Economist Paul Krugman points to some of Elon Musk’s real rush, but adds that his wealth and activities are mainly related to being an investor in his planned projects. According to Krugman, the situation is even similar to a Ponzi scheme, where this rumor increases the value of companies, and its growth in turn strengthens the rumor (see Vkend). Well, Musk saved X by transferring it to xAI. Now he saves xAI by taking it to SpaceX.
Krugman notes that SpaceX went public at a price that implies a valuation of $1.77 trillion for a company that had only $18.7 billion in revenue last year and was bankrupt. How can this astronomical price be justified? According to Krugman, the IPO was largely based on the assumption that a small investment would buy the shares. Not because they make a rational assessment of SpaceX as a functioning company, but because, apparently, they buy according to the genius of Elon Musk. The economist adds that Musk’s allies from Wall Street are manipulating the game. Some of the main stock indexes, especially Nasdaq 100 and FTSE Russell, recently changed their rules so that SpaceX could be included in them immediately. Such inclusion of the company’s stock in the main stock index entails huge financial benefits. A large share of the stock is in index funds. These funds hold portfolios reflecting the performance of the main index. As soon as the company’s shares are included in such an index, there is an immediate demand for the company’s shares. This is primarily because index funds must include them in their portfolios. Krugman added that in the past, major indexes waited at least a year after the IPO, and did not include company tax. Bending the rules for SpaceX shows that Musk is once again exercising his ability to corrupt the institution. Remarkably, the S&P 500 has withstood the pressure, including SpaceX, for a year. To this, the economist added his prediction: The huge human Ponzi scheme that is Elon Musk will eventually collapse. Traditional Ponzi schemes, however, only abuse investors who choose to participate. This time, the large amount of money that will support Moscow’s fraud will come from ordinary Americans, who were basically forced to invest. According to the economist, 52% of the assets of all sub-funds are index funds. And more than 50% of American households are invested in mutual funds. According to Krugman, the secret cooperation between Musk and Wall Street led to the assumption that Trump’s government was covering Musk. This cooperation then means that many, if not a fifth, small investors will be drawn into Musk’s business. For example, the investment company ARK Invest, which supports and invests in Musk’s activities for a long time, has a different view. About SpaceX on its website, among other things: Starlink represents the first short-term investment. It provides global access to the Internet and has sent a satellite to the press on both sides. The company BroadbandNow Research stated that 42 million Americans currently do not have access to a broadband Internet connection. ARK Invest adds that if this figure is correct, then the offer of broadband services to disadvantaged people in the US could represent a market worth about 10 billion dollars a year. Assuming that the average household has 2.6 people and the average monthly income for an Irocops connection is 50 dollars. And that’s only in the US. There are billions of people worldwide who do not have constant access to the Internet. ARK Invest concludes with the following: Overall, we believe that the market for satellite connectivity could reach 100 billion dollars a year in the medium term. And Starlink, given its unique position, is in a good position to gain a dominant position on it. If rapid reusability can be achieved with Starship rockets, our analysis suggests that annual revenue from space transportation could reach $270 billion.