Comment by Animats
11 hours ago
The decision means companies like SpaceX would not be eligible for inclusion in the S&P 500 until at least one year after its listing and would also need to satisfy the index’s existing requirements for profitability and public float.
Sudden outbreak of common sense.
SpaceX is going "public" with only 4% of the stock being sold to outsiders. The S&P 500 requires a 50% public float. That may disqualify SpaceX for a long time.
Although GOOG and META are listed, despite control being held by insider shares of a different class. There was a time when the NYSE did not permit companies with more than one class of stock to be listed on that exchange. (Except F, FORD, which predates the NYSE). That was lost some time around 1990 or so.
It'll be at 50% within 6 months, then 100% within a year.
https://www.economist.com/finance-and-economics/2026/06/01/c...
GOOG and META are listed on the Nasdaq, as far as I know, hence the four letter ticker, so maybe NYSE still has a mono-class requirement. That's something worth knowing, I avoid investing in companies where my stock isn't the same as everyone else's.
Matt Levine wrote that flouting the rules could be fine if there were market alternatives (he said otherwise it would be a market failure). I am pretty sure there would be market alternatives appearing, at least in the ETF tracking space, and that would erode the brand.
It would be a bad show to have SP500 (cheating rules) underperfoming SP500(proven rules). It would also be a bad show with many financiers and even influencers calling out the corruption.
I for one would be advising newer investments in the proven rules ETF trackers. I also think there might be lawsuits from people who had contracts tied to the old rules. After all if you need to sell to transfer to another vehicle there might be tax consequences.
PS: It is a shame that multiple classes of, non floating, controlling stock do not cause penalties in terms of market cap weight. I will research the issue. I know an ETF is not an index, but the relationship is tight enough for practical reasons.