso than the internet. Starlink alone can be bigger than the telecom sector. SpaceX won't have meaningful competition for 10 years at least.
If the zero hour sandbagging wasn't enough, wait until they sandbag even harder just before insider lockup expo #1503705
HFSP
Yes. The hfsp bit resonates... Thsts what im doing with bitcoin
hahahaha
Haha
Almost certainly it would settle at some moving average at some point, so that would be a good entry point from a risk-reward perspective.
But if you’re busy living your life, securing a small bag right after the IPO could be a good left-curve/right-curve play.
I'm not sure a prediction market really helps with this.
In the event that it's believed to be an arbitrary choice, then people are just predicting what number Elon will pick and at best the prediction market would elicit insiders to reveal the price.
In the event that it's believed they are referencing the prediction market, the incentive is for potential investors to buy shares at really low prices and hope they both win that bet and get a screaming deal on the stock.
Hang on, isn't this the pro case for gambling markets?? Revealing knowledge etc
Yes, that's a useful function but it doesn't help SpaceX find the right price.
Why not?
I thought I already covered that. It's like how a Keynesian Beauty Contest doesn't necessarily elicit true perceptions of beauty.
Now, a market about what the price will be a bit further in the future might be useful because then the predictors will need to think about the equilibrium price.
So liiiiiquidity <3
thanks for sharing. cant get away from this topic.. Even when I log into my bank they have a message about expected volatility tomorrow . From what i see starlink is profitable, spacex is profitable and x-ai is a furnace for that profit. Kinda alarming its being fast tracked into nasdaq index and fidelity (also other brokerages) lowered their account requirements to participant in the IPO with a strict flipping policies and 15 day hold period without account flags. Which is the timing they are supposed to be included into the Nasdaq to get the QQQ flows. Not to mention the offering is 30% retail which is not typical for IPO's and seems very very suspicious. This reminds me of the tradfi version of the ICO crazy of 2017. His prospectus (tradfi white paper) says Elon's bonus award comp is tied to "establishment of a permanent human colony on Mars with at least 1 million inhabitants." a lofy goal indeed seems as ridiculous as DENTACOIN "the dental industry on the blockchain". but hey its elon people say.
The vast majority of people buying spacex I wager have no idea what spacex does, they have no idea what their revenue is, they have no idea of their assets and liabilities... Their products, they have probably never used their products, nor are they familiar with the risk factors of the stock.
They're just like oh Elon Tesla ya let's buy that. What is their best product? No idea. What are their main sources of revenue? No idea.
Obviously this isn't professional investors... But its the majority.
At least with anthropic and openAI its easy to spend many hours using those products, at least to determine oneself what they are worth how 'quality' they really are. But even then are they really that different? Anthropic at least has coding. Google has Gemini for search... Meta has their AI for Facebook / social media...
So what does OpenAI do again?