SpaceX - The IPO That Rewrote the Rulebook

SpaceX rocket on launch pad. Source: SpaceX

Index providers including Nasdaq, FTSE Russell, but not S&P have rewritten their inclusion rules specifically to accommodate SpaceX, forcing many passive funds to buy the stock almost immediately after listing.

With only around 5% of shares available to the public, a wave of forced buying from trillions of dollars of index-tracking capital will chase a scarce float, with consequences for price discovery and portfolio concentration.

SpaceX is expected to begin trading on Nasdaq on 12 June, targeting a valuation of around $1.8 trillion – the largest IPO ever undertaken. This is more than a big tech listing.

It raises some genuinely interesting questions about how passive investing works, who gets to set the rules, and what it means for the trillions of dollars of retirement savings tracking major indices. For many investors, index funds are the backbone of their portfolios. The SpaceX listing affects all of them.