Nasdaq Rule Change: Monkey business among the techbros

Nasdaq Rule Change Would Speed Index Entry for SpaceX IPO

By Theo Wayt Source: The Information

Nasdaq will change a rule for its flagship stock index to allow newly public companies to gain entry much more quickly, in a move that would help SpaceX and other companies expected to have gigantic initial public offerings this year.

In a rule change outlined Monday and effective May 1, Nasdaq-listed companies will be able to join the index after 15 days of trading, down from three months currently. Nasdaq said that industry professionals it had surveyed were “mostly supportive” of the proposal, but that some had raised concerns about whether the change would reduce price discovery for IPOs or “direct passive investment flows to unproven or overvalued securities.” In addition to the fast entry change, Nasdaq will remove a rule requiring 10% of companies’ shares to be publicly floated.

The rule change comes as SpaceX lays the groundwork to go public as soon as June, with bankers discussing anIPO that could raise more than $75 billion at a valuation of more than $1.25 trillion, The Information has reported. The Nasdaq rule change would likely force managers of large passively managed funds that track the Nasdaq 100 to buy SpaceX shares shortly after it goes public. It could also drive up demand for shares of OpenAI and Anthropic if those companies follow through with plans to go public later this year.