Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P

bloomberg.com

Post reply on HN
Print view View original

111–120 of 542 posts

Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P

#111

Post by riffraff »

louiereederson wrote: post #69

The market is more unpredictable than it’s been in a long, long time so I hesitate to make a firm prediction but to me the odds that SpaceX will be a successful IPO over a 3-6 month window are significantly lower now. S&P inclusion basically requires funds to hold a position by default, and per their own estimates $20tn of assets are indexed/benchmarked to the S&P.

They'll still be included in total market indexes (FTSE, MSCI, CRSP).

As I understand it, VTI will be a major thing.

Still, they're float adjusted (for the most part?).

Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P

#112

Post by rchaud »

Good. Indexes are supposed to be slow-moving, precisely due to their entry requirement of sustained profitability that skews towards mature companies.

All that an inclusion of these new companies would accomplish is a bailout of their stockholders by pension funds and ETFs where millions of regular people shoulder all the downside risk.

SpaceX and OAI stock will be available through Robinhood, Questrade and all the other retail investor markets. Individuals can make an informed choice to trade it there, rather than have it automatically added to their index fund without having any say.

Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P

#114

Post by siren2026 »

Those mega IPOs are the latest grift to unload overpriced shares before the whole AI tulip bubble explodes in everyone's face.

The insiders know it, which is precisely why those IPOs are happening right now. Employees and VCs don't want to be holding the bag. small-time investors will be.

Also, SpaceX is going to unlock more and more on their float at around the same time most indexes will have to buy it. It has been engineered to socialize the losses.

I'm happy SP didn't agree to fast track any of those, unlike VTI and Nasdaq100. I spent the weekend to rebalance all my retirement accounts to make sure none of them are going to fast track those grifty IPOs. Unfortunately, I cannot do that for my taxable accounts as it would generate a tax-event.

Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P

#115

Post by tristanj »

pdpi wrote: post #83
tristanj wrote: post #49

Earlier quoted context omitted.

At a fundamental level, an index is supposed to reflect the market. If the current market is IPO-ing unprofitable companies at absurd multipliers, the index should reflect that. Because that is the market. The longer major indexes exclude these companies, the further the index strays from representing the market, and the worse they do their core job of tracking it. It's not the index's fault that market is pushing ou…

Indices are supposed to reflect a part of the market. That's why you have all of S&P500, the Dow, NYSE Composite, and Nasdaq Composite (and several others) in the US — They each reflect different attributes of the market as a whole. As it stands, it's clear that the users of S&P500 are not interested in the performance of the parts of the market made up of overpriced (and potentially highly volatile) IPOs.

The problem with your framing of "users of S&P500 are not interested overpriced IPOs" is that it conflates two fundamentally different things: what an index describes vs what investors prefer. The moment you start filtering out parts of the market based on investor appetite vs market reality, you stop building an index and instead start creating an actively managed product. That's active investing. It's no longer an index.

The S&P 500 is used as the benchmark of the market by practically everyone. Journalists, policymakers, investment managers, politicians, regular investors, everyone I know. If the benchmark that everyone uses as a market proxy is systematically excluding a substantial part of the market, then the gap betweeen "the index" and "the market" has real consequences.

You can't have it both ways: Either the S&P 500 is a market proxy, in which excluding parts of the market is a problem; or it's a curated slice, in which everyone needs to stop it as the default benchmarket for the market.

Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P

#116

Post by Nykon »

yfg2 wrote: post #89
tristanj wrote: post #49

Earlier quoted context omitted.

At a fundamental level, an index is supposed to reflect the market. If the current market is IPO-ing unprofitable companies at absurd multipliers, the index should reflect that. Because that is the market. The longer major indexes exclude these companies, the further the index strays from representing the market, and the worse they do their core job of tracking it. It's not the index's fault that market is pushing ou…

Why do index inclusion rules exist in the first place….? Go do a google search

I feel like a lot of people discussing here have no clue what they're talking about, they just have an opinion - which, combining both, most likely means it's an opinion they did not form themselves.

The rules for index inclusion absolutely make sense in many ways.

Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P

#117

Post by gopher_space »

loeg wrote: post #46
dogwalker5000 wrote: post #28

Earlier quoted context omitted.

The fact that a fast track was even considered is controversial IMHO. People flipping out, especially if their retirement is tied up with those indices, is to be expected. No one wants to be a bag holder for billionaire insiders.

You're making a similar mistake treating it as fait accompli that SpaceX will tank between IPO and some future date, but that isn't a given either.

It's more about sidestepping the waves of market manipulation.

Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P

#118

Post by riffraff »

throw0101a wrote: post #10

See also S&P press release, "S&P Dow Jones Indices Consultation on Treatment of MegaCap Companies - Results": * https://press.spglobal.com/2026-06-04-S-P-Dow-Jones-Indices-...

So they did tweak the rule for total market indexes, just not the "curated" ones.

Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P

#120

Post by tristanj »

rchaud wrote: post #112

Good. Indexes are supposed to be slow-moving, precisely due to their entry requirement of sustained profitability that skews towards mature companies. All that an inclusion of these new companies would accomplish is a bailout of their stockholders by pension funds and ETFs where millions of regular people shoulder all the downside risk. SpaceX and OAI stock will be available through Robinhood, Questrade and all the o…

On a fundamental level, the S&P 500 index is meant to be a benchmark of the market. Journalists, policymakers, investment managers, politicians, regular investors, everyone I know all use the S&P 500 as the benchmark of the US stock market.

If a significant percentage of the market is excluded from the index because they don't meet index inclusion criteria, then then index stops being a useful benchmark.

Post reply on HN