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andriy_koval • today at 5:41 AM • 1 reply • view on HN

mechanical buying in your link is 17.5B for initial 555M shares. 9nb is some creative napkin math.

Now, since than, spacex float increased from 555M shares to 4.3B.


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JumpCrisscross • today at 5:44 AM

> mechanical buying in your link is 17.5B

No, that's the upper end of what it could possibly be. It's what would happen if every manager in the first days after the IPO immediately bought the share. Most indices don't work that way, they rebalance over time, in part to avoid this sort of crowding. (They also have latitude to accept and reject index specifics, e.g. around buying new issues.) Managing tracking error against transaction cost is the whole business of passive management.

Also, let's use $17bn in forced buying–globally–and $12bn domestically. That's just not enough to move anything. It's also a vanishing percentage of total index assets. You're again talking about 0.04% of index assets going to what remains a multi-trillion dollar asset.

> spacex float increased from 555M shares to 4.3B

How is this relevant to the argument?

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