[l23k4]

>I don’t think you have either?

I don't know how I could? The indices have already provided their reasoning for these rule changes, but that's just summarily rejected by the conspiracy-minded.

To laymen this appears to be a grand conspiracy. Rules are being changed to accommodate big companies, that's usually bad.

To people in the financial industry, it's fait accompli. The indices exist to reflect the market, these IPOs are going to be big enough that the 90s-era rules will/would result in untenable divergence.

[trhway]

the explanation what i heard from some financial analytics is that small float with large valuation would create a dog pile/short squeeze type situation among the funds trying to reflect the SpaceX valuation vs. the whole index valuation - 1.8T vs 70T ratio would be 50B of float vs. 2T where is total of index funds is much larger than 2T, and that is even without accounting for retail investors and other, non-index funds, who will buy a part of float too thus reducing further the float available to the index funds. Such squeeze situation would lead to stock price rise leading to valuation rise, ....

>To people in the financial industry, it's fait accompli.

of course, they've engineered a new way of making even more money. The pile of passive money in ver low expenses index funds obviously have been a fat target for them.

>to reflect the market

the described above squeeze is hardly a way to reflect the market

[l23k4]

>of course, they've engineered a new way of making even more money. The pile of passive money in ver low expenses index funds obviously have been a fat target for them.

Are you planning to substantiate this conspiracy theory in any way?

[trhway]

Where do you see a conspiracy theory? I've shown the numbers, it is simple arithmetics.

The situation is similar with mortgage CDS back then - no conspiracy theory/whatever, they just found a way to make AAA bonds out of junk. It was a simple arithmetics too. Everybody knew the arithmetics and was doing it.

Now is the same - they talked about that expected float/valuation squeeze even on NPR - this is where i heard it, i'm not that into finance markets to come up with it myself :)

[l23k4]

> Where do you see a conspiracy theory?

You are presenting a theory that an unidentified group of people is engaged in a conspiracy to change the rules of the major indices for corrupt reasons.

That's a conspiracy theory. It might be true, but so far nobody can come up with any evidence in support of it.

The simplest possible explanation is that the indices are supposed to track the market, they can't do that if they exclude these IPOs.

[trhway]

The simplest possible explanation is basic statistics so the top 20% of those bonds supposed to fit AAA criteria. No conspiracy. No "unidentified group of people". No corrupt reasons, just legitimate profit seeking and extraction.

It just naturally happens that that legitimate profit seeking and extractions benefits from the actions like "the indices are supposed to track the market, they can't do that if they exclude these IPOs", and i described the natural simple arithmetics how it happens. No conspiracy. Just arithmetics. You can verify it.

[l23k4]

> of course, they've engineered a new way of making even more money

You claim this to have been engineered somehow