SpaceX Nasdaq 100 weight to jump to 2.82% in quarterly rebalance -Bloomberg

 SpaceX’s weighting in the Nasdaq 100 Index will more than double to 2.82% when the benchmark's quarterly rebalance takes effect on Monday, Bloomberg reported, citing data from the index provider. 

The adjustment, calculated using Friday's closing prices, confirms a provisional weighting that will begin to align the space and satellite giant's influence in the index with its massive market valuation.

SpaceX, which made its public debut in July, currently holds a relatively small 1.28% weighting in the gauge. Most of its shares were locked up following its listing, constraining its index representation even after Nasdaq revised its rules to allow newly listed mega-cap companies to enter the index sooner without requiring a 10% free-float minimum.

The rebalance helps close an unusual disparity: while SpaceX ranks as the seventh-largest company in the Nasdaq 100 with a market capitalization exceeding $2 trillion, its current weighting does not even place it among the top 20 constituents by percentage weight.

Mechanical buying for passive funds

The sharp increase in index weight will force passive funds and exchange-traded funds (ETFs) tracking the benchmark to adjust their portfolios and purchase billions of dollars in SpaceX stock to maintain proper tracking accuracy.

Major funds affected by the rebalance include:

• Invesco QQQ Trust Series 1 [(QQQ)]: The $482 billion fund is one of the largest ETFs in the world tracking the Nasdaq 100.

• Global Benchmark Products: Over 200 investment products track the Nasdaq 100, managing more than $800 billion in total assets globally.

The Nasdaq 100 tracks the 100 largest non-financial companies listed on the Nasdaq exchange. While inclusion does not require a minimum market capitalization threshold, companies must maintain an average daily volume of at least 200,000 shares alongside other liquidity requirements.