SpaceX IPO could hit popular index funds — and your 401(k) — in as little as 5 trading days as indexes relax their rules

Elon Musk’s SpaceX is going public at a valuation north of $1.75 trillion, and if you hold a broad index fund in your retirement account, you’re likely to end up owning a slice of it whether you buy a single share or not. For many savers, the first fund to pick it up won’t be a famous tech fund or even an S&P 500 fund. It’ll be a plain total-market fund, possibly within five trading days of the IPO.

That’s the result of index providers relaxing rules written more than two decades ago specifically to keep unprofitable, unproven companies out of the funds millions of Americans rely on for retirement. SpaceX hasn’t turned an annual profit. It’s about to enter the indexes anyway.

Here’s how that happened, what it means for the money you’ve already invested, and what your options actually are.

Must Read

What’s in the SpaceX IPO S-1 filing

SpaceX filed its S-1 — the formal registration document a company must submit before selling stock to the public — with the U.S. Securities and Exchange Commission on May 20, 2026 (1).

• A target valuation around $1.75 trillion, which would make it one of the largest U.S. companies by market cap on day one.

• $18.7 billion in 2025 revenue, against a GAAP net loss of $4.9 billion.

• Starlink, the satellite-internet business inside the Connectivity segment, drove $11.4 billion of that revenue, roughly 61% of the total, on $4.4 billion in operating income (2).

• The losses trace to the AI segment, which SpaceX added when it absorbed xAI in a February 2026 merger and recast its financials to include it. That unit is dragging an otherwise profitable Space and Connectivity business into the red (1).

• Musk will hold about 42% of the equity but a majority of the voting power through Class B shares carrying 10 votes each. A provision Reuters reviewed in the filing lets him be removed as CEO and chairman only by a vote of those same Class B holders he controls, making his ouster effectively a self-vote (3).

• Only about 5% of the company will trade publicly at the listing, with up to 30% of those IPO shares earmarked for retail investors, roughly three times the norm for an offering this size (1).

Why index funds couldn’t buy unprofitable companies — until now

After the dot-com crash, index providers tightened their admission standards. In 1999 and 2000, flagship benchmarks scooped up richly valued, money-losing companies near the top, and ordinary savers in passive funds paid the bill when those names collapsed.

So the guardrails went up. To join the S&P 500, a company had to have traded publicly for at least 12 months and posted four consecutive quarters of GAAP profitability (4). Index providers also set minimum “float” requirements, a baseline share of stock that has to be freely trading, because funds need enough available shares to buy and sell efficiently during rebalances.

Those rules held for more than two decades. Tesla, Musk’s other company, traded publicly for over 10 years before it finally cleared the S&P 500’s profitability bar in 2020 (4).

Then SpaceX filed.

How index providers changed the rules for the SpaceX IPO

Four index providers have moved to fast-track large new listings, but at different speeds and different stages. From fastest to slowest:

The quickest path runs through funds most savers have never thought about. CRSP, the index behind Vanguard’s roughly $607 billion Total Stock Market fund (NYSEARCA:VTI), one of the most widely held funds in American retirement accounts, adopted a fast-track rule that can add a qualifying IPO after just five trading days (5). SpaceX would have failed CRSP’s old eligibility screen, which required a public float of at least 12.5%, but in late April CRSP introduced an alternative test based on absolute float-adjusted market cap, which SpaceX clears easily (5). The rule is new, though, and has never been applied to a live IPO. CRSP can still defer a name even when the methodology would let it in (5). According to investment adviser Jacob Friedman, the first fund to own SpaceX won’t be the famous Nasdaq tech fund. It’ll be the plain total-market fund sitting in millions of 401(k)s (5).

FTSE Russell moves on the same five-day clock. On May 26 it confirmed a Fast Entry mechanism, effective immediately, under which an IPO that clears the Russell Top 500 market-cap threshold becomes eligible five trading days after listing, instead of waiting for the next quarterly review (6). A separate carve-out covers companies that don’t yet meet the 5% public-float minimum, provided their lockup arrangements will produce that float within 12 months (6). SpaceX’s staggered lockup, which releases insider shares in tranches over the months following its first earnings report, appears designed to satisfy exactly that condition. That moves likely Russell 1000 inclusion from a projected fall 2026 quarterly review to roughly a week after the IPO (6).

Nasdaq sits in the middle. Its Fast Entry rule, effective May 1, 2026, cut the waiting window for the Nasdaq-100 from roughly three months to 15 trading days for companies large enough to rank among the index’s biggest members (7). That likely puts SpaceX in the Nasdaq-100 sometime in early summer.

The S&P 500, the benchmark the most retirement money actually tracks, is the slowest, and the only one that hasn’t locked anything in. S&P Dow Jones Indices opened a consultation proposing to cut the seasoning window from 12 months to six and to waive the four-quarter profitability test above a certain market-cap threshold (8). That consultation closed May 28, with any changes proposed to take effect June 8; as of publication, S&P had not announced a final decision (8). Some commentary has wrongly lumped the S&P in with the five-day indexes. In practice, likely S&P 500 inclusion lands in late 2026 or early 2027, not days after the IPO (5). S&P itself has said companies of this scale carry immediate market relevance, and that existing rules could keep them out and make the index a less faithful mirror of the market (8).

Read More: Taxes are going to change under Trump’s ‘big beautiful bill’ — 4 reasons you can’t afford to waste time

How much SpaceX stock index funds will be forced to buy

When a company enters a major index, the funds that track it don’t get to decide whether they like the price. They have to buy, in proportion to the company’s weight, on rebalance day. With SpaceX, that mechanical demand collides with a very small float.

Analysts estimate conservative forced buying of $15 billion to $30 billion across S&P 500, Nasdaq-100 and Russell 1000 trackers in the months after inclusion, with more aggressive float-weighted scenarios running far higher (9). More than $30 trillion in assets is benchmarked to these indexes (7). A flood of price-insensitive buying, aimed at a sliver of available stock, in retirement accounts whose owners never opted in.

Fast-tracking SpaceX is a fix for some, a broken promise for others

There’s a real case for the changes, even if some online commentators have framed the whole thing as a stitch-up.

Indexes have always adapted to the market they’re meant to represent. The “Magnificent Seven” tech giants already strained profitability-history conventions on their way to dominating the market. Providers argue that a benchmark mechanically excluding the single largest company in the country stops doing its core job and becomes less useful as a result (8). Float minimums were written for liquidity, and a $1.75 trillion company arguably clears the spirit of that test even with a thin public float.

The profitability rule has its own history. It went up after the dot-com crash specifically because passive savers got hurt, and dropping it the first time a big enough company wants in tests who the rule was there to protect.

What SpaceX index inclusion means for your 401(k)

None of the following is investment advice. It’s a map of the options.

If you hold a broad S&P 500, Nasdaq-100 or total-market fund, SpaceX is coming to you regardless. It shows up by default and in small doses, without the pricing risk of buying on day one, and for most long-term savers that’s the version of exposure they’d actually choose.

Buying the IPO outright is a different bet, and so is grabbing pre-IPO shares through a private vehicle. At a $1.75 trillion valuation you’d be paying something like 90 times last year’s revenue for a company that lost billions, and the staggered lockup means insiders keep feeding shares into the market for months after the debut. That supply tends to sit on the price (2).

The other option is to avoid the stock entirely, which is harder than it sounds when it’s riding inside every broad fund you own. Direct indexing does it — you hold the index’s stocks directly and drop the handful you don’t want — but you pay a manager for the privilege and take on the bookkeeping.

And keep an eye on what comes next. The same fast-track playbook is widely expected to apply to other giant, not-yet-profitable listings on deck, including OpenAI and Anthropic (8).

You May Also Like

Join 250,000+ readers and get Moneywise’s best stories and exclusive interviews first — clear insights curated and delivered weekly. Subscribe now.

—

Article Sources

We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines.

U.S. Securities and Exchange Commission (1); Morningstar (2); Reuters (3); S&P Global (4), (5); Investmentnews (6); London Stock Exchange Group (7); Yahoo Finance (8); Spotgamma (9)

This article originally appeared on Moneywise.com under the title: SpaceX IPO could hit popular index funds — and your 401(k) — in as little as 5 trading days as indexes relax their rules

This article provides information only and should not be construed as advice. It is provided without warranty of any kind.