Dow Jones may change rules to quickly include SpaceX in the S&P 500 after its IPO

S&P index operator Dow Jones Indices is considering changing the rules governing the inclusion of companies in the main U.S. stock index S&P 500, sources told Bloomberg. Such a move could accelerate the appearance of Elon Musk's space company SpaceX in the S&P 500 after its IPO, which is expected this summer, the agency said.

A change in the rules for including companies in the S&P 500 index may lead to a wave of forced purchases of SpaceX securities, Bloomberg writes. Funds that track the index are obliged to buy shares of companies added to the S&P 500. Bloomberg Intelligence estimates that about $24 trillion in assets are linked to the index.

According to Bloomberg's sources, the index provider is consulting with market participants to understand whether they want to change the rules. The final decision has not yet been made, and before introducing any changes, S&P Dow Jones Indices will have to hold a formal consultation, which could take several weeks, the agency said. An S&P spokesperson declined to comment to Bloomberg, and a SpaceX spokesperson did not respond to a request.

Unlike many other indices, there is no expedited process for inclusion in the S&P 500. A company must meet a number of criteria, including a market capitalization of at least $22.7 billion, registration in the United States and public company status for at least 12 months. The decision on inclusion is made by a special committee.

Any changes in the rules of the S&P 500 will be of great importance, emphasizes Bloomberg. This index includes 500 companies, which account for about 80% of the market capitalization of the U.S. stock market, and brings together the largest companies in the world.

The discussion of possible changes comes as large private companies, including AI startups OpenAI and Anthropic, are also considering IPOs as early as this year. If all 10 major U.S. venture capital firms go public and join the S&P 500, their combined weighting in the index could be about 4.5% - more than the energy sector but less than Microsoft alone, according to a recent publication by the index provider itself.

SpaceX is counting on early inclusion in stock indexes after going public, which could come as early as the end of this year, The Wall Street Journal wrote in early February. The newspaper's sources said the company's advisers have contacted major index providers, including Nasdaq, to discuss how SpaceX could get into key benchmarks sooner than usual. Nasdaq is also considering a proposal to accelerate the inclusion of large recently floated companies in the Nasdaq-100 index, and FTSE Russell has begun consultations on rules for including large IPOs in its Russell US Equity indices, Bloomberg writes.

According to Bloomberg sources, SpaceX could seek a valuation in excess of $1.75 trillion at IPO and raise as much as $50 billion. Earlier, Reuters reported that SpaceX is considering listing on the Nasdaq exchange and has made early inclusion in the Nasdaq-100 index a condition of the move.

With a market valuation of $1.75 trillion, SpaceX would be larger in capitalization than almost all of the companies in the S&P 500 index - behind only five: Nvidia, Apple, Microsoft, Amazon and Alphabet. The company would also be ahead of Meta Platforms and another Elon Musk company, Tesla.

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