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

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

#411

Post by kmbfjr »

infecto wrote: post #372
john_strinlai wrote: post #368

Earlier quoted context omitted.

https://en.wikipedia.org/wiki/Carvana#Controversy " In January 2025, short-selling investment firm Hindenburg Research published a report titled "Carvana: A Father-Son Accounting Grift For The Ages," in which it disclosed a short position against the company. The report alleged that Carvana's financial turnaround was a "mirage" propped up by accounting manipulation and lax loan underwriting. " " A class-action securi…

[flagged]

Madoff’s scheme ran for nearly 15 years, starting in earnest possibly 20 years before that.

I think “long” is very relative to the scam.

Carvana has been written about in the WSJ in glowing articles, that now have shifted to a questioning tone. This may be that inflection point.

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

#412

Post by cosmicgadget »

infecto wrote: post #362
vannevar wrote: post #124

Earlier quoted context omitted.

>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. Carvana is the poster child for this. It's astonishing that a company with a history of shady practices, and that has yet to offer a convincing explanation for why it is not a scam, is part of the S&P 500.

Please elaborate why caravan is a scam?

https://hindenburgresearch.com/carvana/

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

#413

Post by dlenski »

yorwba wrote: post #261
twiceaday wrote: post #254

Earlier quoted context omitted.

And the relative values of those stocks will shift requiring rebalancing. You might be able to do that with new dollars for a while but hopefully, eventually, the swings are much more than new dollars and then what? Pay capital gains tax on sales to rebalance? Convince yourself the new random allocation is fine?

I thought the point of index funds weighting by market cap is that they don't require rebalancing, because the weight of stocks in the index exactly tracks price movements. You just keep holding the exact same number of shares, and more valuable stocks automatically take up more of your portfolio.

Yes, this is one of the benefits of a cap-weighted index fund.

It doesn't eliminate the need for the fund to rebalance, because of companies moving in and out of the index criteria.

But it certainly vastly reduces the need of the fund manager to trade.

(Also, stock buybacks and new share issuance should in principle not change a company's index weight, but in practice they sometimes do.)

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

#414

Post by vessenes »

tcp_handshaker wrote: post #383
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…

At this moment, there is so so much, publicly available information [1] on the fact the SpaceX IPO is the biggest scandal in the long history of Wallstreet insiders fleecing the "Johns". A scandal orchestrated and cheered on by the NASDAQ, as well as Goldman Sachs and JP Morgan the underwriters, that if you spend any money on it, you deserve to be parted with your money. And if you have a 401k...you are forced to buy…

For your own safety do not read or be advised by Ed Zitron. By all means skip the SpaceX ipo if you like: makes sense. But Ed is neither perceptive nor correct historically.

Case in point: a lockup period ending matching with mandated index fund buying is emphatically good for IPO buyers: it adds liquidity to a major cliff every IPO company faces: liquidity seeking by insiders on a schedule.

Now it may be bad for axed buyers like pension funds but buy side liquidity coming in to a company is always good for existing shareholders. Reading Ed would make you think the opposite.

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

#415

Post by lII1lIlI11ll »

parliament32 wrote: post #161

What 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.

"Strong-armed" by whom exactly? Deepstate, lizard people, just (((them)))?

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

#416

Post by ryzvonusef »

All that wailing and gnashing about Spacex ipo 'forcing' index fund to invest and thus 'loot' poor people's retirements... when all you had to do was just...add a waiting clause.

It can still be a passive fund, not the end of the world.

Index trackers hire talented people surely they can add a waiting clause in their tracks too, just like S&P.

If your index isn't adding waiting clause, it's simply because they are greedy.

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

#417

Post by prewett »

Animats wrote: post #217

The decision means companies like SpaceX would not be eligible for inclusion in the S&P 500 until at least one year after its listing and would also need to satisfy the index’s existing requirements for profitability and public float. Sudden outbreak of common sense. SpaceX is going "public" with only 4% of the stock being sold to outsiders. The S&P 500 requires a 50% public float. That may disqualify SpaceX for a lo…

GOOG and META are listed on the Nasdaq, as far as I know, hence the four letter ticker, so maybe NYSE still has a mono-class requirement. That's something worth knowing, I avoid investing in companies where my stock isn't the same as everyone else's.

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

#418

Post by cosmicgadget »

bmitc wrote: post #119

What is prompting SpaceX to IPO all of the sudden? I'm personally convinced that this is Musk trying to get out of debt from his Twitter purchase.

"Get out of debt" is funny because his whole shtick is always being in debt. But yes, his creditors are probably asking to be paid out so he needs to milk SpaceX. Luckily, he can take the company public with a tiny float so that index inclusion drives the share price through the roof, allowing him to borrow against considerably greater assets.

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

#419

Post by tcp_handshaker »

vessenes wrote: post #414
tcp_handshaker wrote: post #383

Earlier quoted context omitted.

At this moment, there is so so much, publicly available information [1] on the fact the SpaceX IPO is the biggest scandal in the long history of Wallstreet insiders fleecing the "Johns". A scandal orchestrated and cheered on by the NASDAQ, as well as Goldman Sachs and JP Morgan the underwriters, that if you spend any money on it, you deserve to be parted with your money. And if you have a 401k...you are forced to buy…

For your own safety do not read or be advised by Ed Zitron. By all means skip the SpaceX ipo if you like: makes sense. But Ed is neither perceptive nor correct historically. Case in point: a lockup period ending matching with mandated index fund buying is emphatically good for IPO buyers: it adds liquidity to a major cliff every IPO company faces: liquidity seeking by insiders on a schedule. Now it may be bad for axe…

>> a lockup period ending matching with mandated index fund buying is emphatically good for IPO buyers

I cant believe you wrote this. You are making Ed Zitron case for him. And the lockup period in this case has been reduced to 15 days or less:

https://youtu.be/T8e2FbwN7dw?t=96

https://youtu.be/T8e2FbwN7dw?t=123

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

#420

Post by srj »

l23k4 wrote: post #179
vannevar wrote: post #124

Earlier quoted context omitted.

>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. Carvana is the poster child for this. It's astonishing that a company with a history of shady practices, and that has yet to offer a convincing explanation for why it is not a scam, is part of the S&P 500.

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.

To me it's more about how real the financial strength of the company is versus being propped up on some shady accounting. Not sure if that was the case with Carvana or any of these new IPOs, but personally I have my nest egg in the S&P and don't want sharks abusing the index for their pump and dump exit strategy.
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