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This one weird trick might cost your retirement fund billions (with SpaceX, OpenAI and Anthropic overvalued) [View all]
From Gary Marcus:
https://garymarcus.substack.com/p/this-one-weird-trick-might-cost-your
Marcus refers to this Wall Street Journal article:
https://www.wsj.com/finance/stocks/stock-indexes-are-contorting-themselves-to-include-spacex-and-openai-92136b13
Stock Indexes Are Contorting Themselves to Include SpaceX and OpenAI
Hot stock IPOs are coming to an ETF near you, like it or not
By James Mackintosh
May 3, 2026 5:30 am ET
If what you want from your index fund is access to the latest hot stocks, you’re in luck. The passive funds holding trillions of dollars of 401(k)s and other investments are rushing to change their rules as the IPOs of SpaceX, OpenAI and Anthropic draw closer.
The latest, on Thursday, was a proposal from S&P to drop the requirement to make a profit and wait a year for initial public offerings to get into the flagship S&P 500.
-snip-
Hot stock IPOs are coming to an ETF near you, like it or not
By James Mackintosh
May 3, 2026 5:30 am ET
If what you want from your index fund is access to the latest hot stocks, you’re in luck. The passive funds holding trillions of dollars of 401(k)s and other investments are rushing to change their rules as the IPOs of SpaceX, OpenAI and Anthropic draw closer.
The latest, on Thursday, was a proposal from S&P to drop the requirement to make a profit and wait a year for initial public offerings to get into the flagship S&P 500.
-snip-
He also quotes Martin Peers of The Information explaining that SpaceX is worth about $700 billion, not the $1.75 trillion valuation bankers are hoping for:
https://www.theinformation.com/newsletters/the-briefing/spacex-worth-700-billion-1-75-billion
Gary points out that many people's retirement accounts are invested in index funds, "which own stock in many companies in proportion their market values."
So anyone with such investments could find themselves invested in SpaceX, OpenAI and Anthropic, based on their overvaluations. (Welcome to the AI bubble. Kiss much of your investment good-bye.)
Re the S&P's planned rule changes, from Gary's Substack:
https://garymarcus.substack.com/p/this-one-weird-trick-might-cost-your
Collectively, they would would mean SpaceX would go quickly into the S&P 500, even before there was clear evidence of consistent profitability—effectively forcing many mutual funds to make huge purchases—long before the dust had settled on how it really should be valued.
If it does, many people maybe stuck indirectly, via their retirement funds, buying SpaceX at a high early valuation.
Because the opening stock price seems a bit of a fantasy, they may see their holdings rapidly plummet.
Same logic may well apply to the upcoming IPOs of OpenAI and Anthropic.
If it does, many people maybe stuck indirectly, via their retirement funds, buying SpaceX at a high early valuation.
Because the opening stock price seems a bit of a fantasy, they may see their holdings rapidly plummet.
Same logic may well apply to the upcoming IPOs of OpenAI and Anthropic.
It definitely applies to the upcoming IPOs for OpenAI and Anthropic. As I've mentioned here before, Ed Zitron has long been explaining why OpenAI and Anthropic are overvalued.
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