The upcoming IPO of SpaceX, led by Elon Musk, is expected to trigger a massive influx of retirement funds into the company. This move could potentially unleash over $30 trillion in passive 401k and retirement money to invest in the commercial space flight giant.
$30 Trillion Worth of Retirement Funds
The IPO is expected to attract a significant amount of investment from retirement funds, including 401(k) accounts. Index providers such as the S&P 500 and the Nasdaq 100 have introduced rule changes that include profitability requirements, making it easier for SpaceX to be included in these indices. As a result, funds investing in these indices will be forced to absorb a significant portion of SpaceX’s float, with the S&P 500 expected to absorb 19% of the company’s float within 6 months, and the Russell 1000 and Nasdaq 100 funds expected to absorb 24%.
Changes in Index Rules
The rule changes adopted by the indices have made it easier for SpaceX to be included in these indices. The S&P 500 has waived its requirement of 12 months of trading and 4 quarters of GAAP profitability, while the Nasdaq has cut its inclusion requirements from 90 trading days to 15. The Russell 1000 index has reduced its requirement to 5 days. These changes will force over $30 trillion in passive 401k and retirement money to buy SpaceX at IPO valuations.
Dan Ives Predicts Tesla Merger
Investor Dan Ives, managing director of Wedbush Securities, has called the IPO a “key chapter for investors in the 4th Industrial Revolution.” He believes that the listing will present a new “investing landscape” in space and has reaffirmed his belief in a merger between SpaceX and Tesla Inc. in 2027. Ives predicts that the merger will have a significant impact on the investing landscape in space.
SpaceX IPO Valuation
There have been reports that SpaceX has trimmed its IPO valuation to $1.8 trillion. However, Elon Musk has responded to these claims, stating that the report is “false.” The company was previously targeting a $1.75 trillion valuation.
Conclusion
The SpaceX IPO is expected to be a significant event in the investing world, with the potential to unleash over $30 trillion in retirement funds into the company. With the rule changes adopted by the indices and the predicted merger with Tesla, the IPO is expected to have a significant impact on the investing landscape in space. As the IPO approaches, investors are eagerly waiting to see how the company will perform in the public market.