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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

#71

Post by XorNot »

loeg wrote: post #46
dogwalker5000 wrote: post #28

Earlier quoted context omitted.

The fact that a fast track was even considered is controversial IMHO. People flipping out, especially if their retirement is tied up with those indices, is to be expected. No one wants to be a bag holder for billionaire insiders.

You're making a similar mistake treating it as fait accompli that SpaceX will tank between IPO and some future date, but that isn't a given either.

SpaceX is not worth $1 trillion, when most of that valuation is based on xAI being worth far more then their already dominant position in the space launch business.

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

#72

Post by BoggleOhYeah »

lokar wrote: post #68
d--b wrote: post #34

Note that Nasdaq and Russel did put in place fast entry rules. S&P is the only one that didn’t. https://www.nasdaq.com/articles/new-fast-tracks-account-olde...

CRSP is changing the index VTI tracks

CRSP has had fast track rules for quite a while.

They changed their minimum float rule for these mega IPOs with low float.

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

#73

Post by lokar »

loeg wrote: post #44
tasty_freeze wrote: post #41

Earlier quoted context omitted.

Do you think that all the alarm had any effect on the blocking of the rule change? Is the right time to complain about a possible change is after it has been decided?

I don't think doom and gloom on HN had any effect, no.

It was much broader then HN

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

#74

Post by philistine »

nothercastle wrote: post #26
aeternum wrote: post #4

Earlier quoted context omitted.

Yes, I think given that misinfo this was probably the right decision by S&P, everyone would be saying I told you so and screaming about providing exit liquidity. My prediction is that this will overall end up costing index holders money though. They will ultimately get a worse entry price for SpaceX and the other mega IPOs. Only time will tell.

They might but changing the rules for a highly controversial company would do more harm in lost trusts than gain for investors.

Exactly. There is this undercurrent of The End Times everywhere, that this is it. This is the end of ... everything that was. When in fact it is not the end times, and the people at those indexes want to exist longer than SpaceX.

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

#75

Post by lokar »

JumpCrisscross wrote: post #19
throw0101a wrote: post #12

Earlier quoted context omitted.

> The top comment and most of its subthreads are run-of-the-mill alarmism. Worth considering: * https://en.wikipedia.org/wiki/Prevention_paradox And the rules for the NASDAQ 100 were changed, as were MSCI and CRSP: * https://www.schwab.com/learn/story/some-indexes-accelerate-e...

Most assets don’t follow those funds. And NASDAQ 100 is explicitly tech focused, I support them making the change. The doomsaying was around most retirement assets. Which don’t follow any single index. But to the extent they do, follow the S&P 500. The market wasn’t pricing in any rebalancing. Commenters were screaming bloody murder about it. In the middle, I’m sure some numpties generated trading and management fees…

VTI uses crsp and is very large

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

#76

Post by Xixi »

tristanj wrote: post #66
jmyeet wrote: post #45

Earlier quoted context omitted.

The market cap of the S&P 500 according to Google is ~$65T. Anthropic, OpenAI and SpaceX could well amount to $4T+ in market cap. That's ~6% of the entire index. It's like adding another NVidia. That's a big deal. The rules around index inclusion exist for a reason. Too much control in one person's hands (which SpaceX has), too small a float (so you don't get price discovery), lack of a history of financial performan…

> Anthropic, OpenAI and SpaceX could well amount to $4T+ in market cap. That's ~6% of the entire index. It's like adding another NVidia. This is a common misconception. The S&P 500 weights allocation by float-adjusted market cap, not by total market cap. In the case of SpaceX, they are planning to float ~4% of shares at IPO. Even if SpaceX was added to the index, its index weight would be based on that tiny float, an…

Nasdaq "solved" that problem by including a 5x float multiplier for stocks with less than 20% of shares available to the public...

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

#77

Post by khimaros »

jauntywundrkind wrote: post #53
arowatbk wrote: post #42

https://podcasts.apple.com/ca/podcast/the-rational-reminder-... Long listen but a very thorough and nuanced discussion by a bunch of smart investment / finance guys in Canada. No click-bait-sky-is-falling content.

[flagged]

were you trying to reply to someone else?

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

#78

Post by yfg2 »

aeternum wrote: post #4
JumpCrisscross wrote: post #3

The amount of misinformation around this topic was absolutely nuts over the past few days. Good rule of thumb: if a YouTuber or other influencer was pitching doom and relaying this rule change by S&P as a fait accompli , stop following them. (It was a common misconception on this thread: https://news.ycombinator.com/item?id=48364055 .)

Yes, I think given that misinfo this was probably the right decision by S&P, everyone would be saying I told you so and screaming about providing exit liquidity. My prediction is that this will overall end up costing index holders money though. They will ultimately get a worse entry price for SpaceX and the other mega IPOs. Only time will tell.

lol what

You can just wait for the price to drop post ipo as it usually does if you actually want to invest.

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

#79

Post by snypher »

JumpCrisscross wrote: post #62
btown wrote: post #47

Earlier 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…

There's overlap between strong minority and nontrivial, so not sure how it can be vastly overstated. Do you have numbers you can add to this, or any explanation of equity exposure etc?

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

#80

Post by yfg2 »

JumpCrisscross wrote: post #25
karp773 wrote: post #22

Earlier quoted context omitted.

What's the urgency to bend the rules? It is not like SpaceX is banned for good. It will be included as soon as it meets the requirements.

> What's the urgency to bend the rules? If you’re buying into a tech-marketed fund like the NASDAQ 100 and it doesn’t include a large chunk of the tech market, you’re no longer passively investing in tech. You’re investing in an actively-managed fund. Historically, companies like SpaceX would have gone public earlier and grown into the index. Recognizing that has changed with multiple $1+ trillion IPO contenders make…

“ Historically, companies like SpaceX would have gone public earlier”

Could woulda shoulda. Mate they didn’t. Moreover if they had, the existing investors would’ve got a shittier exit.

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