What History Says About Stocks That Join the Nasdaq-100 and What It Means for SpaceX
The years ahead will be more important for SpaceX than how it fares in its first few months as a part of the tech-heavy Nasdaq-100 index.
Overview
On July 7, Space Exploration Technologies (NASDAQ: SPCX) was added to the Nasdaq-100, which comprises 100 of the largest nonfinancial companies listed on the Nasdaq.
Initially, some expected its inclusion in the index to be a short-term catalyst that would send the stock higher; exchange-traded funds (ETFs) that track the Nasdaq-100 needed to buy it. For example, SpaceX now makes up 1.1% of the portfolio weight of the Invesco QQQ Trust, which was the second-most traded ETF by trading volume as of March 31. However, that has not been the case. From July 7 to July 17, shares of SpaceX dropped 17%.
Details
Historic patterns suggest that an early decline after inclusion in the index was likely. But those patterns suggest something different about where SpaceX could be headed over the next several months.
Source
Originally published at www.fool.com.