00:00Elon Musk has become the first person in history
00:02worth a trillion dollars.
00:04This happened because SpaceX went public
00:07and investors valued it at nearly $2 trillion,
00:09despite the company losing almost $5 billion last year.
00:13So how does a business that loses money
00:15make its owner the richest person alive?
00:17Here's what's happening.
00:18SpaceX had been private for 24 years.
00:21That means only insiders, employees,
00:23and early investors could own a piece.
00:25On June 12th, SpaceX did something called an IPO,
00:29or initial public offering,
00:30which is the first time a private company
00:32sells shares to the public.
00:34Going public means anyone with a Robinhood account
00:36can buy in while the company raises cash.
00:39SpaceX sold its shares at $135 a piece,
00:42raising over $85 billion, the largest IPO ever.
00:46Days later, the stock had climbed past Amazon,
00:49briefly topped Microsoft,
00:51making SpaceX one of the most valuable companies on Earth.
00:54Elon Musk owns about 42% of SpaceX,
00:57and Forbes says that stake pushed his net worth
00:59past $1 trillion.
01:01But here's the part that most coverage skips.
01:04SpaceX is still too new and unprofitable to join the S&P 500,
01:08the list of 500 top companies
01:10that most people's retirement savings rely on.
01:12That's the system trying to protect you from a risky bet.
01:15Here's the catch, though.
01:17The S&P is holding SpaceX back,
01:19but the NASDAQ and Russell aren't.
01:21Senator Elizabeth Warren and the teachers' union warn that this means
01:25your retirement fund could soon own a slice anyway
01:28just because it landed in the right index.
01:30So you don't even have to download Robinhood to be invested in this thing,
01:33you might already be and not even know it.
01:35But supporters and investors showed little concern,
01:38citing $150 billion in orders for the offering.
01:41They also note 4,400 SpaceX employees who could soon become millionaires.
01:46So is a trillion dollar fortune proof that one company changed the world,
01:50or proof that the system is broken?
01:52Drop your take in the comments and follow us here for more.
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