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SPACEX SHUT OUT OF S&P 500, BUT NASDAQ 100 FUNDS WILL DRIVE BIG DEMAND

Conservative investors worried about their 401k retirement savings are sighing in relief this morning after S&P Global decided it will not relax its criteria for S&P 500 membership to allow SpaceX to join. But the stock, which is on track to make it debut next week, is set to benefit from massive demand after it's added to the Nasdaq 100.

After consulting with investors about potential adjustments that would make it easier for megacaps to join its main indices, it decided not to change rules requiring minimum availability of public tradeable shares, a shorter "seasoning" period following a company's public listing, and that companies be profitable.

Since Nasdaq, bowing to pressure from Elon Musk, and FTSE ​Russell already changed their rules to fast-track SpaceX's entry into their indexes, many investors had expected S&P Global to fall in line. The changes made by Nasdaq and FTSE ​Russell will also apply to the upcoming IPOs of AI heavyweights Anthropic and OpenAI.

SpaceX's IPO next week is set to give the company a $1.75 trillion valuation, while listing only $75 billion worth of its shares on the stock market. It posted a net loss of $4.94 billion in 2025, even as revenue rose 33% to $18.67 billion.

S&P 500 index funds managing trillions of dollars likely would have had to buy up SpaceX shares within six months of its public listing had S&P gone ahead with the changes. Even without that demand from S&P index funds, SpaceX will see massive buying from Nasdaq 100 index funds.

With the four largest Nasdaq 100 index funds managing over $600 billion, those funds will have to buy around 6% of SpaceX's available publicly listed shares at the moment it joins the Nasdaq 100, according to Reuters calculations, likely in early July, potentially creating massive additional short-term demand for the stock.

(Noel Randewich)

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