SpaceX Officially Joined the Nasdaq-100 and Received a $300 Price Target From Wall Street. Here's Why the Stock Is Falling Anyway.
SpaceX's valuation is being tested now that public markets have digested its IPO.
Overview
On July 7, Space Exploration Technologies (NASDAQ: SPCX) joined the Nasdaq-100 -- which is the 100 largest non-financial companies by market cap listed on the Nasdaq stock exchange. It also received a $300 price target from Morgan Stanley, one of the Wall Street banks that underwrote SpaceX's initial public offering (IPO).
Being a part of a major index is more than just name recognition. Exchange-traded funds (ETFs) benchmarked to the Nasdaq-100, such as the Invesco QQQ Trust (NASDAQ: QQQ), will begin buying shares of SpaceX. The more indexes a company can be a part of, the more demand is unlocked from ETF inflows -- the crown jewel being the S&P 500 (SNPINDEX: ^GSPC), because the largest ETFs in the world are linked to it.
Details
Here's why SpaceX was added to the Nasdaq-100 so quickly, and why the growth stock is falling anyway.
Source
Originally published at www.fool.com.