Space Exploration Technologies (NASDAQ: SPCX) made its debut on the stock market on June 12th, marking the largest initial public offering (IPO) ever, with a staggering market cap exceeding $2 trillion.
On July 7th, the company is poised to make headlines again as it, alongside SpaceX, enters the Nasdaq-100. This momentous occasion represents the first instance of its inclusion via the newly established “fast track entry” process designed for sizable IPOs.
Nvidia back in 2009? It seems a similar signal is appearing now. Back then, a notable “double down” signal emerged for Nvidia—a relatively obscure chipmaker at the time. Interestingly, today, a company significantly smaller than Nvidia is exhibiting the same “full conviction” signal.
Understanding the fast-track entry process for the Nasdaq’s new IPOs
In May, Nasdaq introduced some fresh regulations:
For substantial newly listed companies ranking among the top 40 by current market capitalization, a fast entry pathway exists. These businesses will undergo evaluation on their seventh trading day and, if deemed eligible, will be added to the index shortly after, all while adhering to existing liquidity requirements.
Essentially, stocks that satisfy both size and liquidity criteria can join the index within 15 business days post-IPO. SpaceX has had a considerable influence on this policy shift, but there’s the potential of more significant IPOs on the horizon, including Anthropic and OpenAI, both possibly entering the market with values in the trillions.
For shareholders, this shift is significant. The Invesco QQQ ETF (NASDAQ: QQQ) and Invesco NASDAQ 100 ETF (NASDAQ: QQQM) are closely aligned with the index. It’s worth noting that the index’s weighting is determined by free float market capitalization, suggesting that SpaceX’s inclusion might account for about 1%.
Historically, most stocks were added to the index when they were considerably smaller entities, gradually expanding. Nowadays, many companies remain private for extended periods before going public. This situation makes SpaceX the first major market index to adapt accordingly, likely paving the way for similar future adjustments.
Is now the right time to invest in Space Exploration Technologies stock?
Before making any investment in Space Exploration Technologies, it’s crucial to consider a few things:
Our analysts have singled out what they believe to be the 10 best stocks available right now, and notably, Space Exploration Technologies is not on that list. These selected stocks are thought to offer remarkable growth potential in the coming years.
