SpaceX is expected to see its stock receive a significant boost as its weighting in the Nasdaq 100 index is anticipated to increase. This potential adjustment stems from a large tranche of shares, previously held by early investors and employees, becoming publicly tradable after the expiration of lockup agreements. According to Bloomberg, this could unlock billions of dollars in automatic purchases from index-tracking funds and ETFs that benchmark against the Nasdaq 100.
The initial inclusion of SpaceX in the Nasdaq 100 on July 7, despite its $2 trillion market capitalization, resulted in a relatively small 1.3% weighting due to its limited public float. Founder Elon Musk retained roughly 82.4% of the voting power, and only about 4% to 5% of shares were initially available for trading. However, as these lockup agreements expire in stages over the coming months, the public float is set to expand considerably, potentially increasing SpaceX's effective capitalization for index purposes from approximately $300 billion to a figure closer to its actual market value.
This expansion of the public float and subsequent increase in Nasdaq 100 weighting could make SpaceX a top-10 holding in the index, potentially accounting for around 4% of its overall composition. Analysts predict this move will trigger substantial passive inflows, building on the estimated $4.3 billion in passive purchases that occurred after its initial inclusion. While the company's stock experienced some volatility post-IPO, partly due to the limited float and initial insider selling, the impending increase in public shares is expected to generate sustained buying pressure from index funds seeking to accurately mirror the Nasdaq 100's performance.
