Source: Fortune.com
Summary
S&P Dow Jones Indices has decided not to change the rules for entry into the S&P 500 Index, meaning that companies like SpaceX, OpenAI, and Anthropic may face a longer wait before being included in the index. The rule requires companies to have generated positive net income for the past year, including the most recent quarter. SpaceX is not expected to meet this requirement until 2027, according to Evercore ISI research analysts. The decision comes as SpaceX prepares to start trading on June 12 with a targeted valuation of $1.8 trillion.
Our Reading
The numbers tell one story.
SpaceX, OpenAI, and Anthropic are likely to face a long wait before entering the S&P 500 Index. The S&P Dow Jones Indices’ decision to maintain the profitability requirement will delay their entry, potentially until 2028 for SpaceX. The rule change would have led to significant passive buying, with estimates suggesting $14 billion for SpaceX, $8 billion for OpenAI, and $9 billion for Anthropic. The decision highlights the importance of profitability in the S&P 500 Index, with experts like Howard Silverblatt emphasizing the benefits of maintaining the GAAP requirement.
The announcement sounds like a familiar balancing act between growth and profitability.
Author: Evan Null
