Comment by freetime2
13 hours ago
I don't like this either, but from the article:
> Although Nasdaq has already shortened the “seasoning” period before index inclusion to 15 trading days and FTSE Russell has slashed its waiting time to five days (and S&P Dow Jones is reportedly considering something similar), most share indices weight firms in proportion to the value only of shares they have released for public trading (the “free float”). For SpaceX, this means just the $75bn or so of stock it intends to issue in June—so its initial weight in the S&P 500 will be around 0.1%. The NASDAQ 100 is an exception, and has changed its rules to weight companies at up to three times their free float, in an apparent effort to woo Mr Musk. Even so, SpaceX’s probable initial weight in this $40trn index will still only be around 0.5%.
So people who hold ETFs that track the S&P 500 probably don't have too much to worry about. People invested in the NASDAQ 100 probably have more to be outraged about - but then again I suppose if you're invested in the NASDAQ 100, you may be consider more exposure to SpaceX to be a good thing.
This needs to be higher for more visibility, because the weighting and the float's proportions are an important aspect that most news sources or comments fail to mention.
Correct me if I'm wrong, but 0.1% of S&P 500 seems exceedingly huge when you consider how much of the economy is represented in the S&P 500.
https://www.slickcharts.com/sp500
At .1% they'll have the same weight as something like DoorDash.
>The NASDAQ 100 is an exception, and has changed its rules to weight companies at up to three times their free float, in an apparent effort to woo Mr Musk.
im not a finance guy, can someone explain to me why the nasdaq would want to "woo" someone specifically? what benefit would nasdaq get? or, alternatively, what harm would befall nasdaq for not woo-ing musk?
This really makes it clear. Thank you!
how dare you come in with rationality in the face of ELON BAD