Could the three major century IPOs trigger a major reshuffle in the US stock market?

In the near future, the sensational listings of SpaceX, Anthropic, and OpenAI are expected to trigger an unprecedented wave of buying and selling in the U.S. stock market. This is because the new "rapid inclusion" rules will directly add these stocks to the major Wall Street indices.

The new rules implemented by Nasdaq this month mean that shortly after the listing of these three companies, at least billions of dollars in passive funds will automatically flow in, which will drive up their stock prices. However, it will also force investors to sell other stocks.

SpaceX, owned by Elon Musk, submitted an IPO application on Wednesday, and it is expected to be the largest IPO in history. On the same day, the listing plan of OpenAI was also exposed by the media, while its main competitor, Anthropic, may have turned a profit ahead of schedule this quarter, laying the foundation for its own listing.

According to next month's IPO plan, the proportion of shares issued by SpaceX to public investors is actually relatively limited. Under the old rules in the past, such a low proportion of floating shares would usually make it difficult for this space exploration giant to be included in the core indices, meaning it couldn't enter the stock pool of passive funds that track trillions of dollars.

However, in the competition with its rival, the New York Stock Exchange, for the listing of SpaceX, Nasdaq relaxed the rules and allowed the stock to be added to the Nasdaq 100 index just 15 days after its listing. SpaceX and other newly listed companies will also receive an index weighting equivalent to three times the value of their floating shares.

Meanwhile, S&P Dow Jones Indices is also consulting on possible rule changes to accelerate the inclusion of this stock in the S&P 500 index.

Is an epic "fund pump" coming?

According to SpaceX's prospectus, since the number of shares offered in this issuance is relatively small, the initial impact on the other components of the index will be limited. However, this impact may increase after the lock - up period ends. According to the prospectus, the lock - up period will be lifted in stages within 180 days after the start of trading.

JPMorgan estimates that if the company ultimately lists 50% of its shares and has a valuation of $2 trillion, passive investors will have to sell $95 billion worth of stocks from the existing eight major technology stocks on Wall Street (the Magnificent Seven + Broadcom).

Peter Haynes, the head of index and market structure research at TD Securities, said when talking about SpaceX's listing that both the scale of SpaceX's IPO and the subsequent chain reaction brought about by the release of locked - up stocks are unprecedented in recent index weighting adjustment events. We have been inundated with inquiries from institutional investors about the name, scale, and impact of this IPO.

Some investors are also preparing for the sale of small - cap stocks. These stocks may be removed from the benchmark index later this year to make room for SpaceX and other new members with extremely large market capitalizations.

Valérie Noël, the trading head of the Syz Group, said, Regarding SpaceX's listing, the "most discussed trades" in the market include short - selling the "marginal components of the Nasdaq 100 index" (i.e., the candidate stocks that may be removed), and the existing large - cap weighted stocks will also face selling pressure.

Todd Sohn, the chief ETF strategist at Strategas, pointed out that the limited number of tradable shares after SpaceX's listing means that the process of its inclusion in the index will seem "almost chaotic, because you need to deal with ETFs and passive products that track trillions of dollars in assets, while the tradable shares only account for 5%."

Sohn believes that the expected sharp rise in the stock price after the IPO may lead passive investors to buy at a high valuation. "If SpaceX rises 100% in the week after the IPO and they have to buy, they will have to buy. They have to accept that price... They can't be picky," he said.

Christian Raute, the head of market trading strategy at Citi, said that the short time window from SpaceX's IPO to its inclusion in the index means that "there will be significant market fluctuations." "Due to its large scale, this is indeed a challenge, and the stock price may become extremely expensive."

But Raute said that in the end, "the market will have no problem absorbing these IPOs." "The entire industry is ready, and the participants have been trained to handle this situation."

The portfolio manager of a large U.S. hedge fund said, "For these three companies - SpaceX, Anthropic, and OpenAI, we will go all out and participate on the largest scale... We have no liquidity constraints at all."

This article is from the WeChat official account "Science and Technology Innovation Board Daily", author: Xiaoxiang. It is published by 36Kr with authorization.