SpaceX stock continues its consolidation phase on the New York Stock Exchange one week after its Nasdaq listing.
Samuel Boivin | Null Photo | Getty Images
SpaceX became one of the fastest additions to the Nasdaq 100 index in history, sparking a new wave of buying from reluctant investors less than a month after the company’s blockbuster public offering.
Nasdaq announced after the close of trading on Friday whether SpaceX would be eligible for inclusion in its benchmark technology index. Assuming the company meets the requirements, index-tracking funds and other product sponsors will begin buying shares after the market closes on July 6, and SpaceX will officially join the Nasdaq 100 before the start of trading on July 7.
More than $800 billion track this index, including Invesco QQQ Trust (QQQ). QQQ is one of the most popular securities traded daily and is considered a barometer of the artificial intelligence bull market.
Aerospace and satellite companies are expected to be included in the index with a weight of less than 1%.
Adding SpaceX so quickly would make Elon Musk one of the first beneficiaries of Nasdaq’s recently adopted fast-track inclusion framework for newly public companies. This change allows some large IPOs to qualify for inclusion on the Nasdaq 100 in as little as 15 business days, dramatically shortening previously much longer waiting periods.
Under the previous framework, investors tracking the Nasdaq 100 index could have to wait months before gaining exposure to the IPO market giant.
The inclusion could create a new source of demand for SpaceX, which has been one of the most actively traded stocks since it went public on June 12. Index funds and exchange-traded funds that track the Nasdaq 100 will have to buy stocks to align with the benchmark’s new composition, while active managers who closely track the index may also adjust their positions.
SpaceX’s publicly traded stock remains small relative to its market capitalization, so even modest index weighting could necessitate meaningful purchases from passive investment vehicles.
Earlier this month, S&P Dow Jones Indices declined to institute a similar fast-track process for the S&P 500 index. As such, SpaceX remains ineligible for inclusion in the S&P 500 index due to the index’s separate profitability and seasoning requirements.
—CNBC’s Leslie Picker contributed reporting.
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