How is the SpaceX IPO changing the equity index industry? |
The equity index industry is facing a dilemma over how to best capture the market it represents following the initial public offering of SpaceX.
Typically, index providers have strict eligibility requirements to add new equity names into indexes offered, which usually rely on free-float-adjusted weights. The wait period is intended to allow time for price discovery and give the market a chance to settle on a fairer trading price, according to a note by Aon.
However, the dawn of the mega-cap IPOs — SpaceX is expected to be followed by artificial intelligence firms Anthropic and OpenAI later this year — is splitting index providers. Indeed, while the S&P Dow Jones indices elected to maintain a conservative stance, others have changed their rules to allow the inclusion of new IPOs, including SpaceX.
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“It’s very important that our benchmarks represent the market and reflect the opportunities,” says Catherine Yoshimoto, director of product management at FTSE Russell. The firm, she adds, already had a........