Pinchbeck argues that the SpaceX initial public offering is not a capital raise but an engineered transfer of wealth from retirees and small retail investors to Elon Musk's financial backers. Drawing on Patrick Boyle, Matt Levine, corporate law professor Ann Lipton, Gil Duran of The Nerd Reich, Jim Stewartson and More Perfect Union, he reads the prospectus as an exercise in hyperstition: a $28.5 trillion addressable market resting on unbuilt technologies including point-to-point rocket travel, in-orbit manufacturing, asteroid mining and Mars settlement, all dependent on Starship. The essay details Nasdaq's revised listing rules, dual-class shares, Texas incorporation, the xAI merger, Starlink as the only profitable division, and the Kessler effect.
In brief
- Pinchbeck argues that the SpaceX prospectus functions as hyperstition, a document attempting to make a desired future inevitable by asserting it, rather than as a conventional financial disclosure.
- The essay contends that Nasdaq's rule changes, which abolished the requirement that 10% of shares trade freely and force index funds to buy just fifteen trading days after pricing, are designed to move pension and retirement money into the stock before genuine price discovery.
- Pinchbeck notes that Starlink is the only profitable unit inside SpaceX, earning $1.1 billion in the first quarter of 2026 while the space division lost $662 million and the AI division lost $2.5 billion.
- The essay argues that dual-class stock, incorporation in Texas and a board Musk controls give him more than 85% of the voting power while making shareholder litigation nearly impossible.
- Pinchbeck warns that launching up to a million satellites into low orbit risks the Kessler effect, a collision cascade that could render orbital bands unusable for decades or centuries, and that the filing treats orbital debris only as a hazard to SpaceX hardware.
Full text
I've been reviewing the Space X IPO for June 12th and various analyses of their plans and what I found was deeply unsettling, even quite shocking actually. The Space X offering bears little resemblance to normal companies seeking funding to build long-term revenue streams. It seems closer to a final extinction burst of post-industrial capitalism where the whole system contorts itself into a new kind of inhumane form of techno-fascism that also has cosmological pretensions. A lot of people are finding this. Even the Economist has noted a strain of paranoid eschatology embedded in the offering. They wrote, "Apocalyptic thinking is the strongest impulse in American capitalism today. Elon Musk will soon float Space X, a rocket company whose professed mission is to avert existential threats to humanity by establishing a colony on Mars.
Mr. Musk is is America's richest capitalist in part because he is is its loudest Cassandra." So yeah, I mean looking at the Space X IPO, it's a deeply weird, wildly manipulative, and extremely speculative. I mean I'm not a professional business person or investment advisor or anything like that. So what follows is just my opinion and for my lot of other perspectives that I've been exploring. One amazing feature of this thing is that Musk has actually induced the NASDAQ exchange to rewrite it its own rules to guarantee that the Space X IPO will extract billions of dollars from millions of retirees and small-scale retail investors and fork that money over to elite financiers, particularly Musk's super-wealthy cronies and the bankers who've been floating him.
This whole scheme has been orchestrated in such a way that there's nothing small investors can really do about it. I mean really the Space X IPO seems to be grift on a Trumpian scale, perhaps even beyond. If you enjoy this video, please remember to like it and subscribe to this channel. As is widely understood, the Space X IPO will be the largest public offering in history, seeking up to 80 billion dollars in capital. The company, which partners closely with Musk's other ventures, such as Tesla and Starlink and so on, is targeting a valuation nearly two trillion dollars. I think it's like 1.8 trillion.
Despite running at a multi-billion dollar annual loss across most divisions, and also offering just fantastical projections of what their future revenue will be. Where standard IPOs are typically dry recitations of lease agreements and tax liabilities, the Space X prospectus reads a lot less like a standard financial disclosure document and more like speculative science fiction unmoored from material constraints. It reads as if it was written by Isaac Asimov on five hits of acid and a chug of nitrous. The IPO offering document opens with 14 pages of photographs of rockets and satellites. But Space X's true purpose, according to the filing, has little to do with short-term revenue or even making Musk the first trillionaire.
Instead, we're meant to understand that the company's objective is one of galactic generosity. It says, quote, "Our mission is to build the systems and technologies necessary to make life multi-planetary, to understand the true nature of the universe, and to extend the light of consciousness to the stars. To do this, we have formed the most ambitious, vertically integrated innovation engine on and off Earth with unmatched capabilities to rapidly manufacture and launch space-based communications that connect the world, to harness the sun, to power a truth-seeking artificial intelligence that would be Grok, I suppose, which distorts data according to Musk's authoritarian biases. But anyway, truth-seeking artificial intelligence that advances scientific discovery, and ultimately to build a base on the moon and cities on other planets. So, yeah, I mean, one thing I've been learning as I witness, as we're all kind of are witnessing, the United States' kind of precipitous fall and self-willed immolation, or what Tim Snyder calls it superpower suicide, is that fascism is more like an art project or a dramatic spectacle than any reasonable form of governance or responsibility.
Elon Musk, of course, was one of the main architects of our country's rapid race to the bottom of the barrel, showing off his Roman or Nazi salute soon after Trump's victory. It seems like these tech oligarchs still want everybody else, you could call us the suckers, to believe they are embarked on a great mission for humanity that is somehow in the public good and also in our interest. However, the opacity and scale of Musk's initiatives have inevitably fostered an atmosphere of paranoia. Recently, Ashley St. Clair, the what the mother of one of his children, circulated the claim that Musk utilized his satellite infrastructure to interfere with the 2024 voting systems.
While this remains an unverified theory, it's you know, had a lot of resonance with people, and it's sort of amplified by Musk's ominous pre-election posts, where he asserted that anything can be hacked. And yeah, I mean, the fact that such extravagant claims gain traction just underscores the lack of accountability surrounding Musk and his aerospace and communications empire. But we don't need to rely on satellite conspiracy theories to understand his interference. His well-documented efforts to secure Trump's re-election were blatant and unprecedented. They included hundreds of millions of dollars distributed to PAC spending, algorithmic manipulation and acts including creating like bot armies and so on. And you know, very, very legally dubious cash giveaways.
I think it was millions of dollars to swing state voters. The threat that Musk poses to democratic structures is not hypothetical. During an interview, I think it might have been with Tucker Carlson, he laughed nervously while admitting he would probably end up in prison if Trump lost. One concept that has gained a lot of traction recently is hyperstition. And this is an idea that's particularly useful for understanding the recent popularity of neo-fascist and just straight-out fascist movements. Hyperstition proposes that memetics and mythic narratives can be used to manifest a desired future simply by acting as if it is already inevitable. The Space X IPO functions as a massive, albeit incredibly crude and unconvincing exercise in this hyperstition practice.
As financial analyst Patrick Boyle observed on his You Tube channel when he reviewed the IPO, "What we're looking at is quite possibly the most extraordinary document in the history of American securities regulation. To justify its staggering valuation, the Space X prospectus doesn't focus on its existing businesses, but rather projects future enterprises that might eventually emerge. Space X claims a possible total addressable market of $28.5 trillion, a figure larger than the entire annual economic output of the United States. To defend this wild valuation, the company provides a long list of highly speculative business opportunities. One of the proposals in the prospectus is long-haul point-to-point travel. And this involves catapulting catapulting passengers across the Earth like from New York to Shanghai in rockets instead of airplanes.
So it would take like half an hour to get from New York to Shanghai or Boston to Shanghai. Eight years ago Space X's president Gwynne Shotwell stood on its head stage and promised that within a decade people would be taking these, you know, half an hour rocket trips from New York to Shanghai even though they would be having to deal with three times the force of gravity at takeoff in the process. But as of today, no commercial commuter rocket exists. I don't think even a plan for one exists. Yet this product continues to be pitched to investors as a realistic revenue stream. The Space X prospectus also envisions a luminous future of in-orbit manufacturing where we build factories in zero gravity, a feat that's really never been pulled off or even attempted at any scale.
It describes passenger and cargo transports not only across the earth but to the moon and Mars, manufacturing and energy production on the Martian surface, and of course asteroid mining. None of these technologies any commercially viable form and no market exists to price them. Every one of these hypersticious constructs depends on a single machine or technological advancement which is the Starship rocket. This rocket forms the basis of Musk's entire argument. It is expected to launch the next generation of Starlink satellites, carry the cargo for a future Mars colony, and reach a launch frequency that the company itself accurately admits is insane. But so far the Starship rocket remains prone to what engineers call rapid unscheduled disassembly, which is their kind of engineer speak for blowing up on the landing pad.
So this true true trillion-dollar valuation assumes that this Starship rocket is going to work exactly as advertised on schedule without any more setbacks. Remarkably, according to this IPO, Space X actually doesn't even think of itself primarily as a rocket or a satellite internet company. In terms of future revenue, it presents itself primarily as an artificial intelligence company. The filing attributes 93% of its total addressable market to AI and roughly 60% of the company's spending now goes toward AI infrastructure such as massive data centers. Yeah, Musk has been building massive data centers in in Tennessee and Mississippi, often powered by temporary gas turbines that unleash huge pollution alongside the ceaseless noise that apparently people live there say is like a constant fleet of jumbo jets.
Musk's AI product we know is Grok, which currently holds a very marginal 3.4% of the AI market. The filing concedes that the enterprise AI space is already dominated by Open AI, Anthropic, and Google. As Boyle notes uh in his uh video, the main documented uses of Grok have been fact-checking posts on X and also generating non-consensual nude images. Um yeah, furthermore, Grok's explicit rejection of ethical safeguards has drawn regu- regulatory investigations in Spain, France, and the United Kingdom. At the same time, um Grok, you know, which as we know is kind of like tilted towards Musk's political agenda, is being integrated into the Pentagon. I think there's like a $200 million deal with the Pentagon, which as we know, the the Department of War is overseen by Pete Hegseth, which is already struggling to manage escalating conflicts in Iran while it blows up fishing boats off the coast of Venezuela for no reason.
Space X's own engineers have been slow to adopt Grok because it underperforms rival tools. Musk himself recently admitted that the code needs to be rebuilt from scratch. And this is a statement he made soon after he sold XAI to his other company Space X for 250 billion in an all-stock transaction. His proposed fix of this kind of problem was to spend $60 billion to buy Cursor, the coding tool his engineers actually like to use, with a $10 billion penalty if the deal doesn't come through. I think it's still pending. So, there's a palpable sense that Space X is func- functioning as a vehicle to patch up many of Musk's past failures.
Solar City, the Tesla Cybertruck, the chaotic acquisition of Twitter, and it's doing this by bundling them into one monumental initiative that the public kind of is being forced to buy and also being sold as the only way to avoid a planetary extinction, like going the way of the dinosaurs, I think it says in in the prospectus. However, Space X near-term AI revenue doesn't stem from selling Grok for businesses or even as a consumer product, it comes from renting AI computing power to one of its main competitors. Yeah, Space X has a deal where it's renting uh compute capacity from its uh new data centers to Anthropic for 1.25 billion dollars a month through 2029, equating to about $15 billion a year of revenue. And Bloomberg this reports that this amounts to approximately 40% of the company's near-term projected revenue as a whole. But, yeah, once again, Patrick Boyle points out, if Volkswagen rented out all of its car factories to another manufacturer, would anyone still consider Volkswagen a car company?
And so, if, you know, if we calculate 93% of a $28.5 trillion possible market is all in AI, then by Space X's own logic, the companies actually winning that market should be worth a lot more than Space X's. Anthropic's quarterly revenue is is double the revenue of Space X's entire AI segment. Both Anthropic and Open AI are reportedly preparing public offerings, pricing themselves at around a million trillion dollars each, uh which is also problematic, but that's that's another story. Uh Space X is asking the public really $2 trillion based on the strength of a market that's already dominated by its direct competitors. Only one business inside Space X currently makes money.
In the first quarter of 2026, the space division, the part that builds and launches the rockets, lost $662 million. The AI division lost two 2.5 billion in the same 3 months. However, the connectivity division, Starlink, earned $1.1 billion. So, Starlink was founded back in 2019 and it's launched approximately 6,800 satellites into space for personal, commercial, and military use. While Starlink produced 4.4 billion in operating profit across 2025, the overarching enterprise still lost basically around 5 billion overall. So, yeah, that means their whole company, the rest of it is consuming more than $9 billion in a single year. And even Starlink's success suggests some underlying underlying vulnerabilities.
Its average revenue per user has fallen about 18% since 2023, and that's because the company has been relying on steep discounts trying to artificially inflate their subscriber numbers ahead of this massive public offering. There's another, you know, major, sort of ecological, even existential risk about Starlink that people aren't really talking about, which is something called the Kessler effect. This is something the IPO barely mentions, it just kind of like skirts a little bit. In the the prospectus, they talk about orbital debris merely as a hazard to space Space X's own hardware, noting that space is inherently hostile and satellites, you know, of course, may fall may fail. But the the the prospectus doesn't talk about this deeper systemic flaw in its plan, which involves launching eventually up to a million satellites into low orbit.
So, the the Kessler effect outlines the atmospheric threshold where the density of objects in orbit becomes so high that one single collision spews debris, triggering a cascading chain reaction of further collisions. Such an uncontrollable cascade would render whole orbital bands and potentially our entire stratosphere unusable for satellites. This would basically knock out our global communications infrastructures, and this could happen within months or years. According to the scientist Donald Kessler, once this chain reaction reaches a critical tipping point, it would be irreversible as far as we know based on our current technologies. And the resulting debris field might persist for decades, centuries, or even a millennium. The Space X IPO also inadvertently reveals who has been buying the Tesla Cybertruck.
And it turns out that the person buying it or the company buying it has been Space X itself. According to the filing, Space X bought 131 million worth of Cybertrucks from Tesla at full retail price. This amounts to around 1,500 vehicles. At one point in the fourth quarter of 2025, Space X accounted for 18% of all Cybertruck registrations in the United States. In total, Space X reported buying about $650 million in goods from Tesla. And yeah, I mean, apparently this is not normal practice taking the shareholder money of one company you control or own to prop up the sales figures of another company you control, and doing this just before they're both facing this, you know, major financial events and so on.
This would be a kind of a severe breach of standard corporate governance practice. But, you know, in the logic of Elon Musk's paranoid eschatology, which has sort of taken hold of America and the stock exchange as a whole, such rules no longer apply. Uh Gil Duran, the wonderful host of the Nerd Reich podcast and Substack, has documented the ongoing Silicon Valley-funded effort to replace democratic governance with unaccountable corporate rule. And obviously, he places Musk at the center of this attempted transition. For Gil Duran, Space X is not ultimately about reaching Mars or becoming an interplanetary species. And we can wonder if Musk even believes those things are possible at this point.
It's a vehicle for accumulating money and power beyond public reach, cementing a semi-permanent state of techno-feudalism. As Jim Stewartson of Mind War writes in his amazing Substack, Space X is fascist science fiction, literally and figuratively. So, you know, given all of this, the IPO might seem like a non-starter. Like, who's going to go for it? But, Musk and his allies have have cunningly engineered this offering to actually guarantee or force initial demand and guarantee a rapid, lucrative exit for his insiders. Space X is offering less than 5% of its equity to the public, earmarking 30% of that for retail investors. So, what this scheme does is it artificially restricts the supply of shares and actually funnels the resources of retirees and small-scale investors into this tiny pool to temporarily temporarily drive up the price.
And while the price is up, the long-term insiders whose shares are already vested are will be able to cash out at the peak. As previously noted, Musk's influence actually prompted the Nasdaq exchange to dismantle critical safeguards designed to protect passive investors like retirees from unproven companies. Nasdaq actually abolished the requirement that a company have at least 10% of its shares freely trading. And even more significantly, it established a fast entry rule forcing index funds to purchase purchase the stock just 15 trading days after the offering instead of waiting for for the traditional seasoning period of 3 months, several months. And while Nasdaq framed this as a kind of natural evolution of modern markets and high-speed trading and so and so on, it actually functions as an incredibly devious mechanism, particularly for Musk's Space X, which will transfer wealth from pension funds and retirees to this small group of the financial elite who've been backing Musk's projects and and lost a lot of money on Twitter and so on.
The Nasdaq 100 index is tracked by more than $600 billion in passive investor money. With these revised rules, just 15 trading days after Space X debuts, every index fund must automatically buy Space X stock at whatever inflated price the restricted float has set. This happens long before genuine price discovery has occurred. So, yeah, so ordinary retirement savers, they become forced buyers of this company and it's a company which they actually hold no voting power. They're propping up these easy speculative projections of future revenue and so on. According to the media outlet More Perfect Union, every piece of evidence we have is that the IPO is being engineered to rise very rapidly after it prices and then fall very dramatically after that.
Yeah, so passive funds tracking the NASDAQ 100 or are going to be forced to buy between 3.6 billion and 7.2 billion of Space X stock immediately after its launch in June or later this month at the peak valuation. And yeah, many banks and investors, including Morgan Stanley, were left holding massive debt from Musk's chaotic chaotic purchase of Twitter. Uh through a cashless merger that as I mentioned before priced XAI at $250 billion. Dollars. These debts were effectively converted into equity at XAI and they were subsequently incorporated into Space X. And the timing of that merger just prior to the IPO was obviously not coincidental. It's allowing these debt-burdened investors to cash out their equity at the inflated value at the expense of these um index fund uh holders before the broad broader share price inevitably falls.
Uh Antonio Gracias is a Space X director and a Musk ally. He also runs the private equity firm Valor Equity Partners. He's tied to more than $20 billion in AI infrastructure lease obligations owed by Space X. Uh Gracias has also become a major player in in the psychedelics uh industry taking over Lykos, which was uh the company that uh Multidisciplinary Association for Psychedelic studies started. So, Space X carries $29 billion in debt overall. This includes a $20 billion bridge loan taken from a bank syndicate just weeks before the filing. A meaning meaningful share of the 50 to 75 billion the IPO is expected to raise goes straight back to Gracious and other lenders rather than toward building our like fabulous future, you know, Martian space colony.
And this raise is not going to end the fundraising by any means. A different According to various analyses, the company is going to need roughly 235 billion over the next few years. And this is three to five times what the IPO is going to bring in. The Space X governance model is explicitly designed to ensure this financial structure cannot be challenged. As Reuters noted, the company has adopted print policies that erode typical shareholder protections in unprecedented ways. And they also give the founder, Elon Musk, virtually unchecked executive authority. So, yeah, I mean, a wealth manager who previously clashed with Musk described the setup as unprecedented in terms of creating a total lack of accountability.
Space X plans to issue dual-class stock, a mechanism that entirely divorces financial risk from corporate control. Public investors will receive class A shares with one vote each, while Musk holds class B shares granting 10 votes per share. Although Musk will own around 41% of the company, he will control more than 85% of the voting power. And yeah, this makes him impossible to remove. There's also a new class C non-voting stock that's been created, which allows the company to make future acquisitions without diluting Musk's control. Furthermore, Musk is able to pass his super-voting shares into trusts to his children that will ensure dynastic succession. And honestly, this kind of mirrors the neo-feudal structures that you find in science fiction movies and books like for instance Dune.
And then Musk incorporated in Texas because this place is Space X in a jurisdiction where suing management has been made nearly impossible. A shareholder would need to own at least 3% of the company, roughly $52 billion at the proposed valuation, just to bring derivative suit. And they have to prove not merely a breach of fiduciary duty, but outright outright fraud or knowing violation of the law. And meanwhile, Texas corporate law has been changed so that it excludes emails and text messages from shareholder document requests. And this eliminates the precise type of evidence that has exposed Musk's conflicts in the past, his conflicted acquisitions when his companies were incorporated in Delaware.
Musk has also been granted a billion shares that invest only if Space X reaches a, you know, kind of hard to imagine 7.5 trillion valuation and also establishes a permanent colony on Mars. So, these are milestones the filing itself admits are wildly improbable. But by classifying these goals as improbable, it allows the company to record this massive award at zero cost on its balance sheet. Yeah, they really pulled out all the stops on this one to make sure that Musk would have control in perpetuity. As corporate law professor Ann Lipton notes, Musk doesn't even need to reach these crazy milestones to reap these benefits. He'll be able to vote these shares immediately, collect dividends on them, and pledge them as collateral for tax-free loans.
All with the rubber stamp approval of a board that he already controls and will continue to control. Lipton summarizes what public shareholders are buying. That's the clearest verdict available. No votes that matter, no ability to sell at a fairly discovered price, no ability to sue. The IPO filing even renounces the company's ability to limit Musk from pursuing other opportunities. Yeah, normally, you know, if you're the CEO of a new company, you can't go after conflicted, you know, companies and so on. But in this case, nothing stops Musk from starting separate, directly competing companies just as he redefined Tesla as an AI company and then launched x AI as a rival to Tesla.
So, ultimately, the Space X offering could be seen as a as a profound stress test of the American public market. The central question is whether passive investing, you know, investing from retirement savings and so on is going to remain a relatively safe vehicle for ordinary people or whether the whole structure has been fully captured as a mechanism for funneling funneling wealth upward to unaccountable elites without public oversight. According to the Bloomberg financial analyst Matt Levine, there's only one coherent investment thesis that would lead you to buy Space X stock, and is that is that you simply love Elon Musk and you believe in his self-mythology. If you later find that he failed to deliver on his, you know, cosmological promises or science fiction fantasies, uh as Levine says, "Well, that's kind of his whole thing." You know, beyond that, I can't shake my eerie feeling that this Space X IPO, which is just this gargantuan monstrosity, must be the beginning of the death knell of capitalism itself. But hey, more on that another time.
Thank you for listening. If you enjoyed this video, please uh subscribe, uh share, and uh like it. Uh see you next time.
Transcript of the video essay, lightly edited for readability. Originally published on the Liminal News channel.