SpaceX, will be set up with two classes of shares: those held by the general public, and those held by Elon Musk. They will not be the same. The ordinary people's shares will have one vote each. Elon Musk's shares will have ten. This means that, after the IPO, he will personally control 85% of the votes of all shareholders. And so he will do whatever he wants, appoint whoever he wants to the board of directors, and will not be controlled by anyone. There is no mechanism in the company's structure by which the CEO could be removed, for example (if it were found, for example, that he is addicted to ketamine and no longer has his brakes on). The only person authorized to fire the CEO, contrary to what is the case in most listed companies in the world, is the CEO. And that's not all. Shareholders don't even have the right to take legal action against management if they believe it makes decisions that harm their interests. In the case of Tesla, shareholders sued management because it intended to give Musk a bonus of tens of billions of dollars. At SpaceX, suffocating restrictions have been placed on shareholder rights. Any objections should be resolved through mediation, he says, not in court. These are more extreme things. Under normal circumstances, such terms would not pass regulatory authorities and such companies would never enter a serious stock exchange. But in Trump's USA, these are details. Furthermore, when companies go public, they float about 15-20% of their shares. SpaceX is only floating 5%, a common way to create artificial demand (and a trick to artificially boost the stock). Typically, 90% of the shares go to “systemic,” institutional investors, large funds, and investment banks, and only 10% are released to the general public. In SpaceX’s case, 30% will be made available to the general public—something that usually happens when institutional investors have reason to be skeptical about the stock. None of this is unprecedented (except perhaps the governance issues), but all of it is very worrying and tests the institutional limits of stock markets, which in the US are already overstretched. But what completely breaks them apart is the issue of time. A major investment factor in our world, now, are index funds. Giant investment funds that invest in all the stocks included in an index, such as the S&P 500 or the Nasdaq 100. These funds are extremely popular because they are considered safe. They invest, in practice, in a list of very good companies, the best in the market (as rated by the index managers). It does not matter if one of them goes bankrupt or if a market falls into crisis. The others balance the situation and, over time, these indices go up, rain or shine. These funds bring satisfactory returns. That is why they are preferred by individual small investors, as well as conservative organizations, such as pension funds. Precisely because there are all these funds, these indices are very careful about which companies they include. They set rules and limits to ensure that they don't pollute their portfolio with bad companies. One of the safeguards is that only profitable companies are included in the index. Another is that no company can be included in an index immediately after it goes public. In the case of the Nasdaq 100, it has to wait a year to ensure that everything is going well, that its behavior is "mature" and that it doesn't hide any surprises. Until now. Recently, the company that manages the index changed the rules. Now the adjustment period for “very large companies” is not a year, but 15 days. It’s a dramatic change for both SpaceX and the big AI companies that will be listed on the stock exchanges soon. What’s the big deal here? Once these companies are included in the index, the investment funds we mentioned are obligated to buy their shares, no matter what the price. So with the change in the rules, the average American who has their retirement plan in an index fund will be investing, whether they want to or not, in a loss-making company with a price that only makes sense if the sky is filled with space data centers and colonies are built on Mars within the next 5-10 years. And who benefits from all this? Guess who wins. The investment banks that manage the largest IPO in history. The Nasdaq, the stock exchange where the stock will be sold and bought. The investors who threw money at buying the loss-making, toxic Twitter of its fanatic user Elon Musk, and suddenly found themselves with shares of a company that makes spaceships and satellites. And, above all, Elon Musk himself. Who is exploiting the laxity of regulatory mechanisms by the government that he helped in various ways to get elected, to explode his personal wealth by collecting money indirectly from millions of unsuspecting small investors. Only in such a shaky framework, only with the trivialization of rules and the corruption of power, can there be trillionaires in our world. Unfortunately, if things don't change, others will follow.
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