A lot of Americans are about to own a sliver of SpaceX.
The company completed its initial public offering Friday in the world’s largest stock market debut — and in a few days many personal and retirement investment accounts will have a stake in it, largely through index funds that track the broader market.
Below, you can estimate how much of SpaceX and other companies you’d own if your investments were in various index funds:
In the context of other index fund holdings, SpaceX will probably take up a smaller portion than one might expect, because most of its stock is not publicly tradable yet. Other major tech companies, like Nvidia and Apple, will continue to make up a much larger share of index funds compared with SpaceX, at least for now.
And most typical retirement accounts already have a bigger investment in another Elon Musk venture. According to our estimates, investors in total U.S. stock market index funds will own more than 10 times as much Tesla stock as they do SpaceX.
Our calculator can’t predict the future, so it makes a few major assumptions. It assumes that when index funds will buy into the company, its shares will be at $150, the opening price Friday.
This probably won’t be the case, and in fact the price may even push up in anticipation of when the index funds will buy their shares, according to John Shim, assistant professor of finance at Notre Dame.
“Buying immediately after the I.P.O. in the days that follow is usually a very bad idea,” he said.
Some indexes have changed their rules to more quickly include new mega I.P.O.s in their baskets of stocks, on the idea that these companies are now often more mature, more integrated into the economy and less volatile at the time they go public. The CRSP U.S. Total Market Index, which is used by large investment management companies like Vanguard as a benchmark for index funds, is planning to integrate the company five days after its market debut. That’s one reason many average investors will have a stake in SpaceX very quickly.
The Nasdaq-100 index, while not common in retirement accounts, is set to introduce SpaceX 15 trading days after the I.P.O. It is even multiplying the value of SpaceX by three to account for a low initial “float,” or number of shares available for investors — so people who invest in the Nasdaq-100 (by holding the QQQ E.T.F., for example) will have a bigger stake in the company.
The S&P 500, however, is sticking to its current rules and will evaluate SpaceX for inclusion after about a year.
The calculator also won’t account for the fact that the volume of tradable SpaceX stock will change over time.
Even with the company’s unprecedented pre-I.P.O. valuation of $1.77 trillion, the number of shares available for investors is relatively small. Over 90 percent of shares for large companies like Nvidia and Apple are tradable, but only around 5 percent of SpaceX shares will be. The other shares will still be held by the company’s founders, employees and early investors.
It’s common for companies to start with a smaller amount of tradable stock, but SpaceX’s float is especially small. It may be a strategic play to drive up prices by limiting stock availability, said David Brown, associate professor of finance at the University of Arizona.
When it comes to maneuvering for successful I.P.O.s, “companies are much more apt these days than they were a couple decades ago,” he said.
As restrictions for insiders like Mr. Musk or SpaceX employees expire, more shares will be available for trading. If the stock price is steady or climbs higher, a bigger public float could mean increased SpaceX representation in index funds.
For now, SpaceX is set to be a small part of most people’s investments.
“I.P.O.s don’t meaningfully move retirement portfolios right away,” Rodney Comegys, chief investment officer at Vanguard Capital Management and head of global equity at Vanguard, said in a statement. “Even mega I.P.O.s will enter broad indexes at very small weights, so the near-term impact on 401(k)s is limited.”
The giant size of these new public companies should be reason for index funds to think hard about the best time to include them, Professor Brown said. (The artificial intelligence companies Anthropic and OpenAI have also started to prepare for I.P.O.s.) “For most investors, that’s where it’s going to hit,” he said.
About the data
SpaceX ownership estimates use each index’s float-adjusted weighting rules, assuming its publicly tradable shares are worth roughly $150 per share based on their opening price.
To estimate ownership through index funds, we calculate a weight for each company based on the company’s float-adjusted capitalization and the total capitalization of the market that an index tracks. Total U.S. market capitalization, market capitalization for the S&P 500, and weights for index funds use Vanguard VTI and Invesco QQQ were provided by Morningstar. Nasdaq 100’s total market share is calculated from its index page as of May 29. Weights and market capitalization change daily.
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