Index Investors: Here's How Much SpaceX Stock You're About to Own
New index inclusion rules mean millions of investors are about to own the hot IPO.
Index Investors: Here's How Much SpaceX Stock You're About to Own
Overview
Index investing is typically seen as a simple way to match the returns of the overall market. And most indexes are cap-weighted, meaning higher-value companies make up a larger percentage of the index than lower-value companies. For example, Nvidia (NASDAQ: NVDA) with its $5 trillion market cap, is the biggest component of the S&P 500, Nasdaq-100, and CRSP U.S. Total Market indexes.
Space Exploration Technologies (NASDAQ: SPCX), better known as SpaceX, made its market debut at a valuation of $1.77 trillion. The strong stock performance pushed it to become the fifth-largest company by market cap after its third day of trading. And with recent changes to index inclusion rules, many index investors could find they own a slice of the high-flying IPO stock very soon, and the index funds' weightings could surprise many.
Image source: The Motley Fool.
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Originally published at www.fool.com.
