NASDAQ 100 QQQ rule change for investors before SpaceX IPO - gets included after 15 days

Link: https://finance.yahoo.com/news/qqq-investors-sell-spacex-ipo-172258757.html

"Invesco QQQ Trust (QQQ) tracks the Nasdaq-100 index, which is considering a ‘Fast Entry’ provision allowing SpaceX to join after just 15 trading days instead of the standard three-month seasoning period"

Essentially, the question we are trying to answer is:

Is SpaceX IPO overvalued? With its ratios right now, yes it is

Will index funds like QQQ be forced to buy it 15 days after IPO? Yes (compare to waiting 3 months before)

This means there will be a surge of capital going from NASDAQ 100 QQQ into SpaceX 15 days after IPO

So while I forecast insider will be selling the stock to cash out, this surge of cash from index funds will lead to maintaining SpaceX's volatile stock price.

So the actual correction should come after the index funds buy in.

Cheers,

Eric

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Eric Seto

Chartered Professional Accountant (CPA)

Chartered Investment Manager (CIM)

Founder of 5MinInvesting.com

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