Investor Gary Black of The Future Fund LLC believes that the recent Nasdaq 100 rule changes will put significant pressure on fund managers to participate in Elon Musk-led SpaceX’s upcoming IPO. The changes are expected to create “intense pressure” on managers and professional investors to participate, even at a valuation north of $1 trillion, as sitting out may be too risky.
Intense Pressure On Managers
Fund managers are concerned that if they sit out the SpaceX offering and the shares soar, their performance will look dismal. Black added that Musk and the bankers are “well aware” of this pressure on fund managers as SpaceX gears up to sell a record $75 billion worth of stock.
Nasdaq Rule Changes
Nasdaq announced a series of rule changes, including the inclusion of both listed and unlisted shares for calculating a company’s market capitalization. The index also changed the rules around entry into the exchange, allowing companies with market capitalization equal to any of the top 40 listed enterprises on the index to have a “fast entry” within 15 trading days. The new rules will take effect on May 1, 2026, and also include the removal of the 10% free-float requirement for companies.
Criticism of Rule Changes
The rule changes have been criticized by investor Michael Burry of “The Big Short” fame, who flags structural manipulation risk in Nasdaq rules ahead of the potential SpaceX listing.
SpaceX IPO
SpaceX, which has reportedly been leaning towards a listing on the Nasdaq, could benefit from the rule changes as new rules would allow the company to join the index almost immediately after its planned IPO. The IPO is targeting a $1.75 trillion valuation, according to Musk. However, Black has warned against a possible SpaceX-Tesla Inc. merger, citing concerns with the valuation of the EV giant’s stock. He believes that a merger could see Tesla shareholders lose 25-30% of the stock’s value.
Conclusion
The Nasdaq rule changes are expected to have a significant impact on the upcoming SpaceX IPO, with fund managers facing intense pressure to participate. As the IPO approaches, it remains to be seen how the changes will affect the company’s valuation and the performance of fund managers.