“Eventually these mega-IPOs will be added to the S&P 500, unless their business models fail, so it is a question of timing,” said Jay Ritter, University of Florida emeritus professor and director of the IPO Initiative. “Given the low floats and the huge amounts of money indexed to the S&P 500, I think it’s good that they’ll wait until the stocks have a more liquid market.”
A representative for SpaceX didn’t immediately respond to a request for comment. A spokesperson for Evercore ISI declined to comment.
Anthropic PBC and OpenAI are also weighing IPOs as soon as this year, Bloomberg News reported, and could face similar hurdles to SpaceX despite expectations that the companies would be valued at more than $1 trillion each if they went public.
The AI model makers’ entry to the benchmark will depend on how operations and spending balance. Anthropic’s operating profit for the June quarter is expected to hit $559 million, but the company does not necessarily expect to be profitable in future quarters as it ramps up spending on computing resources and other costs, Bloomberg News reported.
OpenAI isn’t expected to be profitable in the coming years.
“It will mean you won’t be in the S&P 500 for the moment,” Creatura said. “But look at those companies now.”
The purpose of the S&P 500 is to emulate the US domestic market, according to Howard Silverblatt, former senior index analyst at S&P Dow Jones. Maintaining the net income requirement is “the hardest one for the S&P to defend,” he said, adding that he believes a GAAP requirement is beneficial to the index.
“There are companies that are spending more on R&D than are making profits, even though they might have profitable lines,” he said in an interview, adding that SpaceX is one such company.
Their fast inclusion in the benchmark would have led to about $14 billion in forced passive buying for SpaceX, more than $8 billion for OpenAI and close to $9 billion for Anthropic, according to Bloomberg Intelligence estimates.
Holding the line may have caused some consternation for market watchers while others were relieved that the rules will remain in effect.
“Let’s be honest: It’s the world’s premier stock-market index. It’s the gold standard of stock-market indexes globally,” he said.
“They have rules about profitability and index inclusion and they’re just sticking by them,” Antonelli said. “Just because it’s Elon Musk and SpaceX, I don’t think that they’re willing to change something that’s hard coded into their product.”
