[khriss]

A lot of comments here are saying that the impact on the S&P would have been 'minimal' since the S&P is float weighted. So SpaceX would have been ~0.3% of the index.

The point isn't that the impact would have been minimal. It's that changing the rules to suit the rich and connected is the literal definition of crony capitalism. Why should SpaceX get exemptions from entry requirements to the S&P when every other company before it didn't?

Trying to justify it based on an argument that it would have been 'just' $200 billion, is absurd since that $200 billion is coming largely from the public via index funds that would have been forced to buy SpaceX shares.

[matwood]

> Why should SpaceX get exemptions from entry requirements to the S&P when every other company before it didn't?

The rules have never been set in stone and changed a number of times since the S&P 500 was created. The current set of rules are based around the old way of companies IPOing and growing into something that could be included. Now, companies are staying private longer and IPOing with huge valuations.

Take AI/Elon emotion out of it for a second, and there is a rational debate to be had if multiple 1T+ market cap companies should be accommodated for in an index that's supposed to represent the 500 largest/most influential US companies. If these companies are still in the 1T+ ranges a year from now, I suspect the S&P may change some rules to get them in with the idea that the market has spoken.

[JumpCrisscross]

> It's that changing the rules to suit the rich and connected is the literal definition of crony capitalism. Why should SpaceX get exemptions from entry requirements to the S&P when every other company before it didn't?

The S&P grandfathers in loads of shit. Google and Berkshire got to be the only special babies with multiple classes of stock for a few years.

The S&P tries to represent large cap American stocks. There was a genuine debate around whether SpaceX et al represent large cap stocks. Elon et al tried to put their thumbs on the scale, of course, but that wasn't the driving concern, this has been a debate that has been happening for a while.

The weird thing is linking it to Elon is absolutely titillating. So that's what influencers did. It's a maddening story. But it really isn't true, and it was even less true when the S&P rule changes were being misrepresented as faits accomplis.

[khriss]

> Google and Berkshire got to be the only special babies with multiple classes of stock for a few years.

Wasn't this after their entry into the index?

[JumpCrisscross]

> Wasn't this after their entry into the index?

Yes. Then rules were changed. Then they were unchanged.

S&P is explicitly a committee-based index. It's not hard and fast rules driven. (Russell markets itself as being super duper rules based. It's a good niche. It's also so wildly complicated as to be, in practice, at least to me, indistinguishable from the committee-based method.)

Elon undoubtedly tried to corrupt this process. But there were loads of non-corrupt reasons to look at a few trillion dollars of market cap hitting the market and ask how that should impact how various indices are calculated. The answer we've come to, that the tech and total-market indices should reflect the change while large caps should not, is a pretty good one.

[dmix]

The definition of crony capitalism is when the corporations collude with the government.

[ExoticPearTree]

> Why should SpaceX get exemptions from entry requirements to the S&P when every other company before it didn't?

I could give you a lot of non-stocks related examples of why rules should not be set in stone.