SpaceX's index fund debut will look nothing like what most investors expect(investmentnews.com) |
SpaceX's index fund debut will look nothing like what most investors expect(investmentnews.com) |
Matt Levine described it well
(https://www.bloomberg.com/opinion/newsletters/2026-05-21/spa...)
> The deal, with SpaceX, is that Elon Musk runs it however he wants, and he does weird stuff, and you have to trust him, and if you don’t like it you can’t complain.
> When SpaceX acquired xAI a few months ago, did a special committee of independent directors approve the transaction? Did Musk recuse himself from negotiations? Was the price set by independent valuation experts using a rigorous process? Did outside shareholders sue to block the deal? Stop. Musk wanted SpaceX to buy xAI, so it did.
> [...] Surely SpaceX has created all that shareholder value more because Musk does what he wants than in spite of Musk doing what he wants; it is hard to accidentally create $1.75 trillion of value. SpaceX’s shareholders signed up for this deal — letting Musk cook — and have been rewarded;
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The complaint here isn't from SpaceX investors. It's from retail investors that are being forced to buy SpaceX stock on an accelerated timeline as part of the ETFs they likely purchased so that they would not be overly exposed to volatile single stock picks. The article isn't explicit on this point, instead vaguely gesturing to the series of mega IPOs coming and pointing out that retail clients need to plan for this.
There is a game being played here where the various indexes (NASDAQ, NYSE, etc.) are trying to sweeten the deal to attract big entries like SpaceX (and later OpenAI, Anthropic). The sugar they are giving is an accelerated timeline and inflated spot in the index (3x float rule). That sugar is paid for by retail investors, who may get squeezed when their index funds pay a high price for a small float of public shares, all on predictable days.
Before you say that retail investors should simply buy SpaceX themselves prior to the 15-day index inclusion, realize that retail investors also don't have access to shares at the IPO offer price. That benefit is reserved for large investors, private equity, etc. While it is possible that some retail investors will take this gamble and win, many will be taking a large risk.