4 ms·

pump and dump scheme, but your 401k bought some.

SpicyLemonZest 3mo ago
Notably, today was the first batch of additions, which really does lend credence to the idea that it's just about people getting out after the forced buying. We'll see what happens in early July when it makes it into the Nasdaq 100.
- rlt 3mo ago
  What's that theory? Who are the "people getting out after the forced buying"? People who bought assuming there would be an increase in price due to forced buying?
  - SpicyLemonZest 3mo ago
    Right. As the "short squeeze" dramas have shown, pump and dump victims these days can have a surprising amount of literacy on market dynamics. I would guess there's quite a lot of SpaceX investors who were convinced that the stock can't go down because the indexes have to buy it.
netsharc 3mo ago
Do 401k's know about pump-and-dump, but think they can time it to make profit? Or are 401ks "bound" to buy stocks? It feels like a lot of retail buyers know the emperor is naked, but are still acting on greed, thinking they can "catch the falling knife" and time the market departure to profit from the hype...
- smw 3mo ago
  A lot of them are heavily invested in index funds that added SpaceX at IPO due to market cap.
  - wrs 3mo ago
    The big indexes have a cooldown period before buying, which these scam artists attempted to radically shorten before the IPO, but they failed (at least partially). The S&P500, for example, will delay a year before adding it to the index. Nasdaq 100 was talked into reducing it to 15 days, so you might want to get out of the Nasdaq 100.
    - tombert 3mo ago
      I got rid of all my QQQ, which was substantial, but I didn't convert all my vulnerable portfolio because I wanted to minimize how much I pay in taxes. I now use the Interactive Brokers MCP to make a "pseudo QQQ" which has all companies except Tesla and SpaceX in there, and I otherwise use the same weights as the official QQQ. In order to avoid tax overhead, my rebalancing is buy-only, no selling, so it's not a perfect analog to QQQ but it's close enough and I at least got some of my capital out of SpaceX.
    - 0cf8612b2e1e 3mo ago
      S&P still requires one year(?) profitability, which SpaceX has yet to achieve. The recent datacenter rentals might have pushed it into a profitable quarter.
      - cyberge99 3mo ago
        They can solve that with “creative accounting”.
- tombert 3mo ago
  I think it's much simpler. A lot of funds are tied to things like the NASDAQ-100, which SpaceX figured out how to get fast-tracked for. Once it's officially on the NASDAQ-100, stuff like QQQ has to buy it, whether or not people like the idea of it. Of course active investors could do something like short Space X by exactly the amount that their funds have to more or less "cancel out" their investment, but most people aren't active investors.
deleted 3mo ago
[deleted]
jerjerjer 3mo ago
They didn't even start on the dump part yet. Only initial 5% of the shares are trading so far.
ttcbj 3mo ago
One thing I learned recently is that Vanguard Total Stock Market Index (VTI) is float-weighted. That means that SpaceX's percentage in the index is based on the value of the floating shares, not the total market cap. As a result, a fund like VTI, for now, doesn't have that much SpaceX. It will add more as the lockup periods expire and the float increases, but increasing float might also drive down the price.
- neogodless 3mo ago
  Looks like the holdings update at the end of each month. Check back in ~8 days and look for SPCX! https://advisors.vanguard.com/investments/products/vti/vanguard-total-stock-market-etf https://advisors.vanguard.com/investments/products/vti/vangu... (there's a search by ticker under Holdings)

Notably, today was the first batch of additions, which really does lend credence to the idea that it's just about people getting out after the forced buying. We'll see what happens in early July when it makes it into the Nasdaq 100.

rlt 3mo ago
What's that theory? Who are the "people getting out after the forced buying"? People who bought assuming there would be an increase in price due to forced buying?
- SpicyLemonZest 3mo ago
  Right. As the "short squeeze" dramas have shown, pump and dump victims these days can have a surprising amount of literacy on market dynamics. I would guess there's quite a lot of SpaceX investors who were convinced that the stock can't go down because the indexes have to buy it.

netsharc 3mo ago

Do 401k's know about pump-and-dump, but think they can time it to make profit? Or are 401ks "bound" to buy stocks? It feels like a lot of retail buyers know the emperor is naked, but are still acting on greed, thinking they can "catch the falling knife" and time the market departure to profit from the hype...

smw 3mo ago
A lot of them are heavily invested in index funds that added SpaceX at IPO due to market cap.
- wrs 3mo ago
  The big indexes have a cooldown period before buying, which these scam artists attempted to radically shorten before the IPO, but they failed (at least partially). The S&P500, for example, will delay a year before adding it to the index. Nasdaq 100 was talked into reducing it to 15 days, so you might want to get out of the Nasdaq 100.
  - tombert 3mo ago
    I got rid of all my QQQ, which was substantial, but I didn't convert all my vulnerable portfolio because I wanted to minimize how much I pay in taxes. I now use the Interactive Brokers MCP to make a "pseudo QQQ" which has all companies except Tesla and SpaceX in there, and I otherwise use the same weights as the official QQQ. In order to avoid tax overhead, my rebalancing is buy-only, no selling, so it's not a perfect analog to QQQ but it's close enough and I at least got some of my capital out of SpaceX.
  - 0cf8612b2e1e 3mo ago
    S&P still requires one year(?) profitability, which SpaceX has yet to achieve. The recent datacenter rentals might have pushed it into a profitable quarter.
    - cyberge99 3mo ago
      They can solve that with “creative accounting”.
tombert 3mo ago
I think it's much simpler. A lot of funds are tied to things like the NASDAQ-100, which SpaceX figured out how to get fast-tracked for. Once it's officially on the NASDAQ-100, stuff like QQQ has to buy it, whether or not people like the idea of it. Of course active investors could do something like short Space X by exactly the amount that their funds have to more or less "cancel out" their investment, but most people aren't active investors.

deleted 3mo ago

[deleted]

jerjerjer 3mo ago

They didn't even start on the dump part yet. Only initial 5% of the shares are trading so far.

ttcbj 3mo ago

One thing I learned recently is that Vanguard Total Stock Market Index (VTI) is float-weighted. That means that SpaceX's percentage in the index is based on the value of the floating shares, not the total market cap. As a result, a fund like VTI, for now, doesn't have that much SpaceX. It will add more as the lockup periods expire and the float increases, but increasing float might also drive down the price.

neogodless 3mo ago
Looks like the holdings update at the end of each month. Check back in ~8 days and look for SPCX! https://advisors.vanguard.com/investments/products/vti/vanguard-total-stock-market-etf https://advisors.vanguard.com/investments/products/vti/vangu... (there's a search by ticker under Holdings)