Plenty of ways to get exposure to that stock without it going into the indices it is not qualified for.
However the market hasn't priced these new stocks at all, the existence of index trackers is being exploited to force prices on enough buyers to make the prices stick. This is the wrong way around. It's market manipulation. It's using the behaviour of index funds to influence prices, decoupling those prices to at least some extent from the discretion of market participants.
Let the market price the stock, then the index trackers can buy in, this is exactly why these rules exist, and why it's a travesty that the NASDAQ is waiving them.
I don't want my life savings tightly coupled to a young and hyped up technology which is currently being wielded in the most antisocial way possible.
Simple as.
A certain amount of required scrutiny and experience derisks that possibility. Also remember pre-IPO the valuation isn't set by the broader market, so you don't know if any of these valuations are even real. Do we want to set a precedent where banks can put any price tag they want on a pig everyone is forced to buy?
Once these companies go through the same process Google or any other S&P member did, they're welcome to join the party.
1. Google has a history of profits. Their move into AI isn't coming at the expense of Search Ad revenue, and can be seen as defending it for the future. Their last annual report shows continued growth in this sector. So the P:E ratio isn't NaN.
2. Their stock prices has survived the test of market trading and multiple reporting windows, short sellers, WSB regressive behavior, etc. In part because they have a huge publicly tradeable float.
3. There isn't a huge bundle of shares in lockup until six months after the IPO that would put selling pressure on the symbol.
It's also a safer bet as a company, though that technically shouldn't be the criteria for indexing:
1. Google has a diverse product line: youtube subs, search ads, adwords, cloud services, etc. And a demonstrated ability to launch more (probably too many more).
2. They have a huge existing customer base to upsell to; cost of customer acquisition would be low for quite a while.
3. Anthropic and OpenAI are dependend on nvidia to supply them every beefier chips, while Google has their own TPUs to run on and lease out to others.
Previously: "SpaceX, Other Mega IPOs Denied Fast Index Entry by S&P" - https://news.ycombinator.com/item?id=48405718
It seems obvious in retrospect, but the fact that SpaceX will be "valued" at $1.75 trillion after the IPO is irrelevant when only $75 billion worth of its stock will be publicly traded.
$75 billion in float-adjusted market cap puts it around 180-190th in the S&P 500. So sure, it will likely get in there eventually, but there's no rush to bend the rules to get it in right away.
> To join the S&P 500, a company must demonstrate positive GAAP net income in both its most recent quarter and the sum of the trailing four consecutive quarters
Neither SpaceX, OpenAI or Anthropic have a future. What's a shame is that had Elon not merged SpaceX with xAI it might've actually had a future - but he had to go and ruin it.
What an idiot.
(I also don't want them to create special exceptions. The S&P 500 has pre-existing inclusion criteria, and I'm glad they're sticking to their rules.)
OK, then put your money in VTI/VTSAX instead of a S&P 500 fund. I own some VTI and also some FXAIX, you can do the same thing and choose which index to buy.
Any individual can buy as much as they want.
Anyway, if other indexes add it, and it fails spectacularly, money will shift to those funds that do better.
I'm not disagreeing that people invest this way, but I'd like to point out that past performance does not imply future performance, and that investors should consider factors other than just past returns.
That's like saying that if Nvidia performs way better than an index fund, then the index fund will shift to consist only of Nvidia.
In any given year, there are plenty of index funds that outperform the S&P 500. They don't freak out over it.
S&P 500 is volatile over 5 years - I'd argue even over 10 years (see the charts at https://blog.nawaz.org/posts/2015/Dec/pay-down-mortgage-or-i...). The whole point of investing in it is for much longer windows.
So yeah, perhaps after 10 years they'll change once they'll see other index funds doing better, and have data to back up that in the long term, early inclusion didn't hurt.
I'm greatly relieved that at least one major institution in the markets is showing restraint and exercising caution. I'm also a little surprised at the rationality given what we've seen in the past year or so.
Okay? But the debate has been specifically about getting rid of new rules introduced in recent decades as they're incompatible with the purpose of the indices in the current situation.
The whole thing is disgusting and the financial sector should be collectively ashamed of themselves.
If you want to be active then keep your positions but just know and accept the active label.
And there are other reasons to be cautious. Many passive funds don't license the SP500 and instead mirror it with their own synthetic index. They are not bound to respect this decision.
Given how that's played out in the movies, I'd be happy about that.
Global population increase: https://www.worldometers.info/world-population/world-populat...
White supremacist: https://www.theguardian.com/technology/2026/feb/12/elon-musk...
https://www.youtube.com/watch?v=-VfYjPzj1Xw
https://www.ms.now/rachel-maddow-show/maddowblog/as-elon-mus...
https://www.cnn.com/2023/11/17/business/elon-musk-reveals-hi...
https://religiondispatches.org/2026/01/09/musk-endorsed-whit...
and so on and so forth
> In many places, the birth rate is well under replacement
Of course, in some places, this is true. But not globally. We don't need more births to keep population going on. There's a surplus of starving, fecund people globally. Musk amplifies and composes tweets about how white people are going to be a minority (we have been for basically all of human existence, but w/e), and he's even said things like if white people are a minority, we will all be killed. Which only makes sense if the assumptions underlying this claim are that white people are uniquely non-violent (i.e., supreme). Or it's an admission that everyone commits genocide against everyone else. Which is so transparently fictitious that someone as allegedly brilliant as he is couldn't possibly believe it.
The most generous description of him is that he's dumb. The least generous is he's a white supremacist.
You'll be shocked to know they have changed the inclusion rules a number of times.
I suspect if in 12 months these megacaps are still megacaps, they will revisit the profitability rules. It's hard to have an index with 500 of the largest, most significant companies leaving out companies with trillion dollar market caps.
Of course this all becomes moot if all the companies crash out. I don't think enough people are asking what if these companies don't crash out though.
Did it really used to require that you own "15 railroads" ?
Regardless, the S&P 500 also excludes a company like Microstrategy (the company that holds Bitcoin) from their index, had excluded Robinhood for a wile due to missing the profit requirements, and so on. It was never "meant" to cover the 500 largest companies by market cap, and has generally resisted pressure to change that.
They have resisted that pressure historically, and remained fairly conservative. But if these companies stay in the 1T+ range, that's an amount of pressure they have not had in the past. You also missed one of the largest exclusions for a time for profit reasons that's also relevant here - TSLA.
I have 1 trillion shares, and I sold 1 to a mate for a dollar.
Total company revenue is like 50 bucks a month and profits are nil.
Can I be in the S&P 500 too?
The S&P recovered from Dotcom bottom in ~7 years while the Nasdaq-100 took 15 years. Likewise Nasdaq took 3.5 years and the AI hype to recover back to its COVID highs in 2024 while S&P had the same recovery in about 2 years.
This is the downside to Nasdaq having higher returns in tech bull markets.
So the indices have a very different volatility profile by design, we should be happy to have the choice rather than have them all converge to the same product.