So relieved to see this!
SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P
31–40 of 542 posts
Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P
#32Earlier quoted context omitted.
> What's the urgency to bend the rules? If you’re buying into a tech-marketed fund like the NASDAQ 100 and it doesn’t include a large chunk of the tech market, you’re no longer passively investing in tech. You’re investing in an actively-managed fund. Historically, companies like SpaceX would have gone public earlier and grown into the index. Recognizing that has changed with multiple $1+ trillion IPO contenders make…
Not really. The underlying rules for Nasdaq has changed. The preexisting ruleset was used by investors to gauge their portfolio balance. Now investors have to revaluate their portfolio based on the new ruleset as their fundamental risks have changed.
Yeah, the rules have kind of made the passive investment active. I don't understand OPs point at all. I don't understand why we suddenly change the rules and rush things, and OP has provided 0 justification for that.
Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P
#33Earlier quoted context omitted.
What was the common misconception?
> What was the common misconception? That the rule change was a done deal. The pitch was some shadowy financial cabal forcing everyone’s retirement savings into SpaceX (which would not have been true even if S&P voted to include, but that’s a separate topic). The top comment and most of its subthreads are run-of-the-mill alarmism.
I mean S&P had actually drawn up a lot of the changes, regulations, and paperwork for entrants, so it wasn't a done deal, but they absolutely were considering it, and it was a very real "risk".
Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P
#34Note that Nasdaq and Russel did put in place fast entry rules. S&P is the only one that didn’t.
https://www.nasdaq.com/articles/new-fast-tracks-account-olde...
Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P
#35Earlier quoted context omitted.
> What's the urgency to bend the rules? If you’re buying into a tech-marketed fund like the NASDAQ 100 and it doesn’t include a large chunk of the tech market, you’re no longer passively investing in tech. You’re investing in an actively-managed fund. Historically, companies like SpaceX would have gone public earlier and grown into the index. Recognizing that has changed with multiple $1+ trillion IPO contenders make…
Yeah, but is SpaceX actually worth $1T or does Elon just think that because of how Tesla investors value Tesla?
Historically a $1T market cap with a PE of 20.0 would be achievable with a $50B/yr profit. That seems easily achievable eventually for SpaceX, as it has actual hardware and services and IP.
Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P
#36Earlier quoted context omitted.
What's the urgency to bend the rules? It is not like SpaceX is banned for good. It will be included as soon as it meets the requirements.
> What's the urgency to bend the rules? If you’re buying into a tech-marketed fund like the NASDAQ 100 and it doesn’t include a large chunk of the tech market, you’re no longer passively investing in tech. You’re investing in an actively-managed fund. Historically, companies like SpaceX would have gone public earlier and grown into the index. Recognizing that has changed with multiple $1+ trillion IPO contenders make…
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Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P
#37Earlier quoted context omitted.
It seems to me like there's a fair amount to be concerned about, I wouldn't consider myself an expert on finance by any means so if you have some explanation of why it's not that bad I'd love to hear it. Two other indices changed their rules to allow these companies specifically. Pensions and retirement funds rely on these indices to have continual, stable growth. Often the people whose money is being invested don't…
> Two other indices changed their rules to allow these companies specifically One of which is the NASDAQ 100, marketed for decades as a tech-focused index. > Pensions and retirement funds rely on these indices to have continual, stable growth Pensions build their own benchmarks. About 10 to 20% of retirement assets follow these indices directly for a variety of purposes. The S&P 500 aims for continuous large-cap grow…
> marketed for decades
So why change? You're not building a case for why this change is needed. Is there even another Nasdaq 100 company like SpaceX? Probably not because it would be an obvious point of discussion. So now we need to add a new 'thing' to our definition of tech, then change our funds to adopt our new definition. To what end, with this haste?
> The NASDAQ 100 has seen practically no net outflows
Is it a fund or just an index? If an index, what are you monitoring when you cite 'no outflows'?
Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P
#38Earlier quoted context omitted.
> The top comment and most of its subthreads are run-of-the-mill alarmism. Worth considering: * https://en.wikipedia.org/wiki/Prevention_paradox And the rules for the NASDAQ 100 were changed, as were MSCI and CRSP: * https://www.schwab.com/learn/story/some-indexes-accelerate-e...
Most assets don’t follow those funds. And NASDAQ 100 is explicitly tech focused, I support them making the change. The doomsaying was around most retirement assets. Which don’t follow any single index. But to the extent they do, follow the S&P 500. The market wasn’t pricing in any rebalancing. Commenters were screaming bloody murder about it. In the middle, I’m sure some numpties generated trading and management fees…
As they should have. The rules were in flight with a layover time measured in days on assets that are managed on the timescale of years. There was a legitimate reason to act urgently. It's easy to make claims in hindsight but the information on hand it was 100% the right call to protect your investments.
This is not misinformation. Misinformation is saying the proposed rule change and their proximity to trillion dollar IPOs introduced no risk. Please do not spread such misinformation.
Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P
#39The amount of misinformation around this topic was absolutely nuts over the past few days. Good rule of thumb: if a YouTuber or other influencer was pitching doom and relaying this rule change by S&P as a fait accompli , stop following them. (It was a common misconception on this thread: https://news.ycombinator.com/item?id=48364055 .)
Contrarily, you can interpret the doom pitches as a necessary political backlash whose degree of panic and whose quantity prevented the change from ending up as a fait accompli.
Public decisionmakers do this sort of thing all the time. They "float an idea", "test the waters", "put up a trial balloon". They see what they can get away with. When the decisionmaker has a strong desire for the change, it may only get rolled back if powerful and widespread public dissent makes itself known, as it did in this case. When they don't really care about the issue, they might cancel it at the first sign that anyone has an issue. We can't know their degree of insistence just based on outcomes in these cases.
Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P
#40Earlier quoted context omitted.
Yeah, but is SpaceX actually worth $1T or does Elon just think that because of how Tesla investors value Tesla?
Historically a $1T market cap with a PE of 20.0 would be achievable with a $50B/yr profit. That seems easily achievable eventually for SpaceX, as it has actual hardware and services and IP.
It's years away from $50B/year profit, if it ever gets there. The IPO valuation is insane.