cross-posted from: https://piefed.world/c/tech/p/1160169/a-danish-pension-fund-has-blacklisted-spacex-calling-it-grossly-overvalued-with-catastro
AkademikerPension will not buy SpaceX shares at any price near the $1.8 trillion IPO target, saying the company cannot reasonably be worth more than $1 trillion and that Musk’s voting control makes it effectively uninvestable
That sounds like someone takes their fiduciary responsibility seriously. Good job.
That’s because it bloody is.
They’ve got one business unit making money (and to be fair, that business unit is making crazy margins) - Starlink - and one business that could be profitable if it turn down the starship R&D. But it’s so crazily leaning into “AI in space” for its insane multiples - and leaning in to achieving a dominant position there, when both China, Japan and other US companies are prepping reusable launch vehicles.
I wouldn’t touch it with a barge pole and if I could blacklist it in my passive fund I would. That said mine follows the FTSE Russel Global index, which only rebalances every 6 months and with much stricter requirements than the fast-follow Nasdaq funds, so by the time any passive investment of mine jumps on SpaceX its real value will be much more apparent.
Americans with 401k are about to get screwed when this IPOs. They’re wanting to change the index rules. That means every index will have to include this rotten piece of shit. Most 401ks would be affected.
The rule changes include changing how long after an IPO a stock can be included in an index fund Right now it’s a year. They want it to be weeks.
This makes me feel better about exchanging all US index funds in my 401k into International index funds. I may regret this because markets can be irrational for a long time, but it certainly feels like the US is circling the drain. The fallout will impact International of course, but what else is there to invest in?
I’m happy for you. Sadly, my employer retirement plan does not allow me to select my investments. Only target date funds which track the total world stock market. At least it’s diversified.
I don’t know how the teachers funds work. But if they invest in index funds they’ll be affected.
It depends if they invest it in funds that track the Nasdaq directly. If they do, yes then they’ll get dragged in for a fast pump and dump.
The rule is quite simple: if Elon has something to do with it it is grossly overvalued. Europe’s pension funds are not stupid and have a long history of making stable gains on their investments, as they should.
are not stupid and have a long history of making stable gains on their investments, as they should.
Except the Danish government-mandated pension fund ATP that everyone is forced to contribute to. If you want to hit jackpot just invest opposite of what ATP is investing.
Why is it so bad? I don’t know about the exact situation, but 10.4% average yearly gain seems exactly like what a pension fund should do. Trying to hit the jackpot with people’s pensions is not a secure or sustainable way to deal with people’s pensions.
Not when you look at their entire (investment) business. an article from the biggest danish financial paper outlines it (paywalled)
ATP is actually an insurance company masquerading as a pension fund: focus more on their guarantees, instead of getting optimal returns.
Their guaranties and payouts in their inaurance-branch are also horrendous and laughable, plagued by nonsensical coverage rules and ridiculous low rates.
Edit: and no, it’s not an insurance company masquerading as a pension fund, the areas are two entirely independent branches they have slowly been merged over time in the name of government efficiency (a.k.a. budget cuts). They also handle student financial support and basically all government financial aid programmes. But again, the cost of these things are entirely separate from the pension fund and how that is managed, it’s not the same pool of money.
This is unfortunately way too real. How a supposedly professionally managed fund can loose money when prretty much the entire market is trending upwards is almost impressive.
Oh, this could be fun. I mean, the entire market is about to collapse when AI companies can’t deliver and this might be the first card to fall.
Me, looking around at every other company in existence: uhh… guys…
Theres overvalued with catastrophic governance, and then there’s everything Elon Musk is attached to. For example, Tesla is valued at 1.6 trillion - more than the next 29 car companies combined - and recently agreed an almost 1 trillion pay package which would be something like $130 000 per every Tesla ever sold.
No salary, and the stock value is contingent on the company meeting some ambitious goals over 10 years.
Unfortunately the article doesn’t say what happens if they don’t nor is it comparing to anything: are those goals as ambitious as they look when we’re talking 10 years? I don’t know
If you argue that musk’s talent is a reality distortion field creating bubbles, it has historically panned out pretty well. The original Tesla bubble was the reason they were able to grow fast enough to be where they are today
…. Personally I’m skeptical of most ai businesses surviving when that bubble pops, and I’m very skeptical of their being a market for a million humanoid robots that cost as much as a car
It’s made up value so he can borrow against it. You dont pay taxes on borrowed money.
