SpaceX Set for Bigger Nasdaq 100 Weighting After Rebalance

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SpaceX is set to receive a larger weighting in the Nasdaq 100 later this month, a change that could trigger billions of dollars of buying by passive funds tied to the benchmark. Based on pro forma data from Nasdaq's Global Index Watch circulated late Friday, its weighting is expected to rise to about 2.82% from roughly 1.28%, with the final weighting to be determined later this month. The relatively small weighting dates to SpaceX's addition to the gauge in July, when most of its shares were still locked up and unavailable for public trading, limiting the weighting it received even after Nasdaq changed its rules to allow newly listed large-cap companies to enter sooner and eliminated a requirement that at least 10% of their shares be publicly tradable. As those lockups expire, more SpaceX shares are becoming available for trading, increasing the company's free float and potentially lifting its index weighting again, with additional shares scheduled to come out of lockup. A higher weighting matters because passive funds tied to the benchmark must adjust their holdings accordingly, including the $481 billion Invesco QQQ Trust Series 1, known as QQQ, with roughly $1.7 trillion in assets tracking the Nasdaq 100 as of the end of the second quarter, according to Nasdaq.

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Nasdaq's index rebalance raises SpaceX's Nasdaq 100 weighting, a change Nasdaq itself administers and that increases the benchmark's relevance to passive flows.

Financials · 1 stocks