From the video description:
SpaceX is targeting a $1.75 trillion valuation for what could be the largest IPO in history. In this video, we examine how Elon Musk is folding a money-burning AI startup and a struggling social media platform into a rocket company to justify a price tag that defies financial gravity. From the engineering absurdity of "orbital data centers" and lunar railguns to the structural manipulation of the Nasdaq 100, we explore how low-float strategies and "fast-track" index inclusion rules are being used to turn passive 401(k) investors into exit liquidity for insiders. We look at the gap between EBITDA "vibes" and GAAP reality and the pivot from Mars to the Moon.
This is a slightly drier treatment than we’ve come to expect from Boyle. There are no laugh-out-loud lines or extended bits of exquisite Irish deadpan sarcasm. Boyle means business here, and his presentation is devastating.
Managing to be concise and yet in-depth, Boyle lays out the criminal absurdity of the entire thing: from the silliness of shooting data centers into orbit, to SpaceX’s suspect profitability, to the way Musk used the rubber-stamp board of directors to bail out his disastrous artificial intelligence company (currently losing a billion dollars a month), which he had previously used to bail out his even more disastrous purchase of Twitter (all of which echoed his first great scam and the basis of his fortune, leaving Tesla investors holding the bag for Solar City, but we really don't have time to dive that deep), to the various schemes and misrepresentations he is currently employing to get a trillion-dollar-plus market cap for SpaceX before the credit bubble and/or the artificial intelligence bubble pop.
The video is too pithy to summarize—just watch the damn thing—but I did want to highlight this one part.
Video transcript cleaned up by ChatGPT:
This all leads us to the question of how Elon Musk actually expects to get that $1.75 trillion price tag. The answer isn’t found in the physics of rockets, but instead in the physics of the stock market.This could be Musk's ultimate scam in terms of scale -- the potential payout here makes the mind reel -- but also in terms being his last chance to cash in on this level. There are signs (spelled out by Boyle and already familiar to anyone who has been following the story) that things are starting to dry up, Add to that the likely scrutiny of congressional hearings if the Democrats retake one or both houses in November. Remember Musk apparently immigrated here illegally, was already forced to step down as chairman of Tesla due to fraud charges, is actively funding far right extremists around the world, has extensive ties to Epstein, and has an AI company best known for creating nonconsensual, sexualized images of undressed women and children. Retail investors may be the dumbest of dumb money, but presumably even they aren't stupid enough to bet on an aerospace company that can't get any government contracts.
The most important thing to understand about this IPO is that SpaceX isn’t selling the whole company to the public. They’re likely only releasing a tiny float. The financial press is suggesting that just 5 to 10% of the total shares might be issued. By keeping the supply of stock artificially low while marketing it to every retail investor on the planet, this could create a supply squeeze before the opening bell even rings.
When everyone wants a piece of the future but there are only a few shares to go around, the price has only one way to go — and that’s up.
Craig Coben wrote about this low-float strategy a few years ago in the Financial Times, where he pointed out that a lot of recent tech IPOs had floated only a tiny number of shares — often between 7 and 10%, compared to the historical average of 20%. He used the example of Instacart, where only 8% of the shares were floated, and of those 60% went to cornerstone investors and 5% to friends and family. This left a tiny supply of shares to be traded, presumably to cultivate a sense of scarcity.
The real magic for SpaceX might happen with the index-inclusion trap. This isn’t just a lucky break for Elon Musk — it’s reported to be driven by a specific demand from him. According to Reuters, SpaceX made early inclusion in the NASDAQ-100 index a necessary condition for agreeing to list on the exchange. In response, the exchange is consulting on a new rule that would allow SpaceX to join the NASDAQ-100 after just 15 trading days, bypassing the year of price discovery required for every other company.
And it isn’t just the NASDAQ either. Bloomberg reports that S&P Dow Jones Indices is also considering historic rule changes to fast-track SpaceX into the S&P 500.
This is significant because there are roughly $24 trillion tied to that index. Maybe Elon can get on the phone to the people at Russell to see if he can get SpaceX classified as a value stock too.
If SpaceX is added to the S&P 500 and the NASDAQ-100, every passive investor will find themselves buying the stock at whatever price the supply squeeze has manufactured.
As veteran fund manager George Noble points out, the proposed five-times float multiplier used to determine its NASDAQ index weighting is “shameless structural manipulation.” It effectively turns every pension fund into exit liquidity for SpaceX insiders, where your retirement account is being forced to buy into a bubble designed by the seller.
As Noble argues, the rules are being rewritten to benefit IPO issuers and early-stage insiders, and your capital is the tool being used to enrich them.
We’ve seen this movie before. In December 2020, Tesla was added to the S&P 500 after a massive run-up in price. Since the day of inclusion, Tesla has underperformed the broader index by more than 20%. The passive investors who were forced to buy in at a huge valuation right before sales started drying up became the bag holders, while the early insiders took their victory laps.
SpaceX may be an extraordinary engineering company, but it’s being sold to the public as a financial miracle at a price that, to me, is very difficult to explain.
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