This investment has never been secret.
Google (now under parent company Alphabet) invested roughly $900 million as the majority of a ~$1 billion funding round alongside Fidelity Investments. This gave Google an initial equity stake of about 7–7.5% in SpaceX at a valuation of roughly $10–12 billion.
Remember this was also when SpaceX was actually about space, instead of mostly AI and Twitter. Long-term shareholders that were sold on the space, have to be thinking about how to get out once their lockups expire.
Not just that, but private investors were sold shares that all had the same voting rights. Since just before the IPO SpaceX now has dual class shares, Elon and a few insiders have class-B shares with 10x the voting power, while everybody else (including private investors) have class-A shares with 1x the voting power
With the serious lapses in governance being made by founders with these special shares, such as Musk and Zuckerberg, I wonder if the shares without these special rights will be substantially discounted. What rights do these other shareholders retain that would keep them valuable? Rights to compensation in the case of bankruptcy?
Facebook would never have become what it is today if Zuck had lost control of the voting. It would have been sold 10 times over and prob not exist today. I suspect the same could be said for Mask and his businesses.
Facebook IPOd in 2012, after it was already used by hundreds of millions of people, and after it bought Instagram
These have become some of the most valuable companies on Earth. The idea that there are lapses in governance in these companies is insane. Any shareholder is buying in fully aware of the governance structure. Many because of it! Shareholders’ rights are clearly enumerated.
I agree many buy because of the governance structure and founders retaining control, but there is a lot of dumb money out there.
From Claude via stockanalysis.com: META — institutions 67.51%, insiders 13.49%, float 2.19B of 2.54B shares outstanding. That leaves roughly 19% as retail/other.
SPCX — institutions 5.95%, insiders 46.47%, float only 638.65M of 13.17B shares. Residual is ~47.6%, but that is not retail.
> Any shareholder is buying in fully aware of the governance structure.
This is laughable. Many shareholders don’t even know they own stock in these companies.
That’s an indictment on them. You should know where you’re putting your money and why. If you delegate this to a professional or influencer, you do not get to blame them. After all, you could just buy something you think you understand better like real estate or keep it in cash.
You don't get much of a say in how your retirement fund is invested.
How true is that these days? Sure, old-school pension funds are managed without any input from the future pensioners, but most 401ks (and similar) these days have a variety of investment options that the employee can choose from. Yes, there are some that have extremely limited options, but I'm not sure how common those are.
And once you've left the company and roll those 401ks over into IRAs, you can put them at whatever financial institution you want, many of which have more or less unlimited flexibility (within legality) with regard to what you can invest in.
Now, I know many employees just sort of adopt an "autopilot" attitude and don't pay much attention to their retirement account investments, but that's on them for ignoring this stuff. (The lack of general financial literacy, in the US at least, continues to disappoint me.)
So: yes, there are some people who don't have much of a say in how their retirement fund is invested, but my feeling is that those people are a small minority. I do think a large number (perhaps even a majority) of people do have the ability to direct their retirement investments, but either don't know they can do it, or can't be bothered. Again, though, that's on them for not educating themselves and playing a more active role in their financial future.
Exactly. If nothing else, you should know who you're supporting.
Many people wouldn't support SpaceX and Tesla if they knew more about Musk. Conversely, some other people who don't know much about him might want to support his companies.
The typical "investor" is an ETF these days.
Your standard SPY or VTI investor doesn't know jack diddly squat about shareholder rights, nor do they ever plan to invoke them.
Willful ignorance is not an excuse. If you buy into an ETF, you are delegating responsibility to the people who run the ETF (or the people who maintain the index that the ETF tracks), and you've decided you're ok with that, and are ok with whatever companies are in the index/ETF.
You can always decide to pick an ETF that doesn't invest in the companies you don't like, or invest in individual stocks if you have the time and stomach for it.
I'm not saying I like this turn of events.
I'm saying it's how the world works. The majority of pension funds (public or private) and 401k plans are simply passive index funds with nearly no direct voting rights (and at best very limited, indirect voting rights).
> The majority of pension funds (public or private) and 401k plans are simply passive index funds
That’s completely wrong.
Most 401k plans have by far more active fund options than passive fund options. However, more and more dollars are tiling towards the passive index funds, i.e. through consumer choice.
Where do you get your information from?
you should have a look at proxy firms. you would be surprised
Could you explain to me how an investor owning SPY shares gets to control the proxy vote?
Oh, don't worry. I already know the answer. I'm asking if YOU can tell me the answer.
You can buy IVV instead and get the same exposure but this time you get to vote. Or you could just not own spy and buy the shares individually.
What 401k program do you or your peers have that allows you to buy funds outside of the few, selected by the 401k manager?
I certainly can't buy individual shares in my 401k program. And very, very few programs I'm aware of ever offered that as an option.
they typically offer a brokerage option. fidelity and vanguard both offered this when I had them. if that wasn't on the table I'd roll it into something that gave me flexibility.
In the case of Spacex that's literally not the case, when private investors bought shares the company was already a decade old and had a single class of shares. It's only since the IPO that the company switched to a dual structure, multiple years after private investors bought in. And class-B shares have only been given to Elon and a few of his friends.
The private investors were free to sue or arbitrage, as it is a private matter.
There were disputes around SpaceX secondary market/special purpose vehicle shares before the listing, but they were all settled out of court, AFAIK.
Generally the 10x shares aren't traded so it's impossible to see if they trade at a premium.
One exception is GOOG / GOOGL which both trade actively, and there's not much difference in price.
The mechanism for a price divergence could be accumulation of the 10x shares to seize control, but even if you could buy the entire float, it wouldn't be enough to take control, so that mechanism never happens.
There are three classes of Google stock.
By voting rights, they have 10x (founder stock), 1x (trading as GOOGL), and 0x (trading as GOOG). The class with 10x voting rights does not trade publicly. The class with 1x voting rights does not have enough voting power to control the direction of the company so there is no real difference in perceived value between GOOG and GOOGL.
Employee stock awards are IIRC all in restricted shares of GOOG (0x voting rights) so they don't dilute the power of the founders.
You are correct.
Interestingly, the 10x shares held by Brin and Page constitute only 11% of the economic value of Alphabet, but 51% of the voting control.
And the 10x shares automatically convert to 1x shares upon transfer or inheritance, so if the founders cash out or die, the 10x supervoting power disappears.
Oh wow so that lets them honestly say they have the same value as other shares?
Yes. And as far as any future owners are concerned, that's perfectly true.
> I wonder if the shares without these special rights will be substantially discounted
it should be, but the market might be a bit irrational.
No rights to compensation on bankruptcy. Payroll is first, then debt, taxes and stuff. Equity holders ride down to zero.
zuck for all his fault - he ain't a scammer or wannabe scammer.
he might have a large miss with the metaverse, & maybe current a.i effort. but in terms of being ruthless with competition & acquiring competition he did his job well as CEO.
musky on the other hand - overpromising and underdelivering.
Putting the principal idea of “publicly owned” in its head.
Not at all. Ownership and voting rights are two different things. Musk can't, for example, declare a dividend that pays his shares out more than the common shares.
He absolutely can, but would expect to be sued in court. In Texas, where we don’t know what shareholder protections exist because the case law is so immature compared to Delaware.
But Texas is making a push very specifically around giving less shareholder protections.
Well, okay, he can do lots of illegal stuff that's going to get punished in the courts. There's no way something like that would survive SEC scrutiny, I don't care what state you're in.
A) it’s not the SEC’s jurisdiction. It’s the state of incorporation that covers shareholder rights.
B) we literally don’t know if it’s illegal or not yet. The reason investors like Delaware is that there is tons of decided case law and courts that are expert and fast at deciding these issues so you’d get quick predictable answers.
But those answers have lots of rights to minority shareholders which the modern dictator founders hated. So Texas made a play for them with the specific pitch that they will give much less support of minority shareholders.
How do you think googles stocks are set up?
Eh meh.
If you're investing in an Elon company you better believe in the man because he's always ran them however he wants. Seems fine for the voting shares to reflect that since he's been running companies for decades; you had the opportunity to know what you're getting into.
If for some reason you're invested into some total market index or the like and you don't like the companies that it invests into then maybe you shouldn't invest according to those rules.
I don't think companies expanding their business should be the only reason to sell. Apple was a desktop and laptop computer company when they released the iPod. Nokia was a company making rubber products when they started making cellular equipment in the 1970s. Amazon was a ecomm company when they released AWS. Etc.
Sure, I'm cherrypicking the success stories but I don't think it's the only signal people should use.
Companies laundering their CEO's other failing companies is certainly a reason to sell.
$8.7B in losses over the last 5 quarters sounds bad, but that is also with $20.4B capital expenditure in the period and double digit percent increases per quarter in user metrics.
By traditional business metrics it looks toxic but compared to a typical tech unicorn it's not really outstanding.
Considering it's a tech unicorn with strategic and financial leverage like no other (their own global Internet infrastructure, access to arbitrary billions in capital, ability to build the biggest chip fab in the world), it's certainly fair to call it a gamble, but to call it failing is a stretch imo.
Did I miss something? When did Spacex get into the fab business?
The project was first teased by Musk in early 2026 and officially announced on March 21, 2026 during a special event at the defunct Seaholm Power Plant in Austin, Texas [1][2]
So part of the extended cinematic universe then.
(man, I wish I could get people to throw money at me for all of my outstanding projects that I buy some parts for and would be nice to do "some time")
I'm sure they'll get around to building that electric VTOL Elon Musk has been "recently thinking about" for the past decade eventually, too.
What failing companies?
I wouldn't really say SpaceX expanded its business. It was merged with a social network and AI firm to juice its IPO valuation. The SpaceX part of the business is interesting, but the value is generously only about 20% of the value of the company. Anyone who wants to invest in AI isn't going to want a near last place model company. And who wants to put money into Twitter?
I don't think what place you're in matters anymore when a small lab like Moonshot can come in and take the top spot out of nowhere.
The iPod was a peripheral to use alongside your MacBook, it was meant to drive Apple computer sales initially and it's not like it was Apple's first attempt at a portable device (Newton). Nokia was building telecom equipment (stemming from their telephone cable experience, the insulation being a product of their original rubber business) and military equipment along with a bunch of other consumer electronics before they got into mobile phones. Amazon released AWS because that was their infrastructure they had built for themselves to handle their massive e-commerce business.
Companies generally don't just jump into a totally new market unless they've already got some experience.
The SpaceX acquisitions of xAI and X have absolutely nothing to do with space. While I'm sure SpaceX software engineers benefit greatly from cheap access to Grok, it and X have no relevance to the core business of SpaceX. It's the same level as "huh?" if Boeing decided to buy up an AI company and social media platform. The only reason xAI and X are even part of SpaceX is because Musk fucked himself with being forced to buy Twitter and he decided to bundle them with an actually profitable company.
Spacex has no existing customer to satisfy their future launch ambitions with Starship, hence data centers in space, just like they did with starlink to provide the necessary demand for Falcon 9. The launch business is not profitable without a regular cadence, too many fixed costs - ground infrastructure and personnel.
X can supply training data to to Xai and Grok is heavily integrated into X so there is some synergy there.
I didn't expect to read "Datacenters in space" on HN.
SpaceX had adult leadership for a long time. I suspect there was a tacit agreement with Musk about a bit of separation.
He broke through that professional firewall when he merged xAI with SpaceX and then pushed it to go public as he did. I also posit that Gwynne Shotwell is weirdly undervalued for what she's accomplished and what she's put up with, and I think that will show up some time in the future.
There was enough technical analysis to show that even Musk's cult feed can't overcome the significant financial hardships he laid on SpaceX. I personally think it was his jump the shark move. He can't really go up again after this. He no longer has any untainted assets for mega-exploits.
>'Gwynne Shotwell is weirdly undervalued for what she's accomplished and what she's put up with, and I think that will show up some time in the future.'
Gwynne is fiercely loyal to Elon. I don't expect to see significant strife between them.
There are a small single digit number of 'new space' company president opportunities in the world and one of them requires dealing with Musk. Makes sense to be loyal when there's so few other equal opportunities. No doubt many companies would love to have her at the helm but very few offer the ability to build reusable rockets.
I wouldn't say Shotwell is "undervalued, weirdly or not. She's a household name among space enthusiasts.
Without looking, can you tell me who the COO of ULA is?
"succeeding despite Elon musk" is, however, a skill set applicable at only a (strike)small number of companies (/strike) single company.
I'm sure her skill here translates to other difficult CEO personalities.
Have you got any evidence for these claims?
Nvidia was a company making PC gamer hardware, not high-performance computing.
It also seems to me to be a very odd conflict of interest given that they must see themselves as primary competitors in the AI space.
Seems similar to me as when Eric Schmidt resigned from the Apple board many years back because their products started to overlap, especially mobile.
I think those long-term holders who 10x their investment are quite happy with that investment so far.
SpaceX is WAY more about space than Twitter.
Twitter by itself is lucky to be worth $15B anymore.
The space portion of SpaceX is easily worth 10x that.
xAI is theoretically the hype machine that makes up the remainder of the value.
Twitter is the “hype machine”. It’s basically the advertising arm disguised as a social media company.
At SpaceX’s valuation, even a 1-2% increase in share price due to some astroturfing on the platform they themselves own basically pays back the cost of acquiring twitter.
Where did you get $15 billion from?
Or $150 billion SpaceX? Internet constellations may be mildly profitable, but beyond that, most things are an endless money pit without clear path towards profit anytime soon. Like, no one is going to spend a trillion on a moon base (or exponentially more for mars) without plans to somehow recover all that money.
"Internet constellations may be mildly profitable"
It's insanely profitable they did $7.2bn in EBITDA on $11.4bn in revenue in 2025.
The US government is the one who routinely spends trillions with no plans to recover money.
And SpaceX has become their favorite place to put money over the last 5 years.
Moon is taxfree zone?
Yes I'm sure they are just desperate to get out of their 100x investment.
A huge mistake, I'm sure the relevant parties have been punished appropriately.
They must be seething in envy at the superior returns of the average HN naysayer who has been predicting the imminent collapse of all the "scams" Elon Musk is running for the last several years.
SpaceX, like Tesla, has always been about Elon Musk.
Investors are buying Musk, like they were buying Warren Buffett with Berkshire Hathaway. Long-term shareholders are not buying space; they are buying Musk. This has been clear to everyone since the beginning; it has been well communicated (look at SpaceX governance rules in Texas), and there is nothing mystical about it.
It's very likely Musk will roll everything up into a single Musk conglomerate.
Investors are buying into the fallacy that musk can continue to work as a hype man, rather than some visionary or innovator. They like that he can make stock numbers go up, seemingly against all odds and reason.
Whether this trend continues or not indefinitely will largely determine if incestors start looking for the door.
It's a valid point. But the markets are a harsh mistress. If you don't like fallacies, you don't buy. And if you think the number is not going to go up, you can always short the stock.
In defence of Mr Musk, despite his character flaws, Tesla is the only Western electric car company in the top 20, and this includes Korea and Japan. Also, SpaceX is ~90% of the world's commercial rocket launch capacity.
But this does not mean SpaceX would be correctly priced at the moment. It may be expensive, but SpaceX is going to have many years to come to reap the benefits of their hard work building the business.
> Tesla is the only Western electric car company in the top 20
WV is number 6 in the top 20, and BMW is number 10. And while Tesla has good sales now their lack of innovation is a huge risk.
https://www.blackridgeresearch.com/blog/list-of-global-top-e...
> In defence of Mr Musk, despite his character flaws, Tesla is the only Western electric car company in the top 20, and this includes Korea and Japan. Also, SpaceX is ~90% of the world's commercial rocket launch capacity.
This conflates the quality of the product with the value of the business. There is no contradiction between Tesla cars selling well because they fit a market and Tesla the business not being a good investment.
> you can always short the stock.
Which is going not too badly for the shorts, so far. There's a reason almost 50% of the float is loaned out.
We'll see once the earnings call rolls around.
Possible that a lot of those shorts are by early SpaceX investors who want to lock in a specific price before their share lockup period ends.
Unlike Tesla, SpaceX is still a visionary and innovative company. Their current cash problems are precisely because they are so heavily invested in so many innovations that have yet to pan out
Tesla is making two big R&D plays into humanoid robotics and cyber taxi. That’s just as bold and requiring innovation as the SpaceX AI and starship stuff. That plus Tesla/SpaceX/Intel are together putting big money into Terafab to make semiconductors in Texas for those platforms.
> Tesla is making two big R&D plays…
The funniest thing you can write… Can’t believe people still write “Robotaxi” after 12+ years of failed promises… wild wild stuff
Just like OpenAI/Anthropic vs open models it's way too early to call winners or losers in the self-driving market. I called it a Tesla R&D project on purpose. They are at least in 2nd place to Waymo but it's barely a market in 2026, Waymo has been very conservative with expansion the last 5yrs for a good reason. It was still R&D.
Ramping up Cybercab production is definitely high risk play. Which is counter to OP's point that Tesla is now just some boring non-visionary company, especially combined investments in humanoid robots and semiconductors.
If Tesla was just looking to make safe easy money they wouldn't be making huge gambles on new markets.
Waymo currently operates 250,000 paid robotaxi rides a week across several U.S. cities, and the robotaxi market is projected to grow at a yearly rate of ~70% from 2025 to 2030.
Exactly. Tesla is way behind the competition.
Who is better than Tesla besides Waymo?
exactly, and Tesla cannot move a car from point A to point B since 2014 so this projected growth certainly is great news for a lot of companies - Tesla is not one of them
Love the typo.
I think Musk's luck is running out, he's been too political this past year and he seems to also have run out of geek "street cred". Remember youtubers visiting (whatever the Tesla trade show was called) were more perplexed than impressed with what has been shown. Similar sentiment seen across trade shows (like CES) where everything was AI and no one seemed to ask themselves "why are we putting AI in this?". The answer, of course, for startups and stock listed companies, to make themselves more valuable on paper.
Investors would probably be aware of that if they run any kind of sentiment analysis on online social media content. And at the same time there's some pull-out from tech stock. So maybe some are starting to realise that things are too shaky for their risk profile?
It’s so weird to see people actively try to criticize arguably the most successful person in the history of Earth.
I have achieved nothing this year, and yet I have had a lot more success than Mr. Musk in the "human lives saved" category by not gutting USAID. With reasonable estimates on the weight of this category I'm quite confident to have been more successful overall as well.
That’s some weirdly perverse attitude to have. Regardless if it’s Musk or anyone else, in general the actions of highly successful people have a disproportionally high impact on the society. So they need to be criticized as harshly as is reasonable for any misstep they take.
It's because his companies have insane P/E and constantly overpromise
Are you young and raised with the cult of personality, like so many gen Z and alpha?
Because I find your words surprising since critique is what I was raised with in the late 90s early 2000s. Offline and in the media.
At the same time your definition of criticizing is very lax, when I'm stating banal opinions and a broad observation.
If you framed it as 'the biggest criminal' it'd still be impressive but would read mighty different. Acquiring money and power is no way to go through life. Not at that cost.
Some of the richest people the world has ever seen seem to tick all the same boxes as the least likeable and most devoid of love and empathy.
If only some billionaires (trillionaires?) could strike a better balance between successful and human. Especially since most wealth is actually wealth transfer from the poor and from taxpayer coffers to the rich.
It is only a single counterpoint in a sea of depressing examples but you may enjoy the story of Yvon Chouinard, owner of Patagonia, who gave it all away to trusts for protecting the environment.
Yvon is solid. Bezo's ex is good. There's plenty of gray, too, where they're trying to give a lot away or make life better for everyone.
But, fundamentally,bro become a billionaire, you exploited some people at some point in the process. Their mere existence is not ideal for society. And their assets would be better served distributed to the masses. Unfortunately, we also lack many good and strong governments and policies - so I wouldn't feel great just transfering their wealth to the governments of the world for said distribution, either.
Envy is a hell of a drug
This is the weakest retort to critique of the wealthy. "Youre just jealous". Lame.
It doesn't rise to the level of critique. Just baseless accusations and conspiracy theories. Success speaks for itself and the mental gymnastics of those that deny it screams "envy" as loudly as if it was written on the accuser's forehead.
Stalin was also an immensely talented and successful man. In fact he was so successful that any criticism of him became entirely inconceivable to many.
You are implying that any successful person should strive to achieve something like that? Or what point are you even trying to trying to make?
I know this will sound inconceivable to you but some people genuinely think nobody should have that much money - including themselves. If you want to make it sound irrational and emotional the correct word wouldn't be "envy" - it would be "fremdschämen" or if you prefer something not borrowed from German: "cringe".
It's really sad to see that we just accept that Elon Musk, one of the most influential and maybe-still-the richest person in the world is constantly lying to shareholders for his own benefit. And gets zero punishment for it.
We really need to stop thinking in terms of individuals and more in terms of systems. The problem isn't just Musk. If it wasn't him, it would be someone else.
Well X is at the end of the name, so first is about Space, then about X, right?
/s
Original HN thread, 11-years ago (220 comments):
What a find in the archives!
"It's quite amazing how this values SpaceX at 10bn, less than 50% of WhatsApp."
Somebody was wise a decade ago.
At the time Starlink was announced as was rocket reusability. Both were widely mocked and considered infeasible.
Since then Starlink has succeeded, reusable rockets are a reality, ISS crewed spaceflight restored to US.
I expect all that had an impact on the valuation. Personally I wouldn't invest in Elon because his stock is a wild ride but space x has achieved a lot.
In fact it was often mentioned as a recommended way to try to invest in SpaceX via proxy, before IPO. I don't think that advice had much merit, but it was there nevertheless.
Alphabet is the modern day berkshire hathaway.
Alphabet’s investment holdings (eg, spacex, anthropic..) are worth in the same order of magnitude of BRK’s (~$300B)
The track record of google’s M&A is pretty good.
Except for search and cloud, many of Google’s important products were from M&A - Maps, Docs, android, doubleclick, youtube , deep mind, etc.
The companies you listed have great synergy with Google's core business. What's Google's play with SpaceX? Data centers in space?
Google X was building Loon at least a decade ago to solve internet connectivity with laser-networked high-altitude balloons. They clearly benefit structurally from expanding access to the internet to the unconnected population.
So on that front, while I didn’t guess this, it does sound like a good investment.
Furthermore, while I am skeptical about the “DC in space” thing in the short term, and Musk’s timelines are, generously, something like P99.9 outcomes, it seems plausible that in 10 years it might make sense. And at that point Google will want to put their TPUs in orbit, too.
Presumably Starlink for routing throughout space. Google does under-sea cables and domestic internet access too.
They invested in SpaceX long before Starlink was a thibgy
Starlink wasn't working yet, but had been announced as a thing they intended to do.
Ehh, more like Starlink was a thing they said they'd do to justify the investment at the time. Just like they said they'd build an assembly line mass producing Falcon 1's for small launch market, or send a Starship full of artists around the Moon. The first prototypes were three years later.
Having your exponentially more expensive fleet of satellites constantly burning up versus dedicated cables that rarely need replacing
The big use-case for Starlink is typically for people in locations without dedicated cables.
All energy generated on earth contributes to global warming, even solar panels which decrease Earth's albedo. If you care about climate change and the earth you should want the datacenters to be in space.
The earth is limited in the amount of thermal energy it can radiate.
Ah yes, burn thousands of tonnes of methane (assuming Spacex) to launch a data centre satellite into an orbit, then burn thousands more to maintain it and update compute or burn the entire thing in the upper atmosphere, to avoid contributing to global warming by not burning all of that fuel and dry mass.
Uh, that's not how global warming works, you know.
YouTube is probably one of the few companies that could benefit from data centers in space.
Rather than co-locating media servers into ISPs you can stick them into space so they're just closer.
Space in NYC isn't cheap. Space in space is free.
> Space in NYC isn't cheap. Space in space is free.
... what?
Say what you want about starship etc etc, but space in space is far from free and will be for a long time.
Google has a strong interest in everybody getting better internet (see Fiber, Loon, Fi, etc), which lines up well with Starlink.
It's telecom infrastructure to increase the number of people who have internet in order to increase the number of people using Google. They might have been considering having satellite internet in Android phones.
> Data centers in space?
They had a big early investment back when Google was doing more crazy out of scope things.
Low cost payloads to space can unlock lots.
starlink cellular connection for android in future
Similar of SpaceX and Twitter I guess
Google Cloud, low latency cross-continental links, etc.
I don't think gcp customers were hoping for higher latency, 5% packet loss, and modem speeds.
lower latency. You forget about cross-satelite laser links that shorten the latency for cross-continental traffic.
Everything else you said draws from some regular consumer experiences. That's not what I am talking about here.
One would presume connectivity and services in space as industry and services spread there. Asteroid mining, on orbit manufacturing, space colonies/tourism, data centers in space, centers for working outside traditional government jurisdiction.
How is Alphabet the modern Berkshire Hathaway?
Google's return of invested capital has averaged 32% since IPO.
This may be a narrative violation on HN, but the quality of Google's management is exceptional.
That is true. It’s a big corporate so I understand why purists dislike it but as a business it has done well.
I guess I'm not sure on the purists take but to me I think they're going to eventually tank themselves over too many external hires into management that want to do things the same other other companies do instead of in-house solutions.
In-house is Google's moat. The big piece right now is LLMs where in-house TPUs allow cheaper internal costs. If Cloud customers want to rent Nvidia GPUs that's fine since they're paying. But Search and etc get an edge on competitors by not.
The bigger problem with in-house is the failure to out-house it. Kubernetes shouldn't been new. Things should be done like AWS where the internal APIs are the external APIs.
Because Google, the business, is run so well, Google, the product, can be kinda shit for quite a long time before anyone who is only watching the business notices anything is wrong. Microsoft had the same situation, inspiring Bill Gates' famous email: https://techcrunch.com/2008/06/25/gates-sends-angry-e-mail-s...
I don't think anybody at Google has sent that email, yet. Maybe Sergey and Sundar don't use Google products, anymore. Maybe they have a special Google just for billionaires that doesn't suck.
Google also has around a 14% stake in Anthropic (as at 2025 [1]) and they participated in the "G" funding round [2]. Amazon has a significant stake in them too.
[1] https://www.nytimes.com/2025/03/11/technology/google-investm... , https://archive.md/f0BxC
[2] https://www.anthropic.com/news/anthropic-raises-30-billion-s...
100x return, I would sell immediately after this kind of gain, maybe that's why I am not a Google
Per the article, they can’t, yet.
I'm sure at an $80 valuation they will tell everyone how it's time to buy as it slides down further
Pichai will talk about data centers in space again, like he did before the IPO. Then he'll sell SPCX.
1 Gigawatt in space is about 31k acres of just solar panels, not including heat dissipation systems. Given we can't block the sky for advertising, and this would block the night sky worse, I don't see it happening.
Average pre-ipo sale price is $6.xx
This is a micro/macro mistake. You obviously can't dump a 6% stake at strike price on Robinhood.
"The Market", at this scale, means "You find the buyer(s) yourself and work up the deal with a hundred lawyers and PR staff and hope the contract negotiation stays secret".
Actually, that's the service provided by GS, etc. They have those buyers on the other side of their Rolodex.
Well, yes. They're the ones who actually employ the hundred lawyers and PR staff. But that's what it takes, and it's not about clicking some buttons on a Web 2.0 Day Trading UI.
It's really not far from it. You don't need to do a private off-exchange sale (though you can), they do incremental execution (where you break the trade in small batches)
What is GS?
Presumably Goldman Sachs (or any investment bank worth its salt)
Well, to be really accurate, I assume GS is Goldman Sachs alone and "any investment bank worth its salt" is referred to by the "etc".
a great vampire squid wrapped around the face of humanity, relentlessly jamming its blood funnel into anything that smells like money
Goldman Sachs
Isn't that literally what institutional trading desks are for? One of the reason to use one is that they can execute a large order without impacting the market price
tell me how you dont know anything about dark markets and dark pools. I loveeeee how you average people dont know how they operate at top
There would be some laws in place. And it would also stress the relationship with Elon.
(1) there's a lock out, they can't legally (2) Moving that kind of volume at market price is extremely difficult (3) This disclosure was required by law as part of their earnings. They would rather have said nothing and quietly offloaded it.
One consequence of booking the revenue is that they're going to have to report a loss when they sell it.
It's possible there's some tax shenanigans at play (idk): report the profit, mark it against their massive AI capex, sell later when they can book a loss. (I'm not sure if it works that way, it wouldn't for an individual, but maybe they can find a way to trigger a stepped up basis.)
Retail doesn't really move stocks like Google too much, and institutions might understand Google and it's finances better than Google...i.e. there are no accounting tricks or mysterious losses that can shake institutional analysts much (besides illegally hidden stuff). They will perfectly understand why Google is taking a "loss" on the sale.
Feeling sated and not constant greed is no way to build billionaires, nope.
Your comment is difficult to parse. Is Alphabet greedy for spending $900M on SpaceX equity many years ago before the business was built and there was a risk it would not be built?
Or is Alphabet greedy for holding onto the equity instead of selling it for cash? Or is throwaw12 greedy for wanting to sell something after a 100x return?
if you are big company like google, another 100 billion is not gonna make you feel better since cold cash is liability at that scale
100 billion is nothing if that money can put you in better spot at technology landscape
It seems obvious that the deal Google signed to rent compute from xAI just before the IPO was specifically to goose the IPO, giving xAI nice looking growth. They could have paid a lot more for that deal and still made it all back on the IPO. I don't believe for a second Google needs the compute. They've got their own AI inference hardware, the biggest data centers in the world, and they don't make any of the most popular AI products. They're not desperate for compute.
Also the agreement can be can be terminated with only 90 days notice
6% is more than all of the issued IPO shares. They were 5%, right?
Correct
Makes you wonder about whether Google's deal to lease SpaceX's compute is about Google doing what's best for Google, or about shoring up SpaceX's very bad bottom line.
https://www.cnbc.com/2026/06/05/google-to-pay-spacex-920-mil...
One of the best corporate investments in recent history. >100x returns in 10 years
Maybe hacker news is wrong and SpaceX is actually valuable.
I don't think anyone is arguing SpaceX is actually valuable, just overvalued and the repeated recipient of obvious corruption.
Which corruption exactly? NASDAQ giving them fast entry so the biggest IPO in history is done on NASDAQ and not on NYSE who was also competing for it? Both are fighting for OpenAI and Anthropic listings as well which likely influenced their choice to get in early with SpaceX
I was primarily referring to the acquisition of musk's ai company. But the more general (and unfortunately widely accepted practice of) government contracting culture certainly applies to OpenAI and Anthropic as well.
EDIT: cleaned up my comment; removed a more inflammatory claim about corruption in the private sector.
Who has delivered better value for money on government contracts than SpaceX?
You can't make that claim for a company that's as deep in the red as SpaceX is. With all of the VC subsidies, the cost of delivering the product isn't reflected in the price they charge.
fortunately the passive investor bagholding didn’t work, the price sliced straight through their forced buying pressure and only created more shortable shares, as people without share lending sold to passive funds that do
Corruption that stands out to me would be regarding starlink, Elon got the FCC to change power emission rules to hamper competitors with better satellites, but the competitors were able to comply and offer a better service still, while starlink’s existing fleet cannot. meaning elon still would actually have to compete and make a new starlink fleet, which he is doing now. (Basically competitors dont need a base station, and future starlink wont meed a base station either, direct to device ubiquity high speed service is coming) but before that path, he then tried to get an exception from the fcc regulation he promulgated, which was extremely grimy. The fcc didn’t go along.
> Elon got the FCC to change power emission rules to hamper competitors with better satellites
Didn't SpaceX petition to lessen the rules around geostationary power limits? Why would less rules be corruption? Because it disfavors legacy incumbents? Amazon also benefited from the new rules.
the order of operations matters here.
they tried to limit the ability of direct to device competitors to function, as the current starlink fleet is practically useless for direct to device. they got their regulatory change, and it didn't limit the ability of direct device competitors to function. THEN their petition came.
I still don't see how companies petitioning FCC for rule changes is a signal of corruption. Especially when the existing rules benefited entrenched companies who were petitioning to keep them. And the end result resulted in Amazon also getting a waiver.
because his involvement with the current administration after spending $300 million to begin with, and the subsequent appointments to the FCC that were being leveraged to begin bully other companies out of existence? it just happened to be unsuccessful and resulted in him trying to then get a waiver from his own insidious rule.
all you have to do is imagine being an investor in the smaller companies that had to navigate around the unnecessary rule change, and spend more time helping the FCC see why Elon was coming back to get starlink exempted from the rule
what stands out to me is that in other countries that we aren't conditioned to respect, we call the exact same interplay "corruption". there is no nuance, there is no "well its not bushels of cash in a back alley, it's a campaign donation and following the process proscribed by the legislature and unexpected court rulings", its just "corruption"
$500bn marketcap is still valuable
Its how it declines to that point at another 70% loss from $1.5 trillion that people are worried about
Yeah, I have put my money where my mouth is, but I think it is. Extraordinarily so, and I think the Musk hate has clouded people’s judgement.
For what it’s worth, I get it. I have found Musk insufferable for the last decade since he attached himself to the right and got into drugs, however I think SpaceX is undervalued right now.
1. They are literally the only company on earth with a reliable partially reusable launch system. There are a few people trying, but everyone else is way behind.
2. When they eventually (hopefully) get Starship right, we will see a price drop in the cost of transportation to orbit we have never seen. When I did the numbers a few years ago, the price for space mining to be comparable to terrestrial mining was around $20-60/kg to orbit. They’d effectively be the ONLY way to access that. That’s one of a gazillion things that becomes possible with cheap access to space. UPS becomes a competitor at those prices… it’s game changing.
3. They are basically dominating the satellite internet world. Nothing compares. Starlink is amazing, especially here in Alaska, I suspect they will eventually have a phone, which will be revolutionary.
4. A gazillion government contracts, Star shield, and arguably point to point QRF shuttle (after starship). The defense implications alone mean that they are going to be around indefinitely.
I don’t know, but I think people are sleeping on this.
5. A gazillion amount of telemetry data and social media data to sell on the data broker market. That alone is enough to attract another billion dollar of potential investment consistently, especially for training data and intelligence...you know, selling to the Mossad or CIA.
In a world of money, every bit you can earn, you have to earn, while I know it is immoral to sell the data for spying purposes, morality alone don't mean shit now, that I never see any capitalists and corpo dogs have any kind of morality anyway, except when massive backslash, congress hearings and boycotts, which is, ahem, Meta/Facebook and Cambridge Analytica. But given the unique position Musk used to have in Trump's government and his right leaning position he is safe to do so. At least for now, he is immune to holding congress hearing for a scandal I suppose.
And not to mention that Grok is literally trained over X/Twitter, and keep in mind Bluesky is federated and strangely, no one seems to be scraping it over ActivityPub. I believe Thread is also built on the same foundation but it's sure that Meta made good measures for antiscraping, I expected as a data oriented company.
Alas, keep in mind SpaceX merged with xAI and nonetheless don't forget their data side
You’re right! And then they’re an inference provider too.
All these come together with orbital data centers…
Given how much ai spending Google need to do, and that the are selling equity for the first time in a long time to do it, no doubt spacex shares are going to be dumped out they moment they can.
What’s that in data centers?
Didn’t they just raise $85B “for AI”?
It's not like they can sell the SPCX stock. It's still locked up.
Can’t wait for SpaceX to go even lower.
Hopefully they made this investment pre-IPO at some vastly lower valuation because otherwise… …this is a not going to end well for them.
They got in at a ~12B valuation. They'll be fine
If true then they paid under $800 Million for their 6%, now valued at $94 Billion.
Yes, google they paid $900 millions in 2015 for about 7% stake, 100X. % Number probably fell because of all the "merging".
They’ll be fine? Dang I wanna be “fine”!
Why? They will still have their same stake no matter what happens with the stock price.
Why is this not seen as a circular deal? But other oracle debt is said to be circular
I am short both Google and SpaceX RN; SpaceX's IPO smells foul. Google is an AI-bubble short; Anthropic and OpenAI haven't IPOed yet.
Not sure why you'd short Google. Their business was doing great pre-AI, and will likely do great regardless of what happens to AI. The rumors of their demise when AI hit the scene were clearly greatly exaggerated.
Excluding all the capex from AI this last quarter has been one of their best.
> Excluding
But you don´t get to to that. Would be like "Excluding my business costs, my company profits are the same as my revenue".
I think the point is more: as soon as they stop with the AI silliness they'll return to being a quite strong business.
The implication is if AI implodes, the AI-related expenses go away and what remains is a great business.
> But you don´t get to to that.
You can, and for tax purposes you must. The bean counters hate that you can’t deduct capex.
The return on capital is also phenomenal. To be a bear, you have to assume that will crater.
EBITDAI
There is quite a bit of information out there as to how Google is achieving short term growth in their core search business. And boy, it is ugly. It does not signal long term continued growth.
Please explain more. I haven't seen anything of quality. Best I can observe is they've increased ads on videos and pages.
They search used to be good and became rather bad.
from your list, I think only Google has moat and something I would short least.
Google has hardware, software ecosystem, mobile ecosystem, controls browser, has access to 2B+ users, has talent to come up with ideas - perfect spot for AI
Now Microsoft, them I'd short. In a way I have by starting my own company to undermine their various competitive advantages comprehensively
The number of companies that default to using Teams shows why MSFT isn't going anywhere.
Microsoft bundles enough things at a low enough price that it seems silly not to use Microsoft if you are a corporation, because the alternative is to buy a number of different SAAS products (which are generally superior) at a higher price and have to deal with half a dozen to a dozen vendors.
I will be very concerned for MSFT if small companies start outperforming larger companies. That's when Microsoft's advantage disappears. If AI truly encourages smaller, flatter organizations. IMO large enterprise adoption is their moat.
Installed by default is their moat. Trying to arrange a video conference on other platforms means making sure that everyone has the client installed, which can be a real headache. Teams is the common denominator.
Google Meet doesn't require a client
The only strategy that can work against Microsoft is a full broadside. You can't try beat them in just one niche, you have to go after the whole tech stack they offer. That's what I'm willing to try doing.
Yes, exactly, would I bet that Microsoft’s products are inferior in quality to others. Yes.
Would I bet that other humans would believe that? Nope.
Microsoft has many of the same advantages but is incapable of judging the quality of the products it makes.
Time will tell but that feels foolish. MSFT is a terrible product company (look at copilot) but what they sell is a safe decision which is one of the most important factors for enterprise software. Nobody is close to replacing that.
I'm content for that be the narrative. Nobody is close, and what's more it's not even possible, and even if it was possible nobody would want it, and even if anyone did want it would only be a few people. ; )
You missed the plot. ; )
Concur; I am shorting them as well. Your approach is more clever!
Microsoft is in the same situation as IBM decades ago. „ nobody ever got fired for buying IBM“ used to be a common saying. If at all you’ll see a slow decline.
Wow why has nobody thought of this /s
Microsoft is in a better position (as their b2b ecosystem can realistically be made LLM-agnostic), but Google will be fine.
Maybe you’re right but, man, there’s easier money to be made than betting against those two companies.
Have you seen Microsoft’s price over the last year. If AI doesn’t pan out they’re going to be the next IBM.
Agreed, and in my opinion he's 100% right. But I'm still invested in both.
The market hasn't been working on fundamentals for a long time. I have a fair amount of value stocks and a bunch of cash lying around, so I'll be ok.
I really feel for anybody trying to invest to grow right now; there's no obvious safer play.
Like?
> Like?
Vanguard’s total market fund (VTSAX). Just setup a monthly purchase and forget about it. Turn wealth building into a time problem instead of a skill/luck/cash problem. (Assuming time is on your side)
All of the quantum computing companies (Especially QUBT, which is outright fraud), although the window may have passed on that.
Google makes money hand over fist and they don’t have enough things to spend it on. AI is a natural fit for them to burn all their profits into. Gemini’s integration is, I think, absolutely awesome - it’s completely changing the way I interact with the concept of googling and finding answers, and is free of sign ups or purposeful interactions with the likes of ChatGPT or Claude where you know you’re AI-ing. So your short could work, but it’s not going to work for google’s involvement in an AI-bubble, it’s predicated on the entire market tanking, which should have been occurring for the past two years already if fundamentals and capex translating into profit were what the market cared about. But it seems like the market isn’t caring right now so you could be holding that short for quite a while before it turns into a major return.
SpaceX I actually bought at the IPO price because I think the company will be around in 30 years time, so as fraudulent and mispriced as it is, having a small holding over that kind of horizon I believe will be profitable. And I want to be that kind of old-timer who can chuckle at buying it at the IPO and holding through the crash and still holding when they are on Mars and beyond and SPCX is worth multiples of what it is today.
> Gemini’s integration is, I think, absolutely awesome - it’s completely changing the way I interact with the concept of googling and finding answers,
Oh, me too. The way it writes things that look like they address my question, and then links references that totally don't makes me dread Googling in a way I hadn't yet. For probably five years, I've been doing DDG first and Google when I DDG doesn't work well and usually Google doesn't either, so I already have dread for Google, but this makes it worse.
Nailed it. I didn't state this explicitly, but:
> So your short could work, but it’s not going to work for google’s involvement in an AI-bubble, it’s predicated on the entire market tanking
Is indeed a required assumption. Major return is not going to happen with this, Not losing a big chunk of my money is the goal!
> SpaceX I actually bought at the IPO price because I think the company will be around in 30 years time, so as fraudulent and mispriced as it is, having a small holding over that kind of horizon I believe will be profitable. And I want to be that kind of old-timer who can chuckle at buying it at the IPO and holding through the crash and still holding when they are on Mars and beyond and SPCX is worth multiples of what it is today.
I think that's a fine play as well. The short is more of an "This IPO price doesn't make sense; sell within a year after it settle"
Short Google? Early is wrong you know?
That’s a pretty weird take considering they’re down 21% in the last 2 months. How, exactly, is this early?
Early in terms of there being no sign of actual signs of decay of their business. It's less than a week since Google reported literally the highest quarterly profits by any public company ever[0]. This is while growing at 25% YoY, which is just insanely fast for a company that size.
[0] By net income. By operating income, still like top 5 to top 10 depending on how you interpret the numbers.
Zoom out. Look at 5 yr chart then look at April 2025 could say the same thing.
Also when shorting you are betting against the machine of capitalism. It's like very rare and abnormal for today to be a GFC or Enron sort of day rather than a business as usual. You need a lot of skill to short a top 50 comompany. Anyway good luck.
That’s brave, and I don’t mean that shittily, but more cautiously. Like, I’m thinking of the Simpsons shirt-tugging meme when I read this.
I’ve always been hesitant to short stocks because of the old adage “the market can stay irrational longer than you can stay solvent” and the market has a REAL vested interest in seeing these companies not explode.
Good luck on this one, genuinely, because you may need it.
(That said, if you DO win big on this one, I think we’re all fucked, so maybe I shouldn’t be wishing you TOO much luck. =) )
Sage advice!. In shorts like these, there's no outcome that "wins big" unfortunately, unless you do it with large amounts of money. (Unlike a long position on an individual stock that 10xs, or options which are much riskier). But... it will ideally make the landing softer after the Fall.
SpaceX near $100/share is a great long position now, IMO.
Why $100? Why not $80 or $5 or $134?
Google is not a good short. They are actually one of the companies that will likely come out on top when the AI-bubble has popped.
Anthropic and OpenAI though will likely be dead, killed by cheap open weight LLMs and local LLMs.
Most sane comment.
Even in the last Elon Musk interview by The Economist, he admited that it's likely China will win at the end.
The gap is so close now. Opinions matter not, the Chinese will have their own GPUs, RAM and everything they need.
Giants like google and spacex are the few that can handle it because their business is not only about shipping the best models.
It isn't currently —for google— only about shipping the best models, but in the future however...
I expect China to eventually develop or sidestep EUV lithography. When that happens it’s over.
It will also crash the price of chips globally. These high prices are kind of artificially buoyed by the fact that China can’t obtain ASML machines. This keeps China’s vast proven ability to scale manufacturing off the playing field.
This is so clearly the Chinese century. Doesn’t mean the US, EU, etc become backwaters. England was a huge influence on the 20th century. It does mean that China will drive tech and the global economy forward.
Everybody here an expert, but no trillionaires, billionaires, and I’m guessing millionaires
You don't think there are any millionaires on the world's preeminent VC forum?
Nope
pablo escobar was a billionaire too
Much better business instinct that the average poster on HN
Lol what? You think most people on HN who live in america are not millionaires?
Bad decisions like this explain a lot
FIFY: Google discloses $94B loss
They didn't invest 94B$
But yes the stock could go down much further and I hope they are willing to show the losses if they can show this as gains today.
Imagine the next call being about how their 95$B went to sub 30B$..
Will that be a negative line item. I don't see the point in disclosing this stake as earnings.
But I do get that accounting was made as a tool for companies to show off.
Accounting goes back thousands of years. It was not made as a tool to show off. Lesson is more that tools can be abused for other purposes than intended.
correction "modern business accounting".
They don't have to be willing because hiding the losses would be a crime. And it still doesn't matter b/c anyone with a calculator can tell you exactly what the value of their position is on any given day. The $94 billion is 2.4% of Google's market cap, so even if SpaceX goes to zero it will be barely noticeable from the background noise of the stock price movement.
It will be difficult since they acquired it for less than a billion 10 years ago.
https://www.theguardian.com/science/2015/jan/20/spacex-fundi...
"The company’s marketable equity securities include $80 billion in shares subject to short-term restrictions and $14.1 billion subject to long-term restrictions"
Actually more like $14.1 and whatever value the other $80 is worth when they sell. Which is probably going to be worth well North of whatever is lost on the $14.1 B long-term... All part of the scam to inflate the value of the AI bubble
hate makes people stupid.