SpaceX is scheduled for rapid inclusion in major stock indexes like Nasdaq, FTSE Russell, and MSCI after these providers altered their rules to accommodate its early addition. This move is anticipated to channel billions of dollars from index-tracking funds into SpaceX shares. According to Intropic, a provider of index-rebalancing forecasts, approximately 30% of SpaceX's free float is projected to be owned by passive investors within just 15 days of trading, a substantial increase from the 4% that would have been absorbed under previous, slower inclusion rules. Academics and market observers are concerned that this influx of demand could create a feedback loop, driving the company's shares even higher.
This rapid integration comes as Wall Street has been intensely focused on preparing for what could be the largest IPO in history. Institutions like S&P Global Inc.'s Equity Bookbuild group have spent weeks enhancing their infrastructure to handle the anticipated volume and complexity of the trading debut. The Depository Trust & Clear Corp. also planned to monitor systems over the debut weekend, reflecting the significant operational challenges associated with such a large-scale market event. The company went public at a valuation that could make it one of the world's biggest firms.
The inclusion has also raised concerns among some financial advisors and money managers, particularly those invested in index funds, who feel compelled to own SpaceX despite its characteristics. SpaceX, with its $2.7 trillion market capitalization, is noted for having no earnings, no yield, and high volatility (implied volatility was almost 120, three times that of the iShares Bitcoin ETF), making it the most volatile trillion-dollar-plus company without profits. Some argue that this forced ownership through index funds represents a market distortion, particularly criticizing index providers like Nasdaq for rule changes that facilitate such rapid integration. They suggest that such moves compromise the principles of passive investing for U.S. savers and could significantly increase index-level volatility.
