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Passive investors and retirement accounts are heavily in on automatic indexing. This deal has been pushed hard to be included prematurely in the indexes to the

Passive investors and retirement accounts are heavily in on automatic indexing. This deal has been pushed hard to be included prematurely in the indexes to the point that Nasdaq changed the rules. The accusation is that these changes were made so that index funds will buy this stock automatically far earlier than they would have previously. Given the… uh… astronomical asking price, it looks like SPCEX is meant for Elon stans and institutional index investors to be the bag holders.

l23k4 5mo ago
[flagged]
- dghlsakjg 5mo ago
  It has been covered extensively. The change of nasdaq rules has been covered by Bloomberg, WSJ, NYT, and most others who have reporters on the Wall Street beat. Columnists at all three of those publications have called it out as a possible play on institutional indexing money. I don’t need to tell you who like it’s some big secret either. It was Elon Musk on behalf of spacex. The changes were openly part of the ipo. I’m not going to cite sources for a major financial news story that is being extensively covered in the financial and general press.
  - l23k4 5mo ago
    Here's Matt Levine from Bloomberg saying something along the lines of "lol, obviously the indices have to do this, they'll look like fools if they don't because these will be the biggest companies on the market". He famously spends much of his time making fun of Musk, but seems to reject the idea of his influence here. https://www.bloomberg.com/opinion/newsletters/2026-05-26/index-funds-can-t-say-no-to-spacex https://www.bloomberg.com/opinion/newsletters/2026-05-26/ind... Perhaps you can provide a single counterpoint? I can't find the columns you refer to.
    - dghlsakjg 5mo ago
      That is one of the columns. The headline makes my point succinctly. Your paraphrase of the column misses the crucial point. A Nasdaq index fund doesn’t buy a company unless it is in the Nasdaq. Under the old rules SPCEX was ineligible for listing. Now Nasdaq index funds all have to buy. Index funds by nature do not selectively buy stocks, if the stock is in the index, they buy, that’s their mandate. That’s the game, to be included in as many indexes as possible that force institutional investors to buy. That’s hundreds of billions worth of funds that now have to buy in, that previously wouldn’t have had to if it wasn’t listed on the Nasdaq. The SP500 did not waive the rules, and that made above the fold news this week, because it is a major blow to the big IPOs happening this month since they are valued so high. It will be harder for them to move stock if the massive index funds aren’t buying automatically. The big IPOs this month are asking for prices that demand hundreds of billions or trillions of dollars of liquidity. Index funds are automatic liquidity, but only if you are on the index. They didn’t ask them to change long standing rules for shits and giggles.
      - l23k4 5mo ago
        [flagged]
        dghlsakjg 5mo ago
        In the context of my message it is very clear that they is SpaceX. This isn’t a secret. Nasdaq has said that they are changing the rules specifically for this listing. It’s clear you aren’t interested in a good faith conversation. Thanks for the discourse either way.
        l23k4 5mo ago
        [flagged]
        bryanlarsen 5mo ago
        NASDAQ and the NYSE competed heavily for the SpaceX IPO. NASDAQ was willing to do more for SpaceX, so NASDAQ won. One of the concessions NASDAQ made was to put spacex on the Nasdaq 100 index (QQQM) early.
- codechicago277 5mo ago
  It’s been covered extensively and is common knowledge. One example after a 5 second google: https://www.wsj.com/livecoverage/may-jobs-report-stock-market-06-05-2026/card/spacex-ipo-could-start-a-great-divergence-in-index-returns-qDytUbdZDWsJakf9wEM7 https://www.wsj.com/livecoverage/may-jobs-report-stock-marke...
  - l23k4 5mo ago
    [flagged]
- ambicapter 5mo ago
  > buyers decide the prices they'll buy at. Not if they're index funds. They buy at the price it is, until they've satisfied their holdings represent the appropriate share of the market. Which, pre-IPO and early-days-after-IPO, is likely to not be accurate to the long-term price.
  - l23k4 5mo ago
    [flagged]
  - kylecordes 5mo ago
    This, of course, is why it's wise to wait a while after an IPO for the market to figure out how it values a new stock before it joins the index.
JumpCrisscross 5mo ago
> retirement accounts are heavily in on automatic indexing Majority are not. A minority are, mostly towards the S&P. Most assets remain actively managed, including in retirement assets (which covers 401(k)s, IRAs, pensions, et cetera).
- 0xffff2 5mo ago
  Way outside of my area of expertise, but a quick search suggests that exact numbers probably depend on exactly how you define the question, but it would be broadly reasonable to say that the balance is about 50/50 +/-5%, and trending towards the passive side over time. Would you agree with that?
  - JumpCrisscross 5mo ago
    Yes. But I’d caution to not conflating passive investing with indexing to a popular index. They sound similar. But most passive assets index to one of a variety of indices, many of them built in-house by various asset managers. (Vanguard, for example, is famous for doing this.)
    - worik 5mo ago
      Yes. And just because yesterday's rules were "invest in S&P500" does not mean the governors of many (not all) funds cannot change the rules to dodge such blatant fraud The managers of huge funds are not complete idiots- far from it- and they will do what they can, most of them, to fulfill their duties
      - JumpCrisscross 5mo ago
        > just because yesterday's rules were "invest in S&P500" does not mean the governors of many (not all) funds cannot change the rules to dodge such blatant fraud There are no governors. The assets that automatically follow the S&P 500 are like individual IRAs. If a fund has a governing body, they're generally not indexing to a single narrow index like the S&P 500. They're going for a set of total-market funds, or they're building a custom benchmark. For the assets that do follow the S&P 500, virtually nbody would be expected to react to these kinds of rule changes. If anything, you'd just create a higher-fee fund that anyone who is upset about this can switch into that equal weights or won't include SpaceX. This is what some RIAs I know in the Bay Area have done, and this entire shitshow has just been a moneymaker for them. > managers of huge funds are not complete idiots Zero hedge funds automatically follow the S&P 500, or any other public index, like that. That's sort of the point of being a hedge fund–you're delivering something different.

l23k4 5mo ago

[flagged]

dghlsakjg 5mo ago
It has been covered extensively. The change of nasdaq rules has been covered by Bloomberg, WSJ, NYT, and most others who have reporters on the Wall Street beat. Columnists at all three of those publications have called it out as a possible play on institutional indexing money. I don’t need to tell you who like it’s some big secret either. It was Elon Musk on behalf of spacex. The changes were openly part of the ipo. I’m not going to cite sources for a major financial news story that is being extensively covered in the financial and general press.
- l23k4 5mo ago
  Here's Matt Levine from Bloomberg saying something along the lines of "lol, obviously the indices have to do this, they'll look like fools if they don't because these will be the biggest companies on the market". He famously spends much of his time making fun of Musk, but seems to reject the idea of his influence here. https://www.bloomberg.com/opinion/newsletters/2026-05-26/index-funds-can-t-say-no-to-spacex https://www.bloomberg.com/opinion/newsletters/2026-05-26/ind... Perhaps you can provide a single counterpoint? I can't find the columns you refer to.
  - dghlsakjg 5mo ago
    That is one of the columns. The headline makes my point succinctly. Your paraphrase of the column misses the crucial point. A Nasdaq index fund doesn’t buy a company unless it is in the Nasdaq. Under the old rules SPCEX was ineligible for listing. Now Nasdaq index funds all have to buy. Index funds by nature do not selectively buy stocks, if the stock is in the index, they buy, that’s their mandate. That’s the game, to be included in as many indexes as possible that force institutional investors to buy. That’s hundreds of billions worth of funds that now have to buy in, that previously wouldn’t have had to if it wasn’t listed on the Nasdaq. The SP500 did not waive the rules, and that made above the fold news this week, because it is a major blow to the big IPOs happening this month since they are valued so high. It will be harder for them to move stock if the massive index funds aren’t buying automatically. The big IPOs this month are asking for prices that demand hundreds of billions or trillions of dollars of liquidity. Index funds are automatic liquidity, but only if you are on the index. They didn’t ask them to change long standing rules for shits and giggles.
    - l23k4 5mo ago
      [flagged]
      - dghlsakjg 5mo ago
        In the context of my message it is very clear that they is SpaceX. This isn’t a secret. Nasdaq has said that they are changing the rules specifically for this listing. It’s clear you aren’t interested in a good faith conversation. Thanks for the discourse either way.
        l23k4 5mo ago
        [flagged]
        bryanlarsen 5mo ago
        NASDAQ and the NYSE competed heavily for the SpaceX IPO. NASDAQ was willing to do more for SpaceX, so NASDAQ won. One of the concessions NASDAQ made was to put spacex on the Nasdaq 100 index (QQQM) early.
codechicago277 5mo ago
It’s been covered extensively and is common knowledge. One example after a 5 second google: https://www.wsj.com/livecoverage/may-jobs-report-stock-market-06-05-2026/card/spacex-ipo-could-start-a-great-divergence-in-index-returns-qDytUbdZDWsJakf9wEM7 https://www.wsj.com/livecoverage/may-jobs-report-stock-marke...
- l23k4 5mo ago
  [flagged]
ambicapter 5mo ago
> buyers decide the prices they'll buy at. Not if they're index funds. They buy at the price it is, until they've satisfied their holdings represent the appropriate share of the market. Which, pre-IPO and early-days-after-IPO, is likely to not be accurate to the long-term price.
- l23k4 5mo ago
  [flagged]
- kylecordes 5mo ago
  This, of course, is why it's wise to wait a while after an IPO for the market to figure out how it values a new stock before it joins the index.

JumpCrisscross 5mo ago

> retirement accounts are heavily in on automatic indexing Majority are not. A minority are, mostly towards the S&P. Most assets remain actively managed, including in retirement assets (which covers 401(k)s, IRAs, pensions, et cetera).

0xffff2 5mo ago
Way outside of my area of expertise, but a quick search suggests that exact numbers probably depend on exactly how you define the question, but it would be broadly reasonable to say that the balance is about 50/50 +/-5%, and trending towards the passive side over time. Would you agree with that?
- JumpCrisscross 5mo ago
  Yes. But I’d caution to not conflating passive investing with indexing to a popular index. They sound similar. But most passive assets index to one of a variety of indices, many of them built in-house by various asset managers. (Vanguard, for example, is famous for doing this.)
  - worik 5mo ago
    Yes. And just because yesterday's rules were "invest in S&P500" does not mean the governors of many (not all) funds cannot change the rules to dodge such blatant fraud The managers of huge funds are not complete idiots- far from it- and they will do what they can, most of them, to fulfill their duties
    - JumpCrisscross 5mo ago
      > just because yesterday's rules were "invest in S&P500" does not mean the governors of many (not all) funds cannot change the rules to dodge such blatant fraud There are no governors. The assets that automatically follow the S&P 500 are like individual IRAs. If a fund has a governing body, they're generally not indexing to a single narrow index like the S&P 500. They're going for a set of total-market funds, or they're building a custom benchmark. For the assets that do follow the S&P 500, virtually nbody would be expected to react to these kinds of rule changes. If anything, you'd just create a higher-fee fund that anyone who is upset about this can switch into that equal weights or won't include SpaceX. This is what some RIAs I know in the Bay Area have done, and this entire shitshow has just been a moneymaker for them. > managers of huge funds are not complete idiots Zero hedge funds automatically follow the S&P 500, or any other public index, like that. That's sort of the point of being a hedge fund–you're delivering something different.