SpaceX’s first week as a publicly traded company went well. The stock climbed 5.7% during its debut week in the Russell 1000, recovering some ground after falling 24% from its record closing high of $201.80 before listing.
Space Exploration Technologies Corp., SPCX
Now the next test arrives. SpaceX joins the Nasdaq 100 on Tuesday, and that brings with it a wave of forced buying from passive funds.
Funds tracking the Nasdaq 100 hold a collective $800 billion in assets under management. That includes the Invesco QQQ ETF, one of the largest ETFs in the world. All of these funds must buy SpaceX at Monday’s closing price to mirror the index.
The buying is real, but the weight is smaller than the company’s size might suggest. SpaceX has a $2.1 trillion market cap, but it sold less than 5% of its total stock in last month’s IPO. Because the Nasdaq weights companies by their publicly available float, SpaceX will initially be treated more like a $300 billion company. Its starting weight in the index will be under 1%.
Employee lockup rules also limit how much stock is trading right now. That keeps the float — and therefore the index weight — low for now.
The passive buying boost sounds like a tailwind, but the track record for recent Nasdaq 100 additions is mixed at best.
Of the 21 stocks that joined the index over the past two years, only six rose in their first week. The average first-week move was a drop of 3.8%. CoreWeave, Nebius, and Rocket Lab all fell more than 15% the week they joined back in June. Super Micro Computer dropped 11% in July 2024. Strategy fell 9% in December 2024.
There are brighter spots further out. The average one-month return after joining is a gain of 3.6%, and after three months it rises to 6.3%.
SpaceX’s index entry is also drawing attention to the ETFs tracking the Nasdaq 100. QQQ charges a 0.18% annual fee. State Street’s newly launched SPDR Portfolio Nasdaq 100 fund is undercutting that at 0.10%. Invesco’s own QQQM charges 0.15%. A BlackRock fund tracking the same index is set to launch shortly.
SpaceX advisers approached index providers earlier this year pushing for early inclusion under new rules designed to bring megacap companies in faster. The strategy makes sense — passive fund flows have posted net inflow records year after year, and index inclusion creates a built-in source of demand.
As lockup periods expire over the next year, analysts expect index funds to help absorb some of the employee selling that typically weighs on newly public companies.
SpaceX won’t be eligible to join the S&P 500 for at least another year. Its Nasdaq 100 weighting will grow as more stock becomes publicly available over time.
The post SpaceX (SPCX) Stock Joins Nasdaq 100 — But History Warns Against Getting Too Excited appeared first on CoinCentral.
