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S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic

arstechnica.com

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Re: S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic

#161

Post by matwood »

MikeNotThePope wrote: post #138
matwood wrote: post #135

Earlier quoted context omitted.

> the same passive strategy they always have You'll be shocked to know they have changed the inclusion rules a number of times. I suspect if in 12 months these megacaps are still megacaps, they will revisit the profitability rules. It's hard to have an index with 500 of the largest, most significant companies leaving out companies with trillion dollar market caps.

It’s a list of the 500 largest profitable companies. Gotta make some bottom line $$$ to be included. At least that’s how it’s worked in the past.

It also used to require 15 railroads, but the market moved on. They held tight on the profitability requirement with TSLA and missed a huge part of the growth. They may continue to hold the line on that going forward. But, if the AI companies grow their market caps, it's going to be hard to point to the S&P 500 as representing the most significant companies in the US market when trillions in market cap end up no represented.

Of course this all becomes moot if all the companies crash out. I don't think enough people are asking what if these companies don't crash out though.

Re: S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic

#163

Post by JumpCrisscross »

frikskit wrote: post #159
JumpCrisscross wrote: post #158

Earlier quoted context omitted.

> It’s not just Nasdaq-100 it’s Russell indices too, which are way bigger by the way (not that it matters) Russell does total-market indices. S&P also changed its rules for total market because it pretty clearly makes zero sense for total market to ignore a few trillion dollars of the market. The NASDAQ 100 change has some capability of being sketchy due to Nasdaq wanting to win the listing. Russell, eh, not seeing i…

So what that it’s total market? We must be talking about different issues. The main issue for me is that the seasoning window was reduced. Of course eventually spcx should be included, I’m not arguing against that (and I haven’t heard anyone else argue that convincingly or at all either). If everyone expected the price of the stock to remain the same or higher after the seasoning windows then why were those with the…

> So what that it’s total market?

Total market is meant to be total market. It isn't slicing out large caps, like the S&P 500. The assumption was new issues would be too small to matter. That's clearly changed.

> main issue for me is that the seasoning window was reduced

Seasoning really only matters nowadays in respect of lockups. Private markets provide a lot more price signal than we had previously.

> what do you mean the 0.3% thing never happened?

S&P 500 won't include SpaceX. The magnitude of the effect of including SpaceX would have been on the other of about 0.3% for the S&P 500. (The other indices collectively matter less than individual allocators at e.g. BlackRock and Fidelity.)

Re: S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic

#164

Post by JumpCrisscross »

matwood wrote: post #139
vostrocity wrote: post #20

Earlier quoted context omitted.

The market may not have ever priced in a rebalancing of the S&P 500, but the S&P 500 also has never allowed entry of companies that may never become profitable.

> but the S&P 500 also has never allowed entry of companies that may never become profitable I suspect this will be revisited if all these companies are still 1T+ market cap 12 months from now. At some point the S&P will have to say the market itself has spoken and likely capitulate.

> At some point the S&P will have to say the market itself has spoken and likely capitulate

It really doesn't. The S&P 500 is an opinionated index. If you want total market, buy a total-market index.

My guess is S&P will stick to its guns, Anthropic will season in, and SpaceX and OpenAI (if it goes public) will stay outside for a few years.

Re: S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic

#165

Post by matwood »

petesergeant wrote: post #126
JumpCrisscross wrote: post #118

Earlier quoted context omitted.

> because only Nasdaq has the incentive to do it I'm not going to say Nasdaq didn't do this corruptly. But there are plenty of good reasons for the NASDAQ 100, an index marketed as being tech focussed, bending over to include AI issues that don't require nefarious explanations.

Why do you think they originally had inclusion criteria, and have the reasons for having those criteria changed? Why do you think Musk has made it so clear that he’s strongly weighting that inclusion in his choices?

[flagged]

Re: S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic

#166

Post by frikskit »

frikskit wrote: post #159
JumpCrisscross wrote: post #158

Earlier quoted context omitted.

> It’s not just Nasdaq-100 it’s Russell indices too, which are way bigger by the way (not that it matters) Russell does total-market indices. S&P also changed its rules for total market because it pretty clearly makes zero sense for total market to ignore a few trillion dollars of the market. The NASDAQ 100 change has some capability of being sketchy due to Nasdaq wanting to win the listing. Russell, eh, not seeing i…

So what that it’s total market? We must be talking about different issues. The main issue for me is that the seasoning window was reduced. Of course eventually spcx should be included, I’m not arguing against that (and I haven’t heard anyone else argue that convincingly or at all either). If everyone expected the price of the stock to remain the same or higher after the seasoning windows then why were those with the…

If you think seasoning windows don’t matter and pre ipo price signal is already great, true and fair, explain Cerebras price after IPO in the midst of one of the biggest sectoral bull runs in history.

Re: S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic

#167

Post by [deleted] »

frikskit wrote: post #159
JumpCrisscross wrote: post #158

Earlier quoted context omitted.

> It’s not just Nasdaq-100 it’s Russell indices too, which are way bigger by the way (not that it matters) Russell does total-market indices. S&P also changed its rules for total market because it pretty clearly makes zero sense for total market to ignore a few trillion dollars of the market. The NASDAQ 100 change has some capability of being sketchy due to Nasdaq wanting to win the listing. Russell, eh, not seeing i…

So what that it’s total market? We must be talking about different issues. The main issue for me is that the seasoning window was reduced. Of course eventually spcx should be included, I’m not arguing against that (and I haven’t heard anyone else argue that convincingly or at all either). If everyone expected the price of the stock to remain the same or higher after the seasoning windows then why were those with the…

[deleted]

Re: S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic

#168

Post by kd913 »

iugtmkbdfil834 wrote: post #127
khazhoux wrote: post #67

Earlier quoted context omitted.

Thank you! So sick of people always ascribing the market's movement to whichever narrative headline they pick that day.

Heh. I would not discount narrative so fast. You may not believe it, but it does not mean others don't.

My theory is hedgies and investment banks using semi and ai hype as a liquidity bridge to drop into SpaceX which happens next week.

Arm and AMD pumped to insane levels on basically nothing.

What proof is there for your narrative versus mine?

Re: S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic

#169

Post by matwood »

JumpCrisscross wrote: post #164
matwood wrote: post #139

Earlier quoted context omitted.

> but the S&P 500 also has never allowed entry of companies that may never become profitable I suspect this will be revisited if all these companies are still 1T+ market cap 12 months from now. At some point the S&P will have to say the market itself has spoken and likely capitulate.

> At some point the S&P will have to say the market itself has spoken and likely capitulate It really doesn't. The S&P 500 is an opinionated index. If you want total market, buy a total-market index. My guess is S&P will stick to its guns, Anthropic will season in, and SpaceX and OpenAI (if it goes public) will stay outside for a few years.

They can certainly say they no longer track the 500 leading large-cap companies on the US exchanges.

The S&P 500® is widely regarded as the best single gauge of large-cap U.S. equities. The index includes 500 leading companies and covers approximately 80% of available market capitalization.

Re: S&P 500 rejects SpaceX, also blocking entry for OpenAI and Anthropic

#170

Post by JumpCrisscross »

kd913 wrote: post #168
iugtmkbdfil834 wrote: post #127

Earlier quoted context omitted.

Heh. I would not discount narrative so fast. You may not believe it, but it does not mean others don't.

My theory is hedgies and investment banks using semi and ai hype as a liquidity bridge to drop into SpaceX which happens next week. Arm and AMD pumped to insane levels on basically nothing. What proof is there for your narrative versus mine?

> a liquidity bridge to drop into SpaceX

What does this mean?

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