If You Own This Popular ETF, You'll Soon Own SpaceX Shares Too. Here's What You Should Know.
Written by Stefon Walters for The Motley Fool -> The Nasdaq altered its rules to fast-track megacap IPOs into the Nasdaq-100 index. Weightings of the Nasdaq-100 are based on the valuation of a company's free-float shares, not total market cap. SpaceX is likely to account for l
The Nasdaq altered its rules to fast-track megacap IPOs into the Nasdaq-100 index.
Weightings of the Nasdaq-100 are based on the valuation of a company's free-float shares, not total market cap.
SpaceX is likely to account for less than 1% of the Nasdaq-100.
When SpaceX makes its market debut on June 12, it'll be the largest initial public offering (IPO) in the stock market's history. Unsurprisingly, it has come with a lot of hype, but also a lot of scrutiny because of how the IPO is expected to be treated.
The S&P Dow Jones Indices, which manages the S&P 500 , considered altering its rules to fast-track SpaceX as well, but it faced significant backlash and decided against it after a vote. The Nasdaq, however, altered its rules to fast-track SpaceX into its Nasdaq-100 index. Let's take a look at what that means.
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Traditionally, to be included in the Nasdaq-100, a company would need to have traded for at least three months and meet a liquidity threshold. However, the Nasdaq changed its rules, and now, to be included, a company only needs to be valued in the top 40 of Nasdaq companies in its first week, and then it can join after 15 trading days.
Whenever SpaceX is added to the Nasdaq-100, investors in the Invesco Nasdaq-100 ETF (NASDAQ: QQQM) will automatically gain exposure to SpaceX. Since it mirrors the index, it won't be optional.
