Is QQQ Worth Buying Now That SpaceX Has Joined the Nasdaq-100? Here's My Honest Take.
SpaceX may be getting a lot of media attention, but it has a relatively small impact on the Nasdaq-100 at the moment.
Overview
On July 7, Space Exploration Technologies (NASDAQ: SPCX) made history by becoming the index's fastest inclusion ever. It's the first stock to be admitted to the Nasdaq-100 under the new "fast track" rules to account for megacap initial public offerings (IPOs) hitting the market.
Despite the hype and headlines surrounding SpaceX joining the index and, by extension, the Invesco QQQ ETF (NASDAQ: QQQ), which tracks the index, the stock's influence on them is relatively minimal. As of July 30, SpaceX is only the 24th-largest holding in the Nasdaq-100, with a weight of just 1%.
Details
If you're wondering how that's possible for a company with a $1.5 trillion market cap, you're not alone. It's because the index's weightings are based on free-float market cap, not total market cap. Since only a small percentage of SpaceX shares are publicly available, its free-float market cap is lower. Thus, its weighting in the Nasdaq-100 and the Invesco QQQ ETF is lower.
Source
Originally published at www.fool.com.