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SpaceX bond worth 10% less than issue price – heading for junk bond status
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- DuckConference 2mo ago> has now widened from the initial +175bps to a whopping +231bps doing more than two-thirds of the work. 2.31% spread over treasuries is heading for junk bond status?
- kQq9oHeAz6wLLS 2mo ago[flagged]
- lmohseni 2mo ago[flagged]
- marcusverus 2mo agoIf these figure represent actual deaths (big if), those people will have died because literally nobody on earth was willing to pay to keep them alive--yourself included.
- rightbyte 2mo agoA gigantic rug pull of bread and medicine is really not where we should blame the poor.
- macintux 2mo agoIf a pillar is removed from a building with no warning, no one would claim that its collapse was from the unwillingness of anyone else to put a new one in place. If DOGE had announced a 2-year phaseout of humanitarian aid, governments and NGOs might have had time to fill the gap. Doing so arbitrarily and abruptly was simply cruel.
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- lmohseni 2mo agoBut wait, I do pay taxes? By you logic, no policy choice can ever cause harm because the responsibility is always redistributable to several billion bystanders. Pretty convenient!
- evantbyrne 2mo agoNot everyone is looking to save a buck at anyone's expense. Don't ever make the mistake of thinking we're the same.
- marcusverus 2mo agoWe both know you haven't lifted a finger to help these people. You're not interested in actually saving lives, just that sweet righteous indignation (after all, it's free!)
- evantbyrne 2mo agoI've been pursuing the public good my entire career, including making major career moves to improve the developing world. You've crafted a delusion to justify your clearly antisocial behavior. You have no right dictating to people that they need to do x, y, and z to have genuine ethics when you are stumping to increase child mortality in Africa. Good day to you sir!
- tyre 2mo agoNo, but the fact that they're the worst-performing BBB bonds, the company is burning cash, and the equity being down 38% since its peak after 1 month of trading is indicative of the market's…suspicions. We'll see what ratings agencies think of the health of the company.
- beaviskhan 2mo agoIt's a lot closer to junk (approx 2.7%) than it is to investment grade (approx 0.8%): https://www.macrotrends.net/3006/high-yield-spread https://www.macrotrends.net/3006/high-yield-spread https://www.macrotrends.net/3042/us-corporate-bond-spread https://www.macrotrends.net/3042/us-corporate-bond-spread
- Sol- 2mo agoIsn't it realistically only worth talking about SpaceX stock a few years out? The random walk the stock will do after an IPO seems very uninformative.
- enopod_ 2mo agoThis bit is not about the stock, it‘s about bonds. They made about $70B (?) in the IPO and now issued bonds for about $25B. This debt is rated at junk level now.
- rchaud 2mo agoBurton Malkiel's "A Random Walk Down Wall Street" was published in 1973, well before significant changes to financial markets that affect its theoretical randomness. 1. 401Ks were introduced in 1978, making mainstream the concept of automatic payroll deductions that funded an investment account. Trillions more dollars moved into pension funds that might otherwise have been spent elsewhere. 2. Bloomberg Terminals went online in 1982, kicking off an ever-growing information assymetry between investment professionals and retail investors. 3. Electronic trading didn't take off until 1992 with Globex, the Chicago Mercantile Exchange's platform 4. High-frequency trading didn't take off until 2005 or so 5. Finally, the Nasdaq changed its rules in 2026 in a way that directly benefited new IPOs like SpaceX, triggering automated purchases from investment funds, propping up its price beyond what its business fundamentals might have justified.
- exabrial 2mo ago[flagged]
- postalrat 2mo agoWhy is this only about Elon to some people? It's not only about Elon.
- fnordsensei 2mo agoI have a friend who unironically said "Elon Musk is the most important human who has ever lived"
- shevy-java 2mo agoAnyone still buying anything the right-arm-raising guy is controlling is out of his or her mind.
- orbitalventures 2mo agoIs really anyone surprise about this? To be honest a company that shifts goal posts constantly, that has Government as the only backer, that inflates revenue and talks about Base in Mars and the expansion of human consciousness is the definition of Red Flag. The bond so quickly after the IPO is just another scheme of the kind of people this is being targeted to. As son as you dig slightly deeper into the BizPlan and numbers you realize how much of the entire SpaceX IPO and Bond are scams.
- binaryturtle 2mo agoArticle needs registration.
- nijave 2mo agomagnolia1234 bypass-paywalls-clean https://archive.is/tnSeY https://archive.is/tnSeY
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- aftbit 2mo agoThe fact that this works by exploiting AMP is delicious.
- qup 2mo agoCan you explain? I'm not sure how to Google that.
- aftbit 2mo agoNot a recommendation for this fork of the extension, just the first I found googling. https://github.com/aspenmayer/bypass-paywalls-chrome-clean-magnolia1234/blob/master/contentScript.js#L2354 https://github.com/aspenmayer/bypass-paywalls-chrome-clean-m... https://github.com/aspenmayer/bypass-paywalls-chrome-clean-magnolia1234/blob/master/contentScript.js#L74 https://github.com/aspenmayer/bypass-paywalls-chrome-clean-m...
- fragmede 2mo agoGoogle pushed this AMP thing to make pages load faster but via them as a powergrab so using amp to archive articles is using the system against itself if you squint real hard and oversimplify the various actors in the situation.
- polynomial 2mo agoReally slick!
- preetham_rangu 2mo agoCheap capital masked a lot of risk. The current rate environment is exposing it.
- rsynnott 2mo agoThese are bonds that were issued a few weeks ago.
- notahacker 2mo agoyeah, as the article said bond prices have fallen slightly over the time period but this is much more bond buyers seeing increased risk SpaceX isn't going to have the cashflow or ease of further equity raises to pay them back in the long run. (With it being bonds the upside of "but what if SpaceX actually does become bigger than the present US economy" is capped too)
- londons_explore 2mo agoI don't see a future in which those bondholders don't get paid back. The company has plenty of revenue, and if needed can just turn off the r&d tap and become a boring company. Terrible for the shareholders obviously, but the bond holders will be fine.
- notahacker 2mo agoThis assumes that SpaceX's decision maker decides to prioritise cuts to repay bondholders over R&D to see if they can innovate their way to bigger profits, which doesn't seem a sure bet (tbh I'd put SpaceX under its current management very low on the list of companies likely to do this) I mean the bond yield is 6.65% over US Treasury returns of 4.75% so it's not like everyone's running in fear of their imminent collapse either. But they're less confident than they were when Elon company valuations looked immune to gravity.
- 33hgtt 2mo agoAnother example of complete idiocy on this board. Yep spacex can afford to have a declining value of equity… its talent who are mostly paid with stock will leave for its competitors - increasing the probability of bankruptcy. Putting the company in a tail spin heading for default. So how are the bond holders gonna get paid in the event that happens? Oh in bankruptcy court? Lmao. Raising equity is not a loophole either - ebit and ebitda drive measures of default risk. Most of you on here should never ever talk about finance. It’s like you learned how to discount a cash flow and have it all figured out lololol
- lenerdenator 2mo agoGood thing there's a strong corporate governance model at SpaceX where the c-suite is fully accountable to an independent board of directors, who could use their majority voting power to remove that c-suite at will. Could you imagine the abuse of power that could happen if one person held over 50% of the voting power at such a company?
- rtkwe 2mo agoAre super shares like Zuckerberg's and Musk a new thing? Genuinely curious if they're a recent invention or something that's quietly happened for a while because it seems like a large inversion of the deal of going public, lose some control of the company in exchange for a large amount of cash but these nonvoting/supervoting share splits seem to completely upend what I understood to be part of the deal for access to the stock market.
- nolta 2mo agohttps://en.wikipedia.org/wiki/Ivar_Kreuger#B-shares https://en.wikipedia.org/wiki/Ivar_Kreuger#B-shares
- lapcat 2mo ago> Kreuger's financial empire has been described by one biographer as a Ponzi scheme... Another biographer called Kreuger a "genius and swindler", and John Kenneth Galbraith wrote that he was the "Leonardo of larcenists".
- skybrian 2mo agoNo. Google has them too.
- rtkwe 2mo agoGoogle is also pretty new in the terms I was talking about only slightly older than Facebook. I mean going back to the 80s/90s or earlier, pre current FAANG at least.
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- reactordev 2mo agohttps://archive.is/tnSeY https://archive.is/tnSeY
- swader999 2mo agoI'm impressed with the general public. I thought these guys would get away with their hype train. Nice surprise.
- baggachipz 2mo agoDon't worry, they made plenty with the pump-and-dump.
- maest 2mo agoA much larger percentage of bond traders are institutional, compared to equities, where retail is very active in some names. So I wouldn't really give too many points to "the general public" for this one.
- solumunus 2mo agoThe thing that propelled Tesla to ridiculous heights was the massive shorting (and eventual covering). This should just drop and drop (I hope).
- tjwebbnorfolk 2mo agobut they did. they already got their money. it's the investors who are going to take a bath, not spacex
- mixdup 2mo agoThe next time SpaceX wants to sell some bonds they will take a bath. Even if this isn't immediately screwing Elon or SpaceX, it indicates a much higher interest rate next time they issue bonds
- asim 2mo agoQuite honestly IPOs and the stock market in general is a Ponzi scheme. This is something I would never have said before. I am not a skeptic. I invested in the markets for years and made money on Amazon, Google, twilio, and so many others. But I also lost a lot of money buying near or after the IPO. The game is rigged. Those who put money in post IPO in the 12 months after are left holding the bag for years. It takes 10+ years to recover that. The people who invested pre IPO, the VCs, the bankers, etc. they are getting a good deal. In the case of VCs they are taking early risk. Not at the late stage. But earlier. In many cases it's been a long hold. Again 10+ years. But anyone coming in at the IPO you are buying at a peak when someone decided that's the perfect time to hype it. We're all catching a falling knife. Doesn't matter if the business fundamentals are sound. They become disconnected from realities of the market when it all gets tulip crazy. These things have a way of working themselves out. But look at almost all IPOs and the next 12 months the stock is down 50+% so I'd rather wait. And honestly when I buy, it's to hold 10+ years, not make a quick buck and it's because I believe in the value. You can believe in SpaceX but also still believe the market and the dynamics of IPOs is almost criminal for retail investors. It's almost as bad as crypto token sales tbh.
- aftbit 2mo ago>Doesn't matter if the business fundamentals are sound. The business fundamentals are rarely sound for modern IPOs, especially anything Elon adjacent. His companies are just as bad as crypto token sales in terms of their hype. Heck, some of the stock price appreciation of Tesla _was_ driven by their ownership of crypto for a year or two.
- an0malous 2mo agoStocks, especially without dividends and negligible voting rights, are basically baseball cards for companies.
- Ekaros 2mo agoThat is funny comparison looking how baseball card markets have gone recently. Which is extreme increases in prices for little logical reasons. Or has baseball massively increased in popularity? (Honest question)
- trolleski 2mo agoMusk biggest mistake is that he wanted to start another bubble while the last bubble didn't pop yet. This is against the handbook of a Wall Street thief, bad, bad Elon.
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- lucd 2mo agoThe worst about the SpaceX IPO is Nasdaq changing their inclusion rules for the Nasdaq 100. The index fast-tracked SpaceX stock for inclusion 15 days after the IPO, instead of the normal three-month seasoning period. They also changed its 10% minimum float rule to a 3x weighting boost for low-float stockss. So many people will unwillingly and prematurely invest into SpaceX, before it has any chance to discover its real price. IE: The floating, 5% at launch, could attain 30% end august, if Nasdaq didn't change their rules it would have included SpaceX after this.. https://finance.yahoo.com/markets/stocks/articles/nasdaq-cheated-changed-laws-fit-193113947.html https://finance.yahoo.com/markets/stocks/articles/nasdaq-che...
- tossandthrow 2mo agoIMHO it is prudent to allocate a bit more conservatively these days. I cut out my nasdaq100 and have generally allocated towards ex us
- hnburnsy 2mo ago>The worst about the SpaceX IPO is Nasdaq changing their inclusion rules for the Nasdaq 100 Why, no employer's 401K or retirement plan offers QQQ as an investment choice. Anyone buying the Nasdaq 100 is doing so by choice?
- richwater 2mo agoThe Nasdaq is a shit index to begin with. There are so many other options.
- tyre 2mo agoThe NASDAQ is up 27% in the past 1 year. S&P 500 up 21%, DOW +20%. So, it's doing pretty well!
- mattkrause 2mo agoIf the argument is that it's being manipulated, I'm not sure these stats help.
- tcp_handshaker 2mo agoIf only these people have been warned before.... </pretend_care>
- somat 2mo agoA stupid/naive question. Why does this affect SpaceX? They have their money(The IPO) Any third party trading value does not change that. Sure there may be individuals, officers of SpaceX who hold these instruments who will be negatively affective, but the company itself? My best guess, it makes it harder to get loans in the future.
- clickety_clack 2mo agoIt makes borrowing money much more expensive going forward.
- panphora 2mo agoThe losses fall on bondholders now, but it does make it harder for SpaceX to raise money going forward. And if they actually slip into junk territory, some institutional investors will be forced to sell (mandates only allow investment-grade), pushing prices down and yields/spreads up even further. That can snowball: wider spreads → higher borrowing costs → more stress → wider spreads. The existing bonds' coupons are fixed, so the real bite is on future issuance and refinancing. Lots of capital-intensive companies (SpaceX is definitely in this category) lean heavily on debt markets to fund ongoing investment and roll over maturing debt, so losing cheap access is a big deal.
- aynyc 2mo agoThis is about their bond, not that share price. If you are in the US, it's like having low credit score, everything you want to do financially such as leasing or financing a car, buying a house, etc.. will be more costly (higher interest rate) from the lender.
- dofm 2mo agoExcept that it's not clear really that lenders will be able to judge on that basis alone. SpaceX is a different kind of unicorn: it's a government contractor run by the richest man in the world who controls a media echo chamber and gets people elected. That article compares them to Oracle. Who are, as it goes, pretty similar: run by rich people with a media empire who have their teeth deep in government systems. These bonds could get worse and worse but if US state and federal governments continue to put thumbs on scales it doesn't matter. The US free market isn't uniformly free.
- chmorgan_ 2mo agoIs this a real concern? SpaceX is doing amazing in terms of business.
- nemomarx 2mo agoIt depends on if you mean the space part or the nascent AI mega company SpaceX is pretending to be. The ipo claimed the space launches would only be a small part of their future profits and business and that they'd reach a 7 trillion dollar TAM or etc - this isn't a good sign for that promise.
- aftbit 2mo agoSpaceX-the-space-launch-business is doing amazing things, which is part of what makes it so sad that the financials and buzz is all for SpaceX-the-enterprise-AI-business. Their S-1 projects $28 trillion TAM, with 93% of that attributed to AI, ~6% to connectivity via Starlink, and only ~1% for space launch capability. Of their $20 billion CapEx spent in 2025, 60% was spent towards AI data-centers, 20% was spent towards Starlink satellites, and ~20% was spent towards actually building Starship and Falcon 9. That's gone up to nearly 80% towards AI in Q1 2026. Of course, "AI" makes up only ~20% of their current revenues. So... this company is priced as an AI startup but it's actually a satellite internet and space launch business.... or is it? Shame to see the coolest thing that Elon did be eaten by the AI monster. https://www.sec.gov/Archives/edgar/data/1181412/000162828026036936/spaceexplorationtechnologi.htm https://www.sec.gov/Archives/edgar/data/1181412/000162828026...
- bawolff 2mo agoif people aren't buying the bonds, then people do not believe that they are doing amazing.
- xutopia 2mo agoI can't comprehend for the life of me that people put their life savings in what Elon Musk is doing. Are people not seeing how he's lying about the future all the time? He said he aimed to have 5000 Optimus robots out by end of 2025, 50000 by 2026 and 10 times that in 2027. He promised in 2015 that full autonomous driving would arrive in 2 years and we aren't there yet 11 years later. He even said in 2016 that there would be coast-to-coast autonomous driving in 2017. He promised manned missions to Mars by 2024-2025 in multiple interviews between 2011 and 2016. He promised in 2016 that there would be solar roofs expansions by 2017 that didn't pan out, he promised AGI by 2025 in 2024. Elon Musk has repeatedly lied about outcomes of his ventures, gotten crazy valuations based on those exaggerations and now people are starting to finally wake up that he isn't as good as his ego.
- futevolei 2mo agoYeah yeah yeah he lies all the time but Tesla cars exist and are awesome and the company is worth more than all other car companies combined going on how many years now? Do you really believe you have some unique insight that the rest of the market has not discounted? Spacex was probably just over valued and this sell off has nothing to do with “people starting to finally wake up that he isn’t as good as his ego”. I suspect the best thing you could for yourself, at least as far as the stock market goes, is humbly acknowledge you know nothing and just buy index funds.
- DustinBrett 2mo agoEvery company you mentioned has made more progress in those spaces than anyone else, and they are all clear progress towards the goals discussed.
- xutopia 2mo agoYou're mistaken. Name 3 accomplishments he made and I'll show you world class work done elsewhere by other companies. The only thing he did which was notable was Starlink and I'll gladly grant you that. China is about to eat Starlink's lunch with their own tech. Again I think people overestimate Musk's contributions to the world.
- khurs 2mo agoThe financial press failed to run headlines damning the SpaceX IPO, or all the ongoing false promises Elon makes. And now they report that investors, many of whom are their customers, are suffering...
- disgruntledphd2 2mo agoThis particular author/publication has been beating this drum about Elon and his many companies for years now, fwiw.
- antitoi 2mo agoBetween Matt Levine and the FT, I saw plenty of damning (or at least skeptical) coverage throughout the entire lead-up.
- Havoc 2mo agoWhich is all sorts of backwards. Debt has liquidation preference over equity. And equity market say spacex has trillion+ of supposed equity buffer before it cuts into debt value
- mixdup 2mo agoIf the equity market says something that must make it true. Markets have never gotten valuations wrong
- elbasti 2mo agoThis is incorrect. SpaceX has a trillion in Market Capitalization, not a trillion in Equity. These two concepts are no the same. The equity value is the theoretical intrinsic "worth" of a company, and has a very simple definition: Equity = Assets - Liabilities. Market capitalization takes into account the future value of the business, while equity (an accounting concept) only looks at present day cash & liabilities. When a company gets liquidated, the future growth/value of the business is, pretty obviously, zero, so the "market cap" is irrelevant. What matters is what is left over once all debts are liquidated. SpaceX's equity at the time of their IPO was $34 Billion (it's in the S1!). You can also see in their S1 that their cash decreases by about $8B a year, so unless things change they should be underwater in about 4 years.
- Havoc 2mo agoBy „equity buffer“ I don’t mean equity in the balance sheet sense you seem think. In this case the gap between the value bond market and equity markets assign to spacex is equal to market cap ie a trillion. If equity markets are right there is a trillion of spare equity buffer ( ie equity in the enterprise value sense not accounting equity) before endangering bonds and the bond people are idiots for marking their bonds down. If bond market is right equity is worthless and equity people are silly to push it to a trillion market cap. Either way someone is wrong by a trillion.
- swingandamiss 2mo ago[flagged]
- dheera 2mo agoI don't actually hate Musk. Although he has done bad, I think he has done far more good than bad. He has, for one, directly improved my quality of life on the transportation front.
- groundzeros2015 2mo agoIt certainly is a contrast from the Tesla years. But overall I think the current consensus is: - we don’t believe in startups (low quality scams) - we don’t believe in technology. (It’s surveillance and distraction). - we don’t believe in markets (regulate the RAM) - we don’t believe in agency (unruly rule breakers) And honestly we’ve seen a lot of events that strengthen those positions. Some of it is age as well. I’m just interested to see what comes next with so little faith in the industry.
- baggy_trough 2mo agoI can't identify one item on that list that I think would be fair to consider a consensus.
- groundzeros2015 2mo agoReally? Do you want to try one out? I don’t see very many articles interested in new startups. It’s usually about them failing. I often use market explanations in my comments and these are not received favorably.
- baggy_trough 2mo agoConsensus means there is general agreement, but those statements are highly disputed.
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- cyberjerkXX 2mo agoKeep an eye on Rocket Lab. Peter Beck is legit.
- CurbStomper 2mo ago[dead]
- earth-tattoo 2mo agoCan we have a separate anti-Trump, Elon, etc. section on hacker news? So I can separate this noise from the real news. I'm no pro Elon, but this stock went from 150 to 200, and there was no news on HN. Now it dipped from 150 to 136 and suddenly it's on HN front page. The headline should be: "Traders trading".
- charcircuit 2mo ago10% drop 1 month after IPO is normal for a stock. It doesn't mean it's heading for junk bond status.
- eigenspace 2mo agoBonds are not the same thing as stocks.
- me_again 2mo agoStocks and bonds are different things, and the bond issue is separate from the IPO. Both are ways for companies to raise money, SpaceX did both. This thread's nominally about the bond, but for some reason everyone's talking about the stock.
- elbasti 2mo agoHere's what this means for SpaceX for those of you uninitiated in bond-math: 1. SpaceX issued long-term bonds whose coupon (ie, "interest rate") was 6.5%. 2. Those bonds are now trading for less than their face value. That means that if you buy one of those bonds on the secondary market, you will get a return (yield) of 7.387% (if the price of a bond goes down, but the coupon stays the same, the yield goes up). 3. This doesn't affect SpaceX directly, but it tells you that if SpaceX were to issue new bonds today, they would have to offer 7.4% coupon on them, not 6.5%. Note that even though that was caused by a 10% drop in the bond value, it's a 13% increase in cost of borrowing! SpaceX is a cash-flow negative company that depends on debt and selling equity in order to pay the bills. They will have to issue bonds again, and those bonds will be more expensive. Note that the shortest maturity bonds don't have to be repaid for 5 years, so the impact on cash is not going to manifest for a while...at least 5 years time (assuming they did another bond offering tomorrow). In that sense it's a nothingburger. The immediate impact it could have is if spacex depends on issuing new, shorter-term debt (lines of credit, etc) whose price could be impacted by the market's perception of their riskiness.
- toast0 2mo ago> 2. Those bonds are now trading for less than their face value. That means that if you buy one of those bonds on the secondary market, you will get a return (yield) of 7.387% That's your return if you buy one of those bonds and the bond is paid on schedule. Presumably the market consensus is there's some risk that payment may arrive late or not at all since the yield to maturity has increased since issuance and not as a result of underlying interest rate changes.
- _diyar 2mo agoThe drop in price is a bad metric to judge this by since bond prices depend on the yield of other items. Here's the key point in the article: A month ago, the bond was priced at +175bps yield above treasuries with similar maturity, now it's priced at +231bps.
- GrandMittens 2mo ago>There is a massive downside to premature inclusion of a stock that is initially overvalued Define “massive”. SpaceX is only 1.2% of QQQ. Elon musk is the Elondyssey to himself.
- segmondy 2mo agoHeading for junk? It's absolutely junk and trash. Every retail investor that I know that bought SPCX, did so to make a quick buck. It's even worse than crypto, at least some people believe crypto has value and will take over or replace fiat currency. No one that I know who bought in SPCX did so believes the space data center story or going to mars. There's certainly value in launching things into space, but none believed the valuation with the profit, but the figured Elon has the midas touch and they could cash out before the music stopped.
- perrohunter 2mo agoThe title is quite biased, it's telling us what to think even before we read the article
- 8note 2mo agothe title of a piece is a summary of it. it tells you what the writing is going to argue