SpaceX, Anthropic, and OpenAI are set to make their debut on Wall Street, thanks to new “fast entry” rules by Nasdaq. This move is expected to trigger a massive wave of buying and selling, shaking up the indices.

Nasdaq’s new rules, implemented this month, will allow billions of passive investment dollars to flow into the three companies shortly after they go public. Analysts said that it is likely to drive their share prices higher while forcing investors to offload other stocks, reported the Financial Times.

JPMorgan estimates that if half of the company's shares go public at a $2 trillion valuation, passive funds may need to sell about $95 billion worth of the eight largest tech stocks to rebalance their portfolios. Investors are also bracing for additional selling pressure in smaller stocks that could be dropped from major indices later this year to make room for SpaceX and other new megacap entrants.

Todd Sohn, chief ETF strategist at Strategas, told FT that SpaceX's limited public float could make its index inclusion "frantic" as ETFs tracking trillions in assets compete for a small pool of available shares.

SpaceX IPO May Reshape Indexes

SpaceX filed for its IPO on Wednesday, while OpenAI is reportedly expected to file for the prospectus this Friday. Months before that, Nasdaq relaxed its rules to secure the SpaceX listing over its competitor, NYSE, enabling the stock to join the Nasdaq 100 just 15 days post its public debut. The new entrants will also receive an index weighting three times the value of the shares floated.

According to the FT, S&P Dow Jones Indices is considering rule changes that could fast-track the stock's inclusion in the S&P 500. While the initial effect on the index may be modest because only a limited number of shares are being offered, the impact is expected to increase as lock-up restrictions expire in phases over the first 180 days after trading begins, according to the SpaceX prospectus.

Early SpaceX Backers Eye Big Gains

Previous reports suggested that early investors in SpaceX, such as D1 Capital Partners and Darsana Capital Partners, are set to gain significantly from the public listing. The hedge fund’s stake in SpaceX could be worth around $20 billion if the company achieves its anticipated $1.75 trillion valuation.

Furthermore, fintech startup Ramp CEO Eric Glyman told CNBC that the IPO pipeline is being closely watched as companies like SpaceX, Anthropic, and OpenAI, which are posting extreme growth rates while also generating cash, present an unusual and highly compelling profile for public investors.

Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.

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