SpaceX's stock is set to see at least $5.4 billion in passive buying as it enters major indexes, even as its post-IPO rally fades. FTSE Russell will add the company to the Russell 1000 on Monday, and the Nasdaq 100 will follow about a week later, according to Bloomberg Intelligence strategist Rob Du Boff. The stock has shed a quarter of its value after an initial surge, and short sellers have built positions on concerns over profitability and valuation. Index-tracking funds must buy regardless of fundamentals, potentially distorting price discovery and creating headwinds for bears. Data from S3 Partners shows 45 million shares, or 7% of the public float, are available to borrow with borrowing costs near 0.6%, while S&P Global Market Intelligence reports short interest rose to 0.6% and borrow fees fell sharply. Passive demand from the Russell 1000 alone could reach $8.2 billion when active managers are included, and the Nasdaq 100 entry may add another $4.9 billion in purchases. However, the dynamic could shift when insider lockups expire, as selling by pre-IPO holders may align with short sellers and pressure the stock.
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