You may have overstated the degree of bad outcomes that will result from this IPO, but you're still right about the general badness. NASDAQ, FTSE and Fidelity are doing everything they can to lure in the dumb money. There's no getting around the fact that the rule changes force index fund managers to buy shares of a money-losing company at a premium price.
Right now $75 billion in underwriters are shaking in their $1000 dress shoes because not only do they have to float this atrocity, but they have to make sure it doesn't end up next to the Titanic before they need to float the SS Anthropic, and the SS Openai after that. That they have resorted to this level of desperation is telling.
And all of this so Elon could see a 13 digit number on his balance sheet for a little while and Ipomaxx Altman and Amodei.
The timeline at the end is the key piece. Supply arrives on schedule, demand got told to wait. But there's a scenario missing from the sequence.
If this trades below IPO price in the first 60 days while retail is still locked in and before any meaningful index bid arrives, it changes the arithmetic for everything queued behind it. The autumn filing gets pushed or repriced. The trillion-dollar target starts looking academic. The entire AI IPO pipeline is effectively priced off the first one performing, and the structural setup laid out here suggests the odds of a weak opening quarter of trading are higher than the underwriters want anyone thinking about too carefully.
Maybe 35% odds the first 90 days are weak enough to force at least one of the follow-on IPOs to materially reprice or delay.
If idea that markets are manipulated is true, then they can not let the price drop (significantly) at least before autumn.
I would be interested how much money would be needed to influence the price to keep it at required price before ETFs start buying and are there players involved that have such money.
I think you were actually right the first time. Most passive index funds are market-cap weighted, not free-float weighted. That BS from the NASDAQ ignores that the Nasdaq 100 index itself has never been a free-float weighted index, and the tech ETFs write in their prospectuses -- legal documents which are very difficult to amend -- that they mimic the performance of the -100. Passive ETF's are judged IAW how well they replicate the performance of the underlying indices, less fees and expenses. That's the problem, and NASDAQ and SpaceX know that they have to do that, starting on Day 15, on a very small number of publicly available shares.
From the math in your example. First, the securities opening with under 20% free float have a 5x multiplier, not 3x. https://indexes.nasdaqomx.com/docs/NDX_Consultation-February_2026.pdf (top of page 3). As insiders sell and JUST 20% OF ITS SHARES ARE FLOATED (to guaranteed buyers), the company becomes full-cap weighted anyway. (Bottom page 3). So the 5% opening free float is multiplied by 5, to get 25%. If IPO value is $2T, then $500 billion of that is applied to company's inclusion into the NASDAQ 100 on day 15, and indexers only have $65 billion or so in shares that are publicly available to mimic the $500b market weighting.
The trick is the tiny float, and the fast index inclusion. Free float tends to rise over time as insiders sell their shares after the lockup period, which is also why companies tend to perform poorly in the year following the IPO: more shares are coming onto the market and new buyers must be found.
THEN, LATER, successful companies are eligible for index inclusion. But with fast-tracking, the insiders and seed capital funds never have to worry anymore about carefully timing their block sales at the same time everyone else is looking to cash out.
I respectfully disagree on SpaceX. It's not worth a trillion, but this company is the kind of (literal) moon-shot bets that the NASDAQ and their investors should be looking for. They launch 80% of the world's rockets, and Starlink is a great company even though Beidou will put them out of business in most of the world, eventually.
I also have a lot of respect for Elon Musk, while loathing with every fiber of my being the disgusting people running the AI industry. Musk and Altman despise each other on a personal level, besides, and it's weird that Musk can't see that he just gift-wrapped ChatGPT and Anthropic a better deal than even SpaceX just got. Maybe he thought he could cross over and then haul up the drawbridge behind him, but the real world doesn't work that way, and now the worst people in the whole world will be playing with pension and 401k money.
most insiders can't sell from day 1. Those are the "lock-ups". They will release gradually over time and by end of year most non-founders can sell.
So for the first 15 days or even month this increase in float is essentially indistinguishable.
We do agree on that part.
Whatever we agree on (and I agree with you it's not worth 2T), it doesn't matter, it matters what the shareprice will be to determine that market cap. And if the banksters determine it to be 2T, than it is 2T...
SpaceX, the ONLY earning part is Starlink. The rockets have a cashflow yes, but are burdened by R&D. So a net loss. xAI... "Get the hell outa here"-vibes. That's something that should be pushed far away and never touched again. HUGE loss.
Group-wide: 18.7B revenue (11 SL + 4 R + 4 ai), 2.6B oeprating loss, 5B net loss.
Starlink by itself COULD be argued to be worth 500B (30-35x earnings in 3 years) because it's software scale revenue on a hardware business (i mean the satellites are there, all you need is a modem).
But the 2 other parts are dragging SpaceX down. HARD.
Then back to the math.
For easy calculations, let's assume that it IPOs at 2T (I don't think it'll be 1, probably 1.5T). And the float is said to be around 5%. The first month maybe 10% of extra insiders will sell - so 5.5% float in a month (for our thought exercise: neglible as I'm mainly focussing on the first month).
So: business is "worth" 100B for the weight. Multiplier 3 (as effective May 1) -> 300B
You're also right on the market cap, not the float-weighted-cap. But because most are mature businesses in there (at least the ones that skew it), it doesn't matter again. Total marketcap is what? 40T or so? So index weight is 0.75% as calculated.
In my original article I made the error to conflate Nasdaq & S&P. The HUGE one is the latter, the money following the Nasdaq is actually pretty small. If you have any proof to the contrary, please do tell.
So all that still leads me to the same conclusion... It's bad/evil rule-bending, but before it was arguably worse: >10% float? full weight, < 10% float? you're out. Now at least you're considered "full weight" at 33%. Closer to reality I suppose.
When Musk was kicking around the idea of buying Twitter for himself, we saw reports that his group was considering folding Twitter into SpaceX and turning the platform into a browser that would compete globally with Chrome/Google, including on search. The mapping functions would come from Starlink, and it would be an almost unbeatable bundle for users across the world, especially in remote areas. Phone service, internet, mobile everything--all powered by satellite.
X is the go-to source for unfiltered news that is not blocked by Western sources, especially from conflict zones. It is also unfortunately a source of a lot of fake news and bot-driven content.
It belongs on the NASDAQ, and investors with a high risk tolerance and a very long investment horizon are natural candidates to load up on the shares. For everyone else, extreme caution is warranted. But those guardrails were ripped down, and now everyone will be buying except the insiders who are dumping shares with guaranteed price floors.
"So far," as Homer Simpson put it. If they keep letting them be used for drone guidance, or whatever, the probability of unforeseen malfunctions may be greater than zero ...
Thanks for the pushback. I'll have to check your statements and what I found. (back to my notes 😉). BTW, one thing I know which ain't right is the 5x multiplier. That was proposed, but approved was "only" 3x.
There are 2 pdfs - methodology - bottom of page 4:
> *Float*
> There is no minimum free float criterion, although the Modified Market Capitalization used for weighting purposes imposes a limitation on the weight of low-float securities.
(nothing further in that pdf)
in the FAQ check page 5 & 6.
> For fully floating securities, float and market capitalization are equal, resulting in a multiple of 1x. For securities at the previous 10% float minimum eligibility criterion, the multiple was 10x.
> Implementing the 3x float cap will limit a company’s weight to the lesser of its eligible listed market value or three times its eligible float market value.
Hotel California: a long bus ride, a lot of beer, maybe,probably some pot, and two type-A guitarists battle out the most famous guitar duet in history. By the end of the ride, a masterpiece exists where there once was nothing.
As for the rest of that article, it’s proof there is no “free market”, just a barely-legal scam run by market manipulators. Guess that’s where the crypto guys learned the business.
Nothing to do with your analysis, but where might there be enormous amounts of nervous capital, looking at guaranteed losses over the foreseeable future - possibly even total losses, looking for at least a somewhat safer place to squat?
I touched on this in "https://no01.substack.com/p/the-petrogas-dollar" (fiat inside a country, trade settlement in gold - which seems what the US is doing already for the past few months? maybe for RE with China?)
and I think if you re-valuate gold to $86k/oz you cover the M2 (22T). And then add a windfall tax of 95% for old purchases (86kx95% = 4300$). Perfectly doable. It's all just imaginary numbers anyway.
The bigger problem with this thesis is that govs should stop their out-of-control spending... That's the bigger ask.
If Fidelity allocates retail IPO shares at $135, what's the strategy here? Hold through the 15-day restriction period, or sell earlier and take the six-month allocation ban if the stock pops?
The first 15 days are the most violent. And if any recent IPO is an indication, it's a money-grab opportunity for the VCs. In the days hence, an IPO could be a real opportunity and was a genuine money-raising event for the company. Now... Everything is grift...
But I'd also like to poke at the "if it pops" part. The banks are already 40-50% short on demand, the July Nasdaq bid is modest... So either retail goes crazy (which is always a distinct possibility), or it doesn't pop.
I'm not really touching this one. The whole market feels so unstable, so on edge right now... I cannot really quantify it, but I think it might have to do with the loss of lubricants (pun intended)
You may have overstated the degree of bad outcomes that will result from this IPO, but you're still right about the general badness. NASDAQ, FTSE and Fidelity are doing everything they can to lure in the dumb money. There's no getting around the fact that the rule changes force index fund managers to buy shares of a money-losing company at a premium price.
Right now $75 billion in underwriters are shaking in their $1000 dress shoes because not only do they have to float this atrocity, but they have to make sure it doesn't end up next to the Titanic before they need to float the SS Anthropic, and the SS Openai after that. That they have resorted to this level of desperation is telling.
And all of this so Elon could see a 13 digit number on his balance sheet for a little while and Ipomaxx Altman and Amodei.
“You can checkout any time you like but you can never leave” 😉
The timeline at the end is the key piece. Supply arrives on schedule, demand got told to wait. But there's a scenario missing from the sequence.
If this trades below IPO price in the first 60 days while retail is still locked in and before any meaningful index bid arrives, it changes the arithmetic for everything queued behind it. The autumn filing gets pushed or repriced. The trillion-dollar target starts looking academic. The entire AI IPO pipeline is effectively priced off the first one performing, and the structural setup laid out here suggests the odds of a weak opening quarter of trading are higher than the underwriters want anyone thinking about too carefully.
Maybe 35% odds the first 90 days are weak enough to force at least one of the follow-on IPOs to materially reprice or delay.
If idea that markets are manipulated is true, then they can not let the price drop (significantly) at least before autumn.
I would be interested how much money would be needed to influence the price to keep it at required price before ETFs start buying and are there players involved that have such money.
I think you were actually right the first time. Most passive index funds are market-cap weighted, not free-float weighted. That BS from the NASDAQ ignores that the Nasdaq 100 index itself has never been a free-float weighted index, and the tech ETFs write in their prospectuses -- legal documents which are very difficult to amend -- that they mimic the performance of the -100. Passive ETF's are judged IAW how well they replicate the performance of the underlying indices, less fees and expenses. That's the problem, and NASDAQ and SpaceX know that they have to do that, starting on Day 15, on a very small number of publicly available shares.
From the math in your example. First, the securities opening with under 20% free float have a 5x multiplier, not 3x. https://indexes.nasdaqomx.com/docs/NDX_Consultation-February_2026.pdf (top of page 3). As insiders sell and JUST 20% OF ITS SHARES ARE FLOATED (to guaranteed buyers), the company becomes full-cap weighted anyway. (Bottom page 3). So the 5% opening free float is multiplied by 5, to get 25%. If IPO value is $2T, then $500 billion of that is applied to company's inclusion into the NASDAQ 100 on day 15, and indexers only have $65 billion or so in shares that are publicly available to mimic the $500b market weighting.
The trick is the tiny float, and the fast index inclusion. Free float tends to rise over time as insiders sell their shares after the lockup period, which is also why companies tend to perform poorly in the year following the IPO: more shares are coming onto the market and new buyers must be found.
THEN, LATER, successful companies are eligible for index inclusion. But with fast-tracking, the insiders and seed capital funds never have to worry anymore about carefully timing their block sales at the same time everyone else is looking to cash out.
I respectfully disagree on SpaceX. It's not worth a trillion, but this company is the kind of (literal) moon-shot bets that the NASDAQ and their investors should be looking for. They launch 80% of the world's rockets, and Starlink is a great company even though Beidou will put them out of business in most of the world, eventually.
I also have a lot of respect for Elon Musk, while loathing with every fiber of my being the disgusting people running the AI industry. Musk and Altman despise each other on a personal level, besides, and it's weird that Musk can't see that he just gift-wrapped ChatGPT and Anthropic a better deal than even SpaceX just got. Maybe he thought he could cross over and then haul up the drawbridge behind him, but the real world doesn't work that way, and now the worst people in the whole world will be playing with pension and 401k money.
most insiders can't sell from day 1. Those are the "lock-ups". They will release gradually over time and by end of year most non-founders can sell.
So for the first 15 days or even month this increase in float is essentially indistinguishable.
We do agree on that part.
Whatever we agree on (and I agree with you it's not worth 2T), it doesn't matter, it matters what the shareprice will be to determine that market cap. And if the banksters determine it to be 2T, than it is 2T...
SpaceX, the ONLY earning part is Starlink. The rockets have a cashflow yes, but are burdened by R&D. So a net loss. xAI... "Get the hell outa here"-vibes. That's something that should be pushed far away and never touched again. HUGE loss.
Group-wide: 18.7B revenue (11 SL + 4 R + 4 ai), 2.6B oeprating loss, 5B net loss.
Starlink by itself COULD be argued to be worth 500B (30-35x earnings in 3 years) because it's software scale revenue on a hardware business (i mean the satellites are there, all you need is a modem).
But the 2 other parts are dragging SpaceX down. HARD.
Then back to the math.
For easy calculations, let's assume that it IPOs at 2T (I don't think it'll be 1, probably 1.5T). And the float is said to be around 5%. The first month maybe 10% of extra insiders will sell - so 5.5% float in a month (for our thought exercise: neglible as I'm mainly focussing on the first month).
So: business is "worth" 100B for the weight. Multiplier 3 (as effective May 1) -> 300B
You're also right on the market cap, not the float-weighted-cap. But because most are mature businesses in there (at least the ones that skew it), it doesn't matter again. Total marketcap is what? 40T or so? So index weight is 0.75% as calculated.
In my original article I made the error to conflate Nasdaq & S&P. The HUGE one is the latter, the money following the Nasdaq is actually pretty small. If you have any proof to the contrary, please do tell.
So all that still leads me to the same conclusion... It's bad/evil rule-bending, but before it was arguably worse: >10% float? full weight, < 10% float? you're out. Now at least you're considered "full weight" at 33%. Closer to reality I suppose.
When Musk was kicking around the idea of buying Twitter for himself, we saw reports that his group was considering folding Twitter into SpaceX and turning the platform into a browser that would compete globally with Chrome/Google, including on search. The mapping functions would come from Starlink, and it would be an almost unbeatable bundle for users across the world, especially in remote areas. Phone service, internet, mobile everything--all powered by satellite.
X is the go-to source for unfiltered news that is not blocked by Western sources, especially from conflict zones. It is also unfortunately a source of a lot of fake news and bot-driven content.
It belongs on the NASDAQ, and investors with a high risk tolerance and a very long investment horizon are natural candidates to load up on the shares. For everyone else, extreme caution is warranted. But those guardrails were ripped down, and now everyone will be buying except the insiders who are dumping shares with guaranteed price floors.
🎯!!
> i mean the satellites are there
"So far," as Homer Simpson put it. If they keep letting them be used for drone guidance, or whatever, the probability of unforeseen malfunctions may be greater than zero ...
Thanks for the pushback. I'll have to check your statements and what I found. (back to my notes 😉). BTW, one thing I know which ain't right is the 5x multiplier. That was proposed, but approved was "only" 3x.
I'll get back to this later.
May 8 '26: https://www.nasdaq.com/newsroom/nasdaq100-index-methodology-update-why-now
There are 2 pdfs - methodology - bottom of page 4:
> *Float*
> There is no minimum free float criterion, although the Modified Market Capitalization used for weighting purposes imposes a limitation on the weight of low-float securities.
(nothing further in that pdf)
in the FAQ check page 5 & 6.
> For fully floating securities, float and market capitalization are equal, resulting in a multiple of 1x. For securities at the previous 10% float minimum eligibility criterion, the multiple was 10x.
> Implementing the 3x float cap will limit a company’s weight to the lesser of its eligible listed market value or three times its eligible float market value.
Nothing's changed. CalvinBall since the dot com.
Hotel California: a long bus ride, a lot of beer, maybe,probably some pot, and two type-A guitarists battle out the most famous guitar duet in history. By the end of the ride, a masterpiece exists where there once was nothing.
As for the rest of that article, it’s proof there is no “free market”, just a barely-legal scam run by market manipulators. Guess that’s where the crypto guys learned the business.
Nothing to do with your analysis, but where might there be enormous amounts of nervous capital, looking at guaranteed losses over the foreseeable future - possibly even total losses, looking for at least a somewhat safer place to squat?
US Treasuries.
And not to forget, all the other guvm'nts' debt.
Musical chairs, anyone?
USTs aren't all that safe either. Including the risk of getting "bailed in" by an untrustworthy "partner".
Let's hope people are smart and see that the ONLY way to preserve purchasing power is to park their money in PMs.
Not holding my breath though. It's been a generation or 2 since anyone knew that...
I was actually thinking that some or even a larger portion of the capital now in Treasuries might decide to move to the SpaceX and similar stock.
Gold is too small a market.
Swedish Riksbank stopped making commemorative coins some years ago, and Myntverket was sold to Finland.
Now the Riksbank does actually officially recommend that folks that have several weeks of cash at home.
The fully cashless society is no longer desirable.
So Sweden may be ahead of the curve.
None of my 4 daughters are interested in Precious.
We are antiques!;-)
""Gold is too small a market."" <-- at the current price. Yes.
Understand that GDP is largely a fiction (https://no01.substack.com/p/a-treatise-on-imaginary-numbers-part).
I touched on this in "https://no01.substack.com/p/the-petrogas-dollar" (fiat inside a country, trade settlement in gold - which seems what the US is doing already for the past few months? maybe for RE with China?)
and I think if you re-valuate gold to $86k/oz you cover the M2 (22T). And then add a windfall tax of 95% for old purchases (86kx95% = 4300$). Perfectly doable. It's all just imaginary numbers anyway.
The bigger problem with this thesis is that govs should stop their out-of-control spending... That's the bigger ask.
NO1
As Always, great analysis and commentary.
Thank you
The whole thing smells off.
Unfortunately we are in a race to the top (or bottom)
Just got through the Kissinger book Genesis recently, and the elites / tech bros / government are betting our utopian future on this build out.
All aboard?
If Fidelity allocates retail IPO shares at $135, what's the strategy here? Hold through the 15-day restriction period, or sell earlier and take the six-month allocation ban if the stock pops?
The first 15 days are the most violent. And if any recent IPO is an indication, it's a money-grab opportunity for the VCs. In the days hence, an IPO could be a real opportunity and was a genuine money-raising event for the company. Now... Everything is grift...
But I'd also like to poke at the "if it pops" part. The banks are already 40-50% short on demand, the July Nasdaq bid is modest... So either retail goes crazy (which is always a distinct possibility), or it doesn't pop.
I'm not really touching this one. The whole market feels so unstable, so on edge right now... I cannot really quantify it, but I think it might have to do with the loss of lubricants (pun intended)