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aerospace / news / / Benzinga

Nasdaq 100 rule changes could force investments into commercial space flight giant SpaceX.

Nasdaq rule changes enable newly listed companies like SpaceX to join the index within 15 days.

KEY POINTS
As SpaceX gears up for its blockbuster IPO, Nasdaq could face lawsuits from index funds as the Nasdaq 100 rule changes trigger investments into the commercial space flight giant. Analyst Says Nasdaq Could Be Sued On Monday, economist and co-founder of the Center for Economic and Policy Research, Dean Baker, quoted a post by user @blockchainchick who criticized the SpaceX IPO as “the most brazen retail fleecing in modern market history,” pointing to rule changes by the Nasdaq that would force investments into the IPO. “I assume SpaceX shareholders, especially the accidental ones in index funds (good time to get out), could sue NASDAQ for these rule changes,” Baker said in the post. Nasdaq 100, S&P 500 Rule Changes The rule changes adopted by the Nasdaq would help expedite SpaceX’s entry into the index, as the new rules would add new companies to the index within 15 days of their public listing if the enterprise’s "entire market capitalization ranks within the top 40 current constituents in the index." The new rules also eliminate the clause that states companies traded on the index must maintain a 10% free-float, which means that companies on the index would no longer need to maintain 10% shares available to be traded publicly. Analysts estimate the rule changes could trigger roughly $22 billion to $27 billion in forced ETF buying from physically backed index funds alone SpaceX could also be fast-tracked into the S&P 500 index, as the rule changes would allow companies to enter the index six months after their debut on an eligible index instead of 12 months. SpaceX And Retail Investors, Gary Black’s Prediction Check out more of Benzinga’s Future Of Mobility coverage by following this link. Photo courtesy: Shutterstock
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