Hiltzik: What if you dion't want SpaceX in your portfolio?

Key Points:

• Fidelity Investments has lowered its minimum brokerage account requirement for investing in the upcoming SpaceX IPO from $500,000 to $2,000, aiming to allow more retail investors access due to SpaceX reserving about 30% of shares for this group.
• The SpaceX IPO is expected to be the largest in history, valuing the company at around $1.8 trillion, but it carries significant risks, particularly for retail investors and retirement accounts heavily invested in index funds that will be forced to include SpaceX shares once added to major indices.
• Major index operators like Nasdaq and FTSE Russell have relaxed their listing rules to expedite SpaceX’s inclusion, while Standard & Poor’s has maintained stricter criteria, creating potential exposure to SpaceX for index fund holders depending on the index tracked.
• SpaceX’s revenue is heavily reliant on its Starlink satellite internet service, which is currently profitable but faces challenges such as declining average revenue per subscriber, the need for costly satellite replacements, and potential political and regulatory backlash.
• Elon Musk will retain controlling voting power over SpaceX post-IPO through a dual-class share structure, raising concerns about governance and decisions that may prioritize his interests over those of other shareholders, posing additional risks for investors.