TD Securities: SpaceX Index Inclusions More Significant Than IPO

TD Securities head of index and market structure Peter Haynes stated this week that SpaceX's most important dates lie ahead, following the company's public debut on Friday. Haynes identified upcoming index inclusion events as more significant than the IPO itself, urging investors to monitor when SpaceX is added to key indexes including the S&P Total Market Index, MCI Global Index, Russell Indexes, and Nasdaq 100 early this summer. The S&P 500 Index Committee announced earlier this month that SpaceX will not be fast-tracked into the S&P 500, requiring the Elon Musk rocket maker to trade for at least one year before becoming eligible, a decision Haynes called "controversial" that increases the significance of other benchmark rebalancing events.

Nasdaq 100 Rebalance Scheduled for July 6

Haynes told CNBC's "ETF Edge" this week that Day 15 after SpaceX goes public, which should be July 6, will be the day that Nasdaq rebalances the 100 Index to reflect SpaceX's IPO shares. Haynes stated that from that point, the focus shifts to when indexes adjust for additional shares that will be freely tradable down the road.

S&P 500 Fast-Track Application Denied

The S&P 500 Index Committee announced earlier this month that SpaceX will not be fast-tracked into the index. The decision means SpaceX must trade on the market for at least one year until it becomes eligible. Haynes described this as a "controversial decision" that leaves other benchmarks and their rebalancing schedules with greater significance. The decision means upcoming index events carry increased importance, as many shares will become freely tradable and need to be reflected in the benchmarks, according to Haynes.

SpaceX Closes First Trading Day at $160.95

SpaceX debuted at the Nasdaq at 11:46 a.m. ET on Friday. The stock surged more than 19% to close at $160.95, with its market cap exceeding $2 trillion. In a special note to CNBC after Friday's market close, Haynes wrote that the infrastructure supporting the equity trading business was tested and in his opinion the industry passed the test.

FAQ

When will SpaceX be added to the Nasdaq 100? According to TD Securities' Peter Haynes, SpaceX will be added to the Nasdaq 100 on Day 15 after its public debut, which should be July 6, when Nasdaq rebalances the 100 Index to reflect SpaceX's IPO shares.

Why was SpaceX denied fast-track entry to the S&P 500? The S&P 500 Index Committee announced earlier this month that SpaceX will not be fast-tracked into the index, meaning the company must trade on the market for at least one year before becoming eligible for inclusion in the S&P 500.

How did SpaceX perform on its first trading day? SpaceX debuted at the Nasdaq at 11:46 a.m. ET on Friday and surged more than 19% to close at $160.95, with its market cap exceeding $2 trillion.