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The Largest IPO Of All Time
SpaceX’s IPO was by far the largest IPO of all time raising $75 billion with a 19% share price pop to set an opening day company valuation of $2.1 trillion which rose, yesterday, to $2.5 trillion.
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SpaceX will become part of the Nasdaq-100 index in early July because Nasdaq recently introduced a “Fast Entry” rule, under which a newly listed company with a market capitalization that puts it in the top 40 of current index constituents would be added to the index after just fifteen trading days and be exempt from seasoning and liquidity requirements.
Once the stock is included in the Nasdaq-100, however, countless retail investors, who have index-tracking ETFs in their portfolios, will become SpaceX investors, whether they like it or not. For SpaceX, its shareholders and IPO investors, this is an added safety net, because once the stock becomes part of the Nasdaq-100, index-tracking funds will buy billions of dollars’ worth of SpaceX shares, mechanically creating huge demand for what looks like a very risky investment.
The S&P 500, meanwhile, has rules in place that will likely prevent SpaceX from joining the index anytime soon. To be eligible for S&P 500 inclusion, a company must have a public float of at least 10 percent of its total outstanding shares – a hurdle that SpaceX doesn’t clear.
Thev S&P 500 also requires profitability. A company that wants to be included in the index must have positive GAAP earnings in the most recent quarter and in its past four quarters combined – neither of which SpaceX has achieved
