JVL, well written. I'm proud to read that piece this time around. As I've seen the SPCX stock fly around, there's another piece of the puzzle that you've forgotten to throw in there: options trading.
In order to minimize the speculation associated with an already speculative security like an IPO, all stocks have to wait the pre-requisite period of time to have options listed against the security. However, with SPCX, that timeline was effectively shrunk to almost nothing.
So, now, you have a company burning money faster than I can type these letters creating restricted supply into a mandated expansive demand structure and then maximizing the ability to monetize on the volatility of the situation for traders.
So, how much is SPCX worth? Who the heck knows?
What you do know is that the private market couldn't see the value that Elon (Sam Altman or Dario Amodei) could tell them to believe. And, when the cash cows of the private investment world get tired of re-upping their wads of cash into the coffers of these guys, they are forced to do one thing:
Manipulate the average American into overpaying (whether they know it or not) for the crappy version of the stock.
What's worse is that this all happens and the 99.9% of Americans who don't work for these companies all have to sit there and watch as their own company's value craters due to the rebalancing that happens under portfolio manager stewardship.
The problem is unsolvable at the moment. But, just like 1929, we continue to see the democratization of investing and the ease of entry becoming too prevalent at the same time that we're expanding the volatility of the investment options.
I'd love to say I know what will fix this, but much like every other oligarchical society out there, I suspect the answer will be hyperinflation, growing volatility and eventual collapse. The timing of which could be months or decades. But, the pattern is unfortunately inevitable.
All of us who love you, JVL, are distressed to hear that THIS Triad didn't perform as well as you'd hoped. So I'm here to say I've read the entire thing, and despite having to look up a few things on my own (because I'm not all that smart - I didn't know the word "rentier"), I understood this well enough to feel sufficiently outraged by what you've exposed to the light here. I do read most of your Triads, but some days, when I'm doing a lot of my own writing and editing for work, I just can't. read. one. more. word. Even if the words are from you! So I'd missed this particular Triad. However, I was stunned to learn that professional wordsmiths also worry about how their work is received and ruminate about why, especially when you're sure what you've written was good, and it makes no sense that you didn't get the reaction you were expecting! This is the story of my life, albeit on a much smaller scale. At least now I feel like I'm in good company. If JVL worries about how his writing is received, then so can I. We love and appreciate you, JVL. Dark version, lighter version, any version. Glad you're here, so the rest of us don't feel alone in this insane version of reality.
"Today, I can exclusively report, based on audited financial documents viewed by this publication that have been independently verified by the Financial Times, that OpenAI lost around $38.5 billion in 2025, as well as other crucial details about the financial condition of the company."
The financial projections of SpaceX’s record-shattering $2T+ IPO are based on anticipated AI earnings.
Musk’s xAI is the runt of the US AI litter – OpenAI, Anthropic, Gemini.
If OpenAI was hemorrhaging capital in 2025 and its Q1 2026 bid to charge actual costs to customers (rather than the massively subsidized subscriptions intended to induce dependency/loyalty) failed spectacularly, how can Musk’s public offering be anything but deception perpetrated on the public market? With the underwriters – Goldman Sachs, Citigroup, JPMorgan Chase, and Morgan Stanley – and the Musk-accommodating, shape-shifting NASDAQ itself complicit parties?
AI has no viable business model.
Where is the FTC – any financial regulator – on this?
Index-tracking funds are forced buyers; if the IPO is, blunty stated, a scam, retail investors, retirement and pension fund managers are being duped and the public is at risk.
Doesn’t this warrant investigation before the contrived, fast-tracked – 15 post-IPO trading days v. 1 year – NASDAQ listing proceeds?
I never comment and I'm only an occasional reader, but I heard you complain that this was your lowest performing Triad ever, so I am here to say that this is one of my FAVORITE things I've read here. So meaty and informative and full of wisdom and despair.
Can't believe this was such a low-performing triad, how to regulate trillionaires is about to become the existential question of the 2020s. JVL, don't let the bastards grind you down. This is gold Jerry, gold.
Heard JVL on Friday's pod lamenting that this post didn't do great numbers. Well, these are some of my favorite columns that he does... so I've come back to like and comment. Here's to hoping this in some way adds to JVL's claim to the championship belt!
JVL, I want to thank you (and the excellent Catherine Rampell) for breaking this down into relatively understandable language. I have no background in economics other than working and raising two kids as a widow, so I get the day-to-day. I have learned more about the market and how it works from the two of you than anyone else in my sixty eight years!
Seeing how Elon went from stupid rich Neo- Nazi to trillionaire Neo- Nazi is chilling, to say the least.
I've been thinking about whether it could be profitable to take the other side of the rebalance trade: i.e., when the big index funds rebalance and, through compulsory sales, force down the price of companies that were correctly priced five minutes ago, either "buy the dip" on individual stocks or, more generally, create new funds that are index minus SpaceX. I believe I have read that new funds that exclude SpaceX are actually underway (and thus not my idea).
It’s a long read (so I didn’t read it when it first came out) but it is worth the time. Thanks for helping me make more sense of the SpaceX IPO and index funds
Best Triad I have read in a long time. More like this please.
Also, I very sincerely hope that the (Inshallah) rational president elected in '28 nationalizes spaceX on day 1, right before or after ordering the destruction of the arch and whatever stupid trashy shit trump had built by then and odering a raft of special counsel investigations into the mind boggling corruption of the trump kakistocracy
“But you have to be high net-worth to buy into these funds.”
For now. There’s an effort underway to allow hedge funds and crypto scams (they’re all scams BTW) to be options in anyone’s 401k. No more qualified investors, lots of cash piped into scams and oligarchs. It’ll go through because they’re going to bribe Trump, the only question is whether congress is required to make this change or not.
Eliminate index funds?
Corollary - change the tax code so that income is income. Period.
JVL, well written. I'm proud to read that piece this time around. As I've seen the SPCX stock fly around, there's another piece of the puzzle that you've forgotten to throw in there: options trading.
In order to minimize the speculation associated with an already speculative security like an IPO, all stocks have to wait the pre-requisite period of time to have options listed against the security. However, with SPCX, that timeline was effectively shrunk to almost nothing.
So, now, you have a company burning money faster than I can type these letters creating restricted supply into a mandated expansive demand structure and then maximizing the ability to monetize on the volatility of the situation for traders.
So, how much is SPCX worth? Who the heck knows?
What you do know is that the private market couldn't see the value that Elon (Sam Altman or Dario Amodei) could tell them to believe. And, when the cash cows of the private investment world get tired of re-upping their wads of cash into the coffers of these guys, they are forced to do one thing:
Manipulate the average American into overpaying (whether they know it or not) for the crappy version of the stock.
What's worse is that this all happens and the 99.9% of Americans who don't work for these companies all have to sit there and watch as their own company's value craters due to the rebalancing that happens under portfolio manager stewardship.
The problem is unsolvable at the moment. But, just like 1929, we continue to see the democratization of investing and the ease of entry becoming too prevalent at the same time that we're expanding the volatility of the investment options.
I'd love to say I know what will fix this, but much like every other oligarchical society out there, I suspect the answer will be hyperinflation, growing volatility and eventual collapse. The timing of which could be months or decades. But, the pattern is unfortunately inevitable.
Ugh. We may be about to learn a tough lesson, but thanks for the heads up. Feels like we are wandering around in a fog, blindfolded.
Late to the party here, but thanks for this clear description of what’s going on with all this. I forwarded to TWO friends.
All of us who love you, JVL, are distressed to hear that THIS Triad didn't perform as well as you'd hoped. So I'm here to say I've read the entire thing, and despite having to look up a few things on my own (because I'm not all that smart - I didn't know the word "rentier"), I understood this well enough to feel sufficiently outraged by what you've exposed to the light here. I do read most of your Triads, but some days, when I'm doing a lot of my own writing and editing for work, I just can't. read. one. more. word. Even if the words are from you! So I'd missed this particular Triad. However, I was stunned to learn that professional wordsmiths also worry about how their work is received and ruminate about why, especially when you're sure what you've written was good, and it makes no sense that you didn't get the reaction you were expecting! This is the story of my life, albeit on a much smaller scale. At least now I feel like I'm in good company. If JVL worries about how his writing is received, then so can I. We love and appreciate you, JVL. Dark version, lighter version, any version. Glad you're here, so the rest of us don't feel alone in this insane version of reality.
What she said
Exclusive: OpenAI Lost $38.5 Billion In 2025
"Today, I can exclusively report, based on audited financial documents viewed by this publication that have been independently verified by the Financial Times, that OpenAI lost around $38.5 billion in 2025, as well as other crucial details about the financial condition of the company."
www.wheresyoured.at/exclusive-openai-financials/
Question:
The financial projections of SpaceX’s record-shattering $2T+ IPO are based on anticipated AI earnings.
Musk’s xAI is the runt of the US AI litter – OpenAI, Anthropic, Gemini.
If OpenAI was hemorrhaging capital in 2025 and its Q1 2026 bid to charge actual costs to customers (rather than the massively subsidized subscriptions intended to induce dependency/loyalty) failed spectacularly, how can Musk’s public offering be anything but deception perpetrated on the public market? With the underwriters – Goldman Sachs, Citigroup, JPMorgan Chase, and Morgan Stanley – and the Musk-accommodating, shape-shifting NASDAQ itself complicit parties?
AI has no viable business model.
Where is the FTC – any financial regulator – on this?
Index-tracking funds are forced buyers; if the IPO is, blunty stated, a scam, retail investors, retirement and pension fund managers are being duped and the public is at risk.
Doesn’t this warrant investigation before the contrived, fast-tracked – 15 post-IPO trading days v. 1 year – NASDAQ listing proceeds?
Thank you for this explanation. I’ve been struggling to understand this and today’s Triad helps a lot
I never comment and I'm only an occasional reader, but I heard you complain that this was your lowest performing Triad ever, so I am here to say that this is one of my FAVORITE things I've read here. So meaty and informative and full of wisdom and despair.
Can't believe this was such a low-performing triad, how to regulate trillionaires is about to become the existential question of the 2020s. JVL, don't let the bastards grind you down. This is gold Jerry, gold.
Heard JVL on Friday's pod lamenting that this post didn't do great numbers. Well, these are some of my favorite columns that he does... so I've come back to like and comment. Here's to hoping this in some way adds to JVL's claim to the championship belt!
JVL, I want to thank you (and the excellent Catherine Rampell) for breaking this down into relatively understandable language. I have no background in economics other than working and raising two kids as a widow, so I get the day-to-day. I have learned more about the market and how it works from the two of you than anyone else in my sixty eight years!
Seeing how Elon went from stupid rich Neo- Nazi to trillionaire Neo- Nazi is chilling, to say the least.
I've been thinking about whether it could be profitable to take the other side of the rebalance trade: i.e., when the big index funds rebalance and, through compulsory sales, force down the price of companies that were correctly priced five minutes ago, either "buy the dip" on individual stocks or, more generally, create new funds that are index minus SpaceX. I believe I have read that new funds that exclude SpaceX are actually underway (and thus not my idea).
Loved it. Great article.
It’s a long read (so I didn’t read it when it first came out) but it is worth the time. Thanks for helping me make more sense of the SpaceX IPO and index funds
Best Triad I have read in a long time. More like this please.
Also, I very sincerely hope that the (Inshallah) rational president elected in '28 nationalizes spaceX on day 1, right before or after ordering the destruction of the arch and whatever stupid trashy shit trump had built by then and odering a raft of special counsel investigations into the mind boggling corruption of the trump kakistocracy
“But you have to be high net-worth to buy into these funds.”
For now. There’s an effort underway to allow hedge funds and crypto scams (they’re all scams BTW) to be options in anyone’s 401k. No more qualified investors, lots of cash piped into scams and oligarchs. It’ll go through because they’re going to bribe Trump, the only question is whether congress is required to make this change or not.