Like the public listings of SpaceX and Anthropic, index providers are gearing up for a major market pullout.
When mega-cap companies go public, index providers and investors will see it as throwing warships into an old fishing pond. The outgoing waves will drown everyone.
Privately held artificial intelligence (AI) vendor Anthropic has announced its filing of a draft registration statement with the US Securities and Exchange Commission (SEC) for its first public offering. According to the company's website, Anthropic has not decided on the number of shares it will offer, or the prices. The company recently closed a $65 billion fundraising round, valuing the company at $965 billion.
The news comes as the SEC publishes SpaceX's revised Form S-1 on the market regulator's EDGAR database. The conspicuously absent OpenAI is reportedly filling out its bench of underwriters for a possible September IPO. The AI company reached a post-money valuation of $852 billion, according to CNBC.
Index Aspect
If index providers add these companies that are one of the 10 largest listed companies by market average before their trading prices stabilize, they can be very expensive due to the effect of large price movements.
“Leaving a company with a large liability means the index is not doing its job,” said James Angel, a professor and director of the Psaros Center for Financial Markets and Policy at Georgetown University. Global Finance. “So it makes sense to file a large IPO immediately.”
“Big IPO” is not an understatement. The consensus of Wall Street expects that the IPO of SpaceX will result in a capital market of between $1.75 trillion and $2 trillion, it will lower the level of Meta and Tesla in the components of the Nasdaq-100 Index, the largest by market capitalization while removing Micron Technology from the Top 10. If the rumors of SpaceX-Teslamer are true, Apple proves that Alphabear is only true, Alphabear is market capitalization there is a resulting $3.4 trillion behemoth.
The Fastest Way
Nasdaq has already addressed the big issue by revising its inclusion in the Nasdaq-100 Index, which represents the 100 largest Nasdaq-listed non-financial companies, in May.
Among the major changes made by Nasdaq was the introduction of quarterly index returns in March, June, and September, in addition to its regular December reset. Nasdaq has also included a “Fast Entry” method for new listings that rank among the current top 40 of the Nasdaq-100 by total market capitalization, based on both listed and unlisted stocks.
“These companies are evaluated on their seventh trading day and, if appropriate, added shortly thereafter, with all existing liquidity requirements still in effect,” explained Emily Spurling, Head of Global Indexes at Nasdaq Global Indexes, in an interview posted on the Nasdaq website. “The quarterly balance covers a wide range of relevant companies; Rapid Entry ensures that the index can respond at a time when a large-scale company enters the public market.”
SpaceX stock may see its highest prices not on June 12, its reported IPO date, but on July 7, the first time it was added to the Nasdaq-100 Index, according to Sean Williams of the Motley Fool.
“Considering Juneteenth (June 19) and Independence Day (July 3) stock market holidays, the 15th trading day, including its IPO day, is July 6,” he wrote. “Index funds trying to match the market-weighted Nasdaq-100 will have to buy short-performing stocks after this 15-day period ends. Mandatory purchases from exchange-traded funds and index funds are estimated at $22 billion to $27 billion.”
Nasdaq is making a very big change to the rules for the Nasdaq-100 as a way to get listed on the Nasdaq,” said Angel. “Other index providers don't have the same incentive to shorten the seasoning period. I get the impression that they're just doing it to make their indices more visible to what's going on in the market.”
The Less Fast Way
Meanwhile, the S&P Dow Jones Indices (S&P DJI) includes the methodology changes in the S&P US Indices and the Dow Jones US Total Stock Market Indices. The company is considering whether to apply “a narrowly defined rule for MegaCap companies and to adjust the IPO timing of the IPO,” according to a prepared statement.
The index broker defines large companies as those with a market capitalization equal to or greater than the 100 largest companies in the S&P Total Market Index, which was approximately $150 billion in early June.
According to reports from Bloomberg News, the main consideration is whether to reduce the incubation period for IPOs before they are eligible for inclusion in the index to six months from 12 months.
The consultation period ended on May 28, and any changes S&P DJI proposes will take effect “prior to the market opening on Monday, June 8, 2026, unless otherwise announced,” the statement continued.
The company declined to comment beyond its published statement.
