No space X only had to wait 5 days to be added to broad market indexes, “roughly” 15 days for the nasdaq 100, “as little as one week” for the Russell 1000 and the S&P 500 has also waived the year waiting period for Space X so all the guard rails you’re talking about have been removed so this grift can happen.
The Russel 1000 and NASDAQ 100 did have “fast-track” rules for large IPOs like this. However, they have an additional guardrail that I think you overlooked here. When SpaceX went public only about 4% of the company’s total shares were released to the public (the public “float”). The remaining 95%+ of the shares belonging to Elon Musk, early venture capitalists, and long-time employees are legally locked down and can’t be sold for 90 to 180 days after the IPO. Index funds are weighted based on free float (only the shares actively trading), the amount of stock the fast-tracking index funds are actually forced to buy right now is very small, representing a fraction of 1% of most portfolios.
So no, this really didn’t fleece 401ks and other conservative investment funds. They have rules in place specifically to prevent this sort of thing and outside forces can’t “force” them to break those rules. Musk and other early shareholders were unable to dump their stocks during that initial IPO price spike and pension funds weren’t buying the stocks up in significant quantities.
No space X only had to wait 5 days to be added to broad market indexes, “roughly” 15 days for the nasdaq 100, “as little as one week” for the Russell 1000 and the S&P 500 has also waived the year waiting period for Space X so all the guard rails you’re talking about have been removed so this grift can happen.
The S&P Dow Jones Index Committee explicitly rejected proposals to fast-track SpaceX.
The Russel 1000 and NASDAQ 100 did have “fast-track” rules for large IPOs like this. However, they have an additional guardrail that I think you overlooked here. When SpaceX went public only about 4% of the company’s total shares were released to the public (the public “float”). The remaining 95%+ of the shares belonging to Elon Musk, early venture capitalists, and long-time employees are legally locked down and can’t be sold for 90 to 180 days after the IPO. Index funds are weighted based on free float (only the shares actively trading), the amount of stock the fast-tracking index funds are actually forced to buy right now is very small, representing a fraction of 1% of most portfolios.
So no, this really didn’t fleece 401ks and other conservative investment funds. They have rules in place specifically to prevent this sort of thing and outside forces can’t “force” them to break those rules. Musk and other early shareholders were unable to dump their stocks during that initial IPO price spike and pension funds weren’t buying the stocks up in significant quantities.
But the weight in those indices is still low, and it hasn’t entered the S&P 500 yet.
https://www.hl.co.uk/news/what-does-the-spacex-ipo-mean-for-index-investors