Elon Musk’s rocket, satellite, and AI company SpaceX is expected to go public this month in what could be the largest IPO in history. The company is reportedly targeting a valuation of nearly $1.8 trillion and could raise about $75 billion when it lists on the Nasdaq. If it reaches that valuation, SpaceX would instantly become one of the most valuable companies in the world. And Wall Street is already bending its rules to give the rocket/AI/social media company a boost. Several major stock market index providers, including Nasdaq and FTSE Russell, have recently changed or adopted fast-entry rules that could allow companies like SpaceX to be added to major indexes much sooner than they typically would. Nasdaq’s new rule could allow SpaceX to join the Nasdaq-100 after 15 trading days, while FTSE Russell’s new rule could make the company eligible for some of its indexes after just five trading days.
This could have major implications for millions of investors. Indexes are basically benchmarks that track a specific subset of the stock market. The most well-known is the S&P 500, which tracks 500 of the largest publicly traded companies in the United States.
Many index funds and exchange-traded funds (ETFs) hold stocks that mirror these benchmarks in an effort to replicate their performance. These funds are a key part of many 401(k)s, pension funds, and retirement accounts. So if SpaceX gets added to major indexes shortly after its IPO, funds that track those indexes may have to buy SpaceX shares. As a result, regular people could end up with exposure to Musk’s currently unprofitable company through their retirement accounts even if they never intentionally bought the stock themselves.
