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zhivota 1 hours ago [-]
Big relief for me. As a passive investor, I want the indices to follow the same passive strategy they always have, and specifically not make exceptions for specific companies like SpaceX wanted.
Plenty of ways to get exposure to that stock without it going into the indices it is not qualified for.
gizajob 1 hours ago [-]
This news tanked 5% off the Nasdaq yesterday so it’s still not exactly a cause for joy. We’ve hit the p of the pop of the AI bubble in stocks.
JumpCrisscross 1 hours ago [-]
> This news tanked 5% off the Nasdaq yesterday
No, it did not. The market moved in reaction to earnings misses from e.g. Broadcom [1] and the strong jobs report.
and Meta saying they want to issue. Combined with the IPO scramble there's a lot of dilution and raising hitting the same sector in a very short period of time. Can the public markets pony up the cash in the short timeframe? It seems investors said no, or at least the uncertainty was high enough that they trimmed the risk.
vasco 53 minutes ago [-]
The market moved in reaction to the totality of events that happened in the world all averaged out through the actions of the participants, anyone who says "this" was what happened on any day is wrong. Some days have dominating factors but even if the event is the dominant one, the reason why it has the impact it does might be a 3rd or 4th level effect.
JumpCrisscross 52 minutes ago [-]
> anyone who says "this" was what happened on any day is wrong
There is never a singular reason. But there are negligible reasons. S&P not changing its rules was a negligible reason for today's tanking.
altmanaltman 36 minutes ago [-]
But how can you quantify that? There is no way to prove it, the market cannot say "I wasn't moved by this, I was actually moved by that and this part was actually just negligible."
Isn't it all subjective in the end because nobody really makes their trades with verifiable notes expressing the exact reason. So we can only guess right?
khazhoux 20 minutes ago [-]
Thank you! So sick of people always ascribing the market's movement to whichever narrative headline they pick that day.
d--b 49 minutes ago [-]
The strong job numbers too.
On a side note, I find it very sad that strong job numbers make stock plummet.
It really is an indication that the stock market is mostly speculative and not concerned about the actual economy.
JumpCrisscross 46 minutes ago [-]
> It really is an indication that the stock market is mostly speculative and not concerned about the actual economy
Not really. Strong jobs numbers in the midst of 3+ percent inflation means rates should go up. That, in turn, dilates time on future earnings. So making a company's future earnings more-heavily discounted will be a net drag on valuations even if the jobs numbers indicate those numbers, near term and far, will be higher.
andric 11 minutes ago [-]
Yep. Job numbers are the “actual economy” – the actual economy is driven by wages and consumption.
But higher inflation implying that “rates should go up” is central bank doctrine. It’s not a general law of how economies function.
Central banks intervening with interest rate adjustments is what distorts the prices of equities downward, when inflation rises.
Without central bank intervention, inflation should theoretically push equities higher (a highly-inflated economy driven by rising demand is by definition a well-performing economy!).
Central banks intervene because runaway inflation can be harmful to wage-earners (they save in dollars, not assets).
But I’m not sure if a 2–3% inflation target is ideal. It seems to me that this arbitrarily low inflation target restricts the growth of the economy in ways that might affect wage-earners, defeating the stated purpose of monetary policy, since higher rates also have the effect of curbing job growth as well as raising the cost of servicing mortgages.
bruce343434 28 minutes ago [-]
> not concerned about the actual economy.
Why would it be? Non dividend stocks only have value because other people think they have value (i.e. greater fool theory).
Only dividend stocks have some base value connected to how well the company does. (Higher dividend if it does well, lower if it does poorly.) But they still also have a lot of "greater fool" value.
Beyond dividend, stocks have no intrinsic value. Nowadays you don't even get a piece of paper to wipe your ass with anymore, it's all digital.
torlok 39 seconds ago [-]
[delayed]
andric 15 minutes ago [-]
They do have intrinsic value!
Growth stocks trade on a multiple of earnings: earnings have intrinsic value.
gizajob 10 minutes ago [-]
That’s a lazy take. My spidey senses tell me otherwise.
mawadev 6 minutes ago [-]
-5%? Oh no panic sell everything now, its so over - Warren Buffet
zippyman55 3 hours ago [-]
Yep!! Respect to them. I was planning to move to an equal weight index but this gives me a little more time to evaluate options.
LinguaBrowse 1 hours ago [-]
I’ve moved my S&P 500 investments to the Equal Weight index to reduce my exposure to AI. Quite aside from SpaceX, I think the large-cap tech companies are making some uncomfortably large bets on AI and any major upset could cause a domino effect.
But as so many ETFs have a significant stake in large-cap US tech stocks (the top 10 holdings of the iShares MSCI World ETF is entirely comprised US Big Tech, making up 20% of the value of the ETF), I found S&P 500 Equal Weight to be pretty attractive.
As for SpaceX itself? I feel the numbers involved all sound a bit unbelievable to me. I fear that there will be a rug-pull sometime post-IPO, and retail investors (and taxpayers, if the US Government ends up taking a stake, as they have recently indicated they might do for OpenAI) will inevitably be left holding the bag.
andsoitis 38 minutes ago [-]
> I was planning to move to an equal weight index but this gives me a little more time to evaluate options.
S&P requires 4 consecutive profitable quarters, amongst other requirements, so if one of the new mega caps like SpaceX or Anthropic or OpenAI get included, you’d probably want to get the benefit of their performance.
Put differently, if one previously specifically picked an index fund that is not equal weighted, why would you change from that strategy?
integricho 29 minutes ago [-]
But they haven't been good performers, and don't deserve joining s&p, and that is the point, do not make exceptions just because Elon Musk or whatever delusional billionaire says so.
KaiserPro 10 minutes ago [-]
Its a sensible move. The spaceX IPO is a mess, and if it doesn't go full enron I'm not sure what will happen to the wider market.
zeroonetwothree 2 hours ago [-]
They weight by free float so it would been something like 0.3%. Hardly the end of the world
figmert 1 hours ago [-]
Why is that relevant? The rules are in place for a reason, why does it matter what the percentage is? They're not profitable. When they prove they're worth the dollars, they can be included, per the rules.
Also, S&P500 has a current market cap of $67 trillion, 0.3% of that is some $200billion. That is essentially a wealth transfer to the rich. They don't need it.
smilekzs 40 minutes ago [-]
> why does it matter what the percentage is
This percentage directly determines the influence on SP500 index funds holders (SPY, VOO, etc.).
The outcome could have been:
1. not included (0%)
2. included, weight by free float (0.3%) --- 54th in the list between $AXP and $MCD
3. included, weight by free float x 3 (0.9%) --- 19th in the list between $ORCL and $JNJ
4. included, weight by market cap (1.75 trillion / 67 trillion = 2.6%) --- 8th in the list between $AVGO and $META
#2 is _much_ closer to #1 than #3 (let alone #4), meaning that had an exemption been made to allow SpaceX in, given the rest of the existing rules, at least the impact to ETF holders would not be outblown. The same could not be said for NASDAQ , which was the main source of all the debate.
ralferoo 1 minutes ago [-]
Yeah, the thing that really concerns me about the other indices is the minimum free float in calculations, so not only will SpaceX appear in the index way too early, they'll be artificially giving it a massive boost, meaning that passive fund investors are forced to buy even more. That is the most egregious part of all.
I can partly see the rationale - existing stockholders will want to ditch their stock ASAP to cash in on the artificially elevated prices, and so there's a good chance the free float will increase quicker than the index can capture it, but this rule change will be driving those sales. It's all a scam.
I'm glad a good chunk of my US holdings are in S&P tracked ETFs because they won't include SpaceX until it's ready, but another 25% of my funds are in funds tracking FTSE global indices, and I haven't yet found a good alternative to those. I might end up having to switch to separate UK, S&P 500 and global ex-US.
kortilla 1 hours ago [-]
> That is essentially a wealth transfer to the rich. They don't need it.
These are not valid arguments. The companies that get added to the S&P are always owned in some fraction by rich people.
SpaceX is obviously majorly owned by Elon, but it’s also owned by regular employees, a bunch of private investors and other funds that regular people invest in.
> They're not profitable.
Right
> When they prove they're worth the dollars,
Profitable isn’t related to “worth the dollars”. You need to look at income and how much is being reinvested into growth. Amazon famously remained unprofitable due to reinvestment and waiting for them to become profitable before investing was a bad bet.
gizajob 54 minutes ago [-]
Mostly owned by Elon who has 84% of the voting rights. Completely his entity and it can’t be denied that the value of an interesting space business has been massively inflated by tacking a worthless AI business onto it.
muadddib 58 minutes ago [-]
So is spacex growing like Amazon was? There is no evidence of growth. And no, Google renting them infra grom then is not growth. If it waa, AllBirds is the next unicorn
SkiFire13 1 hours ago [-]
> SpaceX is obviously majorly owned by Elon, but it’s also owned by regular employees, a bunch of private investors and other funds that regular people invest in.
Is it really owned by them if Elon retains most of the voting rights anyway?
JumpCrisscross 55 minutes ago [-]
> Is it really owned by them if Elon retains most of the voting rights anyway?
Owned by various folks. Controlled by Elon. Granted, I don't know how Texas law deals with minority rights.
ddalex 1 hours ago [-]
"they only be stealing a tiny amount so not worth doing anything"
JumpCrisscross 2 hours ago [-]
> I was planning to move to an equal weight index
The only substantial effect I've seen of the influencers who were doomsplaining this decision was some minor churn in retirement assets from low-cost S&P 500 followers to higher-cost funds. (The market, broadly, never priced in a rebalancing of the S&P 500. So this was almost entirely whipped up by influencers.)
Broadly speaking, if you were actually considering trading on the back of S&P's decision, or worse, if you actually did, consider trimming who you follow for financial advice.
vostrocity 2 hours ago [-]
The market may not have ever priced in a rebalancing of the S&P 500, but the S&P 500 also has never allowed entry of companies that may never become profitable.
JumpCrisscross 1 hours ago [-]
> the S&P 500 also has never allowed entry of companies that may never become profitable
Yup. Which is why it was always a long shot. I personally thought they'd adopt some of the seasoning rules, but they were more conservative than even that.
kgwgk 1 hours ago [-]
> The market, broadly, never priced in a rebalancing of the S&P 500
And if you had seen it what would have that pricing looked like?
JumpCrisscross 1 hours ago [-]
> if you had seen it what would have that pricing looked like?
Look up rebalancing trades, or, less graciously, rebalancing front running. If the index is going to rebalance to include a new entrant, you'll see the other components trade down in anticipation. It's a very tight signal, and it wasn't present to any measurable degree for the S&P 500.
kgwgk 44 minutes ago [-]
Again, what would it have looked like? What does “other components trade down in anticipation” mean when SPCX doesn’t even exist?
Drupon 1 hours ago [-]
Crazy to see the Twitter behavior here of really smart, well conveyed top level comments replied to by weird propaganda pushing bottom feeders.
solenoid0937 1 hours ago [-]
HN discussion quality has deteriorated dramatically, especially for anything AI related.
lionkor 11 minutes ago [-]
I suspect this is due to fatigue. I admit I often post low quality replies under AI slop posts, simply because flagging them does nothing when they are somehow upvoted above and beyond anything human made.
This fatigue also causes a lot of readers to skip the AI threads, meaning less self-moderation of the forum through voting.
kortilla 57 minutes ago [-]
The top level comments are not smart or well conveyed, they are just the other side of the internet echo chamber. “Good, the rich don’t need money”, etc.
I think Elon owned companies are just a third rail for any kind of intelligent discussion because it turns into Elon fan boys arguing against Elon haters.
jb_briant 1 hours ago [-]
I wonder if profitable means that investment must be recouped or just if your operational expenses must be compensated by your earnings.
Anthropic is becoming "profitable" while burning a series H of 69 bns usd. Does it count as profitable?
I'm curious if someone well versed in finance can answer, because from my uneducated perspective, it's not profitable to burn billions in order to make a billion.
> wonder if profitable means that investment must be recouped or just if your operational expenses must be compensated by your earnings
S&P requires profitability (i.e. net income) according to GAAP. That definition incorporates both ROA and operating income.
awestroke 58 minutes ago [-]
EBITDA is typically used to evaluate profitability.
JumpCrisscross 55 minutes ago [-]
> EBITDA is typically used to evaluate profitability
S&P requires GAAP profits, i.e. net income. EBITDA is above that.
danielovichdk 2 hours ago [-]
Stocks and money. It's so boring.
I will go drive my old German car now, and get a bit drunk in a bottle of Nebbiolo while listening to some French lunatic with a piano.
Enjoy your trip to Mars and your self driving toy cars. The world is off its rails. Bit time.
MrGando 7 minutes ago [-]
Dude, are you me? :D
q3k 1 hours ago [-]
What's your SKILLS.md? Is your flow multi-agentic?
xeonmc 1 hours ago [-]
just be sure do it in that order and not the other way around
somewhatgoated 1 hours ago [-]
Sir this is a message board run by an US-American venture capitalist organisation; frankly what do you expect
Muromec 12 minutes ago [-]
I expect the balancers to judge and some car batteries mysteriously catching fire as a counterweight.
wg0 33 minutes ago [-]
This is very smart of these folks because for just three companies, they can't ruin the trust and impeccable reputation they have built over the years.
This decision alone is worth several trillion dollars.
Allybag 2 minutes ago [-]
Well, it might be a good decision but I think the possibility of Standard and Poor one day being worth trillions of dollars more than if they had included three companies a year or two earlier than when they inevitably join the index is absolutely zero.
khriss 24 minutes ago [-]
A lot of comments here are saying that the impact on the S&P would have been 'minimal' since the S&P is float weighted. So SpaceX would have been ~0.3% of the index.
The point isn't that the impact would have been minimal. It's that changing the rules to suit the rich and connected is the literal definition of crony capitalism. Why should SpaceX get exemptions from entry requirements to the S&P when every other company before it didn't?
Trying to justify it based on an argument that it would have been 'just' $200 billion, is absurd since that $200 billion is coming largely from the public via index funds that would have been forced to buy SpaceX shares.
Nice to see others are thinking the same, as I just posted the same article as a dupe of this one.
RobotToaster 1 hours ago [-]
It's a risky investment, yes there's a chance it could go to the moon, but it could also plummet to earth.
blobbers 12 minutes ago [-]
Good. Financial grift needs to end. Passive investment has become slightly too passive. S&P saved us. We weren't so lucky when they were rating bonds before the GFC. Glad they seem to have grown some ethics and are not bending the knee to the rocketman.
Major W. Regular people were going to get robbed blind.
JumpCrisscross 2 hours ago [-]
> Major W. Regular people were going to get robbed blind
Not really. One, it was unlikely to happen. The market not pricing in any rebalancing communicated that. Two, the magnitude–even for the S&P 500–would have been small. About a third of stocks are in passive strategies, about 15% in any index, and while most of that is the S&P 500, the index market is incredibly competitive.
S&P made the right move. But the tragedy this episode has revealed, at least to me, is in how venal and influential this new breed of financial influencers on YouTube and X are, and the degree to which they're willing to misinform to get clicks.
frikskit 1 hours ago [-]
What was unlikely to happen? It already happened in Nasdaq. It’s nice that it didn’t for S&P but for most investors it already did happen, so I’m not sure the ‘whatever’ attitude is warranted.
Also, since when is it appropriate/intellectually OK to respond to allegations of corruption by saying ‘stop freaking out, it’s only a small amount of corruption PER PERSON’.
JumpCrisscross 1 hours ago [-]
> What was unlikely to happen?
S&P adopting the rule changes.
> It already happened in Nasdaq
NASDAQ 100 is marketed as a tech-focussed fund. It's also way smaller. And it makes sense for it to include new issues. Total-market funds are also being adapted to include these, and again, that makes sense.
> for most investors it already did happen
What do you mean? For the vast, vast majority of investors, nothing happened. If S&P had adoped these rules, the majority of investors would still be unaffected.
> when is it appropriate/intellectually OK to respond to allegations of corruption by saying ‘stop freaking out, it’s only a small amount of corruption PER PERSON’
I'm saying the allegations of corruption were misplaced. The rule changes have been mooted for years. Did Musk et al try to put their thumbs on the scale? Sure. That should be called out.
But the scaremongering that followed was full of factual misrepresentations. Moreover, it presumed corruption across the board versus certain actors trying to corrupt a process, all for the purpose of getting views.
Kudos to S&P 500. Vast majority of the world has no clue how trillions of $ from their pension funds is being funneled to the select few. Absolutely pathetic.
JumpCrisscross 2 hours ago [-]
> no clue how trillions of $ from their pension funds
Pension funds don't tend to follow the S&P 500, much less automatically. They're sophisticated institutional investors like CalPERS [1] who dabble in everything from public stocks to private equity.
It's other retirement assets, e.g. 401(k)s and IRAs, that tend to follow the S&P 500. But again, with substantial variation.
S&P including these companies would have driven a lot of money towards them. But there was a lot of misinformation around the magnitude of that drive, as well as the breadth of whom it would affect.
In the US at least, many pension funds are not sophisticated, they're small, underfunded, and getting taken for a ride by expensive advisors who promise fantastical returns that will help dig them out of their funding ratio hole. Many would be better off using an S&P 500 index fund for their equity component instead of getting wined and dined into an illiquid, opaque private equity investment.
Telling that among OECD countries, the US is an outlier in having a much lower average funding ratio, and this despite the fantastic performance of the US stock market over the last 15 years.
JumpCrisscross 60 minutes ago [-]
> many pension funds are not sophisticated, they're small, underfunded, and getting taken for a ride by expensive advisors
Who tend to come up with bumfuck benchmarks other than the common ones. Sometimes for good reasons. Often to justify their own comp.
> Many would be better off using an S&P 500 index fund
Maybe. They would probably be better off with some total-market funds (instead of biasing towards large caps, especially if they're small). But my point stands: pension funds don't tend to automatically follow any major index, much less the S&P 500 proper.
kgwgk 38 minutes ago [-]
It’s true that S&P 500 is not the most popular US equities benchmark for pension funds. Russell is the preferred provider - and they will include SpaceX 5 days after the IPO.
joxdosba 2 hours ago [-]
[flagged]
lumost 2 hours ago [-]
It's quite clear that there is an effort to engineer mega financial vehicles that index tracking funds are forced to buy. The incentive to do so is massive, and there is nothing illegal about it.
As a holder of index funds such as the S&P, I'd much prefer that these vehicles are excluded for at least some period of time to ensure that the greater fool isn't simply my index portfolio.
2 hours ago [-]
kortilla 52 minutes ago [-]
Are you happy to be invested in Tesla? It is not profitable quarter to quarter and is included in your fund.
Why do you tolerate that and not this?
muadddib 2 hours ago [-]
I did, in fact, use words. Would you prefer heiroglyphics?
viccis 2 hours ago [-]
All of those are real, natural, organic and, might I add, "actual" words.
3683826312819 2 hours ago [-]
[dead]
propagandist 2 hours ago [-]
The comment above is perfectly clear, and if you have been living under a rock since the Reagan years, that's on you.
See Elon talking about Tesla finally joining the S&P 500 so index funds would finally have to buy its shares. See a hundred examples where socialism is reserved for the few, the jungle and legal constraints for the rest of us.
Plenty of ways to get exposure to that stock without it going into the indices it is not qualified for.
No, it did not. The market moved in reaction to earnings misses from e.g. Broadcom [1] and the strong jobs report.
[1] https://finance.yahoo.com/markets/article/broadcom-stock-sin...
There is never a singular reason. But there are negligible reasons. S&P not changing its rules was a negligible reason for today's tanking.
Isn't it all subjective in the end because nobody really makes their trades with verifiable notes expressing the exact reason. So we can only guess right?
On a side note, I find it very sad that strong job numbers make stock plummet.
It really is an indication that the stock market is mostly speculative and not concerned about the actual economy.
Not really. Strong jobs numbers in the midst of 3+ percent inflation means rates should go up. That, in turn, dilates time on future earnings. So making a company's future earnings more-heavily discounted will be a net drag on valuations even if the jobs numbers indicate those numbers, near term and far, will be higher.
Stronger wages → stronger consumption → higher demand-pull inflation.
But higher inflation implying that “rates should go up” is central bank doctrine. It’s not a general law of how economies function.
Central banks intervening with interest rate adjustments is what distorts the prices of equities downward, when inflation rises.
Without central bank intervention, inflation should theoretically push equities higher (a highly-inflated economy driven by rising demand is by definition a well-performing economy!).
Central banks intervene because runaway inflation can be harmful to wage-earners (they save in dollars, not assets).
But I’m not sure if a 2–3% inflation target is ideal. It seems to me that this arbitrarily low inflation target restricts the growth of the economy in ways that might affect wage-earners, defeating the stated purpose of monetary policy, since higher rates also have the effect of curbing job growth as well as raising the cost of servicing mortgages.
Why would it be? Non dividend stocks only have value because other people think they have value (i.e. greater fool theory).
Only dividend stocks have some base value connected to how well the company does. (Higher dividend if it does well, lower if it does poorly.) But they still also have a lot of "greater fool" value.
Beyond dividend, stocks have no intrinsic value. Nowadays you don't even get a piece of paper to wipe your ass with anymore, it's all digital.
Growth stocks trade on a multiple of earnings: earnings have intrinsic value.
But as so many ETFs have a significant stake in large-cap US tech stocks (the top 10 holdings of the iShares MSCI World ETF is entirely comprised US Big Tech, making up 20% of the value of the ETF), I found S&P 500 Equal Weight to be pretty attractive.
As for SpaceX itself? I feel the numbers involved all sound a bit unbelievable to me. I fear that there will be a rug-pull sometime post-IPO, and retail investors (and taxpayers, if the US Government ends up taking a stake, as they have recently indicated they might do for OpenAI) will inevitably be left holding the bag.
S&P requires 4 consecutive profitable quarters, amongst other requirements, so if one of the new mega caps like SpaceX or Anthropic or OpenAI get included, you’d probably want to get the benefit of their performance.
Put differently, if one previously specifically picked an index fund that is not equal weighted, why would you change from that strategy?
Also, S&P500 has a current market cap of $67 trillion, 0.3% of that is some $200billion. That is essentially a wealth transfer to the rich. They don't need it.
This percentage directly determines the influence on SP500 index funds holders (SPY, VOO, etc.).
The outcome could have been:
1. not included (0%)
2. included, weight by free float (0.3%) --- 54th in the list between $AXP and $MCD
3. included, weight by free float x 3 (0.9%) --- 19th in the list between $ORCL and $JNJ
4. included, weight by market cap (1.75 trillion / 67 trillion = 2.6%) --- 8th in the list between $AVGO and $META
https://www.slickcharts.com/sp500
#2 is _much_ closer to #1 than #3 (let alone #4), meaning that had an exemption been made to allow SpaceX in, given the rest of the existing rules, at least the impact to ETF holders would not be outblown. The same could not be said for NASDAQ , which was the main source of all the debate.
I can partly see the rationale - existing stockholders will want to ditch their stock ASAP to cash in on the artificially elevated prices, and so there's a good chance the free float will increase quicker than the index can capture it, but this rule change will be driving those sales. It's all a scam.
I'm glad a good chunk of my US holdings are in S&P tracked ETFs because they won't include SpaceX until it's ready, but another 25% of my funds are in funds tracking FTSE global indices, and I haven't yet found a good alternative to those. I might end up having to switch to separate UK, S&P 500 and global ex-US.
These are not valid arguments. The companies that get added to the S&P are always owned in some fraction by rich people.
SpaceX is obviously majorly owned by Elon, but it’s also owned by regular employees, a bunch of private investors and other funds that regular people invest in.
> They're not profitable.
Right
> When they prove they're worth the dollars,
Profitable isn’t related to “worth the dollars”. You need to look at income and how much is being reinvested into growth. Amazon famously remained unprofitable due to reinvestment and waiting for them to become profitable before investing was a bad bet.
Is it really owned by them if Elon retains most of the voting rights anyway?
Owned by various folks. Controlled by Elon. Granted, I don't know how Texas law deals with minority rights.
The only substantial effect I've seen of the influencers who were doomsplaining this decision was some minor churn in retirement assets from low-cost S&P 500 followers to higher-cost funds. (The market, broadly, never priced in a rebalancing of the S&P 500. So this was almost entirely whipped up by influencers.)
Broadly speaking, if you were actually considering trading on the back of S&P's decision, or worse, if you actually did, consider trimming who you follow for financial advice.
Yup. Which is why it was always a long shot. I personally thought they'd adopt some of the seasoning rules, but they were more conservative than even that.
And if you had seen it what would have that pricing looked like?
Look up rebalancing trades, or, less graciously, rebalancing front running. If the index is going to rebalance to include a new entrant, you'll see the other components trade down in anticipation. It's a very tight signal, and it wasn't present to any measurable degree for the S&P 500.
This fatigue also causes a lot of readers to skip the AI threads, meaning less self-moderation of the forum through voting.
I think Elon owned companies are just a third rail for any kind of intelligent discussion because it turns into Elon fan boys arguing against Elon haters.
Anthropic is becoming "profitable" while burning a series H of 69 bns usd. Does it count as profitable?
I'm curious if someone well versed in finance can answer, because from my uneducated perspective, it's not profitable to burn billions in order to make a billion.
https://www.cnbc.com/2026/05/20/anthropic-revenue-explosive-...
S&P requires profitability (i.e. net income) according to GAAP. That definition incorporates both ROA and operating income.
S&P requires GAAP profits, i.e. net income. EBITDA is above that.
I will go drive my old German car now, and get a bit drunk in a bottle of Nebbiolo while listening to some French lunatic with a piano.
Enjoy your trip to Mars and your self driving toy cars. The world is off its rails. Bit time.
This decision alone is worth several trillion dollars.
The point isn't that the impact would have been minimal. It's that changing the rules to suit the rich and connected is the literal definition of crony capitalism. Why should SpaceX get exemptions from entry requirements to the S&P when every other company before it didn't?
Trying to justify it based on an argument that it would have been 'just' $200 billion, is absurd since that $200 billion is coming largely from the public via index funds that would have been forced to buy SpaceX shares.
Not really. One, it was unlikely to happen. The market not pricing in any rebalancing communicated that. Two, the magnitude–even for the S&P 500–would have been small. About a third of stocks are in passive strategies, about 15% in any index, and while most of that is the S&P 500, the index market is incredibly competitive.
S&P made the right move. But the tragedy this episode has revealed, at least to me, is in how venal and influential this new breed of financial influencers on YouTube and X are, and the degree to which they're willing to misinform to get clicks.
Also, since when is it appropriate/intellectually OK to respond to allegations of corruption by saying ‘stop freaking out, it’s only a small amount of corruption PER PERSON’.
S&P adopting the rule changes.
> It already happened in Nasdaq
NASDAQ 100 is marketed as a tech-focussed fund. It's also way smaller. And it makes sense for it to include new issues. Total-market funds are also being adapted to include these, and again, that makes sense.
> for most investors it already did happen
What do you mean? For the vast, vast majority of investors, nothing happened. If S&P had adoped these rules, the majority of investors would still be unaffected.
> when is it appropriate/intellectually OK to respond to allegations of corruption by saying ‘stop freaking out, it’s only a small amount of corruption PER PERSON’
I'm saying the allegations of corruption were misplaced. The rule changes have been mooted for years. Did Musk et al try to put their thumbs on the scale? Sure. That should be called out.
But the scaremongering that followed was full of factual misrepresentations. Moreover, it presumed corruption across the board versus certain actors trying to corrupt a process, all for the purpose of getting views.
Pension funds don't tend to follow the S&P 500, much less automatically. They're sophisticated institutional investors like CalPERS [1] who dabble in everything from public stocks to private equity.
It's other retirement assets, e.g. 401(k)s and IRAs, that tend to follow the S&P 500. But again, with substantial variation.
S&P including these companies would have driven a lot of money towards them. But there was a lot of misinformation around the magnitude of that drive, as well as the breadth of whom it would affect.
[1] https://en.wikipedia.org/wiki/CalPERS
Telling that among OECD countries, the US is an outlier in having a much lower average funding ratio, and this despite the fantastic performance of the US stock market over the last 15 years.
Who tend to come up with bumfuck benchmarks other than the common ones. Sometimes for good reasons. Often to justify their own comp.
> Many would be better off using an S&P 500 index fund
Maybe. They would probably be better off with some total-market funds (instead of biasing towards large caps, especially if they're small). But my point stands: pension funds don't tend to automatically follow any major index, much less the S&P 500 proper.
As a holder of index funds such as the S&P, I'd much prefer that these vehicles are excluded for at least some period of time to ensure that the greater fool isn't simply my index portfolio.
Why do you tolerate that and not this?
See Elon talking about Tesla finally joining the S&P 500 so index funds would finally have to buy its shares. See a hundred examples where socialism is reserved for the few, the jungle and legal constraints for the rest of us.