Alex Frankos

The sooner you can get into these indexes, the sooner you have this wall of money coming at your stock.

Right.

Basically, these index funds, which a lot of our listeners are probably invested in, automatically buy whatever is in the index.

And an IPO is always an uncertain process.

You're putting a new company on the stock market.

You don't know how people are going to react.

There's also the issue that a lot of insiders in the company, people who already own shares, are going to sell their shares after the lockup period expires.

So if you have the index funds already buying your shares...

that's probably going to create some demand, push up the stock price, keep things stable.

So it's a way to make the IPO a success.

Indexes have these rules for a reason because it takes a while for investors to settle on what the price should be and what direction it's going.

And it's an untested company.

There are rules about profitability and size and all sorts of things because they're concerned that they don't want something to come in and then tank.

And then people be like, why did you put that in the index?

you know, if it turns out that there was something wrong.

So time often helps prove out that a company is what it says it is.