From A 12-Month Seasoning Period That S&P Considered Cutting To Six Months, To A Float Requirement SpaceX Cannot Currently Meet At Under 5% Of Shares. S&P Said Its Decision “Preserves Core Index Principles”
According to Axios, S&P said Thursday it is not changing its rules to fast-track mega-cap IPOs onto its marquee stock index, the S&P 500. S&P’s decision doesn’t mention SpaceX by name, but it means Elon Musk’s company as well as Anthropic and OpenAI, if they go public as expected; won’t be making it into the index for at least a year.
Under the rules, companies must wait a 12-month seasoning period before being included in the cap-weighted S&P 500 index. The group considered changing that to six months, as well as updating other requirements. It also considered adjusting the float requirement, which held that a company must offer at least 10% of its overall shares to be considered for inclusion. SpaceX is planning to offer fewer than 5% of its shares.
In a statement, S&P said the decision “preserves core index principles.” The S&P did change some rules for some of its broader indexes including the S&P Total Market Index and Dow Jones U.S. Total Stock Market Index; coming up with an alternative float requirement for very large companies offering less than 10% of their shares.
Millions of passive investors won’t be forced to own SpaceX quickly; a move many had criticised. Bloomberg Intelligence senior ETF analyst Eric Balchunas noted: “We’ll see whether this turns out to be a wise choice. Either way tho SPX is such a powerful brand it prob doesn’t matter either way.”
To check out our previous coverage on SpaceX, the S&P 500, and IPO markets, read our articles here.
