SpaceX remains private, yet it is already forcing Wall Street to rewrite the rulebook. The space company valued at over $1 trillion is poised to go public next month, but its sheer size has already triggered a scramble by major stock indexes to fast-track its entry into their benchmarks, raising tough questions about fairness and market manipulation.
The ripple effects extend far beyond SpaceX alone. Venture capitalist and MIT research fellow Paul Kedrosky estimates that SpaceX, OpenAI, and Anthropic could collectively add roughly $5 trillion in value to public markets this year. The influx would be staggering, he warns, with an enormous wave of investor demand pulling money from other assets to buy these stocks. The ocean analogy he uses is telling: like the water pulling back before a tsunami crashes ashore, the reshuffling could upend everything in its path.
Already, the Nasdaq fast-tracked SpaceX for inclusion in the Nasdaq 100 index. Now the S&P 500 is weighing similar changes. The index is considering redefining its rules for what it calls "MegaCaps," companies with valuations placing them in the top 100 by market capitalization. The proposed shifts are significant. Companies would no longer need to be profitable to join. The typical 12-month waiting period would shrink to six months. Most controversially, the requirement that a company float at least 10 percent of its shares publicly would vanish, allowing SpaceX to proceed with a reported 5 percent float.
These changes face sharp criticism. "The rules are being rewritten to benefit IPO issuers and early-stage insiders, and your capital is the tool being used to enrich them," investor George Noble wrote on Substack. Wall Street Journal columnist James Mackintosh called the proposal egregious, arguing it amounts to an admission that different rules apply to different companies.
Index funds now represent an enormous share of the market. If SpaceX lands on the S&P 500, these funds would be effectively forced to buy the stock, guaranteeing massive demand and potentially inflating valuations.
Defenders argue the changes simply reflect how markets have evolved. Jay Ritter, director of the IPO initiative at the University of Florida's Warrington College of Business, points out that companies like SpaceX would likely gain inclusion eventually anyway. "Investors want indexes to be representative of the market," he said. The timing of entry, he suggests, is the real question, not whether they belong at all.
Historical context supports one side of this debate. In the 1980s and 1990s, most companies going public were already profitable. That shifted dramatically this century, with most new IPOs arriving unprofitable. The rules being rewritten today were written for a different era.
The S&P 500 must approve the rule changes by May 28 for them to take effect before June 8, presumably ahead of SpaceX's debut. Whether that happens will signal how much power megacap founders and venture capitalists wield over the market infrastructure itself.
Author James Rodriguez: "This isn't just about making room for SpaceX, it's about whether the market's foundational rules should bend for whoever arrives with the biggest valuation."
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