Earlier quoted context omitted.
https://news.ycombinator.com/item?id=48407542
Thanks, but should I conclude you agree with my point?
Even if he did, it seems he would keep arguing regardless.
SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P
351–360 of 542 posts
Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P
#352What a pleasant surprise. I was positive S&P would get strongarmed into the bamboozle like Nasdaq but it seems they have a bit more integrity. Good for them.
I think key difference here is that Nasdaq is also the market. Where as S&P is external. From this view them manipulating their own market which they profit in various ways actually is somewhat more questionable... Incentives are entirely different. And really now I am starting to think that Nasdaq maybe should not have index it runs in the first place...
Yeah, this has taken me several readings to understand, I guess because I hadn't really dug into it or thought about it, and also a lot the articles talk about "stock exchanges competing for SpaceX's business".
This whole story is about Nasdaq (company) specifically dangling inclusion into the Nasdaq-100 (index) as a means to get SpaceX to list on the Nasdaq (market). They're uniquely able to do this by owning a market and also an index that people care about.
NYSE couldn’t really do this because its own indices don’t matter much. FTSE Russell could theoretically make FTSE 100 inclusion easier to help attract a company to list on the London Stock Exchange, but SpaceX choosing London as its primary market would be odd. S&P Dow Jones Indices has no equivalent incentive, because it doesn’t own a listing venue; its main asset is the credibility of the S&P 500.
In all, this entire story has been about Nasdaq specifically being willing to weaken their index rules in order to attract SpaceX to their market.
Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P
#353This does seem sensible and I’m glad most of my holdings are in s&p funds. Just to play devils advocate though, what are the downsides of not having 3 of the biggest 10 in the world not in your fund, if you hold to track broad market performance? Wouldn’t that have a massive blind spot on AI related growth? Whether or not I personally think ai is over hyped or not, the whole point of these ETFs is to make sure I don’…
No, because AI is still unprofitable and could even be called a speculative venture given the crazy spending amounts. Let the speculators take the risk and reap the rewards. When profitability and all the other conditions are met, I’m happy for the greater market to buy in at the price the market determines. I think everything is functioning as designed.
Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P
#354Earlier quoted context omitted.
Ah, so you'd like the passive broad market index which contains the 500 biggest good companies? Do tell us if you find one I guess.
> Ah, so you'd like the passive broad market index which contains the 500 biggest good companies? And a reminder: not just "good" now , but good over time . Good companies turn bad (Apple almost went bankrupt), and bad companies can become good (see again Apple; in the UK, recently Rolls-Royce).
Rolls-Royce the luxury car or power plant manufacturer?
Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P
#355See 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.
it makes sense for a total market index as it's a "total market" index. Given the purpose of the SP500, it makes less sense but I still see the argument. Grift or not, morals or not, an index shouldn't care. An index shouldn't care any more than Excel should care about the morality of evaluating a formula. It just tracks what it is defined to track. Leave it to the individual index tracking funds to apply a philosophy to their investments.
Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P
#356The 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?).
I think total market indexes are outside the scope of concern. They are buying SpaceX regardless of IPO rules.
Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P
#357Earlier quoted context omitted.
https://news.ycombinator.com/item?id=48407542
Thanks, but should I conclude you agree with my point?
No, because after lockups expire in 6 months, SpaceX float would increase to 40-50% and it's float-adjusted weight would be >1% of S&P. This is assuming share prices remain unchanged, when they could go either way.
SpaceX at its current valuation places it as one of the 5 largest companies by market cap in the US.
Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P
#358Earlier quoted context omitted.
> Ah, so you'd like the passive broad market index which contains the 500 biggest good companies? And a reminder: not just "good" now , but good over time . Good companies turn bad (Apple almost went bankrupt), and bad companies can become good (see again Apple; in the UK, recently Rolls-Royce).
Rolls-Royce the luxury car or power plant manufacturer?
Power plant - the car company is owned by BMW
Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P
#359Earlier quoted context omitted.
The real issue is that existing shareholders will all be eyeing each other wanting to exit at the highest price it'll ever be. That's a lot of selling pressure. I can't imagine many people seriously believe SpaceX is a business worth 1.75T.
Satellite internet is not a new invention- Iridium already did it and they went under. Nice for war zones and remote areas but not much else. Besides the Chinese are launching their own network which will mean a price war. And the Chinese tend to win those.
Well, let’s not pretend like Starlink is the same as previous satellite internet providers. No previous providers were anywhere near as fast or low latency. The use cases for Starlink are a lot wider than previous solutions and it can even compete directly for customers who have cable existing service.
I still agree that the company is disastrously overvalued. Even if we consider Starlink to be just as valuable as a telecom like Verizon, that’s only a $190 billion dollar company.
Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P
#360Earlier quoted context omitted.
I don't care about being forced to own SpaceX if it's in the index, I do care about it being forced into the index before it's had a chance to settle, so that private investors can dump on me.
But that wasn't going to happen with the S&P 500, the proposal was to reduce inclusion time from 12 months to 6 months, and this did not pass. 6 months is more than enough time for price discovery to occur. And even if it was added to the index immediately after IPO, index weighting in S&P is float weighted, SpaceX at IPO will have minimal float, and SpaceX would be ~0.125% of the index at IPO. Not much to matter.
That ".125% is not much to matter" argument also cuts the other way, against the Matt Levine argument that the S&P is excluding trillion dollar companies and should adjust the rules for them.
Should S&P really adjust the rules for such a small portion of the index?