SpaceX's stock, which has recently traded in a tight range, is expected to see increased buying activity with the Nasdaq 100 Index's quarterly rebalancing later this month. This anticipated boost stems from a specific rule in the Nasdaq 100's construction combined with a staggered series of lockup period expirations for SpaceX shareholders, which has previously limited the number of available-to-trade shares. bloomberg.com
Currently, despite a market value exceeding $2 trillion, ranking it sixth, SpaceX holds only a 1.25% weight in the Nasdaq 100, placing it 19th. This discrepancy is due to the index's rule that caps a company's weight based on whichever is smaller: its total share count or three times its free-floating shares. As SpaceX's free float has been constrained by insider holdings and shares under lockup, its index weighting has been capped. briefs.co
However, the free float is expanding as lockup periods expire. Over one billion SpaceX shares have already come off lockup, raising the freely tradable portion to nearly 30% of the share base, up from less than 10% after its June IPO. JPMorgan Securities analysts project SpaceX's weight could rise to 1.51%, potentially triggering approximately $12.4 billion in passive demand from index funds and ETFs that follow the Nasdaq 100, which totaled around $1.7 trillion at the end of Q2. briefs.co
While this rebalancing could generate significant buying, some analysts caution that it primarily reflects mechanical index adjustments rather than a vote of confidence in the company's valuation. The increased float, which enables the higher index weight, also means that more shares are available for insiders to sell. The market has also shown signs of front-running this move, with SpaceX's stock already up about a third in the past month from an August low of approximately $105, now sitting around $153. ainvest.com
More than a billion additional shares are expected to become eligible to trade by the end of October, with another 1.3 billion opening up after the company's Q3 report in mid-November. The reweighting is set to be unveiled this Friday after market close and will take effect on September 21. briefs.co
