Key insights
- The potential inclusion of SpaceX (SPCX) into major ETFs like SPY and QQQ is raising concerns about how these funds will adjust their holdings. The high valuation of SPCX ($1.75T) could force proportional sell-offs of existing holdings, trimming of the smallest holding (CSGP), or temporary expansion of the index beyond its standard number of stocks. The rebalancing strategies of ETFs will dictate the timing and magnitude of these adjustments, potentially creating short-term selling pressure on existing holdings.
$SPCX filed its S-1 on May 20, targets a Nasdaq listing June 12 at a $1.75T valuation. Index providers literally rewrote their rules to fast-track it in.
How big ETFs gonna include $SPCX in their holding?
- will they proportionally sell of holdings and we will be fucked ? 2. or the last name in SPY (500/500) / QQQ (100/100) gonna be trimmed out directly $CSGP ? 3. or the ETFs will run 500+1 & 100+1 ? 4. or it will happen gradually given some ETFs have rebalancing quarterly window ?
This is what Bloomberg thinks