S&P refused to fast-track SpaceX into its index — while Nasdaq cut the wait to 15 days

The decision, and the divergence

S&P Dow Jones ran a consultation on whether to speed up index entry for enormous newly-public companies — and decided to keep its rules as-is. In practice that keeps SpaceX and its peers out of the flagship indices until they clear the usual bar, including sustained GAAP profitability. The story is the contrast with everyone else, which the thread supplied with specifics:

"Nasdaq changed its rules recently so SpaceX can join the Nasdaq 100 Index… in just 15 trading days, down from a three-month minimum. FTSE Russell adopted a similar approach, shortening the waiting time to five trading days." — a commenter cataloguing the rule changes

So the index providers split: Nasdaq and FTSE Russell rolled out the fast lane; S&P held the line.

Why a boring rule is actually a transfer of money

The thread's insight is that index inclusion is not a label — it's a forced bid. One commenter spelled out the mechanism: S&P inclusion "basically requires funds to hold a position by default," and with an estimated $20 trillion indexed to it, that's an enormous automatic buy. Slowing that door has a redistributive logic:

"Indexes are supposed to be slow-moving, precisely due to their entry requirement of sustained profitability… All that an inclusion of these new companies would accomplish is a bailout of their stockholders by pension funds and ETFs where millions of regular people shoulder all the downside risk." — a skeptic on who pays

Others reframed it as governance hygiene: changing index rules forces every fund tracking that index to re-evaluate its risk profile, so a provider that moves the goalposts makes its own product look more volatile. The relief that S&P kept the profitability requirement was pointed — one reader quipped that "Ed Zitron would be proud."

For a passive investor, this is the quiet win

If you hold an S&P 500 index fund, this decision is on your side: it means your automatic money won't be conscripted to buy a pre-profit megacap at its IPO-window valuation just because it's big. The other providers chose the opposite, and SpaceX will likely ride Nasdaq's 15-day door instead. The tell is that the most market-friendly outcome here was the regulator-like one — the slow door, not the fast one.