For decades, investors have been told that diversification is one of the simplest ways to reduce risk. By spreading money across different companies and asset classes, losses in one investment are less likely to derail an entire portfolio. SpaceX's record-breaking $25 billion bond sale is now challenging that assumption.
Analysts say investors who already own SpaceX shares following the company's blockbuster June IPO may believe buying its newly issued bonds offers additional diversification. In reality, both investments rely on the same company delivering on ambitious growth plans, creating what portfolio managers describe as concentration risk. Rather than reducing exposure, owning both securities could leave investors more dependent on SpaceX's future success than they realise.
