I've posted Ben Felix videos before, and he's one of the best at both researching and explaining complicated stock market concepts. This is great not just for the two stocks mentioned, but for understanding how IPOs impact index funds in general.
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The way that Elon got the Nasdaq to change critical rules like the index listing is wild to me. I personally think that the Texas Stock Exchange must have made a hell of a pitch to Elon and he took it to Nasdaq and they folded. It is making me more hopeful and excited when TXSE launches later this year!
I'm very curious about the impact the TXSE will have, given their double listing rules. Should be interesting to watch, regardless.
This says: on the day that one of them gets tracked, short every other incumbent large cap
The part most people miss about mega-IPOs and index funds is the forced buying mechanics. When a company like SpaceX enters the S&P 500, every index fund tracking it has to buy shares at basically any price to maintain their tracking error. That's trillions in passive AUM that becomes a guaranteed buyer on inclusion day.
Pre-IPO shareholders and insiders know this. They can price the IPO aggressively because there's a structural floor of demand waiting. It's not really a "market" price at that point, it's a tax on every 401k holder in America.
The historical pattern is pretty damning. Research from the Journal of Financial Economics found that stocks added to the S&P 500 saw an average 3-7% price bump around inclusion, with most of those gains coming from forced index buying rather than any fundamental change in the company. That premium has been shrinking as more people front-run index additions, but the mechanism is still there.
What makes SpaceX and OpenAI different is the scale. These would be the largest IPOs by market cap in history. The passive buying demand on inclusion day would be unprecedented. You're basically watching wealth transfer from passive index holders to venture capitalists and early employees, with the index fund structure itself as the pipe.
The Bitcoiner framing is obvious but worth stating: you can't force-include anything into a bearer asset with a fixed supply schedule. Nobody's 401k gets diluted because Satoshi decided to IPO.