JVL (Jonathan V. Last)

Companies should not be so big that they can exert leverage over the exchange itself.

How did NASDAQ win the SpaceX IPO war?

They did it by saying, we will change a bunch of rules which will allow you to be included into index funds early.

And the result of that will be that it will force index funds to buy your stock.

Now, this is gonna get a little complicated.

And so I'm just gonna sort of hand wave away some stuff and hope you can follow with me, right?

Yeah, okay.

When we talk about inclusion into an index fund, part of that is based on what's called float.

So if only 5% of your stock as a company is for sale,

then when index funds are calculating how much of your stock they have to buy, it's based on that.

The more stock you float, the more stock the index fund is forced to buy based on their own rules.

Okay?

Okay.

Part of what NASDAQ did was say...

Oh, under these new rules for certain companies whose names begin with S and end in X, when they are initially included, if their float is below 20%, then index funds must use a 5X multiplier on their float number in order to calculate how much stock they have to buy.

No.

Yes.

And so the idea here is not only are they rushing the SpaceX into the index funds, but they are jiggering with the float percentages and making people buy more

relative more making index funds by more relative spacex shares relative to the amount of spacex shares that are actually for sale which is going to drive the price up okay the final thing they did here

was say that the rebalance, because these float calculations are then rebalanced because they change, right?