Elon Musk is now the world’s first trillionaire, after his SpaceX exploration and satellite company went public on the Nasdaq on Friday.
With shares priced at $135 each, Musk’s aerospace and satellite maker soared to an overall market valuation of approximately $1.77tn – which raised Musk’s net worth (which had already hovered at the astronomical $813bn) into the $1tn stratosphere.
What does this tell you about capitalism in this era? That it’s no longer based on economic principles as they’re taught in school – prices set by supply and demand. It’s now based on hype, connections and total, arbitrary control.
First, the hype.
Musk priced SpaceX stock at roughly 100 times the company’s total revenue in 2025. This is ballsy, to say the least, given SpaceX’s consistent negative profitability and its failure to meet prior goals.
Granted, it’s difficult to predict the value of activities that don’t yet exist, such as SpaceX’s stated mission to “extend the light of consciousness to the stars”. Interstellar space travel and interplanetary habitation are inherently speculative endeavors.
But SpaceX’s initial public offering is nothing more than a show of faith in Musk.
Much of SpaceX’s “value” comes out of a deal Musk negotiated between SpaceX and his artificial intelligence startup, xAI. Musk essentially made that deal with himself. A magic trick, out of thin air!
The closer you look at the SpaceX IPO, the more it looks like Musk’s ill-fated Doge. It also bears a striking resemblance to Trump’s takeover of the US government.
All of it is arbitrary – based on the hype and will of one man with a giant ego and an insatiable thirst for money and power. It’s built on self-dealing. There’s no accountability. No checks. No balances.
As to connections, look no further than Brendan Carr, the chair of the Federal Communications Commission. He’s been a Musk booster from the start. In fact, Musk recommended him to Trump as the perfect leader for the agency.
Since then, Carr has approved regulatory requests for Elon Musk’s SpaceX and its Starlink satellite internet – allowing Musk to gain control of two-thirds of all active satellites, more than 10,300, in low Earth orbit, and giving SpaceX dominance over global internet access and defense communications.
Even as Carr led the way to Musk’s near monopoly on low-Earth orbit satellites, Carr also commenced an investigation into a rival satellite company, EchoStar, after Musk’s company complained about it. Carr also threatened to revoke the broadcast licenses of NBC and ABC over their unfavorable coverage of Trump.
Finally, Musk will have total control over SpaceX. Shareholders won’t have any voice whatsoever. Each share held by Musk will have 10 times the voting power of a share offered to the public. SpaceX’s board of directors will engage in a pantomime. They’ll have no meaningful authority.
None of this would be of particular cause for concern if investors could decide for themselves whether the downside risks and potential upside gains from buying SpaceX stock were worth the price. That’s called a “market”. Caveat emptor.
But many of us, if not most of us, with any savings parked in major stock indices (yours truly included) won’t have any choice. We’ll invest in SpaceX whether we want to or not. That’s because the major indices have been rigged.
Normally, major stock indices have a waiting period before they plow their investors’ money into a newly formed company, in order to test whether that company is worth it. But SpaceX has lobbied index funds to change the rules.
On 1 May, for example, the Nasdaq 100 implemented a new “fast entry” rule that will include companies among the top 40 most highly valued companies – which will almost certainly include SpaceX just days from now.
Presto! A big chunk of Americans’ retirement savings and pensions (as well as university endowments) will automatically be tied to SpaceX’s market value. At the same time, all that automatic infusion of investment will artificially jack up the value of SpaceX, at least in the short term.
But here’s the real kicker. SpaceX insiders will be able to sell their shares sooner than is usually the case with an IPO, because that’s the way the SpaceX IPO has been organized.
This means they can enjoy the stocks’ upward tide as the major indices force millions of investors to buy it, and then they can exit SpaceX before the tide goes out.
Musk is now a trillionaire, but a lot of innocent people could be shafted by this IPO, perhaps without their even noticing. It could be a huge redistribution from most of us to Elon and his buddies.
I don’t want to sound cynical, but this is the sort of thing that brings out the cynicism in me. It’s the story of rot at the core of American capitalism in this Second Gilded Age.
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Robert Reich, a former US secretary of labor, is a professor of public policy emeritus at the University of California, Berkeley. He is a Guardian US columnist and his newsletter is at robertreich.substack.com. His new book, Coming Up Short: A Memoir of My America, is out now in the US and in the UK
