Yesterday's SpaceX IPO made Musk an instant trillionaire. But is this IPO actually a giant Ponzi scheme like some analysts claim?

Photo above - Happy trails to you. If you live someplace without nighttime light pollution, you can see Musk's Starlink internet satellites overhead. But if you're one of the billions of conventional internet users - and not the 1% who subscribe to Starlink - you're might be paying less and getting faster service.

First off, let’s set the record straight. Elon Musk is NOT the richest person in history. That honor belongs either to Augustus Caesar, Genghis Khan, or Joseph Stalin, depending on which LLM you ask. Musk is simply a trillionaire – not multiple trillions. But, still, yesterday was impressive, no?

Caesar, Kahn and Stalin got there the old-fashioned way – invasions and land theft. Musk understands that in today's modern world creative Wall Street deals are needed. Also, good tax accountants. Telsa paid zero corporate income taxes recently, and Musk’s effective personal tax rate is around 3-4%. (see links below).

The reason the SpaceX IPO instantly multiplied Musk’s net worth is that various funds and consortiums were REQUIRED to buy shares on day one, the way this deal was structured. You simply can’t say no if you manage an index fund, or pension fund. Upstart SpaceX becomes an index component 30 seconds after the opening bel was rung yesterday. Nobody else ever got a deal this sweet. (see links below)

But wait – it gets better. After the SpaceX IPO musk still owns about half of the company outright and also controls 80% of the voting stock. There’s no way any of the IPO investors or board members can have ANY influence on what SpaceX does. What Musk says is final. Everyone else is just a silent partner, for better or worse.

Full disclosure - apparently I'm also a SpaceX investor now, because I hold shares of an S&P 500 mutual fund. And I’m NOT against space exploration. But Musk/SpaceX apparently has more Starlink satellites in orbit than there are subscribers (just kidding - this isn't true). But I hope Starlink ends better than someone's plan to put cell phone “Iridium” satellites in orbit a few years ago. Those things were obsolete before the last one was even launched. Massive investor losses. Competition is a good thing, but not everybody’ is going to be a winner.

My gut feel is that Musk's Falcon1, Falcon 9, and Falcon GLP-1 rockets are going to have a similar trajectory as Tesla cars. Competitors could come up with launch alternatives which are better and more affordable, Google "best EV of 2026" or ask your AI chatbot if you want conflicting opinions on which one to buy.

And if Musk doesn't end up controlling 80% of the planet's space launches, who other than the US government will pay extra for an official Musk branded thrill ride?

I’m just sayin’ . . .

Paul Krugman claims ‘rigged system’ made Elon Musk a trillionaire, brands SpaceX a ‘Ponzi scheme’

what does elon musk pay in taxes - Search

Pretzel · 70-79, M

The stock market used to be "I'll invest in this company and then take the dividends when they make a profit. I'll earn more money than in a bank account over the long term".

That changed decades ago. Now it's built on the "next bigger fool principal". You buy some stock and hope the price goes up and you'll sell it to the next bigger fool who wants to do the same.

Every once in a while the market realizes that it's a scam and the market "adjusts" (crashes).

And the scam goes on and on.

ArishMell · 70-79, M

@Pretzel True but many of the buyers are pension-fund managers and the like, who want long-term stability. So I'd have thought they'd be very cautious about buying anything labelled "X"; and be ready to sell when they realise their "investment" isn't.

ArishMell · 70-79, M

Given the lack of control by investors, I wonder how long it will be before the institutional buyers will start selling.

His unstoppable filling of near-Space with communications-satellites is interfering with astronomy (not that Musk would care about that), increase the hazards of collisions with other Space traffic including manned flight; and it likely won't be long before serious questions of need and environmental significance start to be raised, if not already. Artificial satellites "die" by falling back to Earth, their valuable metals disintegrating, melting and evaporating in the atmosphere to become dust lost over lands and sea.

Also, he seems at least as interested if not more so in AI and perhaps its potential abuse (by him, for him), so could that replace SpaceX as his main business? Especially if the US government cuts funding for him, if it is a customer.

I think this could be one gigantic bubble, but Elon Musk will do his damndest to ensure he loses nothing whatever happens to his shareholders.