Should Hot IPOs Get Special Treatment?

[Observant1]

"Elon Musk’s SpaceX is expected to sell stock in an initial public offering later this year.
So are artificial-intelligence giant OpenAI and its rival Anthropic.
These deals are likely to be among the biggest IPOs in history,
running into the hundreds of billions of dollars apiece."

"That has caused Nasdaq and other index providers to consider whether to change their standards
for when and how to add newly public companies to widely followed indexes such as the Nasdaq 100
and Russell 1000."

https://www.msn.com/en-us/money/markets/...r-AA1YyIiw

[a2z]

warning: grift ahead!
ft reported huge sell pressure from early rounders at any price >$1trillion ipo listing.

musk is scamming indexers into inclusion, defying all prior rules, so forced buyers>sellers.
i.e., musk does not believe his retail fanboyz have extra cash and doesnt want them dumping tesla for spaceX.

[yogibearbull]

Nasdaq-100 rules now require 3-mo trading history & changes are made at December index reconstitution.

But a fast-track is being proposed that will add a big tech IPO after 5-day notice and then 15-day wait. The addition can be made right away (without waiting for December reconstitution) and nothing will be knocked out - that all will be done at December reconstitution. So, through the year, it will be Nasdaq-100+.

SP500 has 4-quarter profitability rule and some market-cap requirements (tweaked in 07/2025) before a stock can be added.

https://www.ashurst.com/en/insights/nasd...100-index/
https://www.investopedia.com/ask/answers...uirements/

[Sven]

Nasdaq-100 rules now require 3-mo trading history & changes are made at December index reconstitution.

SP500 has 4-quarter profitability rule and some market-cap requirements (tweaked in 07/2025) before a stock can be added.

Musk is exploiting the 3-mo trading requirement (without showing profit) in Nasdaq. He realizes tesla future is dimming with negative growth for multiple quarters in the largest market, China. Getting to be part any index would ensure continuing investor dollars. Much less risk when SpaceX goes IPO.

[DrVenture]

Funny that this comes up at this moment. I am watching a series right now called "Industry", based in the investment industry. Sort of a cross between 'Succession" and "Billions". The IPO issue is a big part of Season 3.

What it really illustrates is that much of it (IPOs) is about 'sales' and 'salesman' pushing products.

If musk is trying to bypass rules, that is not good for investors. And, yet another reason to minimize indexes, or at least hedge your bets with some degree of sector funds or individual stock picking.

[rforno]

I wouldn't trust anything Musk touches .. and in this case, I bet SpaceX is going to play havoc on indexes and index-tracking funds both on the addition and when 'his' bubble bursts and folks rush to sell.

(which is again why I don't own index funds, btw -- I don't want to be in the herd that's controlled by market-cap weightings)

[yogibearbull]

Some more details on how Nasdaq is also playing with it index-weightings under the umbrella of fast-listings.
https://keubiko.substack.com/p/nasdaqs-shame