Makes me wish average joe could buy spacex stock. Willing investors shouldnt have to be elite or accredited. Just believers and supporters of a better future.
Most companies that raise money by other means than publicly trading stock frankly don't want the head ache of dealing with shareholders.
A company like SpaceX can raise all the money they need from a small number of like minded investors. It saves them the hassle of dealing with thousands of shareholders with their own risk tolerances, investment goals, etc.
And once you exceed a certain number of shareholders, you are subject to nearly the same reporting requirement as a publicly traded company anyway, so you get the downsides without the upsides.
That's all well-and-good for SpaceX but it proved to be pretty catastrophic for the dozens of pump-and-dumps that bankrupted many Americans when we tried that previously.
We don't use legal mechanisms to protect citizens from an endless myriad of things, many which are much more dangerous than investing in private startups. This is really a way to keep the proles out of the good investments. It's infuriating and unjust that the wealthy have more rights.
> It's infuriating and unjust that the wealthy have more rights.
No they don't have more rights. There is nothing preventing you from creating your own private company and sell equities only to poor people.
It's like people having a party and not inviting you. You can be frustrated about it, but please don't start whining about them violating your rights or anything. Just as people have the right not to invite you to their daughter's birthday party, they have the right not to do business with you.
Doing things in private association is a right everybody has, regardless of wealth.
> There is nothing preventing you from creating your own private company and sell equities only to poor people.
That's not actually true, which is what the people upthread were referring too. It's not that companies simply don't elect to sell equity to poor people, they aren't actually allowed to in most circumstances.
Being an Accredited Investor (in the US) is 1Mil in net worth not including the value of your primary house. Indeed that seems to exclude most "poor people" I know
Being an Accredited Investor in the US involves stating that on a form. If you badly want to buy these shares, and they're available to buy, then from experience bypassing that is trivial.
The bigger challenge is that most private companies you've heard of won't even consider taking your money unless you can put in a lot more than any poor person would realistically be able to.
It's not about whether they're smart or not - it's that a multimillionaire can lose a bunch of money on a private company and not be out their retirement savings. That's not nearly as true for the typical middle class person.
I'm sure there are some people who could safely drive on the roads without speed limits and other traffic laws, but the number of people who could not is far greater. So it is with careful, responsible investing. Many laws are designed to work on a statistical basis, for the greater overall good. This is one of them.
It's not designed to prevent 'ordinary' people from sharing in investment profits, it's designed to protect the public purse from having to support millions of people that lost their savings due to unwise investments.
So has putting it all on black in Vegas, alcohol, and any other number of statistically proven vices. At least investment has some measure of upside. But yeah, I'd like the $n trillion in debt government tell me how to manage my money.
The government that is able to borrow money at an interest rate lower than inflation? Yeah, they probably could tell you (and me) a thing or two about how to manage money.
I concur, I think there's something wrong with a big nation doing this. (Smaller nations run sovereign wealth funds all the time.)
The FED (more or less) sets the interest rates that the US government has to pay; though if they tried to buy everything, we would see inflation. I suspect the actual failure mode is a different one: real wealth is limited by productivity. If the government is buying all the stocks, we have just shifted ownership around, but don't actually increase productivity. Productivity might even drop, because the government is probably not a good activist shareholder.
For real estate, there's a decent argument to be made that the government should buy it all, and lease it out for a few decades at a time to the highest bidder.
Sounds good in theory, but nowadays what happens is companies go public when they are fully valued, making them ripe for collapse when insiders take advantage of the liquidity to exit positions. When companies go public early, opportunities are created for retail investors to make huge money (AOL, Dell, Amazon, Walmart to name a few examples). Now it's like, you get to buy at the very top and it's for your own good. horaaaaay
If you believe that then short some of these companies. I agree the game can be a little rigged but there is still massive opportunity to invest well on the open market.
I know what you are getting at, but by the time the average Retail Investor can even get the opportunity to short the stock it is truely gambling.
"In a hot IPO, when many investors are clamoring to get shares, many of those who do get the newly issued shares will flip it—immediately sell it in the open market for instant profits. The investment bank must, by law, sell the new shares at the offering price regardless of demand. Because of the demand for the new issues, they have to be allocated, and usually it's the biggest clients of the investment bankers who get the issue—small investors almost never get to participate"
You can buy Google as a proxy. A poor proxy but proxy nonetheless. The "plus" side is Google might make similar investments in other ventures like this so your bet on space is more diversified.
Except that Tesla as far as I know has no ownership in SpaceX, while Google now does. My interpretation is that the OP is not just looking for an investment in Elon Musk, but specifically in his space venture.
I wouldn't be surprised to see SpaceX do an IPO in the future. I'll definitely buy in even if I would do that as a kind of kick-starter rather than for the potential return.
