alt Hacker News>I don’t think you have either?
I don't know how I could? The indices have already provided their reasoning for these rule changes, but that's just summarily rejected by the conspiracy-minded.
To laymen this appears to be a grand conspiracy. Rules are being changed to accommodate big companies, that's usually bad.
To people in the financial industry, it's fait accompli. The indices exist to reflect the market, these IPOs are going to be big enough that the 90s-era rules will/would result in untenable divergence.
the explanation what i heard from some financial analytics is that small float with large valuation would create a dog pile/short squeeze type situation among the funds trying to reflect the SpaceX valuation vs. the whole index valuation - 1.8T vs 70T ratio would be 50B of float vs. 2T where is total of index funds is much larger than 2T, and that is even without accounting for retail investors and other, non-index funds, who will buy a part of float too thus reducing further the float available to the index funds. Such squeeze situation would lead to stock price rise leading to valuation rise, ....
>To people in the financial industry, it's fait accompli.
of course, they've engineered a new way of making even more money. The pile of passive money in ver low expenses index funds obviously have been a fat target for them.
>to reflect the market
the described above squeeze is hardly a way to reflect the market