Topline
SpaceX could join the Nasdaq-100 within weeks, though some investors are already gaining exposure through existing funds, while broader ownership through S&P 500-backed investments—including many 401(k) accounts—is likely much farther off.
Musk’s firm will soon be eligible for inclusion in the Nasdaq-100, but broader investor exposure may take some time.
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Key Facts
SpaceX will be eligible for the Nasdaq-100—a stock market index tracking 100 of the largest non-financial companies, like Nvidia, Amazon and Microsoft—after 15 trading days, meaning it could be included as soon as early July.
That would include SpaceX in funds that track the Nasdaq-100, such as the Invesco QQQ Trust, one of the world’s largest ETFs available in many IRAs and some 401(k) plans.
The company could join the Russell 1000 index—tracking the 1,000 largest companies by market value—shortly after its debut, potentially exposing investors to SpaceX through funds such as the Vanguard Russell 1000 ETF, iShares Russell 1000 ETF or the SPDR Russell 1000 ETF, among others.
Investors may also gain exposure to SpaceX through broad-market funds such as the Schwab U.S. Broad Market ETF or Vanguard Total Stock Market ETF, which add large IPOs more quickly than the S&P 500, as well as actively managed funds, including Cathie Wood’s ARK Venture Fund or billionaire Ron Baron’s Baron Asset Fund, where SpaceX accounts for just over 23% of all holdings as of May 31.
SpaceX may also be included in space-focused ETFs, like the ARK Space Exploration & Innovation ETF or the Procure Space ETF.
can retirement savings opt out of spacex?
Traditional retirement plans like a 401(k) invest through mutual funds, index funds and ETFs, though it’s unlikely an individual would be able to exclude one company while keeping the rest of a fund. Investors tend to have more control over their investments through an IRA, allowing them to avoid specific stocks if they choose, or to select funds that exclude certain industries.
when will spacex join the s&P 500?
S&P Dow Jones Indices announced earlier this month it would not shorten its 12-month waiting period for newly public companies or waive existing profitability requirements to list on the S&P 500. That will delay SpaceX’s inclusion in the index and postpone additional investments by funds tracking the S&P 500 for at least one year, including many 401(k) and retirement accounts. The index also requires positive earnings across four quarters combined, including a firm’s most recent quarter, which could delay SpaceX further: the company reported a loss of about $4.3 billion in its latest quarter.
big number
34.5%. That’s how much SpaceX shares have risen since their debut last week as of Tuesday’s closing price, jumping from their $150 per share IPO to just under $202.
key background
SpaceX drew record-setting demand for its trading debut and raised $85 billion in its IPO. The Elon Musk-led firm was widely expected to be the largest IPO ever, and it has since soared in value over the last three trading sessions, ranking ahead of Amazon as the fifth-largest company with a market value of $2.6 trillion. It now challenges Microsoft, the fourth-largest with a $2.9 trillion market cap. Some analysts have warned that SpaceX is overvalued, including Morningstar, which argued that investors could buy the stock at “more attractive levels” following SpaceX’s IPO. Most of SpaceX’s market value relies on its success in developing technologies that are “novel and untested,” the analysts claimed, noting SpaceX will likely incur “significant” spending costs over several years. Truist analysts warned of potential volatility with SpaceX, citing the stock’s exposure as a “key factor” for its early trading period. PitchBook’s Franco Granda wrote in March that shares may trade similarly to Tesla “on steroids, as the Musk-led automaker is notoriously volatile among mega-cap stocks.
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