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You Might Automatically Own A Slice Of Spacex

TIMOTHY A. CLARY/AFP via Getty Images

For many people, investing in SpaceX is now a matter of doing nothing. Elon Musk’s space and AI company became part of the Nasdaq-100 index today, two weeks after it IPO-ed. This means funds tracking the index, like Invesco’s popular QQQ ETF, are forced to buy the stock, adding it to the portfolios of millions of passive retail investors.

While it usually takes months for a newly public company to join the index, Nasdaq recently created an accelerated process for megacap stocks like SpaceX. While SpaceX is the first to benefit, rivals Anthropic and OpenAI are also likely to use it after their forthcoming IPOs.

Obligatory buy

SpaceX’s inclusion in the index could make the stock even more volatile:

Though SpaceX will make up less than 1% of the Nasdaq-100’s value, funds tracking the index will have to buy as much as $4.3 billion of its shares, JPMorgan estimates.
Since less than 5% of SpaceX shares are available for public trading, ETFs piling into the stock could create scarcity, boosting its price in the short-term.

Meanwhile, some retail investors who think SpaceX is overvalued or oppose Musk’s politics are ditching major ETFs for custom funds that exclude the stock, Bloomberg reported.

It’s not joining the S&P 500 soon…since the most popular stock index recently rejected SpaceX’s request for expedited entry.—SK

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You Might Automatically Own A Slice Of Spacex

Obligatory buy

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