SpaceX will officially join the Nasdaq-100 on Tuesday, with an estimated market capitalization of $75 billion, giving it an index weight of approximately 1.3%. This inclusion is anticipated to create upward pressure on the stock price as mutual funds and ETFs that track the index begin purchasing shares.
However, analysts warn that the impact may be limited due to SpaceX's small weight in the index and the upcoming expiration of lockup periods for insiders, which could lead to increased selling pressure. JJ Kinahan from Cboe highlighted the potential for significant volatility, predicting a possible $20 price movement in either direction over the next week and a half.
Despite the excitement surrounding the index inclusion, experts like Paul Meeks and Jeff Jacobson suggest that the actual buying pressure may be less impactful than expected, given the low float of available shares and the formulaic nature of index inclusion.
Furthermore, the S&P 500, which could provide deeper index demand, is not expected to include SpaceX until next year, limiting immediate effects. As a result, investors are advised to prepare for potential fluctuations in the stock price as they navigate these dynamics