The SpaceX I.P.O. Rocket

Good morning, world. If all goes to plan, Elon Musk will become the world’s first trillionaire . The initial public offering of his rocket, satellite and A.I. company, SpaceX, is the biggest in history. It’s expected to raise more money in one day than the annual economic output of many nations.

A whole bunch of people in Musk’s orbit are going to get very rich — or even richer. And millions of regular people are about to become SpaceX investors, though they may not even realize it. That might make them richer; it also exposes them to meaningful risks.

Today, I write about a public offering that has sent investors the world over into a hot frenzy, but that is also emblematic of the moment we’re in: a time when a handful of people and companies are accumulating vast amounts of wealth and, with it, vast power.

Earlier this year, the arbiters of the world’s largest stock indexes faced a dilemma.

SpaceX told them it was planning an I.P.O. for the summer. It demanded to be included in the top indexes straight away.

This was a big ask: Indexes like the S&P 500 and Nasdaq-100, which are composed of baskets of public company shares and act as barometers of the broader stock market, typically make newly public companies wait a year, until the initial volatility after an I.P.O. settles.

But in May, the Nasdaq exchange altered its rules to allow “fast entry” by large private companies. Nasdaq denied the change had anything to do with SpaceX. Other indexes followed. (Notably, S&P said it would not change its criteria for the S&P 500, one of the world’s biggest indexes.)

As my colleagues Mike Isaac and Maureen Farrell wrote, these changes will mechanically push up demand for SpaceX shares by compelling index-tracking funds to buy the company’s shares within a week or so. They will also turn owners of retirement funds, pension plans and index funds into investors in SpaceX, whether they like it or not.

“If you trust Elon Musk, be my guest and invest directly in the I.P.O.,” said Ed Elson, a host of the “Prof G Markets” podcast. “But you cannot just stuff these genuinely terrible companies into people’s 401(k)s and retirement accounts.”

Except if it’s the largest I.P.O. in history, you kinda can.

Millions, billions, trillions

The scale of the SpaceX I.P.O. is enormous. Musk could very well become a trillionaire, and many of the Silicon Valley venture capitalists and private investment firms that invested early are likely to reap billions in returns.

More than 4,400 current and former SpaceX employees are set to become millionaires, with about 400 of them expected to earn $100 million or more. And that’s not to mention the banks and brokerage firms that could collect more than $500 million in fees, the largest such payout ever.

The sheer size of SpaceX — on course to be valued at $1.77 trillion in the I.P.O. — has also given Musk the power to impose several onerous terms and conditions.

He has obliged Wall Street banks, law firms, auditors and any other advisers working on the I.P.O. to buy subscriptions to Grok, his A.I. chatbot. And instead of a price range, as is customary when shares float, he is giving buyers one price — $135 — to take or leave.

Nasdaq’s president said in May the exchange had begun discussing index rule changes over a year ago. The idea of an index is that it’s a mirror of the stock market — and it seems likely that the market will soon be dominated by SpaceX and the A.I. companies Anthropic and OpenAI, which are about to have their own I.P.O.s.

But are these companies actually good bets for average investors?

At its sky-high I.P.O. valuation, SpaceX’s stock looks like a risky bet. When SpaceX pulled back the curtain on its finances last month, some were taken aback. The company’s space business was generating less revenue than expected. The losses from its artificial-intelligence unit were surprisingly large. These are not the sorts of trends that investors usually like to see.

But Musk is not a typical C.E.O., and SpaceX is not a typical company.

The church of Elon

Think of Elon as the leader of a fan group — some might call it a cult — that supports his companies based as much on its faith in him as on the companies’ underlying financials.

One view of him is that he’s a visionary and a genius. Early Tesla investors, for example, have been rewarded for their faith.

But he’s also highly erratic. To call his politics controversial is an understatement. He spent more than $250 million on Donald Trump’s re-election campaign and uses his social media platform, X, to publicly support far-right parties around the world. This week, during violent protests in Belfast after a Sudanese man was charged in a stabbing attack, Musk shared lists of locations around Northern Ireland for protesters to gather, and reposted messages from far-right figures in Britain.

His notoriety and influence, and the way Starlink, the satellite arm of SpaceX, has become entangled in geopolitics, have also made him a target.

Just yesterday, as the war between the U.S. and Iran began escalating again, Iran’s semiofficial news agency published a report claiming that Iran’s military might attack Musk’s business interests in the region, including Starlink infrastructure.

All this makes Musk’s space-to-satellites-to-A.I. conglomerate an unusually fraught stock to expose so many passive investors to so quickly. That SpaceX will be in many pensions soon is a reflection of the power that a company accumulates when it’s operating on such an enormous scale.

We’re all strapped to the SpaceX rocket now.

MORE TOP NEWS

Trump withdraws his Iran strike threat

President Trump said he had canceled his next wave of planned attacks on Iran, claiming progress had been made in peace negotiations. It’s the latest in a dizzying series of statements he has made about the war this week.

On Thursday morning, Trump had said that the U.S. would hit Iran “VERY HARD TONIGHT,” and mused in a television interview that he might deploy the U.S. military to take Kharg Island in the Persian Gulf, the heart of Iran’s oil economy.

OTHER NEWS

Israel is expected to allocate hundreds of millions of dollars to rapidly expand Jewish settlement across the occupied West Bank, a move prompted by national elections this fall.
Britain’s defense secretary abruptly resigned and accused Prime Minister Keir Starmer of failing to invest enough money in the military.
Thailand sentenced two men to death for their roles in a 2015 bombing of a Bangkok shrine that killed 20 people and injured more than 120.
At least two Iranian women who sought refuge in the U.S. will be deported to the Central African Republic, an impoverished country plagued by conflict.

TOP OF THE WORLD

The most clicked link in your newsletter yesterday was about a tradwife influencer in Utah.

WORLD CUP

The world’s biggest sporting event has kicked off, with the first match in Mexico City. Follow the latest updates.

The striker to watch: Almost six years after a life-threatening skull fracture, Raúl Jiménez is back for Mexico.

Jersey dispute: Haiti agreed to change its uniforms less than 72 hours before its match with Scotland after FIFA deemed the design “political.”

Extreme heat: Many of the host cities may reach dangerously high temperatures this year. In Miami, where England has been practicing, the heat “really does hit you in the face,” midfielder Declan Rice said.

ANCIENT OF THE DAY

Ground squirrel feces

The Klondike region of Canada’s Yukon territory didn’t just have gold in its hills — they were also filled with thousands of frozen pellets of ancient poop from prehistoric ground squirrels. The fossilized feces were unusually well preserved, allowing scientists to extract DNA that showed that the squirrels regularly ate the meat of mammoths, bison and saber-toothed cats.

They also preserved a telltale odor. “I did not think that these would smell anymore, especially when you’re talking about 700,000-year-old poop,” one scientist said. “It was intense.” Read more here.

MORNING READ

In 1936, Viking Press published a children’s book about a young flower-loving Spanish bull with no ambition to fight in the ring. By a string of coincidences (most notably, an untimely bee sting), the bull, Ferdinand, ends up there anyway, but simply refuses to respond to the matador’s taunts.

“The Story of Ferdinand” became a best seller in more than 60 languages and inspired two animated films. But it also became a lightning rod and a Rorschach test. Was the story sinister or benign? Fascist or communist? Subversive or patriotic? Or was it just a lovely story about an animal choosing his own path? Decide for yourself.

AROUND THE WORLD

“I got a Messi!”

In the smartphone age, one of the World Cup’s most beloved traditions is defiantly analog: filling sticker albums with the faces of every player on every team.

The collecting fever is especially strong in Argentina. Parents say their children have left their smartphones untouched for long stretches, gathering instead to swap stickers in schoolyards and parks. “A child opening a pack is timeless,” one historian said. “It’s magic.” Read more.

RECIPE

Bite-sized and extra crunchy, these Shanghai butter mochi are a cross between Chinese nian gao and French canelé. They became extremely popular at bakeries in the Jiangsu-Zhejiang region of China before getting yet more attention online, particularly in Korea. The key to achieving a deeply browned crust is baking the cakes in a well-buttered tin, frying the outside.

WHERE IS THIS?

Where are they walking?

BEFORE YOU GO …

Every four years, I become an amateur football coach. I shout instructions at players on the TV. I throw my hands up at the ref. I dissect the quality of a goal over lunch the next day as if I know what I’m talking about. (I don’t.)

The World Cup does that to people. Big events do that. During the height of the Covid pandemic, we all became amateur virologists. When Iran closed the Strait of Hormuz, everyone had thoughts to share about shipping routes.

It says something bigger about humans. We bond over shared events, and we are social animals — we like to learn from one another.

So, if you want to learn from people who actually know what they’re talking about, I highly recommend a podcast series called “Heroes & Humans of Football” by two journalists, Simon Kuper and Mehreen Khan.

My favorite episode is the story of Kylian Mbappé and the Parisian banlieues, places my colleague Tariq Panja (who also knows what he’s talking about) recently described to me as the most fertile pools of footballing talent in the world. Check it out.

Oh, and in honor of Brazil vs. Morocco on Saturday, here’s the great Jorge Ben Jor with “Ponta de Lança Africano,” one of the most iconic football songs ever written.

Have a great weekend! — Katrin