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Incorrect, You don't just "get put into" the SP500, you need to meet the qualifications first. I doubt WeWork will reach positive earnings and a market cap of 5

Incorrect, You don't just "get put into" the SP500, you need to meet the qualifications first. I doubt WeWork will reach positive earnings and a market cap of 5.3 bln anytime soon. --It must be a U.S. company. --The market cap must be $5.3 billion or more. --The public float must consist of at least 50% of outstanding shares. --It must have positive reported earnings in the most recent quarter, as well as over the four most recent quarters. --The stock must have an active market and must trade for a reasonable share price. https://www.fool.com/knowledge-center/what-is-the-sp-500.aspx https://www.fool.com/knowledge-center/what-is-the-sp-500.asp...

kolbe 7y ago
> I doubt WeWork will reach positive earnings and a market cap of 5.3 bln anytime soon. No one said anything about "anytime soon" (1) They are a US company. (2) They raised at a $40bn valuation in their last funding round, so I don't know why you think a $5.3bn market cap is out of the range of possibility. (3) The float will be whatever it is. (4) WeWork is a real estate company. Real estate companies tend to make profit. The biggest issue most people have with WeWork is that their profits look small. (5) Whatever that means. They will be in an active market, but reasonable is in the eye of the beholder.
- ericd 7y ago
  Softbank is currently making up the valuation, and by doing so, setting the value for their existing holdings. Take those valuations with a large grain of salt, it's not like a publicly traded security where you can be reasonably sure of getting around that market value if you decided to sell right now.
  - kolbe 7y ago
    I suggest you look into the history of companies like TLRY and the current state of BYND.
    - ericd 7y ago
      Can you summarize what you’re trying to point out with those two? Is it just that the market is bubbly and willing to support insane valuations?
      - kolbe 7y ago
        Beyond Meat recently was trading in the open market at $230. They decided they wanted to sell 4% of the company in a secondary offering, and they were only able to get $160/share. Tilray had similar problems trying to monetize their high valuation. The point is that bubbly tech prices in public markets are no less fragile than bubbly ones in private markets.
        ericd 7y ago
        Ah great example, thanks for summarizing. I haven't been following BYND. 4% is a pretty small percentage compared to the amount of float (~91% right now). I wonder if the price would have moved that much if that many shares had been sold unofficially. But yeah, if you sell integer percentages of a company in a short timeframe, you're right that you can't expect to get the current market price. I'm surprised that it moved it so much in this case, though.

kolbe 7y ago

> I doubt WeWork will reach positive earnings and a market cap of 5.3 bln anytime soon. No one said anything about "anytime soon" (1) They are a US company. (2) They raised at a $40bn valuation in their last funding round, so I don't know why you think a $5.3bn market cap is out of the range of possibility. (3) The float will be whatever it is. (4) WeWork is a real estate company. Real estate companies tend to make profit. The biggest issue most people have with WeWork is that their profits look small. (5) Whatever that means. They will be in an active market, but reasonable is in the eye of the beholder.

ericd 7y ago
Softbank is currently making up the valuation, and by doing so, setting the value for their existing holdings. Take those valuations with a large grain of salt, it's not like a publicly traded security where you can be reasonably sure of getting around that market value if you decided to sell right now.
- kolbe 7y ago
  I suggest you look into the history of companies like TLRY and the current state of BYND.
  - ericd 7y ago
    Can you summarize what you’re trying to point out with those two? Is it just that the market is bubbly and willing to support insane valuations?
    - kolbe 7y ago
      Beyond Meat recently was trading in the open market at $230. They decided they wanted to sell 4% of the company in a secondary offering, and they were only able to get $160/share. Tilray had similar problems trying to monetize their high valuation. The point is that bubbly tech prices in public markets are no less fragile than bubbly ones in private markets.
      - ericd 7y ago
        Ah great example, thanks for summarizing. I haven't been following BYND. 4% is a pretty small percentage compared to the amount of float (~91% right now). I wonder if the price would have moved that much if that many shares had been sold unofficially. But yeah, if you sell integer percentages of a company in a short timeframe, you're right that you can't expect to get the current market price. I'm surprised that it moved it so much in this case, though.