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guywithahat | on: Can the stockmarket swallow Anthropic, SpaceX and OpenAI?
Why? An index fund represents the market (usually top 100 or 500 companies), and SpaceX will certainly be in the top few companies. I would argue it's a lot riskier to buy it after the IPO price (if you're buying it secondary it would be easier to spike prices by accident), plus then it's not representative of the actual market until you've purchased the stock.

Unless I'm misunderstanding this, buying at the sale price is the least risky way of purchasing the stock, which is what index funds should do. They should pursue the least risky way of indexing the market

disillusioned | parent | next
Because nothing about the IPO price has any resemblance to a fair market valuation, and if it's being propped up by this forced inclusion, even less so? The rules existed to fundamentally protect against a Potemkin village situation where an underwriter and some early round investors whip the valuation into a froth and raise against a rabid corps of retail investors who don't necessarily care about a PE ratio of 1,000+ because they're buying the hype.

More importantly, it allowed organic price discovery to occur. This eschews that process because the indexes are _forced_ to participate essentially at _any_ price, so rather than the market writ large having the opportunity to reward or punish the underwriter pricing of the IPO and determine any true idea of price, they're forced to buy the banker's narrative, which will intrinsically prop up the stock to some degree, but at what cost, and based on what underlying?

eru | root | parent | next
You know that short selling is possible? And index funds are traditionally some of the keenest participants to lend their shares out to short sellers in return for a bit of extra return (over the raw index).
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Bombthecat | root | parent
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sehansen | parent | next
Index funds are largely synonymous with passive, long term, buy-and-hold investors. That kind of investors are best served by slower changes to the index, especially since index funds are intended to piggy back on the price discovery that happens in public trading. An IPO price, which is the result of a private negotiation, is exactly what you don't want to buy stocks at if you're a passive, long term investor.
eru | root | parent | next
There's lots of different indices with different rules, and lots of different funds to implement these. Pick one that works with your preferences.
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Ekaros | root | parent
If it is actually growing company with growing valuation being a year late is not big deal over say 10 or 20 years. It is actually the smart move.
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SwellJoe | parent | next
Because it's a scam by the richest people in the world to steal from the retirement accounts of everyone else.
vintermann | root | parent
And when it happens, I suspect we'll end up having to eat austerity to avoid inflation again. Under new leadership from the Responsible Party, whoever that is where we live.
fourside | parent | next
Why does SpaceX warrant a change of existing trading rules?
frankacter | root | parent | next
>Why does SpaceX warrant a change of existing trading rules?

They don't, while timing certainly benefits, and potentially was triggered by them and OpenAI and Anthropic IPOs, these rules are not specific to only apply to SpaceX.

FTSE Russell (Russell 1000/2000 etc.) Adopted "fast entry" for large IPOs. Eligible companies (investable market cap above Russell Top 500 cutoff) can join after 5 trading days (previously quarterly rebalances). Also eased float rules with carve-outs.

https://www.lseg.com/en/media-centre/press-releases/ftse-rus...

Nasdaq (Nasdaq-100): Effective May 1, 2026, top ~40 market-cap companies can enter after 15 trading days (previously 3+ months). Adjusted low-float handling.

https://spotgamma.com/spacex-ipo-index-changes-spotgamma/

S&P Dow Jones (S&P 500): Reducing seasoning from 12 months to 6 months for megacaps and waiving the 4-quarter GAAP profitability requirement for large issuers.

https://www.wsj.com/finance/stocks/stock-indexes-are-contort...

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gwerbin | root | parent | next
This is not a "why".
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21asdffdsa12 | root | parent | next
Because this time we did learn our lesson is almost 15 years ago? Its a good time to get out of the ride
jjav | root | parent | next
> Why does SpaceX warrant a change of existing trading rules?

It does not, of course, but when oligarch corruption runs supreme, it is whatever they want.

rvba | root | parent | next
Because twitter helped elect those who set the rules now.
toasty228 | root | parent
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hagbarth | parent | next
Because 5 days is not enough for the market to discover the price of SpaceX. And the rules were changed so the float is weighted as if it was much much larger than it is.
gizajob | root | parent
Are you sure? It discovers it within seconds following a bad earnings report. It seems hard to know right now whether five days might actually be sufficient or not, seeing as the cat is out of the bag about how unprofitable and debt laden this trillion dollar enterprise is.
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oblio | parent | next
SpaceX financials are a mess outside of the actual SpaceX part. xAI is losing money hand over fist, other random bits in there are doing the same. The valuation makes no sense.

It's basically a money transfer from the average person to the poor richest person on the planet.

The true Great Filter is mental illness, apparently.

Alex-Programs | root | parent | next
XAI is now printing revenue thanks to the Anthropic compute deal. Moreso than SpaceX itself.
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philipallstar | root | parent | next
> xAI is losing money hand over fist

I wonder how much better Anthropic is doing.

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XorNot | root | parent
Moreover their filings on the matter basically correctly weight their space launch business and then go "and xAI will obviously be worth a bajilion dollars more".
stingrae | parent | next
they should wait for the major lockups to pass, there by skipping some of the inevitable volatility they will likely cause.
csomar | parent | next
Ask yourself this question: Why were the rules there in the first place? SpaceX being big doesn't make this okay, it actually makes it more dangerous since more and significant money could be funneled.
matwood | parent | next
You shouldn't be downvoted because your point is completely valid. Matt Levine made the same point in the last Money Stuff podcast. These indexes are supposed to contain the largest, most significant, and in some cases all companies so people shouldn't be mad at the indexes for pulling in a company that's going to have a 1.5T market cap at IPO. Given the market cap, it would actually be weird to not have it in an index like the S&P500 or QQQ.

Instead blame the bankers and market who are putting buying in at 1.5T valuation.

If people really don't want SpaceX in their S&P 500 tracking ETF, we should see a S&P-ex SpaceX in short order.

watwut | root | parent | next
The whole point of original rule was to have market discover price over time before adding a company.

It is absurd to blame "market" that did not had enough time to settle. "Bankers" are to blame for making this rules change happen.

It is entirely valit to blame people who changed the rules to allow this to happen.

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bluecalm | root | parent | next
>>If people really don't want SpaceX in their S&P 500 tracking ETF, we should see a S&P-ex SpaceX in short order.

"People" don't know much about finance to put it mildly. ETFs are created by market demand. Even "factors" ETFs are often based on completely irrational things like dividends, P/E ratios and other meaningless metrics. This happens because people are easily seduced by narratives ("solid dividend paying stocks", "low P/E ratio - good returns") which are plainly wrong but tempting to an average person.

Most people realized they don't know anything about finance and would like to pay someone (their fund manager) to make responsible decisions and expose them to wide market while avoiding blatant manipulations. Unfortunately the incentives are misaligned here. The managers' incentives are somewhere else. They are not paid by long term performance of their fund and they are disproportionally penalized for taking contrarian decisions.

People being force feed those mega IPOs losing money on them is bad for others as well - there will be less wealth for productive investments and more in hands of "players" (or scammers if you want to call it out). There might be a crash. Trust in financial market will plummet and hostile regulation might arise which other market participants will pay for even though they are not to blame.

I will not have exposure to those mega IPOs but I am in privileged position because:

-My understanding of financial markets is much better than that of an average person.

-I have quite a bit of time to follow all of it and react in time

-I pay 0% capital gain tax and use a broker with nearly 0 fees which allows me to rotate for free (almost)

-I know where and how to move my money so I don't lose advantages of wide market exposure

It took me a lot of effort to set it all up like that. An average person falls short on all of the above and is not in position to avoid donating part of their pension fund to Musk and Altman though. It is still bad for me for reasons mentioned above.

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oulipo2 | root | parent | next
So then, why change the rules?
pbhjpbhj | root | parent
What's really clever is that Musk could pull his Nazi salute at the inauguration of the president he bought, and the ensuing 'voting with your dollars' against him doesn't matter because he was able to orchestrate forcing people to pay him by cutting them out of the loop. I mean it's absolutely evil, but it's pretty clever - his team proved they can't run a country (they probably could, but don't want to), but they're incredibly adept at stealing.

I wonder if Musk chose rocketry solely because of the ability to use it to drain money from government?

realusername | parent
> SpaceX will certainly be in the top few companies.

I'd argue that it certainly isn't.