SpaceX Faces Allegations of a New Scam as Critics Raise Urgent Concerns

SpaceX’s pending public offering is being framed by some commentators as a “confidential” IPO that could reshape the Nasdaq‑100, but the mechanics described raise red flags about market manipulation. According to financial writer Dana F. Blankenhorn, the plan would float only 5 percent of SpaceX—including its xAI unit—at a valuation of $1.75 trillion, raising roughly $87.5 billion in new capital. The proposal, he notes, is being shepherded by “big banks” that have previously facilitated large‑scale equity transactions, and it would be structured as a dual‑class share offering that lets Elon Musk retain control while offloading a modest slice to public investors. [Blankenhorn]

Blankenhorn argues that the IPO’s design could force index funds to buy SpaceX shares en masse because the stock would be added to the Nasdaq‑100. “These forced purchases will push the stock price up, which will push the market up,” he writes, warning that the uplift would be artificial because “there’s nothing underneath all this except bluster.” [Blankenhorn] If the price spike proves unsustainable, the fallout could extend beyond SpaceX to any fund that tracks the index, potentially eroding retirement savings for millions of investors.

The concerns echo earlier market‑rigging scandals in Hong Kong that Blankenhorn references, such as the rapid run‑ups and subsequent quiet collapses of Magic Empire Global and AMTD Digital, which were covered by CNBC before their bubbles burst with little follow‑up. He draws a parallel to Michael Burry’s warning that the Hong Kong market is “rigged” and suggests the same dynamics could surface on the Nasdaq if SpaceX’s IPO proceeds as described. [Blankenhorn]

Compounding the financial worries, separate reporting from Wired highlights operational and governance issues at Musk’s other ventures. One article details how Starlink has been used to facilitate illicit activity in Myanmar, including modern‑slavery‑related fraud, indicating that SpaceX’s satellite network is already entangled in questionable practices. [Wired] Another Wired investigation reveals that a SpaceX engineer allegedly engaged in dark‑web insider trading, prompting the SEC to pursue its first case of that kind. [Wired] While these pieces do not directly address the IPO, they illustrate a pattern of regulatory scrutiny that could amplify investor risk once SpaceX becomes a publicly traded entity.

Taken together, the alleged “weird trick” of a confidential, dual‑class IPO combined with forced index‑fund buying, and the backdrop of prior market‑manipulation episodes, paints a picture of potential systemic risk. Blankenhorn concludes that if the scheme collapses, “your retirement savings” could be the casualties, and international confidence in the Nasdaq could suffer a blow comparable to the loss of trust in Hong Kong’s markets. [Blankenhorn]