SpaceX to join the Nasdaq-100
SpaceX, the aerospace and satellite company founded by Elon Musk, has made a significant move by becoming one of the quickest additions ever to the Nasdaq-100 index. This development has sparked a fresh wave of buying from passive investors, less than a month after the company’s blockbuster public debut.
Nasdaq announced on Friday that SpaceX qualifies for inclusion in the benchmark technology index. This news has set the stage for index-tracking funds and other product sponsors to begin purchasing shares after the market closes on July 6. SpaceX is expected to officially join the Nasdaq-100 before trading begins on July 7.
With over $800 billion tracking the index, including popular securities like the Invesco QQQ Trust (QQQ), SpaceX is anticipated to enter the index with a weighting of less than 1%. This rapid inclusion is made possible by Nasdaq’s recently adopted fast-track inclusion framework for newly public companies. This framework allows large IPOs to become eligible for the Nasdaq-100 after just 15 trading days, significantly shortening the waiting period that was historically much longer.
The inclusion of SpaceX in the Nasdaq-100 is expected to create additional demand for the company’s stock. Index funds and exchange-traded funds tied to the Nasdaq-100 will need to purchase shares to align with the benchmark’s new composition. Additionally, active managers who closely track the index may also adjust their positions accordingly.
Despite its rapid inclusion in the Nasdaq-100, SpaceX remains ineligible for inclusion in the S&P 500. This is due to the S&P Dow Jones Indices declining to create a similar fast-track process for the S&P 500, which has separate profitability and seasoning requirements.
Overall, this move to include SpaceX in the Nasdaq-100 highlights the company’s growing importance in the market and its appeal to passive investors. As SpaceX continues to make strides in the aerospace and satellite industry, its stock is likely to remain a key player in the market.
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