What a pleasant surprise. I was positive S&P would get strongarmed into the bamboozle like Nasdaq but it seems they have a bit more integrity. Good for them.
I think key difference here is that Nasdaq is also the market. Where as S&P is external. From this view them manipulating their own market which they profit in various ways actually is somewhat more questionable...
Incentives are entirely different. And really now I am starting to think that Nasdaq maybe should not have index it runs in the first place...
Yeah, this has taken me several readings to understand, I guess because I hadn't really dug into it or thought about it, and also a lot the articles talk about "stock exchanges competing for SpaceX's business".
This whole story is about Nasdaq (company) specifically dangling inclusion into the Nasdaq-100 (index) as a means to get SpaceX to list on the Nasdaq (market). They're uniquely able to do this by owning a market and also an index that people care about.
NYSE couldn’t really do this because its own indices don’t matter much. FTSE Russell could theoretically make FTSE 100 inclusion easier to help attract a company to list on the London Stock Exchange, but SpaceX choosing London as its primary market would be odd. S&P Dow Jones Indices has no equivalent incentive, because it doesn’t own a listing venue; its main asset is the credibility of the S&P 500.
In all, this entire story has been about Nasdaq specifically being willing to weaken their index rules in order to attract SpaceX to their market.
Trading of publicly listed stocks happen on stock exchanges, Nasdaq is one of these. They make money by charging fees for companies to publicly list stocks. But also charging fees from anyone who wants to directly trade there. Say stock brokers who allow smaller customers to trade via services these brokers offer.
So Nasdaq owns the company which facilitates this trading of stocks. But they also own the company which says what are 100 most important companies on that market.
Now they changed rules to get big new most likely popular stock on their market. This could at least maybe get some new brokers in. Or make them in general more desirable market to be connected to and thus get fees.
I am not just sure if there is even more fees in some part I don't know there...
Didn't Nasdaq change its rules specifically in order to get SpaceX to list on Nasdaq? Not really sure why other funds would follow them since SpaceX can't list on all of them.
Incentives are entirely different. And really now I am starting to think that Nasdaq maybe should not have index it runs in the first place...