Explaining who pressured FTSE Russell into changing their rules for the SpaceX IPO

SpaceX is going public soon. The company is valued at around 1.75 trillion. However, the insiders are keeping about 95 percent of the shares. They are only selling a very small amount to the public. Usually, big index funds like Vanguard and the S and P 500 have strict rules. They wait until a company proves it makes a profit. They also make sure there are enough shares available to buy. This stops the fund from driving the price up too much when they buy. Now, the people who make these rules are changing them just for SpaceX. Here is what is happening. First, SpaceX told the stock exchanges they would only list if they could get into the big index funds right away. Second, the exchanges want the fees from this massive IPO. So, Nasdaq changed their rules in May. They removed the rule that says a company must have a certain amount of shares available to the public. Third, the index rule makers like FTSE and S and P followed along. They do not want active traders to beat their passive funds. FTSE just changed their rules to let massive IPOs into the index in 5 days. Fourth, because of these rule changes, your passive index fund is forced to buy SpaceX stock right away. They have to buy billions of dollars of it, no matter what the price is. The people who benefit from this are the early investors and insiders. They need guaranteed buyers so they can sell their shares later when their lock up period ends. The people who lose are normal investors. Your index fund is forced to buy when there are very few shares available. This makes the price go up. When the insiders finally sell their shares later, the price will likely drop. Your retirement fund takes that loss.