S&P 500 will not be fast tracking SpaceX entry into its index and it won't waive its rule for unprofitable AI companies

I think the bigger point is that index rules are supposed to be boring. The moment they're rewritten for whichever company has the most hype, passive investors stop getting a rules based product and start getting an actively managed one. Whether it's SpaceX, OpenAI, or anyone else, if they're good enough they'll qualify eventually. If they're not, that's exactly what the criteria are there to filter out. The S&P 500 shouldn't be in the business of making exceptions for celebrity CEOs or hot sectors

I've made some loot off of QQQ so I've hesitated here. Seems like it's time.

Gotta be smoking crack to think Tesla is worth 25x more than ford. There is just not a real way to justify that.

Ive read many people say that even if spacex crashes, it would only affect qqq by 1-3%. But its just the principle of it. If the Nasdaq changed their own rules specifically for a single company, what other rules will they change for other companies in the future? What they did sent a really bad precedent

You're getting down voted because the valuation is not determined by the market. The valuation that is undoubtedly being referenced here is the valuation that is included in the IPO, which is determined by the company and its underwriters.

And the consensus among independent observers appears to be that that IPO valuation is way too high, as it is based on speculative and highly dubious assumptions about the upside for xAI.

I'd go as far as to call it a scam because there is no legitimate basis for believing xAI is likely to someday have a product that is competitive with what Anthropic or OpenAI or even Google can offer, just based what has occurred with it so far.

As of now, they've lost all 11 of their original founders, their % share of both consumer chatbot usage and corporate usage in the low single digits, and in March of this year, Musk stated that Grok was not "built right". Anthropic has huge corporate adoption, OpenAI and Google have major consumer adoption, and xAI has neither and is getting rebuilt.

So what exactly is the basis for its massive valuation? Hope? Musk's name? The company and their underwriters know what they're doing. They're tricking retail investors who they're hoping don't do their research and just rely on the name recognition.

You can justify any valuation with that logic though. Tesla had a 10 year head start on EV’s and they are losing ground to Rivian. Why will their robotics head start matter this time?

Fundamentally Tesla is not rewarded for succeeded, generating profit, or producing a good product and service for a good price. Elon makes the valuation by lying to investors, which means they are not incentivized to actually compete in a free market of robotics companies.

Long term I am of the belief that these companies are doomed to failure because they are competing in the stock market with valuations, and not in the consumer market.

But is not turning a profit. According to Morningstar the valuation is half what SpaceX claims it is. They can wait and let the dust settle, then join the s&p when the stock is stable. I have no issue with them.

Why do you want everyone’s 401k to get dumped mindlessly into gambles? Why can’t active investors take the risk of losing money?

What's the point of rules if they can just be changed willy nilly?

None of the counter examples are trading multiple multiples beyond reason.

No just leave it be. Reddit is acting like SpaceX is the end of days it's going to be a fraction of a percent of your funds. You'll literally not notice.

Starlink profitability isn't dubious, even with satellite refresh. Their cost per satellite (launched) is $1.4M with a \~5% failure rate on launch, and lasts 10 years. To maintain their 10,000 constellation is \~$15B in CAPEX per 5-years.

Even with their diluted monthly ARPU of $66, at 10M customers, holding it flat they generate $660M monthly, or $7.8B / year, as a floor, though their S-1 reports $11.4B. That means that it takes 1 - 2 years of their 5-year lifespan to cover the cost of refresh.

So in our hypothetical to maintain the current constellation they can generate $39B - $57B over 5 years. Their CAPEX cost over that same period is $15B. We can't find their OPEX, but there is no way it eats up that entire $14B - $42B.

Their service also doesn't need to provide service where populations are concentrated, there are enough customers in remote communities that want broadband connectivity where the cost of building equivalent service is cost prohibitive, to keep the constellation and its competitors flush with cash.

"Valuation" is an investing term. Here. It does not simply mean the current stock price.

You are right, however, in that this is an investing sub. And investors think about valuation and the different ways to measure it. Real investors, anyway.

It is enjoying standard large American business/manufacturing tax breaks but I'm not aware of any special carveouts Tesla is getting anymore.

its a cool company but its not a great business model for now.. and their sticking high cost AI data centers to pump the topline and obsecate that..

Greater fool and all that. Maybe you should try peddling this grift to your relatives or whatever instead.