Key facts
- S&P Dow Jones Indices will not alter its methodology for index inclusion.
- Companies must still meet existing seasoning, financial viability, and IWF requirements.
- The required public trading period for S&P 500 inclusion remains one year.
- Positive GAAP earnings for four consecutive quarters are still required.
- Nasdaq has a different rule allowing mega IPOs faster entry into the Nasdaq 100.
- SpaceX could be eligible for S&P indices by mid-2027 if requirements are met.
S&P Dow Jones Indices has decided against altering its methodology to fast-track the inclusion of mega IPOs like SpaceX, Anthropic, and OpenAI into the S&P 500 index. The index provider stated that exceptions to financial viability, seasoning, and investable weight factor (IWF) requirements would not be granted based solely on market capitalization. This means companies must still adhere to the existing rules, which require a minimum of one year of public trading, four consecutive quarters of positive GAAP earnings, and a minimum market capitalization of $22.7 billion. This contrasts with Nasdaq's policy, which allows newly public companies to join the Nasdaq 100 within 15 trading days, and FTSE Russell's approach of five trading days. The decision implies that SpaceX, if it meets all criteria, would not be eligible for inclusion in S&P indices until mid-2027, with some forecasts suggesting entry could be delayed until 2028 if profitability rules remain. Critics had raised concerns that rule changes could compromise investor protection. SpaceX is preparing to start trading on June 12, targeting a $1.8 trillion valuation. Anthropic and OpenAI are also considering IPOs this year, but may face similar hurdles due to expected high spending on computing resources and potential lack of profitability in the near term.