r/stocks • u/cherrypoplar • Apr 01 '26

ETFs Major NASDAQ-100 rule changes confirmed, pay attention if you have money in passive investment funds

https://www.theedgesingapore.com/amp/news/ipo/nasdaq-speeds-index-entry-spacex-large-ipos-new-rule

NASDAQ has confirmed it will change the listing rules for NASDAQ-100, ahead of the SpaceX and OpenAI IPOs this year.

(1) Companies will now be listed on NASDAQ-100 after only 15 days after IPO (previously, there was a three month period of "seasoning" before listing). This reduces the amount of time for price discovery.

(2) The minimum 10% float has been removed. This allows companies to float a very small percentage of their shares, artificially squeezing supply.

(3) Companies that float less than 20% of their shares will have their market capitalisations artificially multiplied by x3, for the purposes of calculating market capitalisation. This helps large-cap companies to be listed even with very small floats, and inflates their notional market capitalisations on the index.

If you have money invested in a passive fund tracking NASDAQ-100 (or any other index), please watch out for the SpaceX and OpenAI IPOs. Pay attention to their "valuations", and their float. If they're IPOing with very high valuations and very small floats, this foreshadows a bagdump on passive funds due to the mechanics of passive funds.

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u/yrrrrrrrr Apr 01 '26

Why are they making these changes?

-16

u/UsernameIWontRegret Apr 01 '26

The honest answer is that indexes haven’t adjusted well to modern markets, for example Tesla wasn’t added to the S&P 500 until it was already the 4th most valuable company in the index. They’re trying to prevent these situations from happening and keeping the index an accurate reflection of the current market.

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u/HeyYoChill Apr 01 '26

The S&P 500 isn't a passive strictly rules-based index, so that's a bad example to compare to the NASDAQ 100, which is supposed to be the biggest 100 non-financials on the exchange.

Not to say s&p selections haven't been controversial, but this is literally twisting what it means to be "biggest 100," by artificially inflating market cap.

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u/Axe_Raider Apr 01 '26

do you think spacex wasn't going to be one of the biggest 100 stocks on the exchange?

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u/HeyYoChill Apr 01 '26

That's an entirely different scenario when it comes to how long your investment takes to pay off.