Monopoly Round-Up: After SpaceX Goes Public, Does the Stock Market Finally Fall?
BIG by Matt Stoller
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Monopoly Round-Up: After SpaceX Goes Public, Does the Stock Market Finally Fall?<br>Elon Musk's SpaceX IPO is a very scary moment for the stock market. And AI is getting repriced in an ugly way as corporate America finally has to start paying for the tools.<br>Matt Stoller<br>Jun 01, 2026<br>∙ Paid
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Lots happened in terms of monopoly news this week, as usual. Household income is now officially declining, California’s assembly is scaring big law firms by passing a major antitrust bill, and there is a merger of two firms most of us haven’t heard of - CoStar and Zonda - who organize how real estate is priced and managed.<br>Before getting to that, I’d like to touch on two important shifts happening in the world of big tech and AI. Both are a function of the gruesome stock market rise we’re all watching, with the S&P and Dow Jones at record highs, even as the real income of Americans decline.<br>I'm writing about this situation for two reasons. The first is that Elon Musk’s company SpaceX is going public, in what looks like a case of market rigging. Surprisingly, AI is a big part of the story for that stock. And the second is corporate America is finally starting to see bills for the AI they are using, and they aren’t liking it. On this latter point, I got into a debate with Bloomberg’s Joe Weisenthal about how inefficient American AI firms really are, and it led us to a useful back-and-forth.<br>The subtext is that much of the increase in equity valuations, and thus our social hierarchy, is a result of the techno-optimism embedded in AI. And it does seem like a lot of Wall Street is desperately hoping there isn’t a bubble. Here are ‘strategists’ at major investment banks saying as much:<br>“Are there pockets of excess? Yes. There is crowding going on. We can get 15-20 per cent correction in individual stocks,” said Mike Wilson, chief US equity strategist at Morgan Stanley, adding: “There will be frothiness and then correction, but the market can keep marching forward.”<br>Ben Snider, chief US equity strategist at Goldman, added that “conditions that typically mark the end of bull markets” — such as “speculative mania, contracting profit margins” or Federal Reserve rate rises — are “absent”. “And that fuels my expectation that the recent market rally will continue.”
No one knows when a bubble pops, but I do think there are signs we’re in one.<br>SpaceX, AI, and a Market Top
We’ll start with Elon Musk’s company SpaceX, which in terms of what it does as a corporation, is extremely cool. Most tech firms are software driven or do some variant of advertising, largely because Wall Street doesn’t let them invest in anything real. SpaceX does something important and expensive. It sends stuff to low earth orbit.<br>And that’s because Musk is a unique figure, able to leverage Wall Street capital to actually bend metal, a sort of huckster who hires and respects engineers. Much of his wealth is a result of the fact that in the 2010s, somehow he cobbled together the capital to do something no one had done since the 1920s, which is to create a new U.S. car company, Tesla. He did the same thing for SpaceX, whose inexpensive satellite launch services have allowed all sorts of companies to send payloads into space.<br>SpaceX is a monopoly in this area, and while it pursues unfair business tactics to maintain that position, largely it is dominant because of operational skill. It has also leveraged its position in launch to send up thousands of satellites and create a communications network called Starlink, which provides high-speed data communications worldwide. It’s hard to overstate the importance of this system. The war in Ukraine runs on Starlink; it matters so much in terms of national security that Steve Bannon once called for it to be nationalized.<br>But just as SpaceX the company represents Musk the engineer, SpaceX the stock represents Musk the financial huckster. It’s so bad that the Financial Times calls the SpaceX IPO the “Enshittification of the Stock Market,” and More Perfect Union published an excellent video called “Did Elon Musk Just Rig the Stock Market?”
Here’s why. SpaceX is a bunch of real assets, but it’s also a holding company where Musk has stashed his less valuable stuff. Twitter is now part of SpaceX. So is xAI, which runs Grok.<br>Moreover, SpaceX released its financial data publicly so investors could analyze it before deciding to buy shares, and it was underwhelming. The investor documents are "a train wreck,” full of pie in the sky cult-style rhetoric about going to the stars, but the actual numbers show that only one part of the company - Starlink - is profitable. Beyond that, its numbers are just ok. The company lost $4.7 billion last year, its annual revenue rate is $18.7 billion, it is growing only modestly at 15% a year.<br>There is a lot of hair here. Its biggest revenue driver is not its...