Further Evidence that the SpaceX IPO Is a Ponzi Scheme

The statements, views and opinions expressed in this column are solely those of the author and do not necessarily represent those of this site. This site does not give financial, investment or medical advice.

24 May 2026, by Eric Zuesse. (All of my recent articles can be seen here.)

On May 23rd, I headlined “Has Musk’s SpaceX already been publicly revealed as a Ponzi scheme?” Today, I call attention to a video explanation headlined “The SpaceX IPO… It’s Worse Than You Think”:

https://www.youtube.com/watch?v=-X6YzlY_8tM

May 21, 2026 #WisprFlowPartner #economics #stocks

SpaceX is about to go public at the largest valuation in history. And because of one quiet rule change, your retirement account is already a buyer of SpaceX stock.

You won’t get a vote on it. You won’t even get a heads up.

The mechanics of passive investing will just buy it for you, at peak valuation, from insiders who got their shares cheap years ago.

In this video, I’ll break down:

• How SpaceX is actually three separate businesses merged into one

• How Starlink quietly became the fastest-growing telecom company in human history

• The $250 billion xAI problem that turned a profitable company into a near $5 billion loss

• The new Nasdaq Fast Entry rule and how it bends the rules for SpaceX

• How “your 401k is the exit liquidity” for SpaceX, and what that actually means for your retirement account

Here it is:

0:00

Elon Musk is preparing the largest

0:02

initial public offering in human

0:03

history. At a $ 1.75 trillion target

0:06

valuation, SpaceX would be worth more

0:08

than every American defense contractor

0:10

combined. Worth more than the market

0:12

caps of Coca-Cola, McDonald’s, Disney,

0:15

Nike, and Starbucks all put together and

0:17

worth more than the top 10 companies on

0:19

the London Stock Exchange combined. So,

0:21

if you’re wondering who the is

0:22

buying SpaceX, a company losing $5

0:25

billion per year at the largest IPO

0:27

valuation in history, well, the answer

0:29

is you. Because within a few weeks, your

0:32

retirement account is going to be one of

0:34

the biggest buyers of SpaceX stock,

0:36

whether you like it or not. And that’s

0:38

because NASDAQ quietly introduced a

0:40

brand new rule designed specifically to

0:42

make that happen. But before we get to

0:44

the rule, you need to understand why

0:46

this all matters. Because the only way a

0:48

nearly $2 trillion valuation makes any

0:51

sense is if SpaceX is actually the

0:53

company the public believes it to be.

0:55

But it’s not. If you ask 10 people on

0:57

the street what SpaceX sells, most will

0:59

say rockets. Some will say Mars stuff,

1:01

but both are wrong. SpaceX isn’t just a

1:04

rocket company. It’s actually three

1:05

businesses stacked on top of each other.

1:07

And the rocket business isn’t even the

1:09

most important one. There’s the good,

1:10

the bad, and the ugly that comes with

1:12

this company. And trust me, it gets

1:14

pretty ugly. So, let’s start there. It’s

1:16

the part of SpaceX that gets the most

1:18

attention and creates the least value.

1:22

XAI is mostly known for owning the

1:24

social media platform Twitter.

1:27

[clears throat]

1:27

Uh, sorry, I mean the social media

1:29

platform X. Anyways, it’s also the AI

1:32

lab Elon Musk founded in 2023 to compete

1:35

with OpenAI and Anthropic. And a few

1:38

months ago, SpaceX acquired XAI in an

1:40

all stock deal that valued the combined

1:42

entity at $1.25 $25 trillion with XAI

1:46

itself accounting for 250 billion of

1:48

that. If you’re wondering how it’s

1:50

allowed for one of Elon’s companies to

1:52

acquire another one of Elon’s companies,

1:54

the answer is I have no idea, but it

1:56

happened. So, with a $250 billion

1:59

valuation, you’d assume XAI is a

2:01

financially sound company, right? Or at

2:04

least close to it. Or at a minimum, that

2:06

the people who built it still work

2:08

there. Well, none of those things are

2:10

true. XAI was founded with 11

2:12

co-founders, researchers and engineers

2:15

from DeepMind, OpenAI, Google, and the

2:17

University of Toronto. It was a true

2:19

heavyweight team. But by 2025, the

2:22

company was burning more than a billion

2:24

dollars a month. And by March of this

2:25

year, every single one of the 11

2:27

co-founders had walked out from the

2:29

company. Then Elon on his own social

2:31

media platform publicly admitted that

2:34

XAI had to be rebuilt from the

2:36

foundations up, which is the polite way

2:38

of saying the CEO of SpaceX just paid

2:40

$250 billion for an asset that needs to

2:43

be rebuilt from scratch. And to say that

2:45

XAI is overvalued would still be a

2:48

massive understatement. OpenAI generates

2:50

around $ 24 billion in revenue annually

2:53

and is currently valued at around $850

2:56

billion. While Anthropic generates over

2:58

$30 billion annually and is valued

3:01

around $400 billion. But XAI who

3:04

estimates a billion in revenue was

3:06

bought for $250 billion. So the market

3:09

is pricing XAI like its Emirates, but in

3:11

reality it’s more like Spirit Airlines.

3:14

I like to look at XAI as the reverse

3:16

Jerome Powell piece of SpaceX. Instead

3:18

of printing cash, it burns whatever cash

3:20

the rest of the business generates. But

3:22

it’s also only one of the three

3:24

businesses inside SpaceX. The other two

3:27

businesses are the ones actually doing

3:28

the work. But before we get to the crown

3:30

jewel, let’s start with the one that

3:32

gives the company its name. [music]

3:36

This is the part most people picture

3:37

when they hear the name SpaceX. It’s the

3:40

rocket business. It launches things into

3:42

orbit. satellites for the US government,

3:44

cargo to the International Space

3:46

Station, crude missions for NASA, and a

3:48

lot of other satellites, which we’ll get

3:50

to in a minute. And the rocket business

3:52

at SpaceX generated roughly $4 billion

3:55

in revenue last year, which may sound

3:57

impressive until you compare it to the

3:58

$2 trillion valuation. Then it suddenly

4:01

doesn’t sound impressive at all,

4:03

especially when you realize the rocket

4:04

business represented only about a

4:06

quarter of SpaceX’s total revenue last

4:08

year. So, this brings us to the third

4:10

business. It’s the one most people don’t

4:12

think about when they hear the word

4:13

SpaceX, but it’s also the one that

4:15

investors care about most, and it’s the

4:17

one that’s paying the bills for

4:19

everything else. [music]

4:22

This is the crown jewel of SpaceX.

4:24

Starlink is a satellite internet

4:26

provider. It’s the answer to the

4:27

question, “What if Comcast but in

4:29

space?” Which sounds like the kind of

4:31

thing a venture capitalist tweets at

4:33

3:00 in the morning, except in this

4:35

case, Elon actually built it. And

4:37

Starlink launched in beta in 2020 and 6

4:40

years later it’s the fastest scaling

4:42

telecom company in human history. There

4:44

are now more than 10,000 Starlink

4:46

satellites in Earth’s orbit. Each one

4:48

beaming internet down to a little dish

4:49

that sits on your roof. The dish points

4:52

itself at the satellites. The satellites

4:54

talk to each other and somehow this

4:56

works. Here’s what entrepreneur and

4:58

podcast host Scott Galloway had to say

5:00

about Starlink.

5:02

And then the best product I think of the

5:04

last few years has been Starlink.

5:06

That’s amazing.

5:07

I just think it’s absolutely I’ve done

5:09

podcasts from planes. I can talk to my

5:12

sons on FaceTime. That product is, you

5:16

know, all airlines are flying the same

5:18

tin can, same routes, same bad food. A

5:21

real point of differentiation for them

5:22

and also in maritime. I think Starlink

5:26

is the best tech product. So power to

5:27

him. when they go public, is it an is

5:30

SpaceX an amazing company, or is it

5:32

overvalued? The answer is yes. Two can

5:35

be true at the same time.

5:36

Starlink has now grown to over 10

5:38

million active subscribers in roughly

5:40

150 countries. And in 2025, Starlink

5:43

alone brought in 11.4 billion in

5:45

revenue, which is roughly 61% of

5:48

SpaceX’s total revenue for the year. But

5:50

Starlink’s ability to generate revenue

5:52

isn’t even the most impressive part.

5:54

It’s the efficiency underneath that

5:56

revenue which blows my mind. Two years

5:58

ago, Starlink’s profit margins were

6:00

about 41%. This year, it’s now 63%.

6:04

Which means Starlink added over 20

6:05

points in margin expansion in just 2

6:08

years. So yeah, the margins aren’t just

6:10

good, they’re also accelerating. And

6:12

Starlink isn’t just for consumer

6:14

internet either. There’s a maritime

6:16

version that ships and yachts use, an

6:17

aviation version that commercial

6:19

airlines have started to roll out, and a

6:21

classified defense version called Star

6:22

Shield with contracts at the National

6:24

Reconnaissance Office and the Pentagon.

6:26

So, this is the real SpaceX. It’s a

6:28

satellite internet provider that prints

6:30

cash. A rocket business that’s doing

6:32

pretty good, but is valued like it’s

6:34

already colonized Mars. And after the

6:36

February merger, an AI lab that lights

6:39

roughly a billion dollars a month on

6:40

fire. And in 2025, Starlink and the

6:43

rocket business brought in roughly $8

6:45

billion in profits, which sounds great

6:48

until you remember XAI showed up to ruin

6:50

the party because the consolidated

6:52

company of SpaceX, which also now

6:54

includes XAI, ended up losing nearly $5

6:57

billion last year on roughly $18.5

7:00

billion in revenue. So, let’s go back to

7:02

the question from earlier. Who the

7:05

is buying SpaceX at a $1.75 trillion

7:09

valuation? And our answer to this

7:11

question from earlier still stands. It’s

7:13

you. And this is where the real story

7:15

for the SpaceX IPO actually is. It’s not

7:18

about rockets. It’s not about magic

7:20

satellites in space. It’s about the

7:22

financial system changing the rules

7:24

right before the biggest IPO in market

7:26

history. Because on May 1st of this

7:28

year, NASDAQ adopted something called

7:30

the fast entry rule. And with SpaceX

7:33

reportedly targeting a June date for

7:34

their initial public offering, the

7:36

timing for this new rule is extremely

7:38

convenient. But before we get into how

7:40

we’ve quietly changed the rules to roll

7:42

out the red carpet for SpaceX. …

9:13

Thank you to Whisper Flow

9:15

for sponsoring this video. And now back

9:18

to that red carpet we rolled out for

9:19

SpaceX and where it actually leads. The

9:22

NASDAQ 100 is the gold standard for

9:24

technology and growth companies. It’s

9:26

not only a badge of honor for companies

9:28

to be included in it, but there’s more

9:29

than 200 investment products with over

9:32

$600 billion in assets that track the

9:34

index. Which means once you’re included

9:36

in the index, it basically forces every

9:38

investment fund that follows the index

9:40

to automatically buy your stock, which

9:42

translates to billions of dollars of

9:44

investment capital. And under the old

9:46

rules, a newly listed company had to

9:48

wait at least three months before it

9:49

could be added to the NASDAQ 100 index.

9:52

That waiting period existed for a

9:54

reason. It gave the market time to

9:56

discover the actual price before passive

9:58

index funds were forced to buy in. But

10:00

the new fast entry rule cuts that

10:02

waiting period from 3 months to just 15

10:04

trading days. It’s 3 months of price

10:06

discovery compressed into 3 weeks, which

10:09

speeds up the process for SpaceX to get

10:11

that automatic demand coming in. But

10:13

this isn’t even the change that matters

10:15

most because there was also two other

10:16

rule changes. There also used to be a

10:19

minimum free float requirement to join

10:20

the NASDAQ 100. A company needed at

10:23

least 10% of its shares actually

10:25

available for the public to buy and

10:26

sell. SpaceX is targeting a free float

10:29

of 4 to 5%. Under the old rules, they

10:31

wouldn’t qualify. Under the new rules,

10:33

that minimum is gone, and SpaceX

10:36

suddenly qualifies. And then there’s

10:37

also the new hidden multiplier. This one

10:40

is the hardest to wrap my head around

10:41

because buried in the technical language

10:43

of the new rules is a hidden multiplier.

10:46

For companies with a free float under

10:48

20%, NASDAQ now treats the float as

10:50

three times bigger than it actually is.

10:52

Meaning a 4% float gets weighted as if

10:55

it were 12%. A 5% float gets weighted as

10:58

if it were 15%. Here’s what all this

11:00

basically means. We’ve bent the rules

11:02

and rolled out the red carpet for

11:04

SpaceX. We’ve changed the listing

11:06

requirement so that SpaceX can join the

11:08

index with just 5% of the company

11:10

actually trading publicly, a float level

11:12

that would have been an automatic

11:14

disqualification 6 months ago. We’ve

11:16

changed the price discovery timeline so

11:18

that SpaceX skips the standard 3-month

11:20

seasoning and gets dropped into the

11:22

index just 15 trading days after going

11:24

public. And we’ve changed the waiting

11:26

rule so that ETFs are now legally

11:28

required to treat SpaceX’s float as if

11:31

it were three times larger than it

11:32

actually is. meaning we’ve built

11:34

manufactured demand. And this is all

11:36

unfolding right now. But it’s not just

11:38

SpaceX. Open AAI and Anthropic are both

11:41

reportedly eyeing their own public

11:42

listings this year. And both will almost

11:44

certainly list with the same

11:45

configuration the new rules were quietly

11:48

tailored for. Meaning the NASDAQ didn’t

11:50

rewrite the rules for one company. It

11:52

rewrote them for a class of companies,

11:54

and SpaceX was just the first in line.

11:56

So NASDAQ cleared the runway for SpaceX.

11:58

The question now is who actually gets on

12:01

the plane? Which brings us to the retail

12:03

allocation part of the listing. Because

12:05

while most initial public offerings

12:06

allocate 5 to 10% of the offering to

12:08

retail investors, SpaceX is targeting

12:11

30%. And Brett Johnson, the CFO of

12:14

SpaceX, told a room full of bankers on

12:16

the record that retail is going to be a

12:18

critical part of the IPO and bigger than

12:21

any IPO in history because, in his

12:24

words, retail buyers have been

12:25

incredibly supportive of us and of Elon

12:28

for a long time. And we want to make

12:29

sure that we recognize that. Translated

12:32

out of corporate speak, the CFO of

12:34

SpaceX told a room of bankers that the

12:36

largest initial public offering in

12:38

history is going to dump 30% of its

12:40

supply on retail buyers and not because

12:43

retail buyers help with price stability,

12:45

not because they help with long-term

12:47

shareholder alignment, because they’re

12:48

loyal to Elon. And that’s how this story

12:51

unfolds. The buyers and sellers of

12:53

SpaceX don’t show up at the same time.

12:55

The buyers are forced in early. The

12:57

sellers are unlocked later. Shares move

12:59

from insiders sitting on a lowcost basis

13:02

to passive funds and retail whose

13:04

retirement accounts absorb them at peak

13:06

valuation. Portfolio manager George

13:08

Noble said it best. Your 401k is the

13:10

exit liquidity. Because if you have any

13:13

sort of retirement account holding US

13:15

stock index funds, then within a few

13:17

weeks of the SpaceX listing, you’re

13:19

going to own some stock and you won’t

13:20

have a vote on it. You won’t have a

13:22

choice in it. The mechanics of passive

13:24

investing will just buy it for you. So,

13:26

here’s the corrected version of SpaceX.

13:28

It’s a mashup of three businesses that

13:30

combined lost $5 billion last year,

13:33

listing at the largest IPO valuation in

13:35

human history, and we’re all going to be

13:37

buyers within a few weeks because of

13:39

manufactured demand. And there’s a

13:41

reason traditional financial media isn’t

13:43

covering it this way. It isn’t clickable

13:45

because SpaceX to go public at a nearly

13:47

$2 trillion valuation is a headline. But

13:50

NASDAQ quietly rewrote its floatwaiting

13:52

methodology to engineer passive fund

13:54

demand for an unprofitable company.

13:57

Well, that doesn’t quite roll off the

13:58

tongue as smooth.

…

——

MY COMMENTS:

To boil this all down: The NASDAQ 100 index coordinated with Elon Musk to change its rules so that automated index-fund buying (“manufactured demand”) of this stock will kick in almost immediately and without the previously required price-discovery, so that 30% of the stock’s buyers will be 401k and other index-fund buyers, people’s pension funds basically, thus guaranteeing an inflated price, and