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.
When it comes to writing about investments, the disclaimers are important. Past performance is not indicative of future returns, my opinions are not necessarily those of TSA Wealth Management, an SEC-registered investment advisor, and this is not intended to be personalized legal, accounting, or tax advice etc.
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