Letting new stocks marinate in the market and get 4 quarters of SEC filings along with following all the GAAP accounting practices will definitely help evaluate them before inclusion. The last large boom/bust cycle had a couple of companies, at least, that were doing illegal things. I'm not stating that these three are, just that nobody knows and the process should play out.
I do wonder if any of these three companies are using AI to do their accounting and bookkeeping. What happens when there are AI hallucinations affecting those outcomes?
show comments
zhivota
Big relief for me. As a passive investor, I want the indices to follow the same passive strategy they always have, and specifically not make exceptions for specific companies like SpaceX wanted.
Plenty of ways to get exposure to that stock without it going into the indices it is not qualified for.
show comments
rdiddly
Anyone care to explain to me why any of them even considered it? What's the specific upside from the perspective of an index provider? Seems to me like all it does when you bend the rules is erode trust, so whatever the upside is, it must be pretty significant since it comes at such a high cost to the credibility and trust placed in the applicable index and the market itself.
show comments
zippyman55
Yep!! Respect to them. I was planning to move to an equal weight index but this gives me a little more time to evaluate options.
show comments
fhe
S&P 500 is already heavily skewed towards tech companies (Apple, Google, Meta, Amazon, Microsoft etc.). I think it's something like 40% of S&P500 is tech. If SpaceX/OpenAI/Anthropic are added, tech risks would be even more concentrated, which is bad for diversification.
show comments
nickandbro
I don't know why they should even consider, all have IPOs that are valued too high compared to their revenues.
wg0
This is very smart of these folks because for just three companies, they can't ruin the trust and impeccable reputation they have built over the years.
This decision alone is worth several trillion dollars.
show comments
danielovichdk
Stocks and money. It's so boring.
I will go drive my old German car now, and get a bit drunk in a bottle of Nebbiolo while listening to some French lunatic with a piano.
Enjoy your trip to Mars and your self driving toy cars. The world is off its rails. Bit time.
show comments
Drupon
Crazy to see the Twitter behavior here of really smart, well conveyed top level comments replied to by weird propaganda pushing bottom feeders.
show comments
linuxhansl
Thank god some sanity prevails.
Adding these to the index immediately would force passive index funds (multiple trillions of $) to buy this stock, and thus not allow the market to make performance based decisions.
It's truly a shame that the NASDAQ caved and I will definitely reduce my position in such index funds (I have less trust in it now).
Ars used to do deep insightful articles a couple of days after the news but today it's just regurgitated blogspam that is 2 days old news. And way more political. It's sad.
show comments
khriss
A lot of comments here are saying that the impact on the S&P would have been 'minimal' since the S&P is float weighted. So SpaceX would have been ~0.3% of the index.
The point isn't that the impact would have been minimal. It's that changing the rules to suit the rich and connected is the literal definition of crony capitalism. Why should SpaceX get exemptions from entry requirements to the S&P when every other company before it didn't?
Trying to justify it based on an argument that it would have been 'just' $200 billion, is absurd since that $200 billion is coming largely from the public via index funds that would have been forced to buy SpaceX shares.
show comments
jb_briant
I wonder if profitable means that investment must be recouped or just if your operational expenses must be compensated by your earnings.
Anthropic is becoming "profitable" while burning a series H of 69 bns usd. Does it count as profitable?
I'm curious if someone well versed in finance can answer, because from my uneducated perspective, it's not profitable to burn billions in order to make a billion.
If you have any doubts, I highly recommend to review the stock price history
of GPRO(GoPro), BYND (Beyond Meat), CGC (Canopy Growth), TLRY (Tilray).
These are just some somewhat recent IPOs that come to mind, I am sure I am forgetting some.
In the case of GPRO, look up their first quarterly reports after the IPO. Pure comedy gold.
show comments
ferrouswheel
Finally some adults in the room.
dash2
I’m seeing a lot of naive optimism about this decision.
The risk S&P takes by doing this is that they will still be forced to buy SpaceX, but a year after everybody else. Given that there is a massive amount of capital that you know will have to buy this stock in 12 months, that itself provides speculative reasons to buy it now.
The indices are in an unenviable position: a race to the bottom. The S&P 500 may be setting up its index funds simply to be the last buyer in a Ponzi scheme.
There is no guarantee that the market will find the “true value“ of SpaceX in the 12 month interval. Markets are frothy and speculative already, and they now have a built in exit liquidity provider.
Even as a SpaceX shareholder I have to say this the right decision, and it's what a person would expect.
NASDAQ has an incentive to offer early entry into the index (they want SpaceX to list on their exchange), whereas S&P has no incentive for early inclusion; it could only increase risk for them. Even if they /wanted/ to add SpaceX early, that could create a precedent with unpredictable consequences.
Since most shareholders I know plan to hold for another 20 years, waiting a year to get into the S&P average seems fine. Congratulations to S&P for sticking to principle.
RobotToaster
It's a risky investment, yes there's a chance it could go to the moon, but it could also plummet to earth.
runfuyngunasdlj
The effective altruists* at Anthropic are not happy about this.
*People who justify stealing from others by lazily giving a small pittance away according to a list some other guy showed them and they thought about for 5 minutes.
glimshe
They don't make decisions like that out of wisdom and restraint. I imagine they got calls from Vanguard and others after index funds themselves got calls from institutional investors.
Is that an institution working for long-term stability instead of short-term gain?
looks through binoculars
Holy hell... it is!
aswegs8
Dodged a bullet... seems like they still have integrity.
balls187
I left my comment saying it was a bad idea.
site-packages1
This would have been so disastrous. What a great move.
kburman
I wonder if Elon would now reconsider IPO.
show comments
everdrive
I'm quite relieved as the S&P should be stable and slow. But with that caveat said, is this why the S&P 500 dropped off a cliff on Friday? If so, why?
show comments
blobbers
Good. Financial grift needs to end. Passive investment has become slightly too passive. S&P saved us. We weren't so lucky when they were rating bonds before the GFC. Glad they seem to have grown some ethics and are not bending the knee to the rocketman.
show comments
blondie9x
Everyone watch out for other indices like CRSP US Total Market Index, which trade as the ETF VTI and mutual fund VTSAX.
There are countless other indices that are not well known to request seasoning time of these mega companies.
Shifting to S&P 500 seems prudent at the point. Besides S&P does anyone know which indices will be safe from these IPOs?
bluecalm
Fast entry rules are terrible.
There is an old adage IPO - It's Probably Overpriced.
Warren Buffet explained why: It's the issuer who chooses the price and time to enter the market. They will pick circumstances that suits them best. The chances that an IPO is a better deal than multiple other companies available in the auction market at that time which didn't get to choose the timing is close to 0 and it's not worth thinking about it - just don't buy IPOs ever.
I don't care about profitability, sustainability, ESG scores or anything like that. If the market is pricing unprofitable company at hundred of billions maybe there is a good reason for it. I do care about market having time to evaluate the company so index funds buy at fair prices. For this you need time and enough float and volume. Time being the main factor.
show comments
outside1234
Great. When the market floats it down to a fair valuation of $70B it will be a great add to the S&P 500.
emsign
Thank goodness my portfolio is safe from these junk papers.
muadddib
Kudos to S&P 500. Vast majority of the world has no clue how trillions of $ from their pension funds is being funneled to the select few. Absolutely pathetic.
show comments
phplovesong
This is REALLY GOOD news for every passive investor. They try to game the system with this one, big time. There should be hearings about this, and new laws need to put in place to prevent something like this.
mgianluc
Thats good honestly and a big relief
sergiotapia
Major W. Regular people were going to get robbed blind.
A bit tangent, as I never had a single thought about investing any of the few precious attention moment into financial theaters.
if I get it this is an index to invest in common in distributed wallets chosen and managed by an organization named S&P?
I'ld be interested in something similar, but aiming at growing cooperatives, non profits, externally checked for alignment organisations striving to benefit humanity as a whole. It doesn't have to be something that have strong garanties of direct personal financial profits, just no way it makes me in personal bankrupts, zero personal gain would be ok, staying ahead of inflation nice to have, and having some profits back would be acceptable.
Please be kind or hold from losing time and energy for everybody with aggressive answers.
I'm just considering ways to make sure as few as possible resources end up in the control of techno fascists.
show comments
spacebacon
Smart choice imo. One pass with the SRT wipes their moat out overnight.
Meanwhile the NASDAQ fell 4.18% Friday just been. This seems more than just a coincidence, people have been talking about pulling investment ahead of the SpaceX IPO, and the latest market activity makes me think the discontent is tangible now.
Letting new stocks marinate in the market and get 4 quarters of SEC filings along with following all the GAAP accounting practices will definitely help evaluate them before inclusion. The last large boom/bust cycle had a couple of companies, at least, that were doing illegal things. I'm not stating that these three are, just that nobody knows and the process should play out.
I do wonder if any of these three companies are using AI to do their accounting and bookkeeping. What happens when there are AI hallucinations affecting those outcomes?
Big relief for me. As a passive investor, I want the indices to follow the same passive strategy they always have, and specifically not make exceptions for specific companies like SpaceX wanted.
Plenty of ways to get exposure to that stock without it going into the indices it is not qualified for.
Anyone care to explain to me why any of them even considered it? What's the specific upside from the perspective of an index provider? Seems to me like all it does when you bend the rules is erode trust, so whatever the upside is, it must be pretty significant since it comes at such a high cost to the credibility and trust placed in the applicable index and the market itself.
Yep!! Respect to them. I was planning to move to an equal weight index but this gives me a little more time to evaluate options.
S&P 500 is already heavily skewed towards tech companies (Apple, Google, Meta, Amazon, Microsoft etc.). I think it's something like 40% of S&P500 is tech. If SpaceX/OpenAI/Anthropic are added, tech risks would be even more concentrated, which is bad for diversification.
I don't know why they should even consider, all have IPOs that are valued too high compared to their revenues.
This is very smart of these folks because for just three companies, they can't ruin the trust and impeccable reputation they have built over the years.
This decision alone is worth several trillion dollars.
Stocks and money. It's so boring.
I will go drive my old German car now, and get a bit drunk in a bottle of Nebbiolo while listening to some French lunatic with a piano.
Enjoy your trip to Mars and your self driving toy cars. The world is off its rails. Bit time.
Crazy to see the Twitter behavior here of really smart, well conveyed top level comments replied to by weird propaganda pushing bottom feeders.
Thank god some sanity prevails.
Adding these to the index immediately would force passive index funds (multiple trillions of $) to buy this stock, and thus not allow the market to make performance based decisions.
It's truly a shame that the NASDAQ caved and I will definitely reduce my position in such index funds (I have less trust in it now).
Yesterday:
"SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P" (bloomberg.com) https://news.ycombinator.com/item?id=48405718
Ars used to do deep insightful articles a couple of days after the news but today it's just regurgitated blogspam that is 2 days old news. And way more political. It's sad.
A lot of comments here are saying that the impact on the S&P would have been 'minimal' since the S&P is float weighted. So SpaceX would have been ~0.3% of the index.
The point isn't that the impact would have been minimal. It's that changing the rules to suit the rich and connected is the literal definition of crony capitalism. Why should SpaceX get exemptions from entry requirements to the S&P when every other company before it didn't?
Trying to justify it based on an argument that it would have been 'just' $200 billion, is absurd since that $200 billion is coming largely from the public via index funds that would have been forced to buy SpaceX shares.
I wonder if profitable means that investment must be recouped or just if your operational expenses must be compensated by your earnings.
Anthropic is becoming "profitable" while burning a series H of 69 bns usd. Does it count as profitable?
I'm curious if someone well versed in finance can answer, because from my uneducated perspective, it's not profitable to burn billions in order to make a billion.
https://www.cnbc.com/2026/05/20/anthropic-revenue-explosive-...
If you have any doubts, I highly recommend to review the stock price history of GPRO(GoPro), BYND (Beyond Meat), CGC (Canopy Growth), TLRY (Tilray).
These are just some somewhat recent IPOs that come to mind, I am sure I am forgetting some.
In the case of GPRO, look up their first quarterly reports after the IPO. Pure comedy gold.
Finally some adults in the room.
I’m seeing a lot of naive optimism about this decision.
The risk S&P takes by doing this is that they will still be forced to buy SpaceX, but a year after everybody else. Given that there is a massive amount of capital that you know will have to buy this stock in 12 months, that itself provides speculative reasons to buy it now.
The indices are in an unenviable position: a race to the bottom. The S&P 500 may be setting up its index funds simply to be the last buyer in a Ponzi scheme.
There is no guarantee that the market will find the “true value“ of SpaceX in the 12 month interval. Markets are frothy and speculative already, and they now have a built in exit liquidity provider.
Related discussion here: https://news.ycombinator.com/item?id=48405718
Even as a SpaceX shareholder I have to say this the right decision, and it's what a person would expect.
NASDAQ has an incentive to offer early entry into the index (they want SpaceX to list on their exchange), whereas S&P has no incentive for early inclusion; it could only increase risk for them. Even if they /wanted/ to add SpaceX early, that could create a precedent with unpredictable consequences.
Since most shareholders I know plan to hold for another 20 years, waiting a year to get into the S&P average seems fine. Congratulations to S&P for sticking to principle.
It's a risky investment, yes there's a chance it could go to the moon, but it could also plummet to earth.
The effective altruists* at Anthropic are not happy about this.
*People who justify stealing from others by lazily giving a small pittance away according to a list some other guy showed them and they thought about for 5 minutes.
They don't make decisions like that out of wisdom and restraint. I imagine they got calls from Vanguard and others after index funds themselves got calls from institutional investors.
Anyone knows what MSCI World will do?
This is a duplicate thread.
Previously: "SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P" - https://news.ycombinator.com/item?id=48405718
Responsible decision as things stand today.
Duplicate: https://news.ycombinator.com/item?id=48405718
Is that... no, it can't be.
squints
Is that an institution working for long-term stability instead of short-term gain?
looks through binoculars
Holy hell... it is!
Dodged a bullet... seems like they still have integrity.
I left my comment saying it was a bad idea.
This would have been so disastrous. What a great move.
I wonder if Elon would now reconsider IPO.
I'm quite relieved as the S&P should be stable and slow. But with that caveat said, is this why the S&P 500 dropped off a cliff on Friday? If so, why?
Good. Financial grift needs to end. Passive investment has become slightly too passive. S&P saved us. We weren't so lucky when they were rating bonds before the GFC. Glad they seem to have grown some ethics and are not bending the knee to the rocketman.
Everyone watch out for other indices like CRSP US Total Market Index, which trade as the ETF VTI and mutual fund VTSAX.
There are countless other indices that are not well known to request seasoning time of these mega companies.
Shifting to S&P 500 seems prudent at the point. Besides S&P does anyone know which indices will be safe from these IPOs?
Fast entry rules are terrible. There is an old adage IPO - It's Probably Overpriced. Warren Buffet explained why: It's the issuer who chooses the price and time to enter the market. They will pick circumstances that suits them best. The chances that an IPO is a better deal than multiple other companies available in the auction market at that time which didn't get to choose the timing is close to 0 and it's not worth thinking about it - just don't buy IPOs ever.
I don't care about profitability, sustainability, ESG scores or anything like that. If the market is pricing unprofitable company at hundred of billions maybe there is a good reason for it. I do care about market having time to evaluate the company so index funds buy at fair prices. For this you need time and enough float and volume. Time being the main factor.
Great. When the market floats it down to a fair valuation of $70B it will be a great add to the S&P 500.
Thank goodness my portfolio is safe from these junk papers.
Kudos to S&P 500. Vast majority of the world has no clue how trillions of $ from their pension funds is being funneled to the select few. Absolutely pathetic.
This is REALLY GOOD news for every passive investor. They try to game the system with this one, big time. There should be hearings about this, and new laws need to put in place to prevent something like this.
Thats good honestly and a big relief
Major W. Regular people were going to get robbed blind.
[dupe] https://news.ycombinator.com/item?id=48405718
A bit tangent, as I never had a single thought about investing any of the few precious attention moment into financial theaters.
if I get it this is an index to invest in common in distributed wallets chosen and managed by an organization named S&P?
I'ld be interested in something similar, but aiming at growing cooperatives, non profits, externally checked for alignment organisations striving to benefit humanity as a whole. It doesn't have to be something that have strong garanties of direct personal financial profits, just no way it makes me in personal bankrupts, zero personal gain would be ok, staying ahead of inflation nice to have, and having some profits back would be acceptable.
Please be kind or hold from losing time and energy for everybody with aggressive answers.
I'm just considering ways to make sure as few as possible resources end up in the control of techno fascists.
Smart choice imo. One pass with the SRT wipes their moat out overnight.
https://github.com/space-bacon/SRT
Meanwhile the NASDAQ fell 4.18% Friday just been. This seems more than just a coincidence, people have been talking about pulling investment ahead of the SpaceX IPO, and the latest market activity makes me think the discontent is tangible now.