Key facts
- S&P Dow Jones Indices will not relax entry rules for its major indices, including the S&P 500.
- SpaceX must trade publicly for at least 12 months, be profitable, and hold a free float of at least 10% to join the S&P 500.
- SpaceX is expected to debut on June 12 but does not meet S&P's current eligibility criteria.
- The company posted a net loss of $4.94 billion in 2025 and has never been profitable.
- SpaceX's free float is estimated to be between 3%-4%, below the 10% requirement.
- Nasdaq and FTSE Russell have recently adjusted their methodologies to fast-track large IPOs.
SpaceX's anticipated entry into the S&P 500 index is set to be delayed as S&P Dow Jones Indices has decided against altering its eligibility criteria for megacap IPOs. This means SpaceX will face a longer wait to join the index, potentially deferring billions in passive fund inflows.
To be included in the S&P 500, companies must have been trading publicly for at least 12 months, demonstrate profitability under U.S. GAAP standards, and maintain a free float of at least 10%. SpaceX, which is expected to go public on June 12, currently meets none of these requirements. The company reported a net loss of $4.94 billion in 2025, with revenues rising 33% to $18.67 billion, and has never achieved profitability. Calculations suggest its free float is between 3% and 4%, significantly below the 10% threshold. However, SpaceX does meet the minimum market capitalization requirement of $22.7 billion, targeting a valuation of $1.75 trillion for its IPO.
J.P.Morgan estimated that SpaceX could attract approximately $10 billion in passive inflows upon inclusion in the S&P 500, assuming a $2 trillion market cap and a 5% float, which would give it a weight of about 0.15%. Similar assumptions for inclusion in the Russell 1000 and Nasdaq 100 suggest inflows of $4 billion and $4.3 billion, respectively.
SpaceX cannot be considered for the S&P 500 before June 2027, and even then, only if it becomes profitable and increases its free float. Competitors like Nasdaq and FTSE Russell have recently shortened their trading history requirements, offering a quicker path to inclusion in their respective indexes. A Nasdaq listing would automatically place SpaceX in the Nasdaq Composite, potentially widening performance disparities between Nasdaq and S&P 500 trackers. Jay Woods of Freedom Capital Markets noted that such an inclusion would make retail investors in S&P 500 ETFs involuntary shareholders of an unprofitable, high-valuation company, which deviates from the index's design principles.
The decision by S&P Dow Jones Indices to maintain its stringent rules raises questions about the future dominance of the S&P 500 as a benchmark, especially since Nasdaq and FTSE Russell have adapted their methodologies. However, Peter Andersen of Andersen Capital Management believes that the absence of a single stock like SpaceX is unlikely to prompt institutional investors to shift away from the S&P 500, which tracks over $20 trillion in assets, compared to the Nasdaq 100's $1.4 trillion.