SpaceX went public amid intense skepticism, but a new Goldman Sachs report reveals its impact on the broader US stock market has been far less violent than feared. While the IPO was highly stage-managed with low free-float and retail stuffing, the overall market distortion has proven minimal. As insider lock-ups expire, freely tradeable shares have increased dramatically, yet SpaceX shares have underperformed the S&P 500 with ridiculous volatility.
Despite being held outside the S&P 500, index funds, primarily QQQ, have had to buy about $32bn of SpaceX shares. The next Russell 1000 Growth rebalancing will add another $10bn-plus. However, outside short-term trading patterns around the IPO, SpaceX has had a much smaller impact on equity indices than expected.
Within the Nasdaq-100, it carries the largest weight, but excluding it, the P/E would be less than half a turn lower. The fundamental impact has been reminiscent of Tesla's 2020 S&P 500 inclusion, with minor effects on index valuation, return, volatility, or concentration. The limited impact suggests financial gravity has reasserted its primacy over index shenanigans.
Estimated benchmarked passive AUM and index weights show SpaceX's influence is concentrated primarily in the Nasdaq-100, with negligible effect on the S&P 500 despite its bloated market cap.
Source: Financial Times Companies · Summarized by HeadlinesBriefing