Standard & Poor’s Dow Jones indices announced It will not change its rules to join the S&P 500. This means that SpaceX and other huge new public companies, called megacaps, cannot immediately become part of the standard that funnels large amounts of investment money around the world.
SpaceX The company is preparing for what could be the largest initial public offering ever, valued at $1.75 trillion, and aims to raise $75 billion. Now, passive index funds with trillions in them can’t swoop in to buy SpaceX stock because the company isn’t in the S&P 500 yet.
S&P DJI adheres to its rule requiring companies to post earnings for at least one year. So, for now, S&P Global is working to stop a massive rush of money from flowing into these stocks — which would happen if these companies had more attractive index listings.
The S&P 500 rejects proposed changes to IPO eligibility
Index Provider A started Public consultation on 30 AprilAsking whether the three main rules for new major companies to be included in the S&P 500 index should be relaxed.
These three eligibility requirements include:
- Seasoning requirements for 12 months — A company must generally trade publicly for at least one year before it is eligible for listing.
- 10% general buoyancy requirement — At least 10% of the company’s shares must be available to public investors for trading.
- GAAP profitability requirements — A company must report positive GAAP earnings in its most recent quarter and across the sum of its last four quarters.
On all three counts, the answer was no.
Standard & Poor’s DJI said in its report advertisement That “exceptions to financial soundness, seasoning, and IWF requirements should not be granted solely on the basis of market value.” IWF, or investable weight factor, is S&P’s measure of a company’s publicly traded stock float and is used to determine the portion of stocks eligible for index weighting.
The committee recognized a conflict between strict eligibility rules and broad representation in the market. However, they determined that their indicators already provide “substantial market coverage and sector balance,” as stated in S&P press release.
Why SpaceX’s IPO Still Fails the S&P 500 Test
SpaceX It reported a net loss of $4.94 billion in 2025, despite revenue of $18.67 billion — a 33% jump from the previous year.. Under current guidelines, SpaceX cannot join the S&P 500 until it shows four consecutive profitable quarters using GAAP accounting.
“Making exceptions because companies are very large and have been private for a long time and yet are still unprofitable didn’t make a lot of sense,” Art Hogan, chief market strategist at B. Riley Wealth, said in comments reported by B. Riley Wealth. Reuters. Earlier, Cryptopolitan reported that IPO market 2026 Maybe it steals the playbook from cryptocurrency launches.
Profitability has always been a major obstacle for companies to be included in the Standard & Poor’s 500 Index. For example, Tesla became a part For the index only in December 2020 after waiting years. Similarly, Uber and Airbnb He spent a lot of time on various indices before getting approval from the S&P committee.
This decision affects more than just SpaceX. Companies like Anthropic and OpenAI face similar requirements as they consider going public. These companies have not shown the GAAP-consistent earnings that the S&P 500 needs.
