If you are a passive investor you might want to read up on the goofy rules that are going to force massive purchases of SpaceX once it goes public for certain index funds. Great news if you own SpaceX now, not so great if you want to avoid anything Elon.
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@paul there's nothing you can do about it really other than "not use index funds" and "not have a pension". By law they're going to be forced to re-balance the assets dump a HUGE amount of American's retirements into Space-X. It's such a blatant scam, especially as normally it would take much longer for this to happen but Elon's greasing the wheels in government and with NASDAQ, etc
@paul don't forget they have to buy *at any price*. If SpaceX doesn't issue enough shares, they have to beg Elon to issue new shares any price he demands.
ANY.
PRICE.
This is gonna be ugly.
ANY.
PRICE.
This is gonna be ugly.
@feld getting out of index funds (at least ones that are forced to buy it) seems like a pretty reasonable option to me, at least for retirement accounts.
I spent some time today going into a rabbit hole of the SpaceX IPO. Thought it was a space company. Turns out it’s a small telecom company that's propping up a space company (not very well at that) and the entire thing is being dragged down by the crappiest of the AI companies.
I then spent even more time researching how one shorts an IPO…
@paul how does one short an IPO?
@johnefrancis @paul There are variations which involve options and futures but I don’t think they are all legal or feasible for Joe Average. Some are riskier than others. For example one could sell call options at the issue price for pure profit if it drops but at the risk of technically unlimited risk if it rises. Short tactics always have that sort of risk, because there is no bound to human fantasy. Consult a broker for the proper advice. (I.e.”Don’t do that, you will lose your shirt. “)
@paul @mackuba no no the funds don't have to buy until December(?), there are detailed articles covering this but I don't have my links handy right now tho
edit: think about it. If they had to buy immediately investors/hedge funds can calculate what the expected movement will be for everyone in the index and trade on that knowledge
edit: think about it. If they had to buy immediately investors/hedge funds can calculate what the expected movement will be for everyone in the index and trade on that knowledge
@grumpybozo @johnefrancis @paul IPOs always have a bubble of a few weeks to a month or two where they ride high from the initial launch and then come down to a more sane price. If you can predict when it's gonna come down, short it
@feld from that article.
@paul you didn't follow to this part:
> To hit the December 18, 2026 quarterly rebalance date for the Nasdaq 100, SpaceX needs to IPO around mid-June.
The December rebalance is actually called the reconstitution and the weight is recalculated based on the full market cap. That's the big one.
edit: so some inflows will happen after the 15 days but the "weighted proportional of investment you have to have in SpaceX in funds like QQQ (?)" won't trigger until December. They can't enforce it immediately after listing because of the IPO bubble is my understanding
> To hit the December 18, 2026 quarterly rebalance date for the Nasdaq 100, SpaceX needs to IPO around mid-June.
The December rebalance is actually called the reconstitution and the weight is recalculated based on the full market cap. That's the big one.
edit: so some inflows will happen after the 15 days but the "weighted proportional of investment you have to have in SpaceX in funds like QQQ (?)" won't trigger until December. They can't enforce it immediately after listing because of the IPO bubble is my understanding
@paul @feld MSCI World uses a free float market cap, so spacex will barely change the weights there
Also ETFs *try* to replicate given indexes and they usually have their own rebalance timings, so it will really depend on the provider if and when You'll have IPOed company in Your portfolio
I don't know how it looks on the USA-investor side, but in Europe it's not that bad if one's not invested directly in S&P or NASDAQ indexes