It’s common for companies to start with a smaller amount of tradable stock, but SpaceX’s float is especially small. It may be a strategic play to drive up prices by limiting stock availability, said David Brown, associate professor of finance at the University of Arizona.
When it comes to maneuvering for successful I.P.O.s, “companies are much more apt these days than they were a couple decades ago,” he said.
As restrictions for insiders like Mr. Musk or SpaceX employees expire, more shares will be available for trading. If the stock price is steady or climbs higher, a bigger public float could mean increased SpaceX representation in index funds.
For now, SpaceX is set to be a small part of most people’s investments.
“I.P.O.s don’t meaningfully move retirement portfolios right away,” Rodney Comegys, chief investment officer at Vanguard Capital Management and head of global equity at Vanguard, said in a statement. “Even mega I.P.O.s will enter broad indexes at very small weights, so the near-term impact on 401(k)s is limited.”
The giant size of these new public companies should be reason for index funds to think hard about the best time to include them, Professor Brown said. (The artificial intelligence companies Anthropic and OpenAI have also started to prepare for I.P.O.s.) “For most investors, that’s where it’s going to hit,” he said.
About the data
SpaceX ownership estimates use each index’s float-adjusted weighting rules, assuming its publicly tradable shares are worth roughly $150 per share based on their opening price.
To estimate ownership through index funds, we calculate a weight for each company based on the company’s float-adjusted capitalization and the total capitalization of the market that an index tracks. Total U.S. market capitalization, market capitalization for the S&P 500, and weights for index funds use Vanguard VTI and Invesco QQQ were provided by Morningstar. Nasdaq 100’s total market share is calculated from its index page as of May 29. Weights and market capitalization change daily.
