Elon Musk Becomes First Trillionaire as SpaceX Starts Trading
nytimes.comThe stock, and subsequently the stock market, is so detached from reality. For the life of me, I can’t understand why investors will literally put a 100x premium on Musk, and the things he touches. I feel like I’m living in some alternative universe.
Have you watched a Starship launch? The more I understand the incredible feats of engineering they are performing the more bullish I become.
It doesn't make money.
Starship is still in development. Do you think the next generation of the iPhone is a waste of time because it doesn't make money yet?
The stock price reflects the potential of the business in the future as well as its current concrete value.
"It doesn't make money."
if that's the reason, why people invest in amazon then since Amazon literally need 20 years for that company to be profitable
because they are not targeting dividend that's why, they expect the exponential growth by re-investing profit to grow the business at scale
we literally live in YC subs where (almost)every startup isn't profitable either but VC still invest, I wonder why you write this
Starship and anything space related is like 5% of the valuation.
Space X is first and foremost being valued on their AI data centers.
Which make no physics sense
Scott Manley has a great video breaking down the physics and it absolutely works:
I am a mechanical engineer, I have a multi decade career doing exactly these kinds of thermal analysis.
This video is basically saying that cooking data centers in space is possible. It is.
The question is if it's better, in any way, to putting them on earth. It isn't.
The common misconception I see is that people think that space is cold like Antarctica is cold. It isn't. Antarctica is cold because there is lots of matter, very cold. Space is cold because there is no matter. No matter to put the heat into and take it away.
It's the same reason that a hard boiled egg takes minutes to cook in water, but 30 to cook in the oven. Now put it in a vacuum insulated thermos and see how long it takes to cook.
Radiation is the weakest of the three heat transfer modes. So much so that in engineering school we often cross it off as negligible compared to the other two (convection and conduction).
Do the heat transfer math yourself, let us know what you find.
One of the comments on the YouTube video you linked says it best. " The only reason to do this is if you have a company who's business is to get things into space".
You obviously didn’t watch the video, he literally does the heat transfer math using radiation only, it works just fine.
Instead of just stating “it won’t work” why don’t you actually do the calculation yourself and show why it won’t work?
Yes they have an incentive to put things in space, but it actually is a decent idea if they can execute on it the same way they did with Starlink. There’s huge demand for compute, many data center projects on earth are being scuttled because of NIMBYs and lack of power, there are no NIMBYs in space and a sun synchronous orbit means you can power them without batteries.
This is a common problem I see. Trying to solve these problems in a vacuum. He makes a joke about that in the video.
This talk will help put it in perspective: https://californiaconsultants.org/event/energy-and-thermal-m...
In order to talk about these things we need to think about the power from the grid, all the way to the cooling water coming out. Not just talk about how we can calculate or optimize each little piece. Of course we can do that, it's the overall system we are talking about and need to understand.
Forest for the trees.
What do I mean by that here?
He does the calculations for 20 kW. Which sounds like a lot. It's only enough to cool one node, not one rack, one node, in a modern data center. The starlink satellite he referenced is viewed as the absolute most modern thermal design in a satellite.
Most data centers have 2000-5000 nodes and the hyperscalers have 100,000 or more.
So to replace a single data center we need 2000-5000 of these things up there, at a minimum, or one thing that is 2000-5000 times bigger.
And maintenance.
And the hardware gets obsoleted every few years.
Or you could just put it in the desert in Nevada. But we don't need rockets to get there.
Once the rich move up to orbit it will make perfect sense.
This.
The real profits will eventually come from selling a McMansion on Elysium.
The more I understand the incredible feats of engineering they are performing the more bullish I become.
You know he's not going to sleep with you, right?
There is no reason to be surprised investors aren't always that rational, though it is weird how extra giddy they are to simp for Musk in particular.
Company literally does not make money, and his other major company is getting dumpstered in its market too.
SpaceX had this similar mystique to where owning a private share was something rich people bragged about like having a rare Lamborghini.
A lot of these modern bubble stocks are underpinned by a bunch of intangible collectibility reasons that realistically only exist because of a huge cash glut in the US stock market.
Maybe it goes on for a long time, but realistically as baby boomers start drawing down on their retirement portfolios and/or dying there's reason to believe money will start leaving the markets in the next 20ish years.
If you're right, that's great news for you, as you can make tons of money buying Spacex puts
If the market is detached from reality then you very much cannot. It's like you weren't even listening.
Markets can remain irrational longer than you can remain solvent.
- John Maynard Keynes
This quote refers to shorting; it's not applicable to every bear position anyone ever attempts to take. You won't go insolvent buying puts.
You won’t go insolvent but you’ll consistently lose money every time the stock doesn’t go down.
What a great quote man. First time I read something like this. And thanks for crediting the author, now I can go learn more about him.
Another great, if not so relevant quote from JMK:
> My only regret in life, is that I did not drink more champagne
Not if people continue to have the 100x premium on Musk. Puts only make sense if the market returns to rationality.
SpaceX will cocoon the planet with next level new accelerated technology the way baseload grid electricity supply took 300 years to achieve.
In a word, baloney.
What, exactly, is the "next level new accelerated technology"? That's a lot of hype-y buzzwords, but what does it mean? What's the actual technology?
Starlink? I mean, we already have internet. Is Starlink that much better, to deserve this glowing description?
Or is it some other tech? If so, what is it?
If you can write that glowingly, can you put some substance behind it? Or is it just hype?
Congratulations to the US. I'm sure it must be nice to have a trillionaire
I wish my country had a trillionaire. That would give my day to day life meaning
It's not like his checking account has $1T in it, this is just a technicality that sums up all of the hypothetical value of the shares he owns in companies.
If he actually tried to sell it and turn it into cash it would be less than $1T.
Yeah but he can borrow against it and not pay any taxes.
Same as anyone else with a HELOC, asset secured loan, etc. You have to pay loans back, which is why they're not taxed as income.
If you borrow against it you still have to pay interest. If he somehow found someone to loan him $1T, which would probably be practically impossible, the interest would make the total amount he got less than $1T.
if you borrow against it and buy shares of stock, the stockmarket generally can be counted on for at least 7% returns, and the borrowing cost would be 5%, so no, chances are the interest would not eat up the borrowing.
Correct, he couldn't borrow $1T from one person with $1T as collateral.
Do people do that? Can I e.g. borrow against my assets and not pay any taxes? Curious to learn more.
When you get a loan you don't pay taxes. You pay taxes on the income used to pay it back, or the gains when you sell an asset to pay it back.
Yeah I’m confused about this part. Is there some loophole where they never have to pay the loan back? Otherwise they’d be taxed at that point.
The loopholes are well known at this point. They keep renewing loans until they die, then it's tax-free after death. It's called Buy-Borrow-Die.
Buy-Borrow-Die resets the basis for capital gains tax, but then there's estate tax when the money gets passed on (exemption is only $15 million, trivial to billionaires).
Taxed on repaying a loan?
No, taxed when you earn the money that repays the loan. Income tax, capital gains taxes, dividend taxes, estate taxes, etc... However the money was acquired to repay the loan, a tax was applied.
Which is pendantically and functionally very different from the implied tax on repayment.
Maybe you didn't read it properly, I said taxed "on the income" then specified that's the money "used to pay it back".
Income has a specific definition if you want to be pedantic, and types of income are always taxed.
I read it properly but "the implied tax on repayment" was referring to lovecg's comment.
Can I e.g. borrow against my assets and not pay any taxes?
If you have a 401(k), yes. It's a way to turn a 25% credit card debt into a 5% loan.
The hitch is that while you can pay the credit card company over 30 years, the 401(k) loan is less than a decade, resulting in higher payments short-term, but money saved in the long term.
This strategy is not a traditional loan with interest and regular payments. If you try to live on regular loans it doesn't make any sense. It's a scheme mostly only available to HNW people where they repay upon death in certain tax loophole ways.
These loans still have interest and regular payments. They are not like your mortgage or credit cards, but interest and minimums still apply.
You won't pay taxes but you will pay interest. Most forms of value (real estate, gold, stocks, your car) you can borrow against in the USA, but the interest you pay almost always makes it a dumb idea.
I mean people get mortgages and carry credit card balances and do margin trading and get helocs. If those are taxable I might need to call the IRS.
For the uber rich it is called "buy-borrow-die".
And this is why the idea of a wealth tax has so many tres comas types up in arms.
So? Imagine he sells all his ownership and this tanks the value of his companies by 90%. Oh no. He only has $100,000,000,000 in the bank. Enough to be ludicrously rich a thousand times over.
I have never once understood this "oh it is only paper money" argument.
I'm just saying that when you say "trillionaire" it evokes the idea that he's hoarding $1T in a bank account. But it's almost entirely just locked up in shares of companies, and if he actually wanted to turn it into cash it wouldn't actually be 1T.
I don't believe that it does. Billionaires and even millionaires don't typically have that amount in a bank account. People understand this.
If it's so worthless, let me have it instead of him.
It's more like "he was already rich before, but now more of his wealth is countable".
SpaceX will be listed on QQQ in the next fifteen days. There are only around 4.2% shares publicly available for trading, (about $75 billion out of a $1.75T market cap). This means passive funds that include QQQ will be forced to buy and compete over a very small sliver of the total shares (estimated at around $25 billion)
The exchange regulations have just been inexplicably loosened a month ago to allow this circus to happen. Beforehand, a company would have to show profitability and stability and wouldn't be allowed to be listed on an index for at least a year after its IPO.
So there is no wonder why the price is as it is. Perfect scam for wallstreet and the little guy get screwed so even better.
I've read somewhere that even some janitors / lunch ladies became millionaires from their shares. Looking then at the great performance of some other stocks, I really wonder where we're headed
I would be surprised if janitors get shares. This is Musk we’re talking about.
Spacex gave lots of low level employees stocks. Either on top of, or as a payroll deduction ESPP.
I’ve never worked at any large company where janitors/cleaning staff were employees. Usually that kind of work is contracted out.
its janitor at first but he climbs into engineering team
Something like ~500 new millionaires is what i've read on x.
It was actually 4500, but that was at the $135 price. With it having gone up 40% that number might now be more like 6500.
Musk has killed hundreds of thousands of people with his reckless dismantling of USAID (https://www.currentaffairs.org/news/how-elon-musk-killed-hun...) and actively promotes white supremacy and race riots on Twitter. The Georges Ruggiu of social media.
Meanwhile, here in our little tech bubble, we pretend it's not happening -- that he's not spending half the day amplifying some of the literal worst people on Earth and blathering about how immigrants are coming to rape our culture. Just focus on the IPO. Don't look behind the curtain.
Where is a good chunk of this newfound money going to go? Into the pockets of AfD, Reform, and other far-right monsters around the world.
It's all just... abhorrent. Beyond words. Regretfully, I start to understand the state of society that can foment revolution. Never before have I felt such impotent fury at the state of things.
I can only hope his career ends as Ruggiu's once did: in shackles in front of an international tribunal.
Bullshit. It’s not the responsibility of US to help everyone on planet Earth. Why doesn’t Saudi Arabia or China go and help? Not the least, most of the aid money is diverted by terrorists just like the medicaid scams in US. And Afd Reform are not “monsters”. The monsters are far left activists and charities who are smuggling people in boats to the UK to claim asylum and lining their pockets.
I don't think I can roll my eyes any harder.
It'll end in suicide or OD. Every time he pulls off a coup like forcing huge indices to buy and hold massive amounts of $80 billion float he delays the inevitable but in the end his puffery will collapse at some point.
I feel second hand embarrassment for all the bankers and analysts who have felt the need to pump this
I think he's steadily working towards "too big too fail": make the entire US economy depend on his rat's nest of a megacorp, plus miltech/policetech (SpaceX, Grok).
Agreed, but please saying "Meanwhile, here in our little tech bubble, we pretend it's not happening" is a quite a bit of a leap.
Right now there are a few stories on "/newest" calling out what is going on. A few of them:
https://news.ycombinator.com/item?id=48514107
https://news.ycombinator.com/item?id=48513464
Also plenty of people upvote these stories when they come up. Yes, most of them are not welcomed by the HN moderating rules/team, and yes a large portion of them get death-flagged.
But please do not disregard the people silently doing something about it. It only reinforces the lie that "people who care about democracy" are outliers and alone. No we are not!
Yes, but: it's hard to have optimism when 4/5 of articles about Musk's horrifying behavior are insta-killed, while Grok and SpaceX puff pieces are cheerfully discussed with nary a mention of their owner's murderous politics.
What does it take to make someone persona non grata in SV tech? Absolutely nothing, as long as they keep bringing in the big bucks. Nazi salutes, incitement of racial violence, thousands dead from starvation and cut-off medical care -- doesn't matter in the slightest. In a functioning society, Musk would not be able to go anywhere without being swarmed by protestors.
Yes, being optimistic, specially today, is hard. But it is important to remember that HN is not SV, and SV is not the USA, and that the USA is not the World. But people have absolutely prevailed over much harder conditions. Even SV in the past was exceptionally anti worker: I wrote about the history of SV here https://news.ycombinator.com/item?id=47099922.
A few more things that can give you perspective:
"Hope can be the consequence of action, not just its cause" https://youtu.be/WK6kRaBzbg4?t=114
https://feld.com/archives/2017/10/hope-consequence-action/
Elon Cancelled This...Let's Do it Anyway https://www.youtube.com/watch?v=MxmqTLps334
Finally, sometimes we just need a break. It is OK to take a break. Do not burn yourself out. This is a marathon, not a sprint. Finally, to quote a historian, "You're always in history, and your choices matter" (src: https://www.youtube.com/watch?v=AFbzg_bp-Q0)
the level of cynicism being communicated on this thread is astounding!
Looking at the figures, I think it is justified.