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Discussion (65 Comments)Read Original on HackerNews
Yes please!
I learned just how bad of a deal Social Security is when an employer (a bootstrapped startup) offered a predatory 401k plan. It was free for my employer to setup but the employees were stuck with extremely high fees. It was so bad that John Oliver made an episode[0] about it!
Yet, even for the worst 401K plan in America, the projected retirement returns were 1600% of the Social Security returns. Even America's worst 401K would be better for the average consumer than the federal debacle
Uncle Sam should sunset SSI and allow citizens to select from and move freely between a number of accredited funds.
[0]: https://www.youtube.com/watch?v=gvZSpET11ZY
Mathematically, there is no alternative to the purchasing power of my Social Security benefits being reduced, simply due to the changes in the population age histogram.
It has to become more and more of a wealth transfer from the working to non working, which means my kids will benefit less and less from their work.
This trope needs to die. SpaceX has no plans to go to Mars. Elon meanwhile regularly says forward looking stuff to attempt to justify the lofty valuations of his companies. Let's just say there is a ... mixed track record on these proclamations (Full self driving, Hyperloop anyone?)
https://www.reuters.com/sustainability/boards-policy-regulat...
Do explain to me his evil plan of becoming rich by lying about going to Mars and yet agreeing to only get paid when he does go to Mars.
He already owns hundreds of billions of dollars worth of SpaceX. He "gets paid" whether or not these goals are achieved (a million people on mars definitely won't be achieved this century, as the place is fucking awful; one thousand is vanishingly unlikely, one million is flat-out not happening). In fact, hyping the company up ahead of IPO gets him paid, to the tune of thousands of working people's lifetime earnings.
The rest of his compensation isn't tied to that, but is tied to the bubble and hype that the lie of Mars living helps prop up.
The "at this scale" is doing a lot of work here. The SpaceX IPO will be $1.5T to $2T, and the next highest IPO ever on the US public markets was Alibaba at $231B. This is so far outside the previous scale that their statement would be true even if EVERY other public company was structured in the same way.
Worldwide, the five highest have been Saudi Aramco, NTT, Alibaba, Facebook, and Uber, at 1.7T, 300B, 231B, 104B, and 75B. Note the outlier, here, which was not on the US public market, AND has a very similar tiny float.
If you go by capital raised, it's not quite as stark, but it's still quite different in the US market: 25B raised by Alibaba, the previous high, compared to 75B expected for SpaceX according to the article. The point that SpaceX isn't at the same scale regardless of governance is still pretty good, I think.
That's not an investment, it's a wealth transfer to original investors at a price they dictate.
without control you can get original founder deciding to build cybertrucks and associating your brand with nazis.
These should not be included in indexes either.
It may not even come to that. I think if large pension funds and the large mutual fund managers coming out and saying "we don't trust this process" will probably be sufficient pressure to change it.
There are two other issues with SpaceX in particular that kind of show just what a house of cards the Elon Empire is:
1. The whole xAI bailout. This isn't a new tactic. Elon did it with SolarCity where one of his companies bought another of his companies who owed a lot of money to yet another of his companies. Elon way overpaid for Twitter. Fidelity had slashed the valuation by as much as 80%. Elon rescued himself from a margin call on his Tesla shares by raising money for xAI and using that to buy Twitter. But now the xAI investors who (IMHO) felt fleeced had to be rescued and so SpaceX "bought" xAI.
So the problem is that I've seen reports that xAI is losing >$1B/month. That's a huge drain on SpaceX's estimated ~$15B of annual revenue where it's already losing money due to the Starship program cost and delays;
2. Allegedly, one of the biggest buyers of Cybertrucks is (drum roll please) SpaceX. So, again, one Elon company is rescuing another.
I have huge respect for what SpaceX achieved with Falcon 9 but honestly, I wouldn't touch any of this, as an investor, wtih a 10 foot barge pole. At least, not until the SpaceX float gets sufficiently large and the lock ups on selling expire so you get a true market picture of its value.
And I think passive investors need to rewrite their rules to do this too.
Option 2: the market has control, and optimizes for short term starlink revenue and the launch business.
I prefer Option 1.
Option 4: Elon takes over a social network and tries to Orbanize the West with it.
https://www.cgdev.org/blog/update-lives-lost-usaid-cuts
They can't really tie the cuts to actually useful programs. That was a big reason for the cuts.
(It does raise questions about how Elon might manage the food supply to Mars, if that ever happened)
Don't ask the public for money and then not provide any of the corporate requirements under the SEC for the proper operation of the markets.
You can't have both.
As a rule, investors optimize for long term growth since that's what maximizes valuations. All the megacap companies are judged by future growth.
The effect is companies tend to exaggerate and lie about what they can achieve in the long term to juice their own stock. Elon's def got the juice.
The issues:
> The New York and California pension systems would become holders of SpaceX shares through their passive allocations if the company is admitted to major U.S. stock indexes.
> The officials… objected to the amount of power the board has given Musk over the company, including:
- voting control over the stock,
- veto power over his own removal as CEO, and
- protections from litigation, including mandatory arbitration for SpaceX shareholder claims.
> …
> In their letter, the pension leaders urged SpaceX to:
- adopt one-share, one-vote or sunset super-voting shares within seven years;
- install a majority-independent board and separate the CEO and chair roles;
- eliminate provisions protecting Musk from termination without his approval;
- scrap mandatory arbitration; and require independent approval of related-party transactions with Musk's other companies.
(Formatting mine; moved paragraph about becoming holders above the lists of concerns and recommendations.)
Over the entire lifetime of SpaceX Nearly 100% of the revenue comes from the government
They pay gifts and tributes to the government
They spend an absurd amount of money on lobbying and writing laws to take monopoly control of the subsection of the market
What am I missing here? Pretty sure there’s Universal agreement that the feudal system is not something anybody should be promoting
that’s undeniable
Starlink would not exist if the government did not prop up the whole thing in the beginning
This is precisely how the Commons get privatized and your ignorance around this topic is unbelievable
Unreal how simplistic you people are
They are living under a feudal system
Any one of the 13,000 could be fired on whim of Musk and even if it was in error they would have months if ever to get restitution. The employees describe him as a “tyrant” that fires people based on ego
The fact that people aren’t dying of scurvy is all you’re pointing to?
https://www.businessinsider.com/tesla-employee-survey-elon-m...
If they have discretion, these pensions can replicate the S&P500 minus SpaceX if they don't like SpaceX's governance.
If they're forced to passively hold precisely the S&P500 then shaddup and stop active managing.
Next.
True. But doing so would be a fair amount (by index standards) of overhead and hassle. Plus they'd get endless complaints any time the S&P500 was outperforming the "S&P 499" that they were using. Plus they'd put themselves in the crosshairs of a whole range of activists who wanted them to switch to an "S&P 498", or ...497, or ... - by excluding various other companies the activists didn't like.
> If they're forced to passively hold...
Their responsibility is managing their pension funds in the interests of their state, and their current & future retirees. Not pious adherence to passive indexing canon. Their calculus here might be to throw a small bone to the anti-Musk activists who are currently bothering them, while acquiring some "we tried!" butt-coverage for whenever Musk really goes off the rails. (And, obviously, trying to discourage other companies from using such control structures.)
I worked for a company where activist investors bought enough shares to have influence, then practically messed up with the company in a way that today, 10-15 years later, the company is a shadow of what it used to be - fell from top positions in Fortune 500, share price is lower in inflation-adjusted money, management is extremely politized and unprofessional, most professionals left or retired. I don't think this is what we want from SpaceX, in the end this is the company that moved the needle in space launches and cost per launch/kg, it's not a ketchup company that not too many people will cry about.
And there are companies that are mostly an investment vehicle whose leaders spin their self-serving decisions as necessary to make changes in the world. Some of them might even be right! (that their decisions are better in the long run, and that ceding more control to shareholders would lead to better short term outcomes but far worse long term outcomes).
If you read the article, they have concerns about the governance structure of Space X and the ability of investors to question what the company is doing.
it should not be “I will go public and try to stop the public from exercising their rights as shareholders”...just stay private.
Or, if those business owners want to retain their right to make all the decisions, they should structure the shares like Meta or Alphabet.
Presumably, the market will price in the risks of super voting shares.