The SpaceX IPO Is Days Away: Could the Stock Join the S&P 500, and How Soon?
Written by Daniel Sparks for The Motley Fool -> SpaceX is expected to begin trading Friday at an initial market value of about $1.77 trillion. The S&P 500 requires positive earnings and at least 12 months of trading before a stock can join. Tesla waited more than a decade afte
SpaceX is expected to begin trading Friday at an initial market value of about $1.77 trillion.
The S&P 500 requires positive earnings and at least 12 months of trading before a stock can join.
Tesla waited more than a decade after its IPO to enter the index.
On Friday, SpaceX (NASDAQ: SPCX) is expected to begin trading on the Nasdaq in what would be the largest initial public offering (IPO) on record. The rocket and satellite company plans to sell about 556 million shares at $135 apiece, giving it an initial market value of about $1.77 trillion and raising about $75 billion. Investor demand has reportedly topped $250 billion -- more than three times what the company is seeking.
A market value of $1.77 trillion would make SpaceX about the seventh-most valuable company in the U.S. Yet nearly every company near that scale has something SpaceX won't: a spot in the S&P 500 , the benchmark behind trillions of dollars of index funds.
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So, could the stock join the index -- and how soon? Here's a closer look at the S&P 500's actual rules, and what Tesla 's (NASDAQ: TSLA) long-delayed inclusion suggests about the answer.
Getting into the S&P 500 takes more than size. S&P Dow Jones Indices, which runs the index, requires a candidate to be a U.S. company with a market value of at least $22.7 billion -- a bar SpaceX would clear about 78 times over.
