MW Elon Musk's SpaceX IPO could quickly launch into your retirement plan
By William Gavin
'It's not a question of whether you will own it or not own it': Index funds popular with retirement plans are poised to buy SpaceX's stock rocket-fast.
Hawthorne (LA County), California - Nov. 20, 2025: Exterior View of SpaceX Headquarters located at 1 Rocket Road
SpaceX's initial public offering is expected to be the largest of all time and, eventually, end up in most investors' portfolios - whether they like it or not.
The Elon Musk-led rocket company is set to be the first beneficiary of a slew of recent moves by index operators to speed up the time it takes for newly large public firms to list on several major indexes. That could push many passive exchange-traded funds, like the popular Invesco QQQ QQQ, to buy SpaceX's stock soon after its IPO, likely exposing many investors' retirement plans to the company.
"It's not a question of whether you will own it or not own it," Mercer Advisors Chief Investment Officer Don Calcagni told MarketWatch. "The question is, 'Do you want to own more of it?'"
Nasdaq has led the rush by index providers to accommodate firms like SpaceX and OpenAI. It became the first to propose and enact a "fast entry" rule that could allow SpaceX to join the popular Nasdaq 100 NDX just 15 trading days after its IPO - rather than months.
After Nasdaq proposed its "fast entry" rule for megacap firms, it was reported that SpaceX had made a speedy index entry a requirement for listing on the exchange. Last week, SpaceX's IPO paperwork confirmed that the company would list on Nasdaq and Nasdaq Texas under the SPCX ticker.
"Under the prior rules, a company could be among the largest in the U.S. and still remain outside the index for months after coming to market despite having completed the seasoning period," Emily Spurling, global head of index at Nasdaq, said recently of the adjusted rules.
See more: Opinion: This mutual fund lets you buy SpaceX stock before the IPO - but what are you actually getting?
But Nasdaq won't be the first provider to include SpaceX on a major index.
The CRSP Total Market Index recently updated its rules to make it easier for new IPOs to be added after just five trading days. On Tuesday, FTSE Russell also approved a rule change that allows certain companies to list on the Russell Top 500 Index after five trading days, rather than waiting for a quarterly review.
Exactly how SpaceX will trade after listing is unclear, but experts say to expect volatility. Proponents of the new fast entry rules say speedy index inclusion, paired with SpaceX's unique lock-up rules, could lead to smoother sailing.
"The inclusion of new entrants after the end of the fifth day of trading, rather than immediately on listing, should help address any immediate post-IPO share price volatility," FTSE Russell said in a blog post.
SpaceX is projected to enter nearly every major U.S. equity index within about three weeks of trading, according to Jacob Friedman, an investment manager at Focused Wealth Management. The big holdout is the S&P 500 SPX, which has its own rule changes under review.
If S&P Dow Jones Indices approves the rules under consideration, they will go into effect a few days before SpaceX is expected to begin trading. It would allow SpaceX to join the benchmark S&P 500 index in just six months, rather than a full year, and sidestep profitability requirements that had stymied Tesla $(TSLA)$ from joining the index's ranks.
"Shortening the seasoning period to six months is a pragmatic evolution," former S&P Dow Jones Indices CEO Alex Matturri wrote on LinkedIn. "Diluting core principles like profitability, or introducing inconsistent eligibility standards, is not."
The potential inclusion of companies like SpaceX or OpenAI could force passive funds to sell existing holdings in other large-cap stocks, according to a May 22 note from Goldman Sachs's John Flood.
Assuming SpaceX does get a quick entry into the S&P 500 index, passive funds tracking it, the Russell 1000 and Nasdaq 100 could need to buy 24% of SpaceX's public shares, according to Bloomberg Intelligence. Toss in the active mutual funds benchmarked to those indexes, and nearly half of SpaceX stock will be owned by index funds.
"That is not price discovery. That is an engineered demand event built on the back of every passive investor in America," Freedom Capital Markets Chief Strategist Jay Woods said in emailed comments.
-William Gavin
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(END) Dow Jones Newswires
May 29, 2026 11:44 ET (15:44 GMT)
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