Elon Musk's 'Granny Drain'
Title: Musk "Milking the Old Folks"
Author: Nancy, PANews
As the memory sector surges with Micron and SK Hynix each surpassing a trillion-dollar market cap, Elon Musk is accelerating his own myth of becoming the world's first trillionaire.
SpaceX, with its astronomical valuation, is speeding toward the capital markets. This potentially wealth-history-rewriting super IPO is pushing Musk toward that unprecedented personal fortune and delivering hundredfold or even thousandfold returns to early backers like Google, Valor Equity Partners, Founders Fund, and others.
However, to sustain this most expensive space narrative in human history, new buyers are ultimately needed. As massive pension funds are set to be "forced to buy," the retirement savings of Americans are becoming the fuel for Musk's space dreams.
Wall Street has begun paving a fast track for such super IPOs. Major indices like Nasdaq and S&P have recently eased rules, allowing mega-companies like SpaceX to be incorporated into key benchmarks like the Nasdaq 100 much faster post-listing.
This matters because a vast portion of the U.S. retirement system—trillions in 401(k)s and pension funds—relies on passive index investing. Once a company enters a major index, all funds tracking it are compelled to buy its shares automatically, regardless of valuation, profitability, or risk.
This has sparked significant backlash. Teacher unions and major public pension funds (collectively managing trillions) have warned the SEC and written to Musk, opposing SpaceX's extreme governance structure where Musk holds 85% voting control. They argue workers' lifelong savings could be tied to a company resembling a Musk family office more than a transparent public entity.
In essence, after early investors reap immense rewards, the potential "bag-holding" cost is being transferred onto passive investors—the ordinary American retirees—through the mechanism of index inclusion.
marsbit05/28 07:07
