Weekly Notes
June 5 — Houston, We Have an IPO
Of the ten largest IPOs in U.S. history, the average one-year return was a loss of 27.8%. With SpaceX set to price the largest IPO ever at a $1.785 trillion valuation, that historical track record is a reason for retail investors to approach with caution.
June 12 — Plan for the Plan Falling Apart
A widely-cited BofA note warning investors to “take profits” turned out to project the S&P 500 falling just 4% from current levels. The piece uses that gap between headline and substance to make the case that pullbacks are a normal, recurring feature of markets, and that avoiding them entirely has historically cost far more than it’s saved.
June 19 — Price vs. Valuation
A $200 share price sounds modest, but at SpaceX’s scale, it reflects a $2.5 trillion valuation on $30 billion in revenue — equivalent to valuing a $3 million-revenue startup at $250 million. The note argues that human brains struggle to intuit numbers at that scale, and that a low-looking share price can mask a very aggressive valuation.
June 26 — Search For the Infinite Money Glitch
Strategy’s “Stretch” preferred shares were pitched as a way to fund Bitcoin dividends indefinitely, but the dividend has already been raised five times, from 9% to 11.5%, and the stock is down roughly 75% since the strategy was first covered here last summer. The episode is framed as a reminder that leverage-based shortcuts to outsized returns tend to unwind the same way they always have.
Idea Worth Revisiting
From April’s Vibes & Valuations:
“When an IPO is all anyone can talk about, and investors seem more concerned with vibes than valuation, it is generally best for retail investors to stay away.”
Seminar Recap: Navigating Market Volatility
On June 3, we hosted a seminar at our office titled “Navigating Market Volatility.” Thanks to everyone who came out — the full slide deck is available here.