TD Securities suggests that while SpaceX’s initial public offering is a milestone, the company’s most significant dates are still on the horizon.
Peter Haynes, the firm’s head of index and market structure, argues that the IPO is merely the beginning of a broader strategic timeline. He advises investors to focus specifically on the timing of SpaceX’s inclusion in major benchmarks, including the S&P Total Market Index, the MCI Global Index, the Russell Indexes, and the Nasdaq 100 early this summer.
“Day 15 [after SpaceX goes public], which should be July 6, will be the day that Nasdaq rebalances the 100 Index to reflect SpaceX’s IPO shares,” Haynes told CNBC’s “ETF Edge” ahead of the Friday debut. “From there, the focus shifts to when indexes will adjust for the additional shares that will become freely tradable in the future.”
Haynes noted a “controversial decision” by the S&P 500 Index Committee, which recently announced that SpaceX will not be fast-tracked into the index. Consequently, Elon Musk’s aerospace company must trade publicly for at least one year before becoming eligible for the S&P 500.
“That leaves us with the other benchmarks and their rebalancing schedule,” Haynes explained, adding that these upcoming index events are critical as more shares become freely tradable and require reflection in market benchmarks.
SpaceX began trading on the Nasdaq at 11:46 a.m. ET on Friday. The stock rallied over 19% to close at $160.95, pushing the company’s market capitalization beyond $2 trillion.
In a note to CNBC following the market close, Haynes remarked: “We take for granted that the infrastructure supporting the equity trading business always works. Today was a test of that infrastructure and, in my opinion, the industry passed the test.”