Earlier quoted context omitted.
were you trying to reply to someone else?
No, I'm saying they are hyping up some random podcast while saying sweet nothings. I really don't like empty hype. I want some actual content to posts that actually says something, not just links breathlessly encouraging me to go spend an hour listening.
SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P
491–500 of 542 posts
Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P
#492Those 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…
Think it does also need to be said because there's a LOT of amateur investors here: If you're a person sitting there thinking you'll drop even just a few thousand dollars into SpaceX, OpenAI, etc when they list - you probably shouldn't. You'll very likely be losing it and you're the one about to make someone else rich.
Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P
#493Earlier quoted context omitted.
The S&P's historical inclusion criteria were designed to filter out unstable, illiquid questionable companies to get a view of large-cap US equities. That logic worked when every major American company was public and profitable. That's not true any more. Today we have multiple giga-caps (SpaceX, Anthropic, OpenAI) vying to IPO, all of which potentially in the top 20 largest companies in the US market, all ineligible…
Then your issue is not the S&P methodology, which despite changes in detail remains, as you've said, aimed at filtering out undesirable companies from the index. Your issue is that you want us to believe your favorite tech stocks, which are both wildly unprofitable and have P:S ratios that defy rational investment, are somehow desirable immediate additions to the index. And your argument for why this should be is a l…
Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P
#494Earlier quoted context omitted.
They're an outlier in the industry in terms of profit per car. But they don't actually get revenue from selling cars, their revenue comes from selling car loans. So they're making the additional margin on the financing. They are also famous for not turning down loan applications. So putting the pieces together, it seems like they are selling high risk loans at a healthy profit. Which brings up the question of who is…
This is how many businesses operate. You have still not provided example of fraud or scam behavior.
Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P
#495Earlier quoted context omitted.
The S&P 500 may not be a fund itself, but Standard & Poor's is a business whose ability to sell services is correlated with the continued relevance of the S&P 500. It absolutely does balance interests - namely, its own - beyond simply being an academic vehicle for communication of a stable thesis. It seems entirely reasonable to say: "if we make a certain decision, we correlate both our reputation and a nontrivial po…
> absolutely does balance interests - namely, its own - beyond simply being an academic vehicle for communication of a stable thesis As a business, sure. As a committee, it’s still a deeply technical process. I can say with a lot of confidence that optics weren’t considered in any of this, possibly to a fault. > and a nontrivial portion of the U.S. economy This vastly overstates the amount of assets tied to the S&P 5…
https://www.ici.org/research/stats/combined_active_index_042...
Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P
#496Earlier quoted context omitted.
It may be used as a benchmark, but that’s not actually the purpose of it. The purpose is to serve as a way for people to invest in a representative sample of the market. It can still be a representative sample with safeguards. If you want a benchmark without safeguards, you can calculate one without risking millions of people’s life savings.
You have your history backwards. The S&P 500 was created in 1957 as a benchmark . The first investable index fund tracking it (Vanguard's) wasn't created created until 1976. Vanguard created their fund to track the benchmark , not the other way around. And if you need a second, different index to function as the true market benchmark because the S&P 500 no longer reflects the actual market, then you just agreed the S…
Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P
#497Earlier quoted context omitted.
I completely agree. People have parroted the benefits of passive investing and blindly following the benchmark index for decades, yet the instant some overpriced turds (Anthropic, OpenAI, and SpaceX) are considered being adding to the benchmark, they backtrack and fight tooth and nail against including them. All three companies are large enough by market cap ($1T+) to qualify for the S&P 500 benchmark, which claims t…
While there's some truth in your point, I think you're being unfair in framing this story as passive investors betraying their own philosophy because they suddenly realize this passivity would cause some "overpriced turds" to be included in their portfolio. Passive investors did not "backtrack", on the contrary their preference on this matter is that index rules should remain unchanged. Conversely, it seems fully con…
How can S&P justify excluding these three companies from an index of large-cap US companies, which when combined together, consist of 5% of the total market capitalization of entire stock market of the United States?
If the rules are not changed, then the S&P 500 will exclude a significant part of the US stock large-cap market, which defeats the entire purpose of it being a benchmark index.
If the S&P 500 was only used as a benchmark as it is originally intended, there will be no debate to adjust the rules to include these companies.
Yet because today there's trillions of dollars tied up to this benchmark, inclusion and exclusion becomes a financial issue.
S&P is under immense political pressure to not adjust their index because asset managers and the general populous don't actually want passive investing.
Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P
#498The 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…
It'll be at 50% within 6 months, then 100% within a year. https://www.economist.com/finance-and-economics/2026/06/01/c...
Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P
#499Earlier 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?
* https://en.wikipedia.org/wiki/Rolls-Royce_Holdings
90 in 2022 to about 1100 now:
* https://www.londonstockexchange.com/stock/RR./rolls-royce-ho...
Interesting interview with the CEO, Tufan Erginbilgiç:
Re: SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P
#500This 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’…
When you IPO, the company basically can set its own price. Then investors can buy it or not at that price. If you set the price so high it makes your company one of the biggest, it means automatically index funds will buy you at the price you set for yourself, no questions asked.
To prevent abuse from this, index funds that track "biggest stocks" have a waiting period, it was often 1 year. That way, by the time the index buys the stock, the price should be reflective of what the market think it's worth, not what the company decided it was worth when they IPOed.
These ETFs have always done this, because you want to hold the biggest company the market chooses as biggest, and not that the company decided.