Nasdaq has announced a series of rule changes that could help Elon Musk-led SpaceX to be listed on the exchange within 15 days following its IPO. Here’s what you need to know:
Rule Changes To The Nasdaq 100
In a statement released on Monday, the index said it had sought feedback on a number of revisions to the Nasdaq 100 methodology, including market cap analysis and expedited entry into the index.
The proposed measures aimed to ensure that the index remained “timely and representative of the market it measures,” the statement said, adding that the decision would also let the index “be consistent with its objective of tracking the 100 largest non-financial companies,” on the platform.
Nasdaq proposed that it would include both listed and unlisted shares for calculating a company’s market capitalization for ranking and inclusion into the index. “This will only affect eligibility and not weighting, which remains based on listed market capitalization,” the statement said.
The index also proposed a “fast entry” for large listed companies into the exchange, which, according to an earlier release, would let new companies be added to the index within 15 days if their “entire market capitalization ranks within the top 40 current constituents in the index.” The statement did acknowledge that multiple individual investors were against such a decision.
Other changes include the removal of the 10% free-float requirement, which dictates that a company must maintain at least 10% of its shares to be publicly traded, as well as sharing that low-float securities’ weight would be adjusted to three times its free-float. Nasdaq said that all of the changes would take effect from May 1, 2026.
How SpaceX Could Benefit
The rule changes could benefit SpaceX, which had been reportedly leaning towards a listing on the Nasdaq. Specifically, the new rules would allow SpaceX to join the index almost immediately after its planned IPO, which could be targeting a $1.75 trillion valuation, according to Musk.
The other rule change that could benefit SpaceX is the proposal that would adjust low-float securities to be calculated at 3 times their free float. Investor Michael Burry of “The Big Short” fame criticized the decision at the time of its proposal.
“If SpaceX IPOs at $1.75 trillion and floats 5% of its shares, there would be roughly $87.5 billion worth of stock available for public trading,” Burry said. He added that “under Nasdaq’s proposed 5x multiplier, the index would weight SpaceX at 25% of its total market cap,” meaning that funds would be forced to buy as if “SpaceX were a $437.5 billion company.”
S&P 500 Rule Changes
The S&P 500 Index, which is managed by S&P Global Dow Jones Indices and lists some of the largest companies in the world, was also reportedly mulling changing its rules for entry into the index. However, responding to a request for comment by Benzinga, the index said that it “does not comment on speculation regarding potential index or methodology changes.”
Current rules dictate that a company must be domiciled in the U.S., have a market capitalization of at least $22.7 billion and be publicly listed for 12 months to be included in the index.
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