SpaceX Stock Soars as It Joins NASDAQ 100

SpaceX, the rocket-making company led by Elon Musk, is set to join the prestigious NASDAQ 100 index on Tuesday (July 7). This comes less than a month after SpaceX went public on June 12. The inclusion in the NASDAQ 100, an index of 100 innovative companies, is expected to boost SpaceX's stock significantly.

According to Fast Company, the NASDAQ recently changed its rules to allow new companies to join the index just 15 days after their initial public offering (IPO). This change was made to attract SpaceX and other large IPOs. As a result, index-tracking funds and exchange-traded funds, which manage over a trillion dollars globally, will need to buy SpaceX stock, increasing its market liquidity and credibility.

SpaceX's rapid inclusion in the NASDAQ 100 is unusual, as most companies wait years to achieve this milestone. The company's market capitalization reached $2.11 trillion on its first trading day, making it one of the world's largest public companies. However, its float-adjusted market cap, which accounts for the shares available for public trading, is smaller due to substantial insider ownership, including Musk's 49% stake.

Reuters reports that the inclusion of SpaceX in the NASDAQ 100 will lead to a wave of passive buying, as index funds adjust their portfolios to reflect the change. This move is expected to enhance SpaceX's presence in the stock market, although its limited float will initially restrict its influence in index funds.

Morningstar notes that SpaceX's unique ownership structure and limited float mean it won't immediately become a major component of index funds. However, as its float increases over time, SpaceX's influence in the market is likely to grow.