[nighthawk454]

Most indexes will be affected. Two of the most common indices - the S&P500 and DJIA - are cross-exchange and include Nasdaq stocks. The biggest market cap companies on the market (MAG7) are all on the Nasdaq exchange and comprise about 35% of the S&P.

[edoceo]

Is this grey cause it's wrong? They are all on Nasdaq; and also around 35% of S&P. What am I missing? Is it that the "Most indexes" part is wrong (cause there are more than a few thousand ETF)?

[exmadscientist]

Yeah, it's wrong.

Nasdaq, Inc. is a company with a stock market ("the NASDAQ") and an index "Nasdaq 100"). They want SpaceX to be listed on their market, because they like having more things on their market for all the usual reasons. They are, apparently, offering to manipulate their index to win the listing.

Accordingly, anything that uses or tracks this particular index (Nasdaq 100), such as the QQQ fund, will potentially have to pay for this manipulation.

Anybody not holding or indexing to the Nasdaq 100 index contents will not particularly care and will not really gain or lose any more money than on an ordinary trading day. In particular, this will have zero effect on stocks that merely trade on the NASDAQ exchange.

Indexing to the Nasdaq 100 is pretty uncommon, outside of QQQ, so most people will not care.

[nighthawk454]

What?! This absolutely affects more than Nasdaq 100 / QQQ.

The index is just a function of the stocks. It only moves if the underlying stocks move. Rebalancing Nasdaq will cause selling in the 100 companies that aren’t SpaceX. And those stocks are held elsewhere too…

The Nasdaq 100 shares 79/100 stocks with the S&P. So if those stocks move (probably down because they’re being sold so SpaceX can get bought) pretty sure that's gonna affect anyone exposed to those companies. Whether that’s directly or through other index ETFs. Many of which have a huge concentration in Mag7 right now, for example.

[paganel]

What you're saying is 100% correct, I fail to see how people are not aware of it.

We're talking about a $1.75 trillion (as per the article) company that is about to enter (a part) of the most important capital market in the world at a distorted price, of course that the market as a whole is going to become distorted, money and capital (and the accompanying money and capital signals) are one of the most "liquid" things in a modern economy (if not the most liquid), once you start putting a wrong price tag on them then those accompanying money and capital signals will for sure start doing their thing, imo that was one of the main lessons we should have taken from what happened back in 2008-2009.

[exmadscientist]

Sorry, a lot of the comments around this have been really badly written and it's been hard to tell what they're actually arguing.

I countered a different argument (which does appear elsewhere in this thread). You are absolutely right that there will be general price distortion from this mess. I disagree that it will be extremely bad, but I do agree that it's a problem and needs attention. It's just been difficult to tell that this is what some comments have meant to discuss, instead of the more basic issues others have been talking about.

[nighthawk454]

Ah, I re-read my original comment with that in mind, and I see how it can go a few directions depending on the context - thanks!

[dh2022]

Actually these two indices will not be affected k as the article explains

[nighthawk454]

I don’t see that in the article. The only thing I see is about S&P is where they mention that the S&P 500’s rules would prevent this manipulation if SpaceX were added to that index. But that’s not being proposed.