It didn't vanish. The early investors got their money and the naive buyers left holding their empty bags.
This is what they call exit liquidity.
Exit liquidity refers to investors who buy assets at inflated prices, enabling earlier investors to sell at a profit.
These later investors often incur losses as asset values decline.
It is very common in crypto and in volatile tech stocks.
For reference, of all the shares that were sold in the IPO, only 281m are able to be traded, the rest are in their own lockup periods from institutional investors. So 1b potential shares flooding the market in 1 month could increase the float by 3.56x
How early?
I made my entry on the 8th June and sold on the 15th June expecting the crash.
(To any zealot wanting to dump on me for trying to acquire wealth for a home: Please leave out any musk bad, spacex bad etc. comments out. Not interested in those)
The big players that invested years ago. They aren't allowed to dump their stock on day 1 because of the obvious issues. But as they are allowed to sell, that increases the selling pressure as well as increasing the share pool available.
Your retirement account has to follow some rules, for example to buy large ETFs. Large ETFs have to follow stock indexes. Stock indexes have to include "big" companies.
So when a big AND inflated company comes along, makes it into the index, and then deflates, you all are screwed automatically and by all the rules.
To prevent this, there were rules in place that stipulated that a reasonable time had to pass for a new company to enter the index after IPO. Strangely, they scrapped that rule just before this one...
No shit. A valution of 100x more than yearly revenue (never mind profits) should never have existed in the first place, and was most certainly a pump and dump.
Anyone who actually thought the stock price was going up from there was delusional.
And how SpaceX got into the NASDAQ is very corrupt. They fast tracked SpaceX's IPO by breaking their own rules but still applied the same old rules to any companies applying for IPO after SpaceX. The folks In NASDAQ must have gotten under the table financial incentive from Musk.
That may be up to us: if they think they can get away with it, it will be our task to prove their gamble wrong. That won't be an easy road, unfortunately.
Well yes but that doesn't mean an entire trillion dollars existed first. Valuation goes by the latest trade price, not total purchase price of all stocks.
A million people could all buy a share of something that has a million shares for 1 dollar and then the some person buys one off one of the investors for 1000 dollars and nobody's selling for any less than that. Congratulations, it's now a billion dollar company. Now some people realize it's a bubble and lower their sell price to 10 dollars. A few people buy. It's now a 10 million dollar company. 990 million was wiped off the stock market.
That obviously simplifies it but you get the point.
It moves when other buy and sell yes, but think about elon holding the stock. He "lost billions" but no money moved. So in this case the money never existed.
The stock exists yes, but the money didn't exist. It only exists one you loan out then money is "created" though fractional lending. No elon created trillions of cash, not hoarded.
There is two truths to this: not 100% of the company exchanged hands. The part that hasn't changed hands only lost perceived value, no money has moved. The part that is exchanging hands is real people losing and winning real money.
So much of this is blogger brain, with people hearing rumors based on clickbait headlines, and having no idea how the money moved around.
The major index that bought into SpaceX on IPO day was the NASDAQ-100. S&P and DOW indexes have not yet included it.
While US ETFs currently own around $16 billion worth of the stock across 179 ETF products, that's around 1% of the total market cap of the firm. The single largest shareholder - at around 44% of the market cap - is Elon himself. Another 20-odd% is owned by various private equity funds that are a whose-who of the modern tech sector - Google, Peter Thiel’s Founders Fund, Sequoia Capital, and Andreessen Horowitz - along with your standard assortment of Wall Street banks - Baillie Gifford, Baron Capital Group, T. Rowe Price, and Valor Equity Partners.
Nobody has actually cashed out yet, in any meaningful capacity. But because the stock slipped off it's IPO high, we're getting a bunch of screaming know-nothings who insist they've all been robbed.
It does exist. People used it to buy overvalued stock and people who knew how this was going to go got their money. The money is real, it just changed hands.
When the IPO first was announced I made the point that Elon Musk isn't now a trillionaire because not one will buy the stock at that price. Overinflated IPOs aren't really relevant to the stock market, they already knew the value of a company they don't need to be told what it is, they're just a marketing gimmick.
The "IPO price" for institutions (banks, hedge funds, a tiny bit for retail brokers) was $135. It opened on the public market at $150-something.
Still perhaps more than the company is worth, but at this point an institution that fought to get in on the IPO would be down 23% (unless they dumped it, which plenty did).
Typical of a lot of stock IPO. People just gonna do pump and dump at the beginning, whether they recover from this later is the challenge. It's the reason why i don't look at IPO anymore, i'm not as fast nor as rich as those career trader so it's high chance for me to lose money.
So every investor who had faith in SpaceX as a central supporting column of the USAs future in space was robbed of money by the greed of wall street and SpaceX executives?
So every investor who had faith in SpaceX as a central supporting column of the USAs future in space
It's not like they're investing to help SpaceX or the country or whoever, they're just as self-interested as wall street and SpaceX executives. Sucks for them they got conned, but there were plenty of warning signs it was overvalued.
What I find interesting about this is that everybody knew exactly what would happen, and then it happened. It's a perfect counterexample to the logic of "this system isn't perfect, but it's the best thing we have." It's just the rich and powerful using leveraging their wealth and power to become even more so, and under the current rules nobody can stop them.
Or it could find a support level. Who knows? Musk may be worthless, but the company isn't. There is some stable valuation. Panic selling is a buying opportunity — assuming you like gambling and want to invest in that asshole's companies.
I'm happy to see it, but the headlines of how much money vanishes are ridiculous. Why isn't it equally news-worthy when it goes up then, gaining 1 trillion in value without anything happening in the company?
It's like the market thinks it's completely normal for companies to just increase in value but when they decrease, it's suddenly losing money. What?
It's all speculation! Nothing is real about stock prices. No actual money is gained or lost. Only in our own heads, because we believe that number on the screen.
Next week the company could be worth twice this amount, or half this amount, if some big news shows up. Because it's just fantasy. Speculation.
You can make real money by buying low and selling high, but its still just a game. Just numbers.
Because people have a well known loss aversion bias while negative news and drama sells more news.
That, and the mainstream media is more infotainment now fighting for attention and clicks making truth an expensive luxury. It doesn't help that the rich and powerful bought large parts of the media so they're under a lot of pressure to not say certain things.
Those are just internet/market speculation numbers, not of any real value. He's no trillionaire, but his buddies own all the media so he gets the platforms and news cycles to say he's a trillionaire. I'm a little pissed at George Orwell for giving them all of those ideas.
I was thinking the similar thing the other day. I love science fiction and fantasy. But I’d be happy not have any of those if it would had stop these privileged nerds to come up with their “unique” ideas.
Hate to say this but I’d rather live in a bland gray world if it’s going to bring equality and justice.
We have all seen Tesla go through massive ups and downs. I think its possible it will go up, but I wouldn't wait for it. Smarter to put it into other stocks.
104 Comments
Melobol@lemmy.ml · 200 pts · 37d
It didn't vanish. The early investors got their money and the naive buyers left holding their empty bags.
This is what they call exit liquidity.
It is very common in crypto and in volatile tech stocks.
PriorityMotif@lemmy.world · 67 pts · 37d
They also got it on the NASDAQ so if you have an index fund that follows that you bought into it.
boonhet@sopuli.xyz · 8 pts · 36d
I exited out of all American ETFs earlier this year so I'm feeling good about myself lol
eestileib@sh.itjust.works · 3 pts · 36d
Ditto
someguy3@lemmy.world · 20 pts · 37d
Early investors are still in their lock in period.
NotMyOldRedditName@lemmy.world · 37 pts · 37d
A lot of people really dont understand this.
SpaceX got the money. Its on their balance sheet.
Everyone who bought at $135 IPO price was giving money to SpaceX.
Everyone since then is just trading shares between each other.
The real shitshow starts once insiders can sell, until that happens we wont really know what price the market will settle at.
mannycalavera@feddit.uk · 11 pts · 37d
What's a typical lock in period?
NotMyOldRedditName@lemmy.world · 16 pts · 36d
Usually around 6 months, but they pulled some shenanigans to make it shorter somehow, but i dont really know the specifics in this case.
ExcessShiv@lemmy.dbzer0.com · 11 pts · 36d
Those shenanigans being "corruption" in this case.
NotMyOldRedditName@lemmy.world · 3 pts · 36d
I wouldn't rule out possible blackmail or extortion either.
Sineljora@sh.itjust.works · 4 pts · 36d
The article says nearly 1B shares can be sold next month
NotMyOldRedditName@lemmy.world · 3 pts · 36d
For reference, of all the shares that were sold in the IPO, only 281m are able to be traded, the rest are in their own lockup periods from institutional investors. So 1b potential shares flooding the market in 1 month could increase the float by 3.56x
SaveTheTuaHawk@lemmy.ca · 2 pts · 36d
https://www.secform4.com/insider-trading/1181412.htm
https://www.secform4.com/filings/1181412/0001628280-26-044069.htm
NotMyOldRedditName@lemmy.world · 1 pts · 36d
This is mainly just showing a lot of option conversions / actions that happened because of the merger / IPO.
There's a small sale on the first form in March, and the 2nd form in April
Appoxo@lemmy.dbzer0.com · -14 pts · 37d
How early?
I made my entry on the 8th June and sold on the 15th June expecting the crash.
(To any zealot wanting to dump on me for trying to acquire wealth for a home: Please leave out any musk bad, spacex bad etc. comments out. Not interested in those)
chunkystyles@sopuli.xyz · 15 pts · 36d
What topics are we allowed to bring up, my lord?
nullify3112@lemmy.world · 2 pts · 36d
Hate the game, not the player
someguy3@lemmy.world · 3 pts · 36d
The big players that invested years ago. They aren't allowed to dump their stock on day 1 because of the obvious issues. But as they are allowed to sell, that increases the selling pressure as well as increasing the share pool available.
Appoxo@lemmy.dbzer0.com · 2 pts · 36d
Ah I see, the pre-IPO share holders.
Soulphite@reddthat.com · 8 pts · 37d
Hey, the orange pedophile is good at doing that too, with his stupid ass coins, and phone and anything really
BigMacHole@thelemmy.club · 87 pts · 37d
It's a GOOD thing Illegal Immigrant Elon Musk FORCED YOU to Invest in this Company with your Retirement Accounts!
Sims@lemmy.ml · 36 pts · 37d
Capitalism working as expected..
Zwuzelmaus@feddit.org · 17 pts · 37d
A very interesting point.
Your retirement account has to follow some rules, for example to buy large ETFs. Large ETFs have to follow stock indexes. Stock indexes have to include "big" companies.
So when a big AND inflated company comes along, makes it into the index, and then deflates, you all are screwed automatically and by all the rules.
ctrl_alt_esc@lemmy.ml · 21 pts · 37d
To prevent this, there were rules in place that stipulated that a reasonable time had to pass for a new company to enter the index after IPO. Strangely, they scrapped that rule just before this one...
Th4tGuyII@fedia.io · 78 pts · 37d
No shit. A valution of 100x more than yearly revenue (never mind profits) should never have existed in the first place, and was most certainly a pump and dump.
Anyone who actually thought the stock price was going up from there was delusional.
TankovayaDiviziya@lemmy.world · 43 pts · 37d
And how SpaceX got into the NASDAQ is very corrupt. They fast tracked SpaceX's IPO by breaking their own rules but still applied the same old rules to any companies applying for IPO after SpaceX. The folks In NASDAQ must have gotten under the table financial incentive from Musk.
holy_scroller@lemmy.zip · 17 pts · 36d
Hope both SpaceX keeps dropping and NASDAQ faces a class action for this obviously corruption.
Diplomjodler3@lemmy.world · 13 pts · 37d
The delusional people run the world these days, unfortunately.
luciferofastora@feddit.org · 13 pts · 37d
Pretty sure it's conmen running the world, with the delusional propping them up
Diplomjodler3@lemmy.world · 5 pts · 36d
The conmen are very delusional too.
luciferofastora@feddit.org · 1 pts · 36d
That may be up to us: if they think they can get away with it, it will be our task to prove their gamble wrong. That won't be an easy road, unfortunately.
ToastedRavioli@midwest.social · 51 pts · 36d
Obvious Pump & Dump Sees Investor Slump, more at 11
Polisheocket@lemmy.zip · 3 pts · 36d
If I coukd afford puts I would have done it, saw this from a mile away
echodot@feddit.uk · 1 pts · 34d
And the most predictable and obvious one to ever be committed.
psycho_driver@lemmy.world · 37 pts · 36d
Not to worry I'm sure the trillion was mostly just from pleb 401ks.
krisevol@lemmus.org · 6 pts · 36d
That trillion doesn't exist. It didn't go anywhere.
ExLisper@lemmy.curiana.net · 14 pts · 36d
It does exist and it was moved from poor people to the rich. As always.
boonhet@sopuli.xyz · 6 pts · 36d
Well yes but that doesn't mean an entire trillion dollars existed first. Valuation goes by the latest trade price, not total purchase price of all stocks.
A million people could all buy a share of something that has a million shares for 1 dollar and then the some person buys one off one of the investors for 1000 dollars and nobody's selling for any less than that. Congratulations, it's now a billion dollar company. Now some people realize it's a bubble and lower their sell price to 10 dollars. A few people buy. It's now a 10 million dollar company. 990 million was wiped off the stock market.
That obviously simplifies it but you get the point.
krisevol@lemmus.org · -1 pts · 36d
It moves when other buy and sell yes, but think about elon holding the stock. He "lost billions" but no money moved. So in this case the money never existed.
conquer4@lemmy.world · 10 pts · 36d
If you can use it as collateral, then it exists just as much as a house or property does.
NihilsineNefas@slrpnk.net · 2 pts · 35d
I dread to think what he managed to spend it on this past couple of months. Hopefully no more "judo lessons" on suspicious islands
krisevol@lemmus.org · -1 pts · 36d
The stock exists yes, but the money didn't exist. It only exists one you loan out then money is "created" though fractional lending. No elon created trillions of cash, not hoarded.
huppakee@lemmy.world · 4 pts · 36d
There is two truths to this: not 100% of the company exchanged hands. The part that hasn't changed hands only lost perceived value, no money has moved. The part that is exchanging hands is real people losing and winning real money.
UnderpantsWeevil@lemmy.world · 2 pts · 36d
So much of this is blogger brain, with people hearing rumors based on clickbait headlines, and having no idea how the money moved around.
The major index that bought into SpaceX on IPO day was the NASDAQ-100. S&P and DOW indexes have not yet included it.
While US ETFs currently own around $16 billion worth of the stock across 179 ETF products, that's around 1% of the total market cap of the firm. The single largest shareholder - at around 44% of the market cap - is Elon himself. Another 20-odd% is owned by various private equity funds that are a whose-who of the modern tech sector - Google, Peter Thiel’s Founders Fund, Sequoia Capital, and Andreessen Horowitz - along with your standard assortment of Wall Street banks - Baillie Gifford, Baron Capital Group, T. Rowe Price, and Valor Equity Partners.
Nobody has actually cashed out yet, in any meaningful capacity. But because the stock slipped off it's IPO high, we're getting a bunch of screaming know-nothings who insist they've all been robbed.
krisevol@lemmus.org · 1 pts · 36d
Well put!
elucubra@sopuli.xyz · 4 pts · 36d
It does exist. People used it to buy overvalued stock and people who knew how this was going to go got their money. The money is real, it just changed hands.
boonhet@sopuli.xyz · 1 pts · 36d
Yes, but that doesn't mean it was a trillion dollars that changed hands, or even anywhere close to a trillion necessarily.
SaveTheTuaHawk@lemmy.ca · 33 pts · 36d
The world's first ex-trillionaire. Back to tres commas for you.
echodot@feddit.uk · 1 pts · 34d
When the IPO first was announced I made the point that Elon Musk isn't now a trillionaire because not one will buy the stock at that price. Overinflated IPOs aren't really relevant to the stock market, they already knew the value of a company they don't need to be told what it is, they're just a marketing gimmick.
NM_Gringo@lemmy.world · 32 pts · 36d
In a way SpaceX did me a favor. I dumped my NASDAQ composite fund before they started carrying SpaceX. It's been on a downward trend ever since.
MyVeryRealName@lemmy.world · 18 pts · 36d
Maybe it's been on a downward trend because of SpaceX?
Art3mis@lemmy.blahaj.zone · 5 pts · 36d
Im pretty sure that is what they are implying
MyVeryRealName@lemmy.world · 1 pts · 34d
Well then, SpaceX did them no favour because they would've profited off their NASDAQ fund investment if not for them.
Art3mis@lemmy.blahaj.zone · 1 pts · 34d
No.... as they said, they had already sold. If spacex never joined or they sold later, they wouldve lost money
MyVeryRealName@lemmy.world · 1 pts · 34d
I assumed that they dumped their NASDAQ fund because it was about to carry SpaceX.
Art3mis@lemmy.blahaj.zone · 2 pts · 33d
I dumped mine because of the war. Missing the spacex slump was just a plus
GutterRat42@lemmy.world · 31 pts · 36d
I knew I should have shorted it 😭
UnderpantsWeevil@lemmy.world · 19 pts · 36d
The market can stay irrational longer than you can stay solvent.
The stock hit $123 on Friday. It's still got a $1.6T market cap. I have no idea where they got that headline from.
Alexstarfire@lemmy.world · 16 pts · 36d
Because the high was just over $200. They are talking from its peak.
magi093@l.tta.wtf · 9 pts · 36d
The "IPO price" for institutions (banks, hedge funds, a tiny bit for retail brokers) was $135. It opened on the public market at $150-something.
Still perhaps more than the company is worth, but at this point an institution that fought to get in on the IPO would be down 23% (unless they dumped it, which plenty did).
Diplomjodler3@lemmy.world · 27 pts · 37d
Who could possibly have foreseen this! It's an utter mystery!
psx_crab@lemmy.zip · 23 pts · 37d
Typical of a lot of stock IPO. People just gonna do pump and dump at the beginning, whether they recover from this later is the challenge. It's the reason why i don't look at IPO anymore, i'm not as fast nor as rich as those career trader so it's high chance for me to lose money.
HugeNerd@lemmy.ca · 19 pts · 36d
Musk is the world's first zeronaire.
Hupf@feddit.org · 1 pts · 36d
Hey, I was here first!
Gsus4@mander.xyz · 18 pts · 36d
"vanishes" from the pockets of buyers into the pockets of the IPOers
ThePowerOfGeek@lemmy.world · 18 pts · 37d
Wonderful. Keep going!
MedicPigBabySaver@lemmy.world · 17 pts · 36d
Good. Choke on it, Elon.
Musk = POS Nazi.
TigerAce@lemmy.dbzer0.com · 17 pts · 36d
Musk is already the person who lost the most wealth a while ago (biggest loser ever to have walked this earth). So now he beats his own record.
ToiletFlushShowerScream@piefed.world · 14 pts · 37d
So every investor who had faith in SpaceX as a central supporting column of the USAs future in space was robbed of money by the greed of wall street and SpaceX executives?
k0e3@lemmy.ca · 10 pts · 37d
And they probably didn't even say thank you for the opportunity.
huppakee@lemmy.world · 4 pts · 36d
It's not like they're investing to help SpaceX or the country or whoever, they're just as self-interested as wall street and SpaceX executives. Sucks for them they got conned, but there were plenty of warning signs it was overvalued.
SpaceCowboy@lemmy.ca · 3 pts · 36d
Yeah I don't have too much sympathy for people that see the CEO of the company doing fucking Nazis salutes and thinks "I need to get in on this!"
ZMoney@lemmy.world · 12 pts · 36d
What I find interesting about this is that everybody knew exactly what would happen, and then it happened. It's a perfect counterexample to the logic of "this system isn't perfect, but it's the best thing we have." It's just the rich and powerful using leveraging their wealth and power to become even more so, and under the current rules nobody can stop them.
EmilieEasie@fedinsfw.app · 11 pts · 37d
Who could have seen that coming
MrSulu@lemmy.ml · 9 pts · 37d
A trillion vanishes and nobody knows if anyone made money from this......
Gammelfisch@lemmy.world · 9 pts · 36d
Shame the SEC will not stomp on the neo-Nazi.
xistera@lemmy.dbzer0.com · 12 pts · 36d
Appoxo@lemmy.dbzer0.com · 7 pts · 37d
Yay
Chivera@lemmy.world · 6 pts · 36d
1 trillion to go!
Crackhappy@lemmy.world · 6 pts · 37d
Damnation. I only made $20k from the downturn.
Regrettable_incident@lemmy.world · 3 pts · 36d
I mean, it might drop further, there's probably going to be a bunch of automated panic selling.
MagicShel@lemmy.zip · 2 pts · 36d
Or it could find a support level. Who knows? Musk may be worthless, but the company isn't. There is some stable valuation. Panic selling is a buying opportunity — assuming you like gambling and want to invest in that asshole's companies.
IronBird@lemmy.world · 3 pts · 36d
considering Musk's lockup period is the last (and largest) to end, my $ would be on it pumping before then
sirico@feddit.uk · 6 pts · 37d
It's a $60 share hasn't even unlocked for the employees to sell theirs yet so can only go down from here.
kokesh@lemmy.world · 4 pts · 37d
I hope they go to hell
1984@lemmy.today · 3 pts · 37d
I'm happy to see it, but the headlines of how much money vanishes are ridiculous. Why isn't it equally news-worthy when it goes up then, gaining 1 trillion in value without anything happening in the company?
It's like the market thinks it's completely normal for companies to just increase in value but when they decrease, it's suddenly losing money. What?
It's all speculation! Nothing is real about stock prices. No actual money is gained or lost. Only in our own heads, because we believe that number on the screen.
Next week the company could be worth twice this amount, or half this amount, if some big news shows up. Because it's just fantasy. Speculation.
You can make real money by buying low and selling high, but its still just a game. Just numbers.
WanderingThoughts@europe.pub · 3 pts · 37d
Because people have a well known loss aversion bias while negative news and drama sells more news.
That, and the mainstream media is more infotainment now fighting for attention and clicks making truth an expensive luxury. It doesn't help that the rich and powerful bought large parts of the media so they're under a lot of pressure to not say certain things.
1984@lemmy.today · 1 pts · 37d
Yeah I know but logically it's a bit silly. It's just stupid. :)
WanderingThoughts@europe.pub · 3 pts · 37d
We're living in a time where Onion articles become normal news in an embarrassingly short time. Logic escaped the madhouse some time ago.
melsaskca@lemmy.ca · 2 pts · 36d
Those are just internet/market speculation numbers, not of any real value. He's no trillionaire, but his buddies own all the media so he gets the platforms and news cycles to say he's a trillionaire. I'm a little pissed at George Orwell for giving them all of those ideas.
lemmelemmy@feddit.org · 1 pts · 36d
I was thinking the similar thing the other day. I love science fiction and fantasy. But I’d be happy not have any of those if it would had stop these privileged nerds to come up with their “unique” ideas.
Hate to say this but I’d rather live in a bland gray world if it’s going to bring equality and justice.
FlashMobOfOne@lemmy.world · -8 pts · 36d
If you bought, just hold. Can't time something this wild.
ChickenLadyLovesLife@lemmy.world · 21 pts · 36d
If you're dumb enough to have been dumb, keep being dumb.
FlashMobOfOne@lemmy.world · 1 pts · 36d
I agree that it was dumb for people to buy SpaceX, especially with the lack of any voting power.
That said, it's dumber to sell stock when it's down.
BeMoreCareful@lemmy.world · 1 pts · 36d
It depends if you don't mind throwing the money away, or waiting thirty years for it to catch back up.
FlashMobOfOne@lemmy.world · 1 pts · 35d
Or you can dollar cost average your way to a more workable position over time.
In investing patience is a great thing.
BeMoreCareful@lemmy.world · 2 pts · 35d
That's what I said?
FlashMobOfOne@lemmy.world · 1 pts · 35d
Not exactly, no.
BeMoreCareful@lemmy.world · 1 pts · 35d
But, basically yes
vandsjov@feddit.dk · 1 pts · 36d
Depends on if the stock will continue to go down… recover what can be recovered before it’s too late. It’s a risk both ways
FlashMobOfOne@lemmy.world · 1 pts · 36d
No one can know that, though.
vandsjov@feddit.dk · 2 pts · 36d
That’s why I wrote the last sentence :-)
FlashMobOfOne@lemmy.world · 2 pts · 36d
I get that, but the rest of your reply suggests that you think people should try and time the market, which is patently absurd. :)
1984@lemmy.today · 1 pts · 36d
We have all seen Tesla go through massive ups and downs. I think its possible it will go up, but I wouldn't wait for it. Smarter to put it into other stocks.