Let’s put aside the euphoric praise that poured out of the financial press yesterday. SpaceX’s long-awaited IPO has finally arrived, and, as expected, ordinary investors are happily lining up to make a fortune by investing in speculative tech companies. It’s a bizarre case of self-harm that deserves to be discussed in a psychiatric journal, not a market report.
If you recently bought SpaceX shares at a high price and consider yourself a visionary leader of the interplanetary economy, I’ll ridicule your wisdom and say it bluntly: you’re actually “exit liquidity” (meaning you provide an exit route for large investors).
My quantitative model, which has been tracking market liquidity for the past three quarters, clearly warned that a major aerospace company’s IPO in an already fragile system could be disastrous. The reality isn’t just bad; it’s an insult to basic mathematics. SpaceX launched at a price not based on the company’s excellent performance, but rather on the fantasy of seamlessly colonizing three neighboring solar systems. Large institutional investors (smart capital), those who read S-1 prospectuses instead of retweeting rocket emojis, passed their early risk onto the general public, consumed by speculation. Essentially, you’re investing in a billionaire’s obsession with infrastructure and accepting the risk of losing money when next-generation launch vehicles miss quarterly revenue targets by billions of dollars.
But the devastation for the average investor is only just beginning. The real macroeconomic tragedy or joke, if you’re short, is how this massive investment will accelerate the bursting of the AI bubble.
For the past few years, the entire market has been artificially inflated by misconceptions and mass psychosis. This thinking dictates that any loss-making startup using the “large language model” (LLM) should be worth as much as the GDP of a small European country. This algorithm-based fraud (miracle drug) constantly needed money from ordinary investors to maintain its absurd prices. Yesterday, that money supply suddenly and violently collapsed.
The abrupt withdrawal of the SpaceX IPO acted as a massive liquidity vacuum, sucking out any remaining funds from ordinary investors’ brokerage accounts. Unwitting investors rushed to sell their small stakes in highly valued AI ventures to buy overvalued shares of rocket companies. What happens when the foundations of a rapidly growing and momentum-driven technology sector, “unwise investment money”, suddenly shift to low Earth orbit? It’s suffocating.
An AI bubble doesn’t require a major technical failure; it merely requires a shortage of additional, unwise investors willing to buy shares at high prices. The SpaceX IPO quickly attracted the remaining speculative capital in the market, perpetuating this shortage. Heavily indebted venture capital funds, founded on the belief that individual investors would eventually buy their overvalued AI shares, now face a terrifying reality: ordinary buyers are no longer in the market. They are trapped in overvalued space stocks, helplessly waiting for dividends from Mars.
Yesterday’s IPO wasn’t a triumph of human ingenuity; it was a classic example of wealth transfer. The countdown has indeed begun, but it’s not about the launch. These are the largest, consecutive margin calls the tech sector has faced in two decades. Build your portfolio accordingly if you still have some headroom.
Tap..🖖
(My criticism states the current market scenario. But i still believe Elon Musk is one of the biggest net positive human being to our society. His endeavours must be cherished, but with a pragmatic lens.)
@tapan4evr.blog
That’s one hell of a thing to write about a grifter whose primary talent is extracting wealth from other people’s achievement and who, via DOGE, is conservatively estimated to be directly and personally responsible for tens of thousands of deaths. Is Pol Pot your second favourite person?
Remote Reply
Original Comment URL
Your Profile
Why do I need to enter my profile?
This site is part of the ⁂ open social web, a network of interconnected social platforms (like Mastodon, Pixelfed, Friendica, and others). Unlike centralized social media, your account lives on a platform of your choice, and you can interact with people across different platforms.
By entering your profile, we can send you to your account where you can complete this action.
I respect your response. I have rarely looked at comments for the past two years, as my PhD is over and I am spending much of my time farming, fishing, and shooting since my businesses are doing well. I also downgraded my WordPress plan, as most comments are just spam. I see you are a computer science researcher.
Sadly, Western democracies have reached a point of ripening where they are for sale to businessmen, and the USA represents the worst version of this. I don’t see much difference between Pol Pot, Mao, Hitler, and Churchill. A little sanity remains in Europe, but it is rarely promoted in an environment defined by unnecessary wars started by the USA, which have led to an illegal migrant crisis in Europe.
Regarding Elon Musk, his involvement in US politics was as nonsensical as his current opinions on Twitter. That said, manufacturing is hard, and Tesla and SpaceX are manufacturing marvels; his businesses might have thrived even more had he stayed away from politics.
@tapan4evr.blog space x tulips get your space x tulips limited time only gotta catch em all
Remote Reply
Original Comment URL
Your Profile
Why do I need to enter my profile?
This site is part of the ⁂ open social web, a network of interconnected social platforms (like Mastodon, Pixelfed, Friendica, and others). Unlike centralized social media, your account lives on a platform of your choice, and you can interact with people across different platforms.
By entering your profile, we can send you to your account where you can complete this action.
Thanks for your response. I too have different issues and I said it all the most rational way.