News: Spotgamma | SpaceX IPO Index Inclusion: How Rule Changes for SPY, QQQ, and IWM Force Index Funds to Sell Stocks and Buy SpaceX
Crime of the century!
The mechanics are simple — and mechanically brutal:
1. The index provider calculates SpaceX’s target weight...
2. Every passive fund tracking the benchmark must sell proportional amounts of every existing holding...
3. On a single rebalance date, those funds buy SpaceX...
@mastodonmigration This is the “why”:
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“Index providers face direct pressure from bankers, issuers, and the largest passive asset managers — who collectively manage trillions in benchmark-tracking capital — to clear the way. “
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That’s why the rules changed to admit dicey meme stocks into major tech indices.
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What form does that pressure take?
