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stockresearchertoday at 7:10 PM2 repliesview on HN

Strongly recommend reading this linked paper, written by CRSP folks:

https://indexes.morningstar.com/insights/analysis/bltcd8e699...

These IPOs will have minuscule impact on the indexes initially. They will have a big impact if they can maintain share price in the first ranking/reconstitution after the lockup period expires.


Replies

largbaetoday at 8:52 PM

Won't the lockup expiry increase the float on these already-included companies, forcing mechanical buying by all the very large pool pool of folks holding these index funds? Thus creating forced buyers to maintain said share price?

BoggleOhYeahtoday at 7:54 PM

They will have a big impact if they can maintain share price AND the float increases due to the lockout period expiring (ie. pre-IPO owners selling off shares).

I'd like to know how the CRSP/Morningstar folks feel about the interesting lock-up period rules that Elon has inserted into the SpaceX IPO and how that jives with their analysis.