If a cherished guest is coming to stay, it’s not unwise to do some spring cleaning — especially if said guest threatens to stay with a neighbour instead. Seen that way, Nasdaq’s proposed tweak to its index inclusion policies, in time for large listings by companies such as SpaceX, Anthropic and OpenAI, looks rational. For the wider capital markets, it may be less helpful.
Under current rules, if Elon Musk lists his $1.5tn rocket-maker in May, SpaceX wouldn’t make it into the Nasdaq 100 before December. The member list is adjusted just once a year. Until then, the index would be shirking its notional duty of reflecting the biggest companies on the Nasdaq exchange. Should Musk list less than 10 per cent of SpaceX stock, existing free-float rules mean it wouldn’t appear in the index at all.
The proposed solution is to let big companies in after just 15 trading days, and swap the 10 per cent threshold with a sliding scale, among other changes. This would benefit Musk, because index-tracking funds might buy SpaceX sooner and IPO investors would pay more for the shares as a result. It’s good for Nasdaq the bourse, since it makes Musk more likely to go there rather than the New York Stock Exchange. While the index-compiling bit is separate, what’s good for the exchange helps it too.