The Golden Age of Daylight Robbery

Donald Trump stole $1.25B for his phony “board of peace,” he’s trying to steal $1.8B for his equally phony “anti-weaponization fund,” he’s pocketed most of another billion from his inaugural funds and ballroom scam, and he's sold over $220 million in stocks whose value he largely determined. When he's done robbing the treasury, he gets to fly it all back to Mar-a-Lago in his $400 million plane, but only after we spend another $1 billion updating it for him.

Total it all up and Donald Trump ... could be a piker. Because Elon Musk is about to vacuum up a sweet $1.7 trillion. Even in the Golden Age of Daylight Robbery, what Musk is about to pull off is amazingly blatant. That sucking sound you hear? That's millions of 401(k)s headed for the pocket of the world's richest asshole.

That $1.7 billion is the value that's been set for Musk's rockets & more company, SpaceX, as it heads toward a June IPO. How big is this deal? Well, if you total all the companies that had initial public offerings in 2025, you get $45 billion. Musk is valuing his company at 38x everything that went onto the market last year.

On paper, SpaceX looks like a terrible buy. If it goes on sale at the projected price, SPCX will have a market ratio over 100:1—definitely risky territory for any stock. Even so, there's a good argument that SpaceX could be valued quite highly. The company already makes enough off its launch business to cover all those Starships blowing up in Texas and still turn in a solid profit. It generates even more revenue from Starlink, its satellite-based internet service.

However, there's a black hole hiding at the center of the company. In February this year, SpaceX acquired XAI. This is the company behind Musk's money-losing X (formerly Twitter) and his money-incenerating AI tools. These efforts to compete with OpenAI and Anthropic have been roasting benjamins at a rate of over $1 billion a month, a number that's genuinely difficult to grasp.

That "purchase" punched such a hole in SpaceX that it's been bleeding ever since. The biggest thing that SpaceX could do to immediately turn its revenues around would be to throw the breaker and turn off xAI, but Musk's ego won't let that happen.

How is it legal that the principal owner and CEO could force one company to buy out another and feed its bottomless maw while telling investors that this doubled the company's value? I don't know.

Until this spring, when a new stock appeared on the NASDAQ exchange, it wasn't included in the index listing for at least 30 days. That cooling-off period gave investors time to bring overvalued IPOs down a few (or many) pegs. Some stocks that were enthusiastically introduced dropped far enough in that period that they never made it into the NASDAQ's listing of the top 100 stocks.

There's another reason that stocks fail to appear on the NASDAQ-100, even if their market value holds up in that first month. It's called the "free float" rule, and it's meant to stop fiscal chicanery like what happened when British chip designer Arm went public in 2023. The company valued its IPO at $54.5 billion, which would have made it part of the index, but at the end of the seasoning period, it became clear that the owners had actually held onto 90% of the stock. NASDAQ halted their gravy train by denying them a spot on the NASDAQ-100.

Only now, that seasoning period is out of season. So is the ownership issue.

As Forbes reported in April.

Under the old rules, a new stock had to season for at least 3 months before it could join the index, and it had to have at least 10% of its shares traded publicly. Both of those requirements are now gone. Now, a stock is eligible for fast-track inclusion after just 15 trading days, with almost no float if its market capitalization places it among the top 40 holdings of the Nasdaq-100.

The free float rule wasn't just there to keep owners from hogging all the wealth if their stocks soared. It was there because, by severely limiting the amount of stock available, the backers of an IPO can easily manipulate the price of the stock. Put out a tiny packet of stocks, buy them up at an insane price, and watch the whole company's theoretical value be dragged up by the slenderest of imaginary bootstraps. Now feed a trickle of stocks back into the market to see who bites.

If one of the people backing the IPO happens to have, let's say, $1 trillion of his own to throw around, it could be incredibly difficult to determine what the stock is actually trading for with ordinary investors. Which is why Forbes warns that SPCX has "additional concerns."

The limited float can amplify price swings in both directions, and large, non-discretionary passive flows may move the market disproportionately.

That's market speak for "Elon can make this thing look like a winner, even if no one wants it."

But Musk isn't worried. As a result of the rule changes, when SpaceX appears on NASDAQ next month, it will have a projected value that wedges it between Meta and Facebook at the #6 spot. SpaceX can then appear on the index just two weeks later, even if Musk holds onto all but a tiny sliver of that stock.

At that point, index funds like Invesco QQQ, Fidelity NASDAQ, Direxion NASDAQ, and dozens of others will automatically snap up SpaceX shares when those funds rebalance. Whatever SpaceX is trading for at that point could essentially become its worth once the investment gates are opened.

The good news is that only about 1% of 401(k) funds are invested in NASDAQ index funds. Far more are in S&P 500 funds, which definitely include most of those same stocks; only S&P has much stricter rules for appearing in their list.

SpaceX is likely to easily scale S&P's market capitalization requirement, since the current minimum is around $22 billion. But S&P doesn't list a stock until it's been traded for at least 12 months, and it has to have been profitable over the previous quarter. So, if you're concerned about your retirement draining into Musk's ever-deeper pockets, you probably have a year to make some changes.

Oh, and it should go without saying that I'm not – NOT – any kind of investment professional. Or knowledgeable in this area. Or anyone that you should listen to at all when deciding how to invest your money. Please talk to someone far more in-the-know before you press any buttons.

Maybe one of these days, Starship will get to Mars. And maybe, one of these days, SPCX will be a great investment. But betting on either is definitely a risk.