SpaceX Seeks Early Index Entry as It Prepares Massive IPO

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Elon Musk’s SpaceX is seeking an early boost for shares after the rocket-and-satellite business makes its stock market debut later this year.

Advisers for the company, which recently merged with xAI, have reached out to major index providers, including Nasdaq, to discuss how SpaceX and this year’s other hot startups might join key indexes sooner than normal, according to people familiar with the matter.

Companies typically must wait several months or a year after their public debut before gaining inclusion in a major index such as the S&P 500 or the Nasdaq-100. Inclusion unlocks access to retail and institutional capital from funds, particularly those mimicking the performance of indexes that have to hold the companies in the index.

The traditional waiting period is intended to give the companies time to demonstrate that they are stable and liquid enough to handle extensive buying from index funds.

SpaceX hopes to skirt traditional rules in an effort to bring liquidity to its shareholders sooner as part of its planned IPO. SpaceX advisers have sought index policy changes that would fast-track its entry into major indexes for the company and benefit other highly-valued private companies, the people said.

Last valued at $800 billion, SpaceX is targeting a valuation of more than $1 trillion, a listing that would become the largest-ever U.S. IPO.

Also worth noting that Elon Musk is seeking changes to the 6-month lockout period after a company IPOs so he can liquidate some of his SpaceX stock more quickly after the IPO.

I think this is interesting in terms of how eager people might be to participate in SpaceX's IPO but I think the much bigger story here is potential changes to how long companies must be public before being included in the major indexes. I worry that this could be really harmful to retail investors, especially if it is paired with a reduced lockout period for executives of newly publicly traded companies. It has the potential to reward companies and executives more on successfully marketing an IPO event than successfully running a company and the liquidity provided by the major indexes could float a scam for a long time. I'm almost entirely an index investor and the prospect of this if pretty frightening to me, I'm not sure how I would pivot as I never had to think too deeply about investing before