S&P Dow Jones Indices will make no changes to the eligibility rules governing the S&P 500, closing off any expedited path into the benchmark index for SpaceX and other large newly public companies.
S&P Dow Jones Indices declined to waive profitability, float, and seasoning requirements for megacap IPOs, blocking a swift path into the benchmark
RONALDO SCHEMIDT / Getty Images
S&P Dow Jones Indices will make no changes to the eligibility rules governing the S&P 500, closing off any expedited path into the benchmark index for SpaceX and other large newly public companies.
In a Thursday news release, the index provider announced it was holding firm on all three contested criteria — the one-year waiting period before new listings can qualify, the requirement for demonstrated profitability, and minimum public float thresholds — regardless of how large a company may be. "Exceptions to the financial viability, seasoning, and IWF requirements should not be granted solely based on market capitalization," the company said. The decision preserves existing methodology without alteration.
The ruling is a setback for SpaceX, which is targeting a $1.75 trillion valuation in what would be the largest IPO in history. Under the rules S&P left intact, S&P 500 membership requires a company to show GAAP profits both in its latest reported quarter and cumulatively across the prior four quarters. According to its IPO filing, the company's 2025 financials show revenue climbing 33% to $18.67 billion, but that growth came alongside a $4.94 billion net loss for the year.
Bloomberg Intelligence had estimated that a rule change admitting SpaceX to the S&P 500 quickly would have generated approximately $14 billion in mandatory purchases from passive funds obligated to mirror the index, according to Bloomberg. Its data puts the total weight of the S&P 500 at roughly $7.5 trillion in passive assets that follow it directly and $3.4 trillion in active funds that use it as their benchmark.
"It speaks highly of the credibility of S&P Dow Jones Indices to be rules-based and make sure there's profitability before entrance to the index," Art Hogan, chief market strategist at B. Riley Wealth, told CNBC.
The decision puts S&P at odds with rivals that have moved in the opposite direction. Nasdaq $NDAQ recently revised its eligibility framework to allow SpaceX entry into the Nasdaq 100 after just 15 trading days of being listed, compressing what had previously been a minimum three-month waiting period. FTSE Russell likewise overhauled its process, establishing a five-trading-day window before new listings can be considered.
The company did carve out one concession: updated investable weight factor rules for the S&P Total Market Index and the Dow Jones U.S. Total Stock Market Index could open the door for SpaceX in those lower-profile benchmarks, the company said. An IPO meeting the updated investable weight factor eligibility rule would be eligible for fast-track entry into those indexes, effective prior to the market open on June 8.
SpaceX filed terms for its IPO earlier this week, disclosing plans to sell shares at $135 apiece and raise close to $75 billion. Trading on the Nasdaq is expected to begin June 12 under the ticker symbol SPCX. The company has posted cumulative losses exceeding $37 billion since its founding and will carry a dual-class share structure giving CEO Elon Musk approximately 82.4% of voting power after the offering.
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