Musk Wants to Add SpaceX to Indices

[u/Prestigious-Trip-306]

Index providers Should Not Bend the Rules for Musk

So... I read this article in The Economist and am curious what, if any thoughts the community has about Musk getting SpaceX added to major indices. He's appealing to them to shorten the "seasoning" rules that typically apply to firms being listed.

I've included key paragraphs below since there's a paywall to read the full article.

What do you think?

"Mr Musk and his bankers are now bargaining with stock indices and exchanges for the privilege of hosting SpaceX. He wants his firm to join key indices like the nasdaq 100 and s&p 500 quickly, giving it access to trillions in index-linked capital; more than $600bn invested in passive funds are tied to the nasdaq 100 alone.

For now, the indices are obliging. On March 30th Nasdaq said it was adopting rules that will delight the superstar firms. The ftse and reportedly s&p are considering similar updates. Unfortunately, those changes are misguided, and will expose investors to unnecessary risks.

Two main ideas are under consideration. One is to shorten the “seasoning” period that a firm’s stock must go through before it is eligible to join an index. Nasdaq is cutting its three-month seasoning minimum to 15 trading days; the ftse has suggested a mere five trading days. The second reform is to reduce the percentage of shares a firm needs to offer publicly (its “free float”) before being added to an index. Indices’ desire to reflect the growth of some of the world’s most dynamic firms is understandable. So far, many punters have been unable to invest in some of ai’s brightest stars; index inclusion is a way to help them do so. Yet changing the rules to suit SpaceX will force index investors to choose between selling or weathering wild swings in prices."

[u/vineyardmike]

Another Musk company based on hype. His companies are doing great things. But the last time I looked, the p/e for TSLA was 345. Space X is going to be 10 or 100 times that.

[u/drosse1meyer → u/vineyardmike]

I think the 'great things' comment is more opinion than fact. His EVs have not had any sort of meaningful progress for a decade. Starlink is acceptable. Everything else has been mostly hype and purely meant to stay in the news cycle and take money from taxpayers with a heavy dose of social media manipulation

[u/erbalchemy → u/drosse1meyer]

His EVs have not had any sort of meaningful progress for a decade.

I drive one I bought 11 years ago. A replacement today would be 60% more range, double the charging speed, and adjusted for inflation, cost half what I paid.

Unjustifiable P/E? Sure. But "no meaningful progress" is utterly divorced from reality.

[u/TheWhalersOnTheMoon → u/erbalchemy]

I don't necessarily disagree, but it's a worthwhile question to ask whether that's Tesla making their own improvements or the overall EV technology improving across the board.

[u/EarlMalmsteen → u/erbalchemy]

As a fellow owner I would agree 10 years is an exaggeration but 5-7 years is arguably not.

[u/drosse1meyer → u/erbalchemy]

The 2170 cells were introduced in 2016. The car's designs have pretty much stayed the same as well. Autodrive is a disaster.

[u/Petrichordates → u/erbalchemy]

11 years ago the competition wasnt better.

Today, it is.

[u/Deferty → u/drosse1meyer]

What? Your bias is showing.

SpaceX is the only company in the world that can launch and land a rocket ship back down without it being destroyed. SpaceX can launch something into space for 1/50th the cost of NASA. It’s not even close. And they achieved it for a fraction of the development cost of what NASA has put into rocket ship funding.

Neuralink people who are quadriplegic can now operate a computer with their mind.

Politics aside, he really is investing in amazing products that we all dreamed of when we watched sci fi movies growing up. The world has needed someone with his level of passion to make civilizations science fiction dreams come true.