06/09/2026
Everyone is talking about the potential IPOs of SpaceX, OpenAI, and Anthropic.
The assumption many investors make is that once these companies go public, they'll immediately become major holdings in index funds like the S&P 500 or Russell 1000.
The reality is a little more nuanced.
While these companies could debut with some of the largest valuations in the public markets, index inclusion is based largely on free float—the shares actually available for public trading—not total company value. As a result, their initial weighting in major indices may be surprisingly small. Some estimates suggest SpaceX could initially represent less than 0.2% of the Russell 1000.
What investors should pay attention to isn't just the IPO itself—it's what happens afterward.
As lockup periods expire and founders, employees, and early investors gradually gain the ability to sell shares, the public float can increase significantly. Over time, that may lead to larger index weightings and greater demand from passive investment funds.
In other words, the biggest impact of these mega-IPOs may not occur on Day One.
It may happen over the following months and years as additional shares enter the market and index providers adjust their weightings.
This is a good reminder that headlines often focus on valuation, while long-term investors should pay attention to market structure, liquidity, and how capital actually flows through index funds.
What do you think?
Will SpaceX eventually become one of the largest holdings in passive portfolios, or will its impact be more gradual than most investors expect?
*Investors cannot invest directly in indexes. The performance of any index is not indicative of the performance of any investment and does not take into account the effects of inflation and the fees and expenses associated with investing.
