How many retirement funds use the nadasq 100 as the benchmark? The only thing that's really objectionable is the 5x multiplier, and so far as I can tell that's confined to the nasdaq 100 index. If the funds use a sane index without such shenanigans, it won't be affected nearly as much, and the whole debate just turns into the perennial question on whether [company] is overvalued and whether passive investors are being taken for a ride.
Nasdaq, Inc. is a company with a stock market ("the NASDAQ") and an index "Nasdaq 100"). They want SpaceX to be listed on their market, because they like having more things on their market for all the usual reasons. They are, apparently, offering to manipulate their index to win the listing.
Accordingly, anything that uses or tracks this particular index (Nasdaq 100), such as the QQQ fund, will potentially have to pay for this manipulation.
Anybody not holding or indexing to the Nasdaq 100 index contents will not particularly care and will not really gain or lose any more money than on an ordinary trading day. In particular, this will have zero effect on stocks that merely trade on the NASDAQ exchange.
Indexing to the Nasdaq 100 is pretty uncommon, outside of QQQ, so most people will not care.
The index is just a function of the stocks. It only moves if the underlying stocks move. Rebalancing Nasdaq will cause selling in the 100 companies that aren’t SpaceX. And those stocks are held elsewhere too…
The Nasdaq 100 shares 79/100 stocks with the S&P. So if those stocks move (probably down because they’re being sold so SpaceX can get bought) pretty sure that's gonna affect anyone exposed to those companies. Whether that’s directly or through other index ETFs. Many of which have a huge concentration in Mag7 right now, for example.
We're talking about a $1.75 trillion (as per the article) company that is about to enter (a part) of the most important capital market in the world at a distorted price, of course that the market as a whole is going to become distorted, money and capital (and the accompanying money and capital signals) are one of the most "liquid" things in a modern economy (if not the most liquid), once you start putting a wrong price tag on them then those accompanying money and capital signals will for sure start doing their thing, imo that was one of the main lessons we should have taken from what happened back in 2008-2009.
I countered a different argument (which does appear elsewhere in this thread). You are absolutely right that there will be general price distortion from this mess. I disagree that it will be extremely bad, but I do agree that it's a problem and needs attention. It's just been difficult to tell that this is what some comments have meant to discuss, instead of the more basic issues others have been talking about.