At this moment, there is so so much, publicly available information [1] on the fact the SpaceX IPO is the biggest scandal in the long history of Wallstreet insiders fleecing the "Johns".

A scandal orchestrated and cheered on by the NASDAQ, as well as Goldman Sachs and JP Morgan the underwriters, that if you spend any money on it, you deserve to be parted with your money.

And if you have a 401k...you are forced to buy no questions asked.

This will become such a disaster for retail, that hopefully Goldman Sachs and JP Morgan and the NASDAQ too, will spend their next 10 years in court defending action group lawsuits.

[1] - https://www.instagram.com/reel/DWzTFAEAhSe/

"SpaceX IPO retail offering is worrying" - https://youtu.be/T8e2FbwN7dw

"SpaceX IPO: Nice Try Though" - https://youtu.be/IHD8BDFYyGI

"SpaceX IPO Scandal" - https://youtu.be/8rS3fTbC7TE

"Anthropic, OpenAI Should Not Be Allowed to IPO, Says Ed Zitron" - https://youtu.be/zbKDmkJPVvI

Also worth noting that other index providers are less principled.

> Nasdaq changed its rules recently so SpaceX can join the Nasdaq 100 Index, a cohort of the largest non-financial companies listed on its exchange, in just 15 trading days, down from a three-month minimum. FTSE Russell adopted a similar approach, shortening the waiting time to five trading days

>All that an inclusion of these new companies would accomplish is a bailout of their stockholders by pension funds and ETFs where millions of regular people shoulder all the downside risk.

Carvana is the poster child for this. It's astonishing that a company with a history of shady practices, and that has yet to offer a convincing explanation for why it is not a scam, is part of the S&P 500.

> Individuals can make an informed choice to trade it there, rather than have it automatically added to their index fund without having any say.

Are you suggesting index funds need unanimous consent from all owners before a company can be added or removed?

No, indexes are meant to track something. The Russel 2000 index has very different criteria for the S&P 500 index. The Dow Jones is yet another one.

The criteria for none of the above is “slow moving”, far from it. Those are all expected to be high growth vehicles for retirement. Safe stuff is bond blended.

Plenty of people at shit in the GFC being invested in “slow moving” S&P 500 companies like Lehman Brothers, WaMu, AIG, GM, etc.

“Was profitable for a while” != “safe” nor is it necessarily good to park money there. You need explosive growth companies that invest rather than profit (like Amazon) being in the S&P 500 are a critical part of its performance.

If retirements only tracked stable mature companies that would be utilities and other stuff that doesn’t actually get you to retirement.

It’s important to note that index funds will eventually get in, so it’s not like 401k will never be holding these stocks. It would be silly to assume that the stock is going to tank that much on day 1, on the asumption that there are not enough investors to buy the big three IPOs that are coming out this year. There is plenty of money in the market, and everyone knows index funds will buy these stocks when the companies get in, so everyone will be able to dump them if needed in a year or so.

Btw I don’t really know how index funds work, but if they need to track the index as closely as possible, they will all have to buy those stocks on a certain day, no? There will be a crazy price hike when they do so. Or maybe they have terms that let them smoothen their trading around entry and exit?

>All that an inclusion of these new companies would accomplish is a bailout of their stockholders by pension funds and ETFs where millions of regular people shoulder all the downside risk.

The purpose of an index is to provide a benchmark of the market, not to build funds that follow the index.

On a fundamental level, the S&P 500 index is meant to be a benchmark of the market. Journalists, policymakers, investment managers, politicians, regular investors, everyone I know all use the S&P 500 as the benchmark of the US stock market.

If a significant percentage of the market is excluded from the index because they don't meet index inclusion criteria, then then index stops being a useful benchmark.

Good for the SP500 but I don’t think it’s true that indexes need to be slow moving. They can serve any purpose! Comparatively I think it makes sense Nasdaq100 would want to include it earlier. Not all indexes need to be slow moving or representative of a buy and hold type strategy. Maybe you only want to capture the highest volume in daily activity for example.