If you think investment banks will catch them during the IPO: They have launched many overpriced IPOs in 1999/2000 and also want a high IPO price.
Historically, listing rules asked: "How much money did you make last year, and do you fit our standard corporate governance box?"
Today, NASDAQ's rules ask: "Do you have the massive market capitalisation, sufficient institutional public float, and transparent liquidity to ensure fair and orderly trading?"
Here are the obvious ones:
1. Free float - Every company that intended to list was required to have at least 20% free float.
2. Index weights were based on the free float.
3. Time before inclusion into the Indices (min 12 months) now 15 trading days
4. Lockup period - minimum 12 months up to 24 months - not 180 days.
I wish people would understand that if America had a functioning criminal justice system, no one would have heard Elon Musk nor Donald Trump.
"The passive funds holding trillions of dollars of 401(k)s and other investments are rushing to change their rules as the IPOs of SpaceX, OpenAI and Anthropic draw closer."
Those index providers are the same interest class with VCs. With such moves they inflate demand post-IPO (hoping it holds for 180+ days), but also allows them to lure buyers in private secondary market and offload that shit pre-IPO.
https://www.wsj.com/finance/stocks/stock-indexes-are-contort...