Key insights
- The article warns that the increasing number of unprofitable, cash-burning companies like SpaceX, OpenAI, and Anthropic going public could drain liquidity from passive investment funds. This trend, driven by index controller rule changes, suggests a potential negative impact on retirement and investment portfolios as these '1%' hits accumulate, implying a bearish outlook for passive fund performance.
You do realise that, after the rule changes made by the index controllers (like NASDAQ and FTSE), SpaceX is not going to be the only cash-burning company to suck exit liquidity from passive funds, right?
We already have OpenAI and Anthropic waiting in the pipelines (and who knows how many other unprofitable companies whose insiders need to cash out), preparing to use the exact same playbook that SpaceX is now trying.
How many "just 1%" hits should people be expected to tolerate for their investment and retirement funds?