17 ms·

SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P

1062 points by tristanj 5mo ago

rcleveng 5mo ago
Two words - Thank Goodness. Before the flood of money from the index funds arrive, I'd love to see what's the right valuation for them.
infinitewars 5mo ago
[dead]
dools 5mo ago
I wouldn’t buy an ETF for an index fund that includes non dividend paying stocks
xenospn 5mo ago
Good.
JumpCrisscross 5mo ago
The amount of misinformation around this topic was absolutely nuts over the past few days. Good rule of thumb: if a YouTuber or other influencer was pitching doom and relaying this rule change by S&P as a fait accompli, stop following them. (It was a common misconception on this thread: https://news.ycombinator.com/item?id=48364055 https://news.ycombinator.com/item?id=48364055.)
- zuzululu 5mo ago
  Not really seeing the issue you are raising. Seems like a pretty nuanced thread.
- aeternum 5mo ago
  Yes, I think given that misinfo this was probably the right decision by S&P, everyone would be saying I told you so and screaming about providing exit liquidity. My prediction is that this will overall end up costing index holders money though. They will ultimately get a worse entry price for SpaceX and the other mega IPOs. Only time will tell.
  - JumpCrisscross 5mo ago
    > given that misinfo this was probably the right decision by S&P The misinformation was almost certainly not taken into account, and it shouldn’t have been. > everyone would be saying I told you so and screaming Influencers will scream regardless. It’s what they’re paid to do. The NASDAQ 100 made these changes and is doing just fine. > will overall end up costing index holders money though. They will ultimately get a worse entry price for SpaceX and the other mega IPOs There are lots of indices. S&P largely targets those built around mature companies. If you want a total-market index, those exist and tend to rapidly incorporate IPOs.
  - nothercastle 5mo ago
    They might but changing the rules for a highly controversial company would do more harm in lost trusts than gain for investors.
    - philistine 5mo ago
      Exactly. There is this undercurrent of The End Times everywhere, that this is it. This is the end of ... everything that was. When in fact it is not the end times, and the people at those indexes want to exist longer than SpaceX.
      - aeternum 5mo ago
        Index investors often believe that indexes work well because they average everything out. The reality is something like 96% of public companies underperform treasuries. ref: https://paretoinvestor.substack.com/p/why-96-of-stocks-are-dead-weight https://paretoinvestor.substack.com/p/why-96-of-stocks-are-d...
        imtringued 5mo ago
        That blog post is garbage and fails to accurately convey the paper it is based on. >I rely on the Center for Research in Securities Prices (CRSP) monthly stock return database, which contains all common stocks listed on the NYSE, Amex, and NASDAQ exchanges. Of all monthly common stock returns contained in the CRSP database from 1926 to 2016, only 47.8% are larger than the one-month Treasury rate in the same month. In fact, less than half of monthly CRSP common stock returns are positive. When focusing on stocks’ full lifetimes (from the beginning of the sample in 1926 or first appearance in CRSP through the 2016 end of the sample or delisting from CRSP), just 42.6% of common stocks, slightly less than three out of seven, have a buy-and-hold return (inclusive of reinvested dividends) that exceeds the return to holding one-month Treasury Bills over the matched horizon. More than half of CRSP common stocks deliver negative lifetime returns. The single most frequent outcome (when returns are rounded to the nearest 5%) observed for individual common stocks over their full lifetimes is a loss of 100%. >Individual common stocks tend to have rather short lives. The median time that a stock is listed on the CRSP database between 1926 and 2016 is seven and a half years. To assess whether individual stocks generate positive returns over the full ninety years of available CRSP data, I conduct bootstrap simulations. In particular, I assess the likelihood that a strategy that holds one stock selected at random during each month from 1926 to 2016 would have generated an accumulated 90-year return (ignoring any transaction costs) that exceeds various benchmarks. In light of the well-documented small-firm effect (whereby smaller firms earn higher average returns than large, as originally documented by Banz, 1980) it might have been anticipated that individual stocks would tend to outperform the value-weighted market. In fact, repeating the random selection process many times, I find that the single stock strategy underperformed the value-weighted market over the full ninety years in ninety six percent of the simulations. The single-stock strategy underperformed the one-month Treasury bill over the 1926 to 2016 period in seventy three percent of the simulations. >The fact that the overall stock market generates long term returns sufficiently large to be referred to as a puzzle, while the majority of individual stocks fail to even match Treasury bills, can be attributed to the fact that the distribution of stock returns is positively skewed. Simply put, large positive returns to a few stocks offset the modest or negative returns to more typical stocks. https://obj.portfolioconstructionforum.edu.au/articles_perspectives/Portfolio-Construction-Forum-HB_Do-Stocks-Outperform-Treasury-Bills.pdf https://obj.portfolioconstructionforum.edu.au/articles_persp... Compare this to the blog post: >The implication is devastating for index fund orthodoxy: When you own a broad market index, you’re mathematically forcing yourself to hold the 96.6% of stocks that create no value while simultaneously diluting your exposure to the 3.4% that generate all returns. The professor just told you that investing in any individual stock is a terrible decision and that investing in more stocks means having greater exposure to the stocks that do net a return, creating a puzzle, where diversification doesn't reduce yields, in fact it did the opposite: it increases the yields. There's also a general fallacy that any index (directly referred to as index orthodoxy) has to be a "broad market index", when in reality there are many competing indices. If someone came up with an index that would follow any investment strategy the blog post suggests and it turns out to work reliably, then people would switch part of their portfolio to that index. "Index othrodoxy" would prevail, because people just need a better index rather than abandoning the idea of an index altogether. It's also difficult to reconcile with the fact that after fees, most active funds have failed to net higher returns to their investors. This random blog post is basically delivering an active investment strategy on a silver platter that will make fund managers and the people investing into it rich, is this believable? Consider that it's written in a "shocking" AI style, trying to sell you something. Funnily enough, the ad in the middle of the blog post "The U.S. Treasury collapse is HERE!" is incompatible with the premise of the article, that 96% of stocks are worse than treasuries. >But even if we use the more moderate 80/20 framing, the strategic implication is identical: If 80% of market returns come from 20% of stocks, why would you construct a portfolio that treats all five hundred stocks in the S&P 500 equally? The thing is, you don't have to do that, like at all. There are indices like the S&P 500 Pure Value and S&P 500 Enhanced Value that are known to outperform the regular S&P 500. The problem is that they have done so over the long term and long term really means long term. There have been decades where they underperform. Also, the article is three times as long as it needs to be, it's clearly AI generated. Edit: Invesco renamed their ETF to S&P 500 Concentrated QVM.
- stubish 5mo ago
  What was the common misconception?
  - JumpCrisscross 5mo ago
    > What was the common misconception? That the rule change was a done deal. The pitch was some shadowy financial cabal forcing everyone’s retirement savings into SpaceX (which would not have been true even if S&P voted to include, but that’s a separate topic). The top comment and most of its subthreads are run-of-the-mill alarmism.
    - throw0101a 5mo ago
      > The top comment and most of its subthreads are run-of-the-mill alarmism. Worth considering: * https://en.wikipedia.org/wiki/Prevention_paradox https://en.wikipedia.org/wiki/Prevention_paradox And the rules for the NASDAQ 100 were changed, as were MSCI and CRSP: * https://www.schwab.com/learn/story/some-indexes-accelerate-entry-massive-ipos https://www.schwab.com/learn/story/some-indexes-accelerate-e...
      - JumpCrisscross 5mo ago
        Most assets don’t follow those funds. And NASDAQ 100 is explicitly tech focused, I support them making the change. The doomsaying was around most retirement assets. Which don’t follow any single index. But to the extent they do, follow the S&P 500. The market wasn’t pricing in any rebalancing. Commenters were screaming bloody murder about it. In the middle, I’m sure some numpties generated trading and management fees by switching target funds.
        willis936 5mo ago
        As they should have. The rules were in flight with a layover time measured in days on assets that are managed on the timescale of years. There was a legitimate reason to act urgently. It's easy to make claims in hindsight but the information on hand it was 100% the right call to protect your investments. This is not misinformation. Misinformation is saying the proposed rule change and their proximity to trillion dollar IPOs introduced no risk. Please do not spread such misinformation.
- insane_dreamer 5mo ago
  S&P wasn't fait accompli, but the NASDAQ 100 was
  - JumpCrisscross 5mo ago
    > S&P wasn't fait accompli, but the NASDAQ 100 was Sure. Nobody was properly making this distinction in social media, including on HN. Particularly with respect to the differences in scale and purpose between the NASDAQ 100 and S&P 500.
    - dogwalker5000 5mo ago
      The fact that a fast track was even considered is controversial IMHO. People flipping out, especially if their retirement is tied up with those indices, is to be expected. No one wants to be a bag holder for billionaire insiders.
      - loeg 5mo ago
        You're making a similar mistake treating it as fait accompli that SpaceX will tank between IPO and some future date, but that isn't a given either.
        XorNot 5mo ago
        SpaceX is not worth $1 trillion, when most of that valuation is based on xAI being worth far more then their already dominant position in the space launch business.
        gopher_space 5mo ago
        It's more about sidestepping the waves of market manipulation.
        insane_dreamer 5mo ago
        sure it's not a given, but I certainly am not confident enough that it won't happen to bet my money in it, which I would automatically be doing if it was admitted to the SP500
- karp773 5mo ago
  What's the urgency to bend the rules? It is not like SpaceX is banned for good. It will be included as soon as it meets the requirements.
  - JumpCrisscross 5mo ago
    > What's the urgency to bend the rules? If you’re buying into a tech-marketed fund like the NASDAQ 100 and it doesn’t include a large chunk of the tech market, you’re no longer passively investing in tech. You’re investing in an actively-managed fund. Historically, companies like SpaceX would have gone public earlier and grown into the index. Recognizing that has changed with multiple $1+ trillion IPO contenders makes sense; as it turns out, I think both NASDAQ and S&P decided correctly.
    - WarmWash 5mo ago
      Yeah, but is SpaceX actually worth $1T or does Elon just think that because of how Tesla investors value Tesla?
      - queuebert 5mo ago
        Historically a $1T market cap with a PE of 20.0 would be achievable with a $50B/yr profit. That seems easily achievable eventually for SpaceX, as it has actual hardware and services and IP.
        SwellJoe 5mo ago
        It's years away from $50B/year profit, if it ever gets there. The IPO valuation is insane.
        duttish 5mo ago
        Plus they now also have to compensate for the giant money fire called xai and the nazi cuddle huddle X/Twitter. The valuation is insane and the very low float plus short timeframe for actual price discovery just seems built to extract money from index investors. They can follow the same rules as everyone else.
- mapt 5mo ago
  Contrarily, you can interpret the doom pitches as a necessary political backlash whose degree of panic and whose quantity prevented the change from ending up as a fait accompli. Public decisionmakers do this sort of thing all the time. They "float an idea", "test the waters", "put up a trial balloon". They see what they can get away with. When the decisionmaker has a strong desire for the change, it may only get rolled back if powerful and widespread public dissent makes itself known, as it did in this case. When they don't really care about the issue, they might cancel it at the first sign that anyone has an issue. We can't know their degree of insistence just based on outcomes in these cases.
  - JumpCrisscross 5mo ago
    > the doom pitches as a necessary political backlash It was totally misinformed, came well after the public-comment period had ended and had zero net effect other than maybe generating some commissions and management fees for rando managers. There is bona fide hatred for these companies and their managers. Influencers twisted the facts to channel that for views.
- tasty_freeze 5mo ago
  Do you think that all the alarm had any effect on the blocking of the rule change? Is the right time to complain about a possible change is after it has been decided?
  - loeg 5mo ago
    I don't think doom and gloom on HN had any effect, no.
    - lokar 5mo ago
      It was much broader then HN
  - JumpCrisscross 5mo ago
    > Do you think that all the alarm had any effect Nope. S&P management probably wanted the rule changes passed.
- protocolture 5mo ago
  >if ... YouTuber... stop following them. Great advice.
- nobodyandproud 5mo ago
  Wrong. HN has been speculating on how wealth would be extracted from 401k and IRAs at least since the November elections in 2024. Far before any influencers even thought this would be a thing. I thought forced cryptocurrency funds, but it turned out to be something else.
- golden-face 5mo ago
  Oh come on Jump, how can you deny it's not shady? I could kind of agree with the argument that "well these companies stay private longer so they are more mature" but the float exemption with the seemingly arbitrary calculation to figure out weights completely belies that argument.
  - JumpCrisscross 5mo ago
    > how can you deny it's not shady? It wasn't. It's dumb. But that's different from shady. At the end of the day, the market never priced in the S&P making this decision because the default understanding was a public consultation by S&P goes nowhere. Influencers ran with a consultation being a fait accompli and now anyone saying otherwise is licking billionaire balls.
- l23k4 5mo ago
  [flagged]
deleted 5mo ago
[deleted]
stubish 5mo ago
This seems a sensible thing to do. If you change the rules on how things end up on your index, you force everyone using that index to reevaluate it. Your index is now perceived as more volatile (and probably is), and all the finance people need to reevaluate the risk of their index funds and decide if it is now 'growth', 'high growth' or whatever bucket it belongs in based on the new risk profile. And then all the portfolios need to be rebalanced. Which all takes time, more time than was being proposed. The sensible thing to do is to create a new index with the new rules.
- JumpCrisscross 5mo ago
  > sensible thing to do is to create a new index with the new rules It depends. Indices aren’t funds. They aren’t meant to balance investor interests. They’re meant to communicate some metric about the market. The S&P tells you how big companies are doing in an index optimized to balance representation against trading cost. So in 2005, float was taken into account for weighting (versus just market cap). This made sense. Also, since the start, the S&P 500 has been a committee-based index. Not rule based. This has made it successful; if you want stable and unchanging, you never went for the S&P 500.
  - jmyeet 5mo ago
    The market cap of the S&P 500 according to Google is ~$65T. Anthropic, OpenAI and SpaceX could well amount to $4T+ in market cap. That's ~6% of the entire index. It's like adding another NVidia. That's a big deal. The rules around index inclusion exist for a reason. Too much control in one person's hands (which SpaceX has), too small a float (so you don't get price discovery), lack of a history of financial performance and minimal trading days just don't give investors confidence and, like it or not, investment decisions are made based on the index. If you want to argue against passive investment, well, good luck with that. I think a lot of people have this weird idea that what we need is some theoretically unfettered market for "true" price discovery when it's actually regulations like this that create markets. It's like a libertarian brain worm. I don't think anybody wants these mega-companies out of the index, specifically. They just don't see why rules that exist for a reason should be suspended when the net effect of that is that investors have less information and there is a lot of forced purchasing. If you have confidence in your IPO, let the market decide what it's worth without trying to fix the price because what they seem to want is for insider lock-ups to end about the time we'd otherwise be getting normal price discovery. Kinda weird. Investor confidence needfs to be managed by creating a stable, regulated market.
throw0101a 5mo ago
See also S&P press release, "S&P Dow Jones Indices Consultation on Treatment of MegaCap Companies - Results": * https://press.spglobal.com/2026-06-04-S-P-Dow-Jones-Indices-Consultation-on-Treatment-of-MegaCap-Companies-Results https://press.spglobal.com/2026-06-04-S-P-Dow-Jones-Indices-...
- riffraff 5mo ago
  So they did tweak the rule for total market indexes, just not the "curated" ones.
  - willis936 5mo ago
    In the summary table of "proposed changes, current methodology, and result", the result column is "no change" for all rows. What rule tweak are you referring to? Edit: Ah I see it now. Separate tables for S&P cap-based indices and their other indices.
  - chasd00 5mo ago
    it makes sense for a total market index as it's a "total market" index. Given the purpose of the SP500, it makes less sense but I still see the argument. Grift or not, morals or not, an index shouldn't care. An index shouldn't care any more than Excel should care about the morality of evaluating a formula. It just tracks what it is defined to track. Leave it to the individual index tracking funds to apply a philosophy to their investments.
throw0101a 5mo ago
* https://archive.is/https://www.bloomberg.com/news/articles/2026-06-04/s-p-dow-jones-keeps-megacap-ipo-rules-as-is-after-consultation https://archive.is/https://www.bloomberg.com/news/articles/2... * https://archive.is/15pOn https://archive.is/15pOn
- skissane 5mo ago
  For me, that only shows the first two paragraphs. This lets you read the whole article: https://finance.yahoo.com/markets/stocks/articles/spacex-other-mega-ipos-denied-223529619.html https://finance.yahoo.com/markets/stocks/articles/spacex-oth...
  - mapleoin 5mo ago
    Unsurprisingly, it was all fluff.
jethronethro 5mo ago
Good. I'm surprised, though, that the usual fanboys/stans aren't converging on this to protest how unfair the S&P is.
- klaff 5mo ago
  They are.
  - jethronethro 5mo ago
    Guess I got in a bit early then ...
2OEH8eoCRo0 5mo ago
Huge relief. Thank God!
bicepjai 5mo ago
Glad there are some grown ups in US leadership
- dyauspitr 5mo ago
  They’ll be gone by Monday and replaced by a fitness coach or something.
- l23k4 5mo ago
  [flagged]
ak217 5mo ago
So relieved to see this!
d--b 5mo ago
Note that Nasdaq and Russel did put in place fast entry rules. S&P is the only one that didn’t. https://www.nasdaq.com/articles/new-fast-tracks-account-older-company-ipos https://www.nasdaq.com/articles/new-fast-tracks-account-olde...
- duttish 5mo ago
  Yea, this is great but I'm not sure how much this helps since it's just 1/3 keeping their wits about them. Nasdaq clearly did it for the big bucks and getting the listing, why did Russell bend the knee?
  - yieldcrv 5mo ago
    Russell tries to represent what investors are actually buying and selling, a larger swath of the economy than S&P Dow and Nasdaq do so they get a little bit of a pass for me, but Nasdaq doesn't
- lokar 5mo ago
  CRSP is changing the index VTI tracks
  - BoggleOhYeah 5mo ago
    CRSP has had fast track rules for quite a while. They changed their minimum float rule for these mega IPOs with low float.
    - lokar 5mo ago
      I feel like you need at least one of the two rules (time, float)
    - anonymousDan 5mo ago
      Sorry so CRSP will be fast-tracking SpaceX? I just checked and my Vanguard has 50% in that so would like to understand how exposed...
arowatbk 5mo ago
https://podcasts.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?i=1000763228561 https://podcasts.apple.com/ca/podcast/the-rational-reminder-... Long listen but a very thorough and nuanced discussion by a bunch of smart investment / finance guys in Canada. No click-bait-sky-is-falling content.
- jauntywundrkind 5mo ago
  [flagged]
  - khimaros 5mo ago
    were you trying to reply to someone else?
    - jauntywundrkind 5mo ago
      No, I'm saying they are hyping up some random podcast while saying sweet nothings. I really don't like empty hype. I want some actual content to posts that actually says something, not just links breathlessly encouraging me to go spend an hour listening.
      - adampunk 5mo ago
        And where did the ad hominem part arise?
        jauntywundrkind 5mo ago
        It's all empty words. > a very thorough and nuanced discussion > bunch of smart investment / finance guys > No click-bait-sky-is-falling content. The middle one is the ad-hominem puffery. The rest isn't quite exactly 100% 'of the person's, but still doesn't give me any actual leads into what the content is: its just empty puffery.
        5mo ago
ProAm 5mo ago
Thank fucking g-d.
impure 5mo ago
Good thing they're not dropping the profitability requirements. Ed Zitron would be proud.
louiereederson 5mo ago
The market is more unpredictable than it’s been in a long, long time so I hesitate to make a firm prediction but to me the odds that SpaceX will be a successful IPO over a 3-6 month window are significantly lower now. S&P inclusion basically requires funds to hold a position by default, and per their own estimates $20tn of assets are indexed/benchmarked to the S&P.
- riffraff 5mo ago
  They'll still be included in total market indexes (FTSE, MSCI, CRSP). As I understand it, VTI will be a major thing. Still, they're float adjusted (for the most part?).
  - dangus 5mo ago
    I think total market indexes are outside the scope of concern. They are buying SpaceX regardless of IPO rules.
- nsoonhui 5mo ago
  Not to say I have an opinion one way or another, but why do you think that SpaceX odds to have a successful IPO is lower now?
  - BLKNSLVR 5mo ago
    Not to whom you're replying... Depends what you mean by successful. If you mean "the IPO goes ahead" then I don't think this makes a difference (unless Elon cracks the shits at this decision and pulls out, which I'm not sure is an option). If "successful" equates to number-go-up, then my understanding is that Fast Index Entry would have resulted in, effectively, forced purchase of shares by various funds. When Fast Index Entry (FIE) was a chance of being introduced, the odds of number go up were higher. Now that FIE has been ruled out, there's a lower chance of number go up because there's no "forced blind purchase" group.
  - HerbManic 5mo ago
    Not OP but I will weigh in. The numbers for SpaceX were not looking great, they are burning cash faster than Starship crashing into the Indian ocean. The idea was that with a fast indexing, this would be mostly irrelevant as retirement funds would automatically buy into the IPO after 15 days thus bolstering the company before any sanity would prevail on the markets. Now that they have to wait a year for that point, that cash burn is going to work against them fairly heavily. There is also something like $20 billion of debt they have to pay back in the next 12 months that might not be covered over so easily now. That said, SpaceX and a lot of Elons companies have had figures that look terrible for ages, and yet they keep manage to pull rabbits out of the hat. So who knows. Maybe they sell a bunch of assets, they have more than enough to cover the gap.
alberth 5mo ago
This feels like massive news that general public won’t ever hear.
- tootie 5mo ago
  Basically nothing happened though. SpaceX asked them to change rules and they said no.
  - zeafoamrun 5mo ago
    Everyone was certain they would. Multiple people I know were rebalancing their portfolios way from the big index funds
    - chasd00 5mo ago
      > Multiple people I know were rebalancing their portfolios way from the big index funds Hypothetically, let's say the SpaceX IPO is a wild success. Will those people be disappointed on missing out in the returns? In other words, did they rebalance away because of financial numbers they didn't believe in or did they rebalance away because of emotional or philosophical reactions to the company? If they just don't like the company (likely company leadership) then i would guess they don't care how much return they miss out on, they want nothing to do with SpaceX period. I made a long drawn out comment up thread but i feel like a lot of this drama is due to an emotional response to SpaceX because of Musk, and the possibility of him becoming the first trillionaire, and Anthropic/OpenAI because of AI's risk to labor.
      - zeafoamrun 5mo ago
        No, it's definitely financial. Something along the lines of SpaceX's valuation only making sense if it replaces the entire productivity of white collar workforce of the entire USA with its AI ventures. If it ends up reaching escape velocity anyway, sure they would be disappointed, who isn't at least a little when they miss some opportunity.
shikck200 5mo ago
Paywalled.
tehlike 5mo ago
For all the people worried about spacex inclusion in nasdaq/qqq/etc It won't matter for your portfolio. Your portfolio will keep growing.
- HWR_14 5mo ago
  Maybe! Returns aren't guaranteed either way.
- tehlike 4mo ago
  I think i am turning out just right.
rchaud 5mo ago
Good. Indexes are supposed to be slow-moving, precisely due to their entry requirement of sustained profitability that skews towards mature companies. All that an inclusion of these new companies would accomplish is a bailout of their stockholders by pension funds and ETFs where millions of regular people shoulder all the downside risk. SpaceX and OAI stock will be available through Robinhood, Questrade and all the other retail investor markets. Individuals can make an informed choice to trade it there, rather than have it automatically added to their index fund without having any say.
- tristanj 5mo ago
  On a fundamental level, the S&P 500 index is meant to be a benchmark of the market. Journalists, policymakers, investment managers, politicians, regular investors, everyone I know all use the S&P 500 as the benchmark of the US stock market. If a significant percentage of the market is excluded from the index because they don't meet index inclusion criteria, then then index stops being a useful benchmark.
  - lovich 5mo ago
    It’s a benchmark of the market under certain rules, like having multiple quarters of earnings for the market to value them at. These companies want special exceptions. If you are an exception why should you be included in a benchmark? At best they should have an asterisk against their name like Sammy Sosa or Mark McGuire if they are not following the same rules.
    - tristanj 5mo ago
      Your baseball cheating analogy makes no sense here. Rules against corked bats / steroids exist so people don't cheat at a sport and all players can compete equally. S&P rules are supposed to make the index reflect the market. Totally different. The profitability requirement is something made up by the S&P committee. If that rule ends up excluding trillions in market cap, the rule has defeated its own purpose. The 12 months of profitability requirement punishes high-growth companies that invest their FCF into growing the business vs taking profits. It excludes companies like Amazon, which when ran by Bezos, was famously unprofitable and invested all free cash flow into growing the business and never turned a significant profit until >20 years after its founding.
siren2026 5mo ago
Those mega IPOs are the latest grift to unload overpriced shares before the whole AI tulip bubble explodes in everyone's face. The insiders know it, which is precisely why those IPOs are happening right now. Employees and VCs don't want to be holding the bag. small-time investors will be. Also, SpaceX is going to unlock more and more on their float at around the same time most indexes will have to buy it. It has been engineered to socialize the losses. I'm happy SP didn't agree to fast track any of those, unlike VTI and Nasdaq100. I spent the weekend to rebalance all my retirement accounts to make sure none of them are going to fast track those grifty IPOs. Unfortunately, I cannot do that for my taxable accounts as it would generate a tax-event.
- gmerc 5mo ago
  They are happening now because the entire space narrative is dependent on SDI, sorry Golden Dome, as a massive heist of taxpayer money for the militarization of space (nobody believes in economic civilian space compute). Like SDI it’s bullshit but like SDI it works at robbing everyone blind. That relies on Trump in power.
  - XorNot 5mo ago
    No? No one believes the Golden Dome will get built. No one is valuing space on that basis either. Even SpaceX's IPO isn't valued based on space launch and that's the problem.
    - gmerc 5mo ago
      “Space Datacenters”
- esskay 5mo ago
  Think it does also need to be said because there's a LOT of amateur investors here: If you're a person sitting there thinking you'll drop even just a few thousand dollars into SpaceX, OpenAI, etc when they list - you probably shouldn't. You'll very likely be losing it and you're the one about to make someone else rich.
bmitc 5mo ago
What is prompting SpaceX to IPO all of the sudden? I'm personally convinced that this is Musk trying to get out of debt from his Twitter purchase.
- Robotbeat 5mo ago
  That already happened with the merger of X with XAI and then the merger of Xai and SpaceX. But the reason is because SpaceX is trying to tool up for orbital datacenters. They're building a bunch of solar cell manufacturing plants and Starship launch pads.
  - conception 5mo ago
    Or at least they are selling the idea of orbital data centers since the technology for orbital data centers does not exist yet or in the short term.
    - Robotbeat 5mo ago
      It’s literally just a satellite with GPUs on it. SpaceX already has about 100MW of satellites in orbit. They’re making an upgraded version of these satellites, V3, designed for launch on Starship. Making a bigger versions of those with larger radiators (because of the duty cycle) and putting them in sun-synch is all that is required, if it can be done cheaply enough. And Starship, if it works, should be cheap enough as its propellant cost would be less than the fuel cost of using airliners to do transpacific air freight.
      - conception 5mo ago
        Ok… but thats not a data center?
        Robotbeat 5mo ago
        I’ve ran a small datacenter. 30kW can be a “datacenter”
matheusmoreira 5mo ago
Excellent. I was getting ready to reposition due to the risk.
- dnnddidiej 5mo ago
  S&P500 is already the A&I5 so yeah.
BLKNSLVR 5mo ago
Important to note: Nasdaq changed its rules recently so SpaceX can join the Nasdaq 100 Index, a cohort of the largest non-financial companies listed on its exchange, in just 15 trading days, down from a three-month minimum. FTSE Russell adopted a similar approach, shortening the waiting time to five trading days.
wg0 5mo ago
Looks like US society and its systems are well and alive despite the usual doom and gloom.
- dgellow 5mo ago
  It’s a single index… that doesn’t say anything about the country and its systems
  - Strom 5mo ago
    Not just any index, it's the most important index.
    - dgellow 5mo ago
      Which doesn’t change the fact that says nothing about US society and systems…
    - deleted 5mo ago
      [deleted]
parliament32 5mo ago
What a pleasant surprise. I was positive S&P would get strongarmed into the bamboozle like Nasdaq but it seems they have a bit more integrity. Good for them.
- Ekaros 5mo ago
  I think key difference here is that Nasdaq is also the market. Where as S&P is external. From this view them manipulating their own market which they profit in various ways actually is somewhat more questionable... Incentives are entirely different. And really now I am starting to think that Nasdaq maybe should not have index it runs in the first place...
  - petesergeant 5mo ago
    Yeah, this has taken me several readings to understand, I guess because I hadn't really dug into it or thought about it, and also a lot the articles talk about "stock exchanges competing for SpaceX's business". This whole story is about Nasdaq (company) specifically dangling inclusion into the Nasdaq-100 (index) as a means to get SpaceX to list on the Nasdaq (market). They're uniquely able to do this by owning a market and also an index that people care about. NYSE couldn’t really do this because its own indices don’t matter much. FTSE Russell could theoretically make FTSE 100 inclusion easier to help attract a company to list on the London Stock Exchange, but SpaceX choosing London as its primary market would be odd. S&P Dow Jones Indices has no equivalent incentive, because it doesn’t own a listing venue; its main asset is the credibility of the S&P 500. In all, this entire story has been about Nasdaq specifically being willing to weaken their index rules in order to attract SpaceX to their market.
  - aucisson_masque 5mo ago
    > key difference here is that Nasdaq is also the market. Where as S&P is external. As someone who has little experience in American stocks and index, would you explain it a bit more ? What you mean that nasdaq is also the market ? I thought they are both index, a valuation of entreprises and that's all.
andsoitis 5mo ago
As far as I know, will still be included in the NASDAQ 100 (since NASDAQ changed their rules already and SpaceX will be listed on that exchange).
wunderlotus 5mo ago
Thank goodness. I was v concerned about the implications of this.
dwroberts 5mo ago
Although it’s good they stood by their rules, elsewhere Reuters points out > S&P Global said it would modify entry rules for its broader S&P Total Market Index and Dow Jones U.S. Total Stock Market Index, creating a pathway for SpaceX to join those less widely followed indexes. So not really as principled as it seems https://www.reuters.com/business/finance/sp-global-keeps-fast-entry-proposal-unchanged-spacex-listing-looms-2026-06-04/ https://www.reuters.com/business/finance/sp-global-keeps-fas...
- anonymars 5mo ago
  Funny enough, I'd say that is exactly the place where tristanj's crusade actually makes sense, because those indexes are supposed to track the total market
OneManHorde 5mo ago
Baffling number of total-paywall links on the front page here these days.
Animats 5mo ago
The decision means companies like SpaceX would not be eligible for inclusion in the S&P 500 until at least one year after its listing and would also need to satisfy the index’s existing requirements for profitability and public float. Sudden outbreak of common sense. SpaceX is going "public" with only 4% of the stock being sold to outsiders. The S&P 500 requires a 50% public float. That may disqualify SpaceX for a long time. Although GOOG and META are listed, despite control being held by insider shares of a different class. There was a time when the NYSE did not permit companies with more than one class of stock to be listed on that exchange. (Except F, FORD, which predates the NYSE). That was lost some time around 1990 or so.
- rsanek 5mo ago
  It'll be at 50% within 6 months, then 100% within a year. https://www.economist.com/finance-and-economics/2026/06/01/can-the-stockmarket-swallow-spacex-anthropic-and-openai https://www.economist.com/finance-and-economics/2026/06/01/c...
  - jeltz 5mo ago
    And 200% within 2 years?
  - chrisandchris 5mo ago
    If Elon said that, it's probably more like 4% now, 12% in 5 years, then a chicken-out because whatever and never 100%. See full-self-driving.
    - ant6n 5mo ago
      Can't he just list his own shares but just keep holding them without selling.
  - Rebelgecko 5mo ago
    Is that a legally binding requirement, or just Elonspeak? (Like sending people to the moon by 2018 and summoning cars hands-free from NYC to LA)
ur-whale 5mo ago
> SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P Good. Looks like there's still a bit of sanity left in this world.
czhu12 5mo ago
This does seem sensible and I’m glad most of my holdings are in s&p funds. Just to play devils advocate though, what are the downsides of not having 3 of the biggest 10 in the world not in your fund, if you hold to track broad market performance? Wouldn’t that have a massive blind spot on AI related growth? Whether or not I personally think ai is over hyped or not, the whole point of these ETFs is to make sure I don’t get a say in the matter, since I’m a terrible stock picker
- nyc_pizzadev 5mo ago
  No, because AI is still unprofitable and could even be called a speculative venture given the crazy spending amounts. Let the speculators take the risk and reap the rewards. When profitability and all the other conditions are met, I’m happy for the greater market to buy in at the price the market determines. I think everything is functioning as designed.
- Analemma_ 5mo ago
  The new stocks are still going in, they're just going in after a year (the normal rules), rather than 5 or 15 days. The outrage here wasn't that the stocks were going into the indexes at all, it's that they were going in before price discovery, several quarters of earnings, more float, and expiration of insider lock-up periods, which seemed especially sketchy because of the (correct or not) perception that these IPO valuations are inflated and unrealistic. It seemed like they were trying to dump the bag on the public.
  - czhu12 5mo ago
    It seems the general consensus on HN is that they are overvalued and for sure will collapse in value down the road, I could imagine some frustration down the road if these companies actually become, say, 4T by the time they get added to indices.
    - undersuit 5mo ago
      There are different indices if you want to be exposed to that risk.
ryukoposting 5mo ago
Keeping newly-publicly listed companies off an index keeps outliers from screwing with the index. It's no secret that companies that have recently gone public tend to be considerably more volatile than companies that have been public for a while. I see a lot of comments saying things to this effect: "S&P 500 is just a metric/benchmark, not a fund, so it should consider the whole market even if that includes a newly-listed but very large company." And yeah, the S&P 500 is an index, not a fund. But you know what is a fund? SPY, VOO, IVV, FXAIX, and loads of others. Regardless of what institution(s) manage your retirement accounts, you are almost certainly benefitting from the S&P 500 filtering out post-IPO fuckery.
- chasd00 5mo ago
  The irony of all this drama is probably 90% of 401ks (retirement accounts) are in a target date fund since that's the default for most/all. When you get your 401k it figures out when you're going to be 65 and then drops you in a fund that gives you the highest and safest return at the time you hit 65. Target date funds contain all kinds of other funds and are actively managed and drift towards bonds (historically safer). As you get closer to retirement you have less time to make up a downturn therefore the risk level gets automatically turned down. So the whole argument of taking advantage of retirement accounts with these rule changes kind of falls apart. If you're close to retirement these funds want nothing to do with equities let alone high risk IPOs. If something happens, like a rule change to a tracked index, and all of a sudden the risk goes way up then the fund managers will make an adjustment to the portfolio that gets the risk back to where it was. Further, the SP500 deciding not to change rules doesn't do anything really anyway. If you're far from retirement your target date fund is going to get exposure to these IPOs because you can tolerate the risk and therefore maybe reap the reward. If you're actively managing your 401k and have everything in say a total market fund or some other investment then you're well enough aware and educated to switch funds as you please. I don't think those people are going to be impacted either because they will/should just switch to a fund they like. If they are negatively impacted then they made the wrong decision. If you have your own brokerage account and you're invested in a fund tracking an index you no longer like, well, then you need to sell and buy something you do like. I still don't see the reason for all the drama :shrug: What i think is really happening is people are having a very emotional response to SpaceX because of Elon Musk and the idea of him becoming a trillionaire and Anthropic/OpenAI because of AI and the risk to labor.
Ile09 5mo ago
Interesting from a sentiment perspective. The market is pricing in inclusion before it happens. By the time it's official the alpha is usually gone.
expedition32 5mo ago
I am currently reading a book about the post war history of the Amsterdam stock exchange and it's quite funny reading about the booms and busts. Although I am in my 40s I had already forgotten a lot- but yeah I was there in the 1990s. Repressed traumatic memories. Dutch consumers really soured on stocks when that house of cards collapsed. I would say "it is happening again" but at least now we have bots who trade for us in milliseconds (although those didn't save anyone in 2008).
- chasd00 5mo ago
  I feel like this drama is another example of the overall society change toward the culture of victimhood. Now it's passive investors outraged about being victimized by stock market index rule changes. The answer is, if you're so upset and impacted then cease being a passive investor. But then the standard reply is "well what about all the retirement accounts and people who just can't adjust?!". Those accounts are in target date funds actively managed for risk anyway so it doesn't matter. For the people who adjust their 401k's as they see fit, well, they should keep doing that. I feel like SP500 made the right decision because the proposed changes don't really align with the purpose of the SP500 IMO but i'm not a financial expert. The HN drama on some issues is a sight to behold.
visha1v 5mo ago
very mature decision by s&p, but at the same time will this not hurt spacex and other big IPOs? i thought the reason these mega IPOs are coming is because investors have run out of money and they companies need access to broader market capital to sustain. without 401k and other funds, won't this just hasten the bubble burst? am i missing something?
- Applejinx 5mo ago
  This is why people are freaking the heck out and demanding that all the index funds MUST include the doomed stocks because they're just that important and totally aren't a doomed bubble you guys. Not all viewpoints are unbiased overviews of the markets just wanting fairness. Some have always been trying to sell you something that's not what it seems, and they can be… vituperative.
schnitzelstoat 5mo ago
I was quite concerned about this, so this is really good news. In Spain, it's much better to use mutual funds rather than ETFs (for tax reasons) so I didn't have as much choice of funds to avoid these IPOs.
deadbabe 5mo ago
It’s popular to trash these IPOs now but I bet if spacex or the big AI companies don’t follow the same pattern as other IPOs and the stocks just keep climbing and making the shareholders a bunch of money, I can’t wait to see people saying stuff like “the market can stay irrational longer than you can stay solvent!” and giving explanations on why they knew this was going to happen all along and why the rule changes were actually a good thing!
schnitzelstoat 5mo ago
It seems MSCI will add them, maybe? See: https://www.msci.com/indexes/markets-in-motion/megacap-ipos https://www.msci.com/indexes/markets-in-motion/megacap-ipos But it's written in a rather confusing manner so I'm not certain.
lol_catz 5mo ago
Thank god.
Havoc 5mo ago
At least someone still has some backbone. I wonder how much of this decision is driven by recent media coverage about ETF holders getting screwed
CuriouslyC 5mo ago
This made my day. The fast track entry is 100% a pump and dump setup.
AngryData 5mo ago
Proof that inherent market efficiency is bullcrap if we need popular sentiment to get companies excluded for being obvious grifts.
- dlenski 5mo ago
  > if we need popular sentiment to get companies excluded for being obvious grifts. I don't understand this argument. SpaceX is not being "excluded" for any exceptional reason. S&P has stated, essentially, that SpaceX will be subject to the same INclusion rules as other companies. When (if!) SpaceX has a series of profitable quarters and reaches 50% free-float market cap, it will be included in the S&P 500 index like other companies are. https://news.ycombinator.com/item?id=48414252 https://news.ycombinator.com/item?id=48414252
deaton 5mo ago
Huge win for investors, given that S&P 500 funds are by far the largest index funds on the market, with VOO, IVV, and SPY being the 3 biggest ETFs.
cmiles8 5mo ago
This is the right decision. These indices are intended for stable, profitable companies with a proven long term business model. It’s not ment to be a casino. The market has plenty of other options available for folks that just want to bet the house on red and hope for the best.
ajaimk 5mo ago
How can we get the other indexes to also follow this too
hartator 5mo ago
I don’t know. Will this just delay bubble burst as people will be just waiting for the index inclusion?
alexpotato 5mo ago
Having lived through a couple big market busts over the past 30 years, it's interesting to see that almost all of them were caused by a loosening of standards. e.g. - DotCom boom was letting companies IPO even if they had no revenue - Great Recession was due to loosening credit restrictions for mortgages e.g. giving people NINJA (no income, no job) loans so very curious to see how this plays out.
- trumpdong 5mo ago
  Caused by, or is it more like the rules were changed to postpone an already inevitable bust?
baggachipz 5mo ago
Now the other golden question: Will they still require profitability?
ryzvonusef 5mo ago
All that wailing and gnashing about Spacex ipo 'forcing' index fund to invest and thus 'loot' poor people's retirements... when all you had to do was just...add a waiting clause. It can still be a passive fund, not the end of the world. Index trackers hire talented people surely they can add a waiting clause in their tracks too, just like S&P. If your index isn't adding waiting clause, it's simply because they are greedy.
Friedduck 5mo ago
It’s a huge relief. This was one of the largest frauds about to be forced upon so many unsuspecting investors. Epic in proportion.

1062 points by tristanj 5mo ago

Two words - Thank Goodness. Before the flood of money from the index funds arrive, I'd love to see what's the right valuation for them.

infinitewars 5mo ago

[dead]

dools 5mo ago

I wouldn’t buy an ETF for an index fund that includes non dividend paying stocks

xenospn 5mo ago

Good.

JumpCrisscross 5mo ago

The amount of misinformation around this topic was absolutely nuts over the past few days. Good rule of thumb: if a YouTuber or other influencer was pitching doom and relaying this rule change by S&P as a fait accompli, stop following them. (It was a common misconception on this thread: https://news.ycombinator.com/item?id=48364055 https://news.ycombinator.com/item?id=48364055.)

zuzululu 5mo ago
Not really seeing the issue you are raising. Seems like a pretty nuanced thread.
aeternum 5mo ago
Yes, I think given that misinfo this was probably the right decision by S&P, everyone would be saying I told you so and screaming about providing exit liquidity. My prediction is that this will overall end up costing index holders money though. They will ultimately get a worse entry price for SpaceX and the other mega IPOs. Only time will tell.
- JumpCrisscross 5mo ago
  > given that misinfo this was probably the right decision by S&P The misinformation was almost certainly not taken into account, and it shouldn’t have been. > everyone would be saying I told you so and screaming Influencers will scream regardless. It’s what they’re paid to do. The NASDAQ 100 made these changes and is doing just fine. > will overall end up costing index holders money though. They will ultimately get a worse entry price for SpaceX and the other mega IPOs There are lots of indices. S&P largely targets those built around mature companies. If you want a total-market index, those exist and tend to rapidly incorporate IPOs.
- nothercastle 5mo ago
  They might but changing the rules for a highly controversial company would do more harm in lost trusts than gain for investors.
  - philistine 5mo ago
    Exactly. There is this undercurrent of The End Times everywhere, that this is it. This is the end of ... everything that was. When in fact it is not the end times, and the people at those indexes want to exist longer than SpaceX.
    - aeternum 5mo ago
      Index investors often believe that indexes work well because they average everything out. The reality is something like 96% of public companies underperform treasuries. ref: https://paretoinvestor.substack.com/p/why-96-of-stocks-are-dead-weight https://paretoinvestor.substack.com/p/why-96-of-stocks-are-d...
      - imtringued 5mo ago
        That blog post is garbage and fails to accurately convey the paper it is based on. >I rely on the Center for Research in Securities Prices (CRSP) monthly stock return database, which contains all common stocks listed on the NYSE, Amex, and NASDAQ exchanges. Of all monthly common stock returns contained in the CRSP database from 1926 to 2016, only 47.8% are larger than the one-month Treasury rate in the same month. In fact, less than half of monthly CRSP common stock returns are positive. When focusing on stocks’ full lifetimes (from the beginning of the sample in 1926 or first appearance in CRSP through the 2016 end of the sample or delisting from CRSP), just 42.6% of common stocks, slightly less than three out of seven, have a buy-and-hold return (inclusive of reinvested dividends) that exceeds the return to holding one-month Treasury Bills over the matched horizon. More than half of CRSP common stocks deliver negative lifetime returns. The single most frequent outcome (when returns are rounded to the nearest 5%) observed for individual common stocks over their full lifetimes is a loss of 100%. >Individual common stocks tend to have rather short lives. The median time that a stock is listed on the CRSP database between 1926 and 2016 is seven and a half years. To assess whether individual stocks generate positive returns over the full ninety years of available CRSP data, I conduct bootstrap simulations. In particular, I assess the likelihood that a strategy that holds one stock selected at random during each month from 1926 to 2016 would have generated an accumulated 90-year return (ignoring any transaction costs) that exceeds various benchmarks. In light of the well-documented small-firm effect (whereby smaller firms earn higher average returns than large, as originally documented by Banz, 1980) it might have been anticipated that individual stocks would tend to outperform the value-weighted market. In fact, repeating the random selection process many times, I find that the single stock strategy underperformed the value-weighted market over the full ninety years in ninety six percent of the simulations. The single-stock strategy underperformed the one-month Treasury bill over the 1926 to 2016 period in seventy three percent of the simulations. >The fact that the overall stock market generates long term returns sufficiently large to be referred to as a puzzle, while the majority of individual stocks fail to even match Treasury bills, can be attributed to the fact that the distribution of stock returns is positively skewed. Simply put, large positive returns to a few stocks offset the modest or negative returns to more typical stocks. https://obj.portfolioconstructionforum.edu.au/articles_perspectives/Portfolio-Construction-Forum-HB_Do-Stocks-Outperform-Treasury-Bills.pdf https://obj.portfolioconstructionforum.edu.au/articles_persp... Compare this to the blog post: >The implication is devastating for index fund orthodoxy: When you own a broad market index, you’re mathematically forcing yourself to hold the 96.6% of stocks that create no value while simultaneously diluting your exposure to the 3.4% that generate all returns. The professor just told you that investing in any individual stock is a terrible decision and that investing in more stocks means having greater exposure to the stocks that do net a return, creating a puzzle, where diversification doesn't reduce yields, in fact it did the opposite: it increases the yields. There's also a general fallacy that any index (directly referred to as index orthodoxy) has to be a "broad market index", when in reality there are many competing indices. If someone came up with an index that would follow any investment strategy the blog post suggests and it turns out to work reliably, then people would switch part of their portfolio to that index. "Index othrodoxy" would prevail, because people just need a better index rather than abandoning the idea of an index altogether. It's also difficult to reconcile with the fact that after fees, most active funds have failed to net higher returns to their investors. This random blog post is basically delivering an active investment strategy on a silver platter that will make fund managers and the people investing into it rich, is this believable? Consider that it's written in a "shocking" AI style, trying to sell you something. Funnily enough, the ad in the middle of the blog post "The U.S. Treasury collapse is HERE!" is incompatible with the premise of the article, that 96% of stocks are worse than treasuries. >But even if we use the more moderate 80/20 framing, the strategic implication is identical: If 80% of market returns come from 20% of stocks, why would you construct a portfolio that treats all five hundred stocks in the S&P 500 equally? The thing is, you don't have to do that, like at all. There are indices like the S&P 500 Pure Value and S&P 500 Enhanced Value that are known to outperform the regular S&P 500. The problem is that they have done so over the long term and long term really means long term. There have been decades where they underperform. Also, the article is three times as long as it needs to be, it's clearly AI generated. Edit: Invesco renamed their ETF to S&P 500 Concentrated QVM.
stubish 5mo ago
What was the common misconception?
- JumpCrisscross 5mo ago
  > What was the common misconception? That the rule change was a done deal. The pitch was some shadowy financial cabal forcing everyone’s retirement savings into SpaceX (which would not have been true even if S&P voted to include, but that’s a separate topic). The top comment and most of its subthreads are run-of-the-mill alarmism.
  - throw0101a 5mo ago
    > The top comment and most of its subthreads are run-of-the-mill alarmism. Worth considering: * https://en.wikipedia.org/wiki/Prevention_paradox https://en.wikipedia.org/wiki/Prevention_paradox And the rules for the NASDAQ 100 were changed, as were MSCI and CRSP: * https://www.schwab.com/learn/story/some-indexes-accelerate-entry-massive-ipos https://www.schwab.com/learn/story/some-indexes-accelerate-e...
    - JumpCrisscross 5mo ago
      Most assets don’t follow those funds. And NASDAQ 100 is explicitly tech focused, I support them making the change. The doomsaying was around most retirement assets. Which don’t follow any single index. But to the extent they do, follow the S&P 500. The market wasn’t pricing in any rebalancing. Commenters were screaming bloody murder about it. In the middle, I’m sure some numpties generated trading and management fees by switching target funds.
      - willis936 5mo ago
        As they should have. The rules were in flight with a layover time measured in days on assets that are managed on the timescale of years. There was a legitimate reason to act urgently. It's easy to make claims in hindsight but the information on hand it was 100% the right call to protect your investments. This is not misinformation. Misinformation is saying the proposed rule change and their proximity to trillion dollar IPOs introduced no risk. Please do not spread such misinformation.
insane_dreamer 5mo ago
S&P wasn't fait accompli, but the NASDAQ 100 was
- JumpCrisscross 5mo ago
  > S&P wasn't fait accompli, but the NASDAQ 100 was Sure. Nobody was properly making this distinction in social media, including on HN. Particularly with respect to the differences in scale and purpose between the NASDAQ 100 and S&P 500.
  - dogwalker5000 5mo ago
    The fact that a fast track was even considered is controversial IMHO. People flipping out, especially if their retirement is tied up with those indices, is to be expected. No one wants to be a bag holder for billionaire insiders.
    - loeg 5mo ago
      You're making a similar mistake treating it as fait accompli that SpaceX will tank between IPO and some future date, but that isn't a given either.
      - XorNot 5mo ago
        SpaceX is not worth $1 trillion, when most of that valuation is based on xAI being worth far more then their already dominant position in the space launch business.
      - gopher_space 5mo ago
        It's more about sidestepping the waves of market manipulation.
      - insane_dreamer 5mo ago
        sure it's not a given, but I certainly am not confident enough that it won't happen to bet my money in it, which I would automatically be doing if it was admitted to the SP500
karp773 5mo ago
What's the urgency to bend the rules? It is not like SpaceX is banned for good. It will be included as soon as it meets the requirements.
- JumpCrisscross 5mo ago
  > What's the urgency to bend the rules? If you’re buying into a tech-marketed fund like the NASDAQ 100 and it doesn’t include a large chunk of the tech market, you’re no longer passively investing in tech. You’re investing in an actively-managed fund. Historically, companies like SpaceX would have gone public earlier and grown into the index. Recognizing that has changed with multiple $1+ trillion IPO contenders makes sense; as it turns out, I think both NASDAQ and S&P decided correctly.
  - WarmWash 5mo ago
    Yeah, but is SpaceX actually worth $1T or does Elon just think that because of how Tesla investors value Tesla?
    - queuebert 5mo ago
      Historically a $1T market cap with a PE of 20.0 would be achievable with a $50B/yr profit. That seems easily achievable eventually for SpaceX, as it has actual hardware and services and IP.
      - SwellJoe 5mo ago
        It's years away from $50B/year profit, if it ever gets there. The IPO valuation is insane.
        duttish 5mo ago
        Plus they now also have to compensate for the giant money fire called xai and the nazi cuddle huddle X/Twitter. The valuation is insane and the very low float plus short timeframe for actual price discovery just seems built to extract money from index investors. They can follow the same rules as everyone else.
mapt 5mo ago
Contrarily, you can interpret the doom pitches as a necessary political backlash whose degree of panic and whose quantity prevented the change from ending up as a fait accompli. Public decisionmakers do this sort of thing all the time. They "float an idea", "test the waters", "put up a trial balloon". They see what they can get away with. When the decisionmaker has a strong desire for the change, it may only get rolled back if powerful and widespread public dissent makes itself known, as it did in this case. When they don't really care about the issue, they might cancel it at the first sign that anyone has an issue. We can't know their degree of insistence just based on outcomes in these cases.
- JumpCrisscross 5mo ago
  > the doom pitches as a necessary political backlash It was totally misinformed, came well after the public-comment period had ended and had zero net effect other than maybe generating some commissions and management fees for rando managers. There is bona fide hatred for these companies and their managers. Influencers twisted the facts to channel that for views.
tasty_freeze 5mo ago
Do you think that all the alarm had any effect on the blocking of the rule change? Is the right time to complain about a possible change is after it has been decided?
- loeg 5mo ago
  I don't think doom and gloom on HN had any effect, no.
  - lokar 5mo ago
    It was much broader then HN
- JumpCrisscross 5mo ago
  > Do you think that all the alarm had any effect Nope. S&P management probably wanted the rule changes passed.
protocolture 5mo ago
>if ... YouTuber... stop following them. Great advice.
nobodyandproud 5mo ago
Wrong. HN has been speculating on how wealth would be extracted from 401k and IRAs at least since the November elections in 2024. Far before any influencers even thought this would be a thing. I thought forced cryptocurrency funds, but it turned out to be something else.
golden-face 5mo ago
Oh come on Jump, how can you deny it's not shady? I could kind of agree with the argument that "well these companies stay private longer so they are more mature" but the float exemption with the seemingly arbitrary calculation to figure out weights completely belies that argument.
- JumpCrisscross 5mo ago
  > how can you deny it's not shady? It wasn't. It's dumb. But that's different from shady. At the end of the day, the market never priced in the S&P making this decision because the default understanding was a public consultation by S&P goes nowhere. Influencers ran with a consultation being a fait accompli and now anyone saying otherwise is licking billionaire balls.
l23k4 5mo ago
[flagged]

deleted 5mo ago

[deleted]

stubish 5mo ago

This seems a sensible thing to do. If you change the rules on how things end up on your index, you force everyone using that index to reevaluate it. Your index is now perceived as more volatile (and probably is), and all the finance people need to reevaluate the risk of their index funds and decide if it is now 'growth', 'high growth' or whatever bucket it belongs in based on the new risk profile. And then all the portfolios need to be rebalanced. Which all takes time, more time than was being proposed. The sensible thing to do is to create a new index with the new rules.

JumpCrisscross 5mo ago
> sensible thing to do is to create a new index with the new rules It depends. Indices aren’t funds. They aren’t meant to balance investor interests. They’re meant to communicate some metric about the market. The S&P tells you how big companies are doing in an index optimized to balance representation against trading cost. So in 2005, float was taken into account for weighting (versus just market cap). This made sense. Also, since the start, the S&P 500 has been a committee-based index. Not rule based. This has made it successful; if you want stable and unchanging, you never went for the S&P 500.
- jmyeet 5mo ago
  The market cap of the S&P 500 according to Google is ~$65T. Anthropic, OpenAI and SpaceX could well amount to $4T+ in market cap. That's ~6% of the entire index. It's like adding another NVidia. That's a big deal. The rules around index inclusion exist for a reason. Too much control in one person's hands (which SpaceX has), too small a float (so you don't get price discovery), lack of a history of financial performance and minimal trading days just don't give investors confidence and, like it or not, investment decisions are made based on the index. If you want to argue against passive investment, well, good luck with that. I think a lot of people have this weird idea that what we need is some theoretically unfettered market for "true" price discovery when it's actually regulations like this that create markets. It's like a libertarian brain worm. I don't think anybody wants these mega-companies out of the index, specifically. They just don't see why rules that exist for a reason should be suspended when the net effect of that is that investors have less information and there is a lot of forced purchasing. If you have confidence in your IPO, let the market decide what it's worth without trying to fix the price because what they seem to want is for insider lock-ups to end about the time we'd otherwise be getting normal price discovery. Kinda weird. Investor confidence needfs to be managed by creating a stable, regulated market.

throw0101a 5mo ago

See also S&P press release, "S&P Dow Jones Indices Consultation on Treatment of MegaCap Companies - Results": * https://press.spglobal.com/2026-06-04-S-P-Dow-Jones-Indices-Consultation-on-Treatment-of-MegaCap-Companies-Results https://press.spglobal.com/2026-06-04-S-P-Dow-Jones-Indices-...

riffraff 5mo ago
So they did tweak the rule for total market indexes, just not the "curated" ones.
- willis936 5mo ago
  In the summary table of "proposed changes, current methodology, and result", the result column is "no change" for all rows. What rule tweak are you referring to? Edit: Ah I see it now. Separate tables for S&P cap-based indices and their other indices.
- chasd00 5mo ago
  it makes sense for a total market index as it's a "total market" index. Given the purpose of the SP500, it makes less sense but I still see the argument. Grift or not, morals or not, an index shouldn't care. An index shouldn't care any more than Excel should care about the morality of evaluating a formula. It just tracks what it is defined to track. Leave it to the individual index tracking funds to apply a philosophy to their investments.

throw0101a 5mo ago

* https://archive.is/https://www.bloomberg.com/news/articles/2026-06-04/s-p-dow-jones-keeps-megacap-ipo-rules-as-is-after-consultation https://archive.is/https://www.bloomberg.com/news/articles/2... * https://archive.is/15pOn https://archive.is/15pOn

skissane 5mo ago
For me, that only shows the first two paragraphs. This lets you read the whole article: https://finance.yahoo.com/markets/stocks/articles/spacex-other-mega-ipos-denied-223529619.html https://finance.yahoo.com/markets/stocks/articles/spacex-oth...
- mapleoin 5mo ago
  Unsurprisingly, it was all fluff.

jethronethro 5mo ago

Good. I'm surprised, though, that the usual fanboys/stans aren't converging on this to protest how unfair the S&P is.

klaff 5mo ago
They are.
- jethronethro 5mo ago
  Guess I got in a bit early then ...

2OEH8eoCRo0 5mo ago

Huge relief. Thank God!

bicepjai 5mo ago

Glad there are some grown ups in US leadership

dyauspitr 5mo ago
They’ll be gone by Monday and replaced by a fitness coach or something.
l23k4 5mo ago
[flagged]

ak217 5mo ago

So relieved to see this!

d--b 5mo ago

Note that Nasdaq and Russel did put in place fast entry rules. S&P is the only one that didn’t. https://www.nasdaq.com/articles/new-fast-tracks-account-older-company-ipos https://www.nasdaq.com/articles/new-fast-tracks-account-olde...

duttish 5mo ago
Yea, this is great but I'm not sure how much this helps since it's just 1/3 keeping their wits about them. Nasdaq clearly did it for the big bucks and getting the listing, why did Russell bend the knee?
- yieldcrv 5mo ago
  Russell tries to represent what investors are actually buying and selling, a larger swath of the economy than S&P Dow and Nasdaq do so they get a little bit of a pass for me, but Nasdaq doesn't
lokar 5mo ago
CRSP is changing the index VTI tracks
- BoggleOhYeah 5mo ago
  CRSP has had fast track rules for quite a while. They changed their minimum float rule for these mega IPOs with low float.
  - lokar 5mo ago
    I feel like you need at least one of the two rules (time, float)
  - anonymousDan 5mo ago
    Sorry so CRSP will be fast-tracking SpaceX? I just checked and my Vanguard has 50% in that so would like to understand how exposed...

arowatbk 5mo ago

https://podcasts.apple.com/ca/podcast/the-rational-reminder-podcast/id1426530582?i=1000763228561 https://podcasts.apple.com/ca/podcast/the-rational-reminder-... Long listen but a very thorough and nuanced discussion by a bunch of smart investment / finance guys in Canada. No click-bait-sky-is-falling content.

jauntywundrkind 5mo ago
[flagged]
- khimaros 5mo ago
  were you trying to reply to someone else?
  - jauntywundrkind 5mo ago
    No, I'm saying they are hyping up some random podcast while saying sweet nothings. I really don't like empty hype. I want some actual content to posts that actually says something, not just links breathlessly encouraging me to go spend an hour listening.
    - adampunk 5mo ago
      And where did the ad hominem part arise?
      - jauntywundrkind 5mo ago
        It's all empty words. > a very thorough and nuanced discussion > bunch of smart investment / finance guys > No click-bait-sky-is-falling content. The middle one is the ad-hominem puffery. The rest isn't quite exactly 100% 'of the person's, but still doesn't give me any actual leads into what the content is: its just empty puffery.
        5mo ago

ProAm 5mo ago

Thank fucking g-d.

impure 5mo ago

Good thing they're not dropping the profitability requirements. Ed Zitron would be proud.

louiereederson 5mo ago

The market is more unpredictable than it’s been in a long, long time so I hesitate to make a firm prediction but to me the odds that SpaceX will be a successful IPO over a 3-6 month window are significantly lower now. S&P inclusion basically requires funds to hold a position by default, and per their own estimates $20tn of assets are indexed/benchmarked to the S&P.

riffraff 5mo ago
They'll still be included in total market indexes (FTSE, MSCI, CRSP). As I understand it, VTI will be a major thing. Still, they're float adjusted (for the most part?).
- dangus 5mo ago
  I think total market indexes are outside the scope of concern. They are buying SpaceX regardless of IPO rules.
nsoonhui 5mo ago
Not to say I have an opinion one way or another, but why do you think that SpaceX odds to have a successful IPO is lower now?
- BLKNSLVR 5mo ago
  Not to whom you're replying... Depends what you mean by successful. If you mean "the IPO goes ahead" then I don't think this makes a difference (unless Elon cracks the shits at this decision and pulls out, which I'm not sure is an option). If "successful" equates to number-go-up, then my understanding is that Fast Index Entry would have resulted in, effectively, forced purchase of shares by various funds. When Fast Index Entry (FIE) was a chance of being introduced, the odds of number go up were higher. Now that FIE has been ruled out, there's a lower chance of number go up because there's no "forced blind purchase" group.
- HerbManic 5mo ago
  Not OP but I will weigh in. The numbers for SpaceX were not looking great, they are burning cash faster than Starship crashing into the Indian ocean. The idea was that with a fast indexing, this would be mostly irrelevant as retirement funds would automatically buy into the IPO after 15 days thus bolstering the company before any sanity would prevail on the markets. Now that they have to wait a year for that point, that cash burn is going to work against them fairly heavily. There is also something like $20 billion of debt they have to pay back in the next 12 months that might not be covered over so easily now. That said, SpaceX and a lot of Elons companies have had figures that look terrible for ages, and yet they keep manage to pull rabbits out of the hat. So who knows. Maybe they sell a bunch of assets, they have more than enough to cover the gap.

alberth 5mo ago

This feels like massive news that general public won’t ever hear.

tootie 5mo ago
Basically nothing happened though. SpaceX asked them to change rules and they said no.
- zeafoamrun 5mo ago
  Everyone was certain they would. Multiple people I know were rebalancing their portfolios way from the big index funds
  - chasd00 5mo ago
    > Multiple people I know were rebalancing their portfolios way from the big index funds Hypothetically, let's say the SpaceX IPO is a wild success. Will those people be disappointed on missing out in the returns? In other words, did they rebalance away because of financial numbers they didn't believe in or did they rebalance away because of emotional or philosophical reactions to the company? If they just don't like the company (likely company leadership) then i would guess they don't care how much return they miss out on, they want nothing to do with SpaceX period. I made a long drawn out comment up thread but i feel like a lot of this drama is due to an emotional response to SpaceX because of Musk, and the possibility of him becoming the first trillionaire, and Anthropic/OpenAI because of AI's risk to labor.
    - zeafoamrun 5mo ago
      No, it's definitely financial. Something along the lines of SpaceX's valuation only making sense if it replaces the entire productivity of white collar workforce of the entire USA with its AI ventures. If it ends up reaching escape velocity anyway, sure they would be disappointed, who isn't at least a little when they miss some opportunity.

shikck200 5mo ago

Paywalled.

tehlike 5mo ago

For all the people worried about spacex inclusion in nasdaq/qqq/etc It won't matter for your portfolio. Your portfolio will keep growing.

HWR_14 5mo ago
Maybe! Returns aren't guaranteed either way.
tehlike 4mo ago
I think i am turning out just right.

rchaud 5mo ago

Good. Indexes are supposed to be slow-moving, precisely due to their entry requirement of sustained profitability that skews towards mature companies. All that an inclusion of these new companies would accomplish is a bailout of their stockholders by pension funds and ETFs where millions of regular people shoulder all the downside risk. SpaceX and OAI stock will be available through Robinhood, Questrade and all the other retail investor markets. Individuals can make an informed choice to trade it there, rather than have it automatically added to their index fund without having any say.

tristanj 5mo ago
On a fundamental level, the S&P 500 index is meant to be a benchmark of the market. Journalists, policymakers, investment managers, politicians, regular investors, everyone I know all use the S&P 500 as the benchmark of the US stock market. If a significant percentage of the market is excluded from the index because they don't meet index inclusion criteria, then then index stops being a useful benchmark.
- lovich 5mo ago
  It’s a benchmark of the market under certain rules, like having multiple quarters of earnings for the market to value them at. These companies want special exceptions. If you are an exception why should you be included in a benchmark? At best they should have an asterisk against their name like Sammy Sosa or Mark McGuire if they are not following the same rules.
  - tristanj 5mo ago
    Your baseball cheating analogy makes no sense here. Rules against corked bats / steroids exist so people don't cheat at a sport and all players can compete equally. S&P rules are supposed to make the index reflect the market. Totally different. The profitability requirement is something made up by the S&P committee. If that rule ends up excluding trillions in market cap, the rule has defeated its own purpose. The 12 months of profitability requirement punishes high-growth companies that invest their FCF into growing the business vs taking profits. It excludes companies like Amazon, which when ran by Bezos, was famously unprofitable and invested all free cash flow into growing the business and never turned a significant profit until >20 years after its founding.

siren2026 5mo ago

Those mega IPOs are the latest grift to unload overpriced shares before the whole AI tulip bubble explodes in everyone's face. The insiders know it, which is precisely why those IPOs are happening right now. Employees and VCs don't want to be holding the bag. small-time investors will be. Also, SpaceX is going to unlock more and more on their float at around the same time most indexes will have to buy it. It has been engineered to socialize the losses. I'm happy SP didn't agree to fast track any of those, unlike VTI and Nasdaq100. I spent the weekend to rebalance all my retirement accounts to make sure none of them are going to fast track those grifty IPOs. Unfortunately, I cannot do that for my taxable accounts as it would generate a tax-event.

gmerc 5mo ago
They are happening now because the entire space narrative is dependent on SDI, sorry Golden Dome, as a massive heist of taxpayer money for the militarization of space (nobody believes in economic civilian space compute). Like SDI it’s bullshit but like SDI it works at robbing everyone blind. That relies on Trump in power.
- XorNot 5mo ago
  No? No one believes the Golden Dome will get built. No one is valuing space on that basis either. Even SpaceX's IPO isn't valued based on space launch and that's the problem.
  - gmerc 5mo ago
    “Space Datacenters”
esskay 5mo ago
Think it does also need to be said because there's a LOT of amateur investors here: If you're a person sitting there thinking you'll drop even just a few thousand dollars into SpaceX, OpenAI, etc when they list - you probably shouldn't. You'll very likely be losing it and you're the one about to make someone else rich.

bmitc 5mo ago

What is prompting SpaceX to IPO all of the sudden? I'm personally convinced that this is Musk trying to get out of debt from his Twitter purchase.

Robotbeat 5mo ago
That already happened with the merger of X with XAI and then the merger of Xai and SpaceX. But the reason is because SpaceX is trying to tool up for orbital datacenters. They're building a bunch of solar cell manufacturing plants and Starship launch pads.
- conception 5mo ago
  Or at least they are selling the idea of orbital data centers since the technology for orbital data centers does not exist yet or in the short term.
  - Robotbeat 5mo ago
    It’s literally just a satellite with GPUs on it. SpaceX already has about 100MW of satellites in orbit. They’re making an upgraded version of these satellites, V3, designed for launch on Starship. Making a bigger versions of those with larger radiators (because of the duty cycle) and putting them in sun-synch is all that is required, if it can be done cheaply enough. And Starship, if it works, should be cheap enough as its propellant cost would be less than the fuel cost of using airliners to do transpacific air freight.
    - conception 5mo ago
      Ok… but thats not a data center?
      - Robotbeat 5mo ago
        I’ve ran a small datacenter. 30kW can be a “datacenter”

matheusmoreira 5mo ago

Excellent. I was getting ready to reposition due to the risk.

dnnddidiej 5mo ago
S&P500 is already the A&I5 so yeah.

BLKNSLVR 5mo ago

Important to note: Nasdaq changed its rules recently so SpaceX can join the Nasdaq 100 Index, a cohort of the largest non-financial companies listed on its exchange, in just 15 trading days, down from a three-month minimum. FTSE Russell adopted a similar approach, shortening the waiting time to five trading days.

wg0 5mo ago

Looks like US society and its systems are well and alive despite the usual doom and gloom.

dgellow 5mo ago
It’s a single index… that doesn’t say anything about the country and its systems
- Strom 5mo ago
  Not just any index, it's the most important index.
  - dgellow 5mo ago
    Which doesn’t change the fact that says nothing about US society and systems…
  - deleted 5mo ago
    [deleted]

parliament32 5mo ago

What a pleasant surprise. I was positive S&P would get strongarmed into the bamboozle like Nasdaq but it seems they have a bit more integrity. Good for them.

Ekaros 5mo ago
I think key difference here is that Nasdaq is also the market. Where as S&P is external. From this view them manipulating their own market which they profit in various ways actually is somewhat more questionable... Incentives are entirely different. And really now I am starting to think that Nasdaq maybe should not have index it runs in the first place...
- petesergeant 5mo ago
  Yeah, this has taken me several readings to understand, I guess because I hadn't really dug into it or thought about it, and also a lot the articles talk about "stock exchanges competing for SpaceX's business". This whole story is about Nasdaq (company) specifically dangling inclusion into the Nasdaq-100 (index) as a means to get SpaceX to list on the Nasdaq (market). They're uniquely able to do this by owning a market and also an index that people care about. NYSE couldn’t really do this because its own indices don’t matter much. FTSE Russell could theoretically make FTSE 100 inclusion easier to help attract a company to list on the London Stock Exchange, but SpaceX choosing London as its primary market would be odd. S&P Dow Jones Indices has no equivalent incentive, because it doesn’t own a listing venue; its main asset is the credibility of the S&P 500. In all, this entire story has been about Nasdaq specifically being willing to weaken their index rules in order to attract SpaceX to their market.
- aucisson_masque 5mo ago
  > key difference here is that Nasdaq is also the market. Where as S&P is external. As someone who has little experience in American stocks and index, would you explain it a bit more ? What you mean that nasdaq is also the market ? I thought they are both index, a valuation of entreprises and that's all.

andsoitis 5mo ago

As far as I know, will still be included in the NASDAQ 100 (since NASDAQ changed their rules already and SpaceX will be listed on that exchange).

wunderlotus 5mo ago

Thank goodness. I was v concerned about the implications of this.

dwroberts 5mo ago

Although it’s good they stood by their rules, elsewhere Reuters points out > S&P Global said it would modify entry rules for its broader S&P Total Market Index and Dow Jones U.S. Total Stock Market Index, creating a pathway for SpaceX to join those less widely followed indexes. So not really as principled as it seems https://www.reuters.com/business/finance/sp-global-keeps-fast-entry-proposal-unchanged-spacex-listing-looms-2026-06-04/ https://www.reuters.com/business/finance/sp-global-keeps-fas...

anonymars 5mo ago
Funny enough, I'd say that is exactly the place where tristanj's crusade actually makes sense, because those indexes are supposed to track the total market

OneManHorde 5mo ago

Baffling number of total-paywall links on the front page here these days.

Animats 5mo ago

The decision means companies like SpaceX would not be eligible for inclusion in the S&P 500 until at least one year after its listing and would also need to satisfy the index’s existing requirements for profitability and public float. Sudden outbreak of common sense. SpaceX is going "public" with only 4% of the stock being sold to outsiders. The S&P 500 requires a 50% public float. That may disqualify SpaceX for a long time. Although GOOG and META are listed, despite control being held by insider shares of a different class. There was a time when the NYSE did not permit companies with more than one class of stock to be listed on that exchange. (Except F, FORD, which predates the NYSE). That was lost some time around 1990 or so.

rsanek 5mo ago
It'll be at 50% within 6 months, then 100% within a year. https://www.economist.com/finance-and-economics/2026/06/01/can-the-stockmarket-swallow-spacex-anthropic-and-openai https://www.economist.com/finance-and-economics/2026/06/01/c...
- jeltz 5mo ago
  And 200% within 2 years?
- chrisandchris 5mo ago
  If Elon said that, it's probably more like 4% now, 12% in 5 years, then a chicken-out because whatever and never 100%. See full-self-driving.
  - ant6n 5mo ago
    Can't he just list his own shares but just keep holding them without selling.
- Rebelgecko 5mo ago
  Is that a legally binding requirement, or just Elonspeak? (Like sending people to the moon by 2018 and summoning cars hands-free from NYC to LA)

ur-whale 5mo ago

> SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P Good. Looks like there's still a bit of sanity left in this world.

czhu12 5mo ago

This does seem sensible and I’m glad most of my holdings are in s&p funds. Just to play devils advocate though, what are the downsides of not having 3 of the biggest 10 in the world not in your fund, if you hold to track broad market performance? Wouldn’t that have a massive blind spot on AI related growth? Whether or not I personally think ai is over hyped or not, the whole point of these ETFs is to make sure I don’t get a say in the matter, since I’m a terrible stock picker

nyc_pizzadev 5mo ago
No, because AI is still unprofitable and could even be called a speculative venture given the crazy spending amounts. Let the speculators take the risk and reap the rewards. When profitability and all the other conditions are met, I’m happy for the greater market to buy in at the price the market determines. I think everything is functioning as designed.
Analemma_ 5mo ago
The new stocks are still going in, they're just going in after a year (the normal rules), rather than 5 or 15 days. The outrage here wasn't that the stocks were going into the indexes at all, it's that they were going in before price discovery, several quarters of earnings, more float, and expiration of insider lock-up periods, which seemed especially sketchy because of the (correct or not) perception that these IPO valuations are inflated and unrealistic. It seemed like they were trying to dump the bag on the public.
- czhu12 5mo ago
  It seems the general consensus on HN is that they are overvalued and for sure will collapse in value down the road, I could imagine some frustration down the road if these companies actually become, say, 4T by the time they get added to indices.
  - undersuit 5mo ago
    There are different indices if you want to be exposed to that risk.

ryukoposting 5mo ago

Keeping newly-publicly listed companies off an index keeps outliers from screwing with the index. It's no secret that companies that have recently gone public tend to be considerably more volatile than companies that have been public for a while. I see a lot of comments saying things to this effect: "S&P 500 is just a metric/benchmark, not a fund, so it should consider the whole market even if that includes a newly-listed but very large company." And yeah, the S&P 500 is an index, not a fund. But you know what is a fund? SPY, VOO, IVV, FXAIX, and loads of others. Regardless of what institution(s) manage your retirement accounts, you are almost certainly benefitting from the S&P 500 filtering out post-IPO fuckery.

chasd00 5mo ago
The irony of all this drama is probably 90% of 401ks (retirement accounts) are in a target date fund since that's the default for most/all. When you get your 401k it figures out when you're going to be 65 and then drops you in a fund that gives you the highest and safest return at the time you hit 65. Target date funds contain all kinds of other funds and are actively managed and drift towards bonds (historically safer). As you get closer to retirement you have less time to make up a downturn therefore the risk level gets automatically turned down. So the whole argument of taking advantage of retirement accounts with these rule changes kind of falls apart. If you're close to retirement these funds want nothing to do with equities let alone high risk IPOs. If something happens, like a rule change to a tracked index, and all of a sudden the risk goes way up then the fund managers will make an adjustment to the portfolio that gets the risk back to where it was. Further, the SP500 deciding not to change rules doesn't do anything really anyway. If you're far from retirement your target date fund is going to get exposure to these IPOs because you can tolerate the risk and therefore maybe reap the reward. If you're actively managing your 401k and have everything in say a total market fund or some other investment then you're well enough aware and educated to switch funds as you please. I don't think those people are going to be impacted either because they will/should just switch to a fund they like. If they are negatively impacted then they made the wrong decision. If you have your own brokerage account and you're invested in a fund tracking an index you no longer like, well, then you need to sell and buy something you do like. I still don't see the reason for all the drama :shrug: What i think is really happening is people are having a very emotional response to SpaceX because of Elon Musk and the idea of him becoming a trillionaire and Anthropic/OpenAI because of AI and the risk to labor.

Ile09 5mo ago

Interesting from a sentiment perspective. The market is pricing in inclusion before it happens. By the time it's official the alpha is usually gone.

expedition32 5mo ago

I am currently reading a book about the post war history of the Amsterdam stock exchange and it's quite funny reading about the booms and busts. Although I am in my 40s I had already forgotten a lot- but yeah I was there in the 1990s. Repressed traumatic memories. Dutch consumers really soured on stocks when that house of cards collapsed. I would say "it is happening again" but at least now we have bots who trade for us in milliseconds (although those didn't save anyone in 2008).

chasd00 5mo ago
I feel like this drama is another example of the overall society change toward the culture of victimhood. Now it's passive investors outraged about being victimized by stock market index rule changes. The answer is, if you're so upset and impacted then cease being a passive investor. But then the standard reply is "well what about all the retirement accounts and people who just can't adjust?!". Those accounts are in target date funds actively managed for risk anyway so it doesn't matter. For the people who adjust their 401k's as they see fit, well, they should keep doing that. I feel like SP500 made the right decision because the proposed changes don't really align with the purpose of the SP500 IMO but i'm not a financial expert. The HN drama on some issues is a sight to behold.

visha1v 5mo ago

very mature decision by s&p, but at the same time will this not hurt spacex and other big IPOs? i thought the reason these mega IPOs are coming is because investors have run out of money and they companies need access to broader market capital to sustain. without 401k and other funds, won't this just hasten the bubble burst? am i missing something?

Applejinx 5mo ago
This is why people are freaking the heck out and demanding that all the index funds MUST include the doomed stocks because they're just that important and totally aren't a doomed bubble you guys. Not all viewpoints are unbiased overviews of the markets just wanting fairness. Some have always been trying to sell you something that's not what it seems, and they can be… vituperative.

schnitzelstoat 5mo ago

I was quite concerned about this, so this is really good news. In Spain, it's much better to use mutual funds rather than ETFs (for tax reasons) so I didn't have as much choice of funds to avoid these IPOs.

deadbabe 5mo ago

It’s popular to trash these IPOs now but I bet if spacex or the big AI companies don’t follow the same pattern as other IPOs and the stocks just keep climbing and making the shareholders a bunch of money, I can’t wait to see people saying stuff like “the market can stay irrational longer than you can stay solvent!” and giving explanations on why they knew this was going to happen all along and why the rule changes were actually a good thing!

schnitzelstoat 5mo ago

It seems MSCI will add them, maybe? See: https://www.msci.com/indexes/markets-in-motion/megacap-ipos https://www.msci.com/indexes/markets-in-motion/megacap-ipos But it's written in a rather confusing manner so I'm not certain.

lol_catz 5mo ago

Thank god.

Havoc 5mo ago

At least someone still has some backbone. I wonder how much of this decision is driven by recent media coverage about ETF holders getting screwed

CuriouslyC 5mo ago

This made my day. The fast track entry is 100% a pump and dump setup.

AngryData 5mo ago

Proof that inherent market efficiency is bullcrap if we need popular sentiment to get companies excluded for being obvious grifts.

dlenski 5mo ago
> if we need popular sentiment to get companies excluded for being obvious grifts. I don't understand this argument. SpaceX is not being "excluded" for any exceptional reason. S&P has stated, essentially, that SpaceX will be subject to the same INclusion rules as other companies. When (if!) SpaceX has a series of profitable quarters and reaches 50% free-float market cap, it will be included in the S&P 500 index like other companies are. https://news.ycombinator.com/item?id=48414252 https://news.ycombinator.com/item?id=48414252

deaton 5mo ago

Huge win for investors, given that S&P 500 funds are by far the largest index funds on the market, with VOO, IVV, and SPY being the 3 biggest ETFs.

cmiles8 5mo ago

This is the right decision. These indices are intended for stable, profitable companies with a proven long term business model. It’s not ment to be a casino. The market has plenty of other options available for folks that just want to bet the house on red and hope for the best.

ajaimk 5mo ago

How can we get the other indexes to also follow this too

hartator 5mo ago

I don’t know. Will this just delay bubble burst as people will be just waiting for the index inclusion?

alexpotato 5mo ago

Having lived through a couple big market busts over the past 30 years, it's interesting to see that almost all of them were caused by a loosening of standards. e.g. - DotCom boom was letting companies IPO even if they had no revenue - Great Recession was due to loosening credit restrictions for mortgages e.g. giving people NINJA (no income, no job) loans so very curious to see how this plays out.

trumpdong 5mo ago
Caused by, or is it more like the rules were changed to postpone an already inevitable bust?

baggachipz 5mo ago

Now the other golden question: Will they still require profitability?

ryzvonusef 5mo ago

All that wailing and gnashing about Spacex ipo 'forcing' index fund to invest and thus 'loot' poor people's retirements... when all you had to do was just...add a waiting clause. It can still be a passive fund, not the end of the world. Index trackers hire talented people surely they can add a waiting clause in their tracks too, just like S&P. If your index isn't adding waiting clause, it's simply because they are greedy.

Friedduck 5mo ago

It’s a huge relief. This was one of the largest frauds about to be forced upon so many unsuspecting investors. Epic in proportion.