Except certain indices are indeed forced to buy if the stock otherwise meets inclusion criteria, this was a somewhat controversial topic with the recent spacex IPO.
Yes if a company's market value exceeds a certain size, it will be considered to be included in indices, most of which track these things automatically.
They have to apply the rules consistently otherwise it wont make any sense to have these indicies right? Spacex got rejected in one of the big indicies because it was not profitable while it got accepted in another. You can buy from both as an investor or a fund manager. If you think one of them is wrong, it is in your interest to switch. If you don't switch then you indirectly don't see anything wrong with it.
Going back to the point, if we want a free market, it has to be free for all. Spacex can go to 0 tomorrow and cause markets to implode, it can also surge 10x over the next 5 years causing everyone in the market to get richer or it can just drag for 10s of years in the same level.
But you and I do not know the future. We cannot block a company from IPOing just because we think it will fail in the future. If it meets all the existing regs, it should be allowed to IPO. If you want to change the regs, thats a different discussion but one i fundamentally disagree with personally. I think the market should be able to take risks and explore potential otherwise we will stagnate.
They have to apply the rules consistently otherwise it wont make any sense to have these indicies right? Spacex got rejected in one of the big indicies because it was not profitable while it got accepted in another. You can buy from both as an investor or a fund manager. If you think one of them is wrong, it is in your interest to switch. If you don't switch then you indirectly don't see anything wrong with it.
Going back to the point, if we want a free market, it has to be free for all. Spacex can go to 0 tomorrow and cause markets to implode, it can also surge 10x over the next 5 years causing everyone in the market to get richer or it can just drag for 10s of years in the same level.
But you and I do not know the future. We cannot block a company from IPOing just because we think it will fail in the future. If it meets all the existing regs, it should be allowed to IPO. If you want to change the regs, thats a different discussion but one i fundamentally disagree with personally. I think the market should be able to take risks and explore potential otherwise we will stagnate.