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

Wall Street is moving to stuff SpaceX shares into small investors' portfolios, exposing them to a potentially overpriced stock.

Fidelity Investments has a rule protecting small retail clients from initial public stock offerings while shares are subject to IPO-related hype. This rule has been in place for a long time, but it may not apply to SpaceX shares. Fidelity's decision to allow small investors to buy into SpaceX through index funds or other investment products could expose them to a potentially overpriced stock. The company's valuation has been estimated to be around $150 billion.

This development directly affects small investors who have retirement accounts or other investment portfolios with Fidelity, as they may find themselves owning SpaceX stock without realizing it. The price of SpaceX stock could impact the overall performance of their portfolio, potentially affecting their retirement savings or other long-term investment goals. For example, if SpaceX stock were to decline in value, it could reduce the overall value of their portfolio. This could lead to a decrease in the investor's wealth.

The move to include SpaceX in small investors' portfolios is part of a larger trend of Wall Street firms pushing tech stocks into index funds and other investment products. This trend has been driven by the growing demand for tech stocks and the desire of Wall Street firms to capitalize on this demand. Insiders know that this trend has the potential to create a bubble in the tech sector, which could lead to a significant decline in stock prices if it were to burst. Historical context suggests that such bubbles have occurred before, with devastating consequences for investors.

Investors should watch for Fidelity's upcoming announcement on its investment products, which is expected to include details on the company's plans for SpaceX stock. The announcement is scheduled to be made on the company's quarterly earnings call, which will take place on a date to be determined. A surprising detail is that Elon Musk, the CEO of SpaceX, has been known to use his Twitter account to influence the stock price of his companies, which could potentially impact the value of SpaceX stock in investors' portfolios. This could lead to a high level of volatility in the stock price.