From the Magnificent Seven to the Magnificent Ten: SpaceX and the new power of index mechanics

The planned SpaceX IPO is more than just a mega-IPO. It could become a stress test for passive investors, and with OpenAI and Anthropic, the next mega-IPO candidates are already in the starting blocks. Our Head of Portfolio Management, Jörg Held, explains why index providers are already rolling out the red carpet and what this means for ETFs and active investors.

The illustrious group of the “Magnificent Seven” is soon to be joined by three further names. SpaceX is set to be listed on the Nasdaq under the ticker SPCX, with an expected offering of between 40 and 80 billion US dollars and a company valuation of 1.75 to 2.0 trillion US dollars. 12 June could thus become the starting point for the biggest “Friends & Family Trade” of all time. It would be the largest IPO in history. OpenAI is targeting an IPO in the fourth quarter of 2026, with Anthropic potentially following shortly before the end of the year. In total, we are talking about around 3 to 3.4 trillion US dollars, which is likely to be reflected in the major indices in some way.

The Magnificent Seven will soon become the Magnificent Ten. This will result in a concentration of market capitalisation in the indices not seen since the 1930s.

Old index rules for a new scale

The problem: the old index rules were not designed for companies of this scale. The twelve-month ‘seasoning’ rule, profitability requirements, minimum free-float rules – all of this makes sense for normal IPOs. But not for companies that could rank among the ten largest in the US from day one.

That is why the index providers have adapted and are rolling out the red carpet. The rules are being tailored to companies that are simply too large for standard IPO criteria.

The Nasdaq 100 has had a new fast-entry rule since 1 May 2026. Any company that ranks among the top 40 (by market capitalisation) after seven trading days can join the index after 15 trading days. There is no longer a seasoning rule. The old ten-per-cent minimum rule for freely tradable shares has also been scrapped; shares with a low free float are capped in terms of index weighting.

Adjustments are also currently being worked on for the S&P 500: the seasoning rule is to be halved from twelve to six months. For megacaps, the rules on freely tradable shares and even the profitability requirement are to be dropped.

FTSE Russell is also considering rapid index inclusion.

The passive premium

In today’s ETF-centric world, this affects every investor. Index trackers account for 25 to 30 per cent of daily S&P 500 volume. As soon as a stock’s inclusion in the index is confirmed, the trackers must buy the new index components – regardless of the price. With three inclusions of this magnitude, we are talking about compulsory purchases in the tens of billions.

Anyone who secures an allocation in these stocks is sitting on a rare commodity. Everyone else will have to pay the passive premium – thereby driving up the book values of existing shareholders.

Magnificent Ten: Concentration rather than diversification

The Magnificent Seven currently account for around 34 per cent of the S&P 500. With SpaceX, OpenAI and Anthropic, this could become the Magnificent Ten with an index weighting of around 40 per cent.

For investors, this is no mere technical footnote. Those who invest passively are not just buying the market. They are increasingly buying into the index concentration of a few mega-caps.

What active investors should now consider

For active investors, the task at hand is clear: it is not a matter of blindly chasing the biggest story. It is about identifying at an early stage where index flows, revaluations and shifts in relative weightings create opportunities or risks that can be exploited proactively and flexibly to generate added value for investors. That is our aim and what active management should deliver for investors – in contrast to index tracking.

At ETHENEA, we are currently holding on to selective FANG+ names and will reassess our positions well ahead of the SpaceX IPO. We are also already heavily positioned in the underwriting banks appointed for the SpaceX IPO, particularly with a view to the expected additional market transactions. Furthermore, our investors have benefited indirectly from the sharp rise in valuations of the space-related names in which we already hold exposure.

This text has been translated by AI. The German version is authoritative.