SpaceX seeks early index entry as it prepares massive IPO

Advisers for the company, which recently merged with xAI, have reached out to major index providers, including Nasdaq, to discuss how SpaceX and this year’s other hot startups might join key indexes sooner than normal, according to people familiar with the matter. Companies typically must wait several months or a year after their public debut before gaining inclusion in a major index such as the S&P 500 or the Nasdaq 100. Inclusion unlocks access to retail and institutional capital from funds, particularly those mimicking the performance of indexes that have to hold the companies in the index. The traditional waiting period is intended to give the companies time to demonstrate that they are stable and liquid enough to handle extensive buying from index funds. SpaceX hopes to skirt traditional rules in an effort to bring liquidity to its shareholders sooner as part of its planned IPO. SpaceX advisers have sought index policy changes that would fast-track its entry into major indexes for the company and benefit other highly-valued private companies, the people said. Last valued at $800 billion, SpaceX is targeting a valuation of more than $1 trillion, a listing that would become the largest-ever U.S. IPO. SpaceX and AI startups OpenAI and Anthropic are expected to list as soon as this year, which could be a banner stretch for IPOs, some bankers say. Finding a stable investor base will be important to their long-term success as publicly traded stocks. Conversations between the rocket maker’s advisers and indexes are part of a broader industrywide discussion about ways to get investors in buzzy startups access to liquidity from public markets earlier. Investors and advisers to companies planning to go public this year are concerned not only about initial trading, but also that the standard six-month lockup period—which prevents early investors, executives and employees from selling their stock—might prompt significant selling that pressures shares. After Meta went public in 2012, shares sank when early investors unloaded all at once. SpaceX is exploring ways to better balance supply and demand to avoid that outcome, some of the people said. Advocates of index methodology changes have said that by allowing newly public companies earlier entry to key indexes, individual investors, who have famously missed out on the big gains in private markets, could secure earlier exposure via popular exchange-traded funds and index funds. Earlier this week, the Nasdaq Stock Market shared proposals to update some of the Nasdaq 100 index methodology and asked for feedback from market participants. Among the proposals is a potential “fast entry" process. Under this option, companies whose market capitalizations rank in the top 40 of the Nasdaq 100’s constituents could be added to the index after 15 trading days. Companies typically now must wait at least three months to be added to the index. At their current valuations, SpaceX, OpenAI and Anthropic would all qualify. The S&P Total Market Index and MSCI indexes have fast-track options, which some advisers to SpaceX are also exploring in an effort to ensure the IPO trades well, some of the people familiar with the matter said. The one index where there is now no fast-entry option is also one of the most important: The S&P 500. To join the index, a company must be U.S.-based, profitable and have a market capitalization of at least $22.7 billion. Joining gives it access to a steadier index-fund investor base. OpenAI is laying the groundwork for a fourth-quarter IPO as it races rival Anthropic to list shares publicly. OpenAI is aiming to raise $100 billion before the IPO at a valuation of more than $800 billion, while Anthropic is raising billions more at a valuation of $350 billion. Write to Kate Clark at kate.clark@wsj.com and Corrie Driebusch at corrie.driebusch@wsj.com