--- title: "Driving up the stock price? 15 days after SpaceX's listing, index funds are expected to hold 30% of the floating stock!" type: "News" locale: "en" url: "https://longbridge.com/en/news/289249070.md" description: "The largest IPO in history is upon us. Within 15 days of SpaceX's listing, approximately 30% of its floating stock may be locked up by passive capital, far exceeding the conventional 4% level. Nasdaq, FTSE Russell, and MSCI are racing to accelerate inclusion, which, combined with the frenzy surrounding Musk and AI, is fostering \"reflexivity\" risks: mechanical buying pushes up the stock price, thereby amplifying the influx of passive capital. Academic research finds that companies rapidly included in indices outperform the market by about five percentage points before the inclusion date, but these excess returns are given back within three weeks" datetime: "2026-06-10T00:03:43.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/289249070.md) - [en](https://longbridge.com/en/news/289249070.md) - [zh-HK](https://longbridge.com/zh-HK/news/289249070.md) --- # Driving up the stock price? 15 days after SpaceX's listing, index funds are expected to hold 30% of the floating stock! SpaceX is poised to set a record for the largest IPO in history, but the controversy surrounding this listing extends beyond valuation itself—mechanical buying by index funds is triggering deep-seated market concerns about price distortion. According to a Bloomberg report on Wednesday, calculations by Intropic, a firm specializing in index rebalancing forecasts, indicate that because Nasdaq, FTSE Russell, and MSCI all plan to rapidly include SpaceX in their respective indices, the proportion of SpaceX's **floating stock** held by passive investors is expected to reach approximately 30% just 15 days after trading begins. In contrast, if the previous, slower inclusion rules were applied, this proportion would be only about 4%. Academics and market observers warn that **this scale of mechanical demand, coupled with market fervor over Musk, SpaceX, and artificial intelligence, could create a self-reinforcing feedback loop, driving the stock price continuously higher.** This dynamic makes SpaceX's listing not only the largest IPO in history but also a significant market stress test for the influence of passive investment. ## Three major indices race for rapid inclusion, creating unprecedented scale of passive demand Both Nasdaq and FTSE Russell have modified their rules to pave the way for SpaceX's early inclusion in their indices, with MSCI also planning to follow suit. **Data from Intropic shows that the concentrated actions of these three index providers will lock approximately 30% of the**floating stock**in the hands of passive investors within a very short time after SpaceX's listing.** Marco Sammon, an Assistant Professor at Harvard Business School who has long studied the market impact of passive investment, pointed out that there is an inherent logic of benchmark competition behind the rush by major index providers to quickly include SpaceX. "Each index provider is eager to include SpaceX in its index, and an important reason is the implicit competition between benchmarks," he said. "This appears to be a case where index methodology, rather than fundamentals, could have a huge impact on prices." Nasdaq economists Phil Mackintosh and Nicole Torskiy defended the rapid inclusion mechanism in a blog post last week, arguing that it helps indices better represent listed companies that are truly important to the economy. Citing data from 2010 to 2025, they noted that stocks entering the Russell 1000 Index first tend to outperform those in the S&P 1500 Index. ## The "Shadow Tax" Effect: Arbitrage windows compressed, forcing passive investors to buy at high prices In a normal index inclusion process, professional arbitrageurs such as hedge funds and market makers typically build positions gradually in advance, transferring their holdings to index funds when needed, thereby dampening price impact. However, the rapid inclusion mechanism significantly compresses the time window for arbitrageurs to build positions. A research paper co-authored by Marco Sammon with John Shim and Stefano Pegoraro from the University of Notre Dame shows that when the inclusion window is compressed, mechanical demand of the same magnitude is more likely to produce larger short-term price impacts, followed by subsequent corrections. His research with Harvard colleague Chris Murray on the index provider CRSP also found that **companies rapidly included in indices outperform the market by about five percentage points before the inclusion date, but these excess returns are given back within three weeks.** "When the window is compressed, mechanical demand of the same magnitude is more likely to produce relatively larger short-term price impacts and subsequent corrections," Sammon stated. "This effect is further amplified by the generally high volatility and poor liquidity in the market following an IPO. In such circumstances, the costs borne by **index fund** investors will be higher." This effectively constitutes a "shadow tax" on passive investors—**they are forced to buy at high prices, while the issuing company cannot directly sell shares to index-tracking funds.** ## "Reflexivity" Risk: Index mechanisms may interfere with price discovery In a report released on June 8, Intropic warned that the passive demand facing SpaceX could spawn a "reflexivity" loop: the scale of passive capital inflows into various indices depends on SpaceX's market capitalization on the ranking benchmark date; yet this market cap itself may be temporarily inflated by mechanical buying from arbitrageurs building positions in advance, which in turn amplifies the scale of passive capital inflows. This loop could even extend to the IPO pricing stage—if investors participating in the subscription are themselves betting on the subsequent buying power of passive capital, the IPO price will also be distorted. **"The price impact of passive capital flows is transient, but it may interfere with price discovery at the most critical juncture of a company's journey in the stock market,"** wrote the London-based firm. Notably, S&P Dow Jones Indices has rejected proposals that could have allowed SpaceX, OpenAI, and Anthropic to be included in the S&P 500 Index ahead of schedule. According to Bloomberg, passive investment vehicles currently account for about 60% of U.S. equity funds and control approximately one-fifth of the market capitalization of the S&P 500. Concerns about index investing distorting trading and prices have long existed, and SpaceX's listing is pushing this issue into the spotlight. ### Related Stocks - [SPCX.US](https://longbridge.com/en/quote/SPCX.US.md) - [SPCH.US](https://longbridge.com/en/quote/SPCH.US.md) - [OpenAI.NA](https://longbridge.com/en/quote/OpenAI.NA.md) - [.SPX.US](https://longbridge.com/en/quote/.SPX.US.md) ## Related News & Research - [This Newly Listed Closed-End Fund Just Revealed SpaceX as Its Top Holding at $117 Million.](https://longbridge.com/en/news/289237054.md) - [A SpaceX stock IPO pop? 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