Space Exploration Technologies (NASDAQ: SPCX) was added to the Nasdaq-100 index before the market opened today, so investors might be surprised to see SpaceX shares fall.
When a company’s stock is added to an index, it can rise due to passive buying by mutual funds and exchange-traded funds (ETFs) that are required to hold the entire index
So why were SpaceX shares down by 5.2% at 12:45 p.m. ET today? It’s the math The Nasdaq-100 tracks the 100 largest non-financial companies listed on the Nasdaq Stock Market exchange.
But even the funds and ETFs that buy SpaceX stock once it’s on the exchange aren’t really buying a large quantity of the company. Consider this: SpaceX raised about $86 billion from its public share offering. But the company was valued at $1.8 trillion at the IPO price.