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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

#171

Post by bootsmann »

matwood wrote: post #169
JumpCrisscross wrote: post #164

Earlier quoted context omitted.

> 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.

Read the quote you posted again

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

#172

Post by londons_explore »

matwood wrote: post #135
zhivota wrote: post #30

Big relief for me. As a passive investor, I want the indices to follow the same passive strategy they always have, and specifically not make exceptions for specific companies like SpaceX wanted. Plenty of ways to get exposure to that stock without it going into the indices it is not qualified for.

> 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.

My personal photography blogging business has a market cap of a trillion dollars too.

I have 1 trillion shares, and I sold 1 to a mate for a dollar.

Total company revenue is like 50 bucks a month and profits are nil.

Can I be in the S&P 500 too?

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

#173

Post by bootsmann »

Allybag wrote: post #77
wg0 wrote: post #63

This is very smart of these folks because for just three companies, they can't ruin the trust and impeccable reputation they have built over the years. This decision alone is worth several trillion dollars.

Well, it might be a good decision but I think the possibility of Standard and Poor one day being worth trillions of dollars more than if they had included three companies a year or two earlier than when they inevitably join the index is absolutely zero.

SpaceX needs 4 profitable consecutive quarters to be included. If you have a lot of faith that they will achieve this I recommend you buy day 1 so you can ride the highs when the passive money eventually pours in.

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

#174

Post by frikskit »

JumpCrisscross wrote: post #94
kgwgk wrote: post #61

Earlier quoted context omitted.

It’s true that S&P 500 is not the most popular US equities benchmark for pension funds. Russell is the preferred provider - and they will include SpaceX 5 days after the IPO.

> S&P 500 is not the most popular US equities benchmark for pension funds. Russell is the preferred provider Where are you getting this from? Basically zero pension funds automatically track any single index. (There seems to be a misconception equating pension funds with retirement funds in general. Pension funds are, on the whole, remarkably sophisticated investors. Many pensions funds were private shareholders of t…

You’re right but this chain of reasoning is irrelevant/missing the important point.

You don’t need to track index X to be affected by changes in X. You only need to hold something related to X. Almost all pension funds, heck almost every investment account in the world holds something affected by some index.

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

#175

Post by wg0 »

bootsmann wrote: post #173
Allybag wrote: post #77

Earlier quoted context omitted.

Well, it might be a good decision but I think the possibility of Standard and Poor one day being worth trillions of dollars more than if they had included three companies a year or two earlier than when they inevitably join the index is absolutely zero.

SpaceX needs 4 profitable consecutive quarters to be included. If you have a lot of faith that they will achieve this I recommend you buy day 1 so you can ride the highs when the passive money eventually pours in.

Absolutely. Plain and simple. Go ahead and buy if so sure.

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

#176

Post by intrasight »

prasadjoglekar wrote: post #113
sscarduzio wrote: post #105

Earlier quoted context omitted.

I agree, but… Plenty? Really?

Yes. Plenty is correct. Fidelity let's you buy SpaceX at IPO with only $2K in the bank. And there are other reasons to be cautious. Many passive funds don't license the SP500 and instead mirror it with their own synthetic index. They are not bound to respect this decision.

I think caution is most warranted, but I also think it's likely that SpaceX will become a real-life Weyland-Yutani Corporation (i.e. "The Company") of Alien and own space. But I'll be long dead before that plays out.

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

#177

Post by matwood »

londons_explore wrote: post #172
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.

My personal photography blogging business has a market cap of a trillion dollars too. I have 1 trillion shares, and I sold 1 to a mate for a dollar. Total company revenue is like 50 bucks a month and profits are nil. Can I be in the S&P 500 too?

Anthropic has raised $130B. It's a bit more than selling a share to your mate for $1.

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

#178

Post by tigerlily »

Meanwhile the NASDAQ fell 4.18% Friday just been. This seems more than just a coincidence, people have been talking about pulling investment ahead of the SpaceX IPO, and the latest market activity makes me think the discontent is tangible now.

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

#179

Post by tialaramex »

matwood wrote: post #161
MikeNotThePope wrote: post #138

Earlier quoted context omitted.

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 repr…

It becomes moot if even some of the companies crash. If you try to say it works if some of them crash because some of them didn't you actually get that XKCD "Nobody has won the US Presidential Election without..." silliness. "OK, the rule should be you have to be profitable OR have an HQ in a city with two vowels in its name".

Did it really used to require that you own "15 railroads" ?

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