Is Wall Street Rigging the Game for SpaceX? Plus, What Investment Banking Really Teaches You

**Scott Galloway** (0:01)
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**Scott Galloway** (1:39)
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All right, let's bust into it. Our first question comes from a listener who e-mailed us. Why aren't more alarm bells going off about the rule changes such that SpaceX can get into the Nasdaq and the next month will be forced to buy shares? It seems like corruption to me. Also, the fact that there's no recourse against Elon, no matter how atrocious his behavior may become. Thanks. Okay, some context here. Major stock indices are rewriting their inclusion rules specifically, if not explicitly, to accommodate blockbuster IPOs. SpaceX must immediately, but OpenAI and Anthropic are also in the pipeline for 2026 For the Nasdaq 100, their new fast entry rules mean mega cap stocks can be added to the index just 15 trading days after their IPO, down from the historic seasoning period of three months. This applies to companies with market cap ranking within the top 40 members of the Nasdaq 100, and fast entry inclusions won't require an already listed security to be dropped, allowing the index to temporarily exceed 100 constituents. FTSE Russell also changed rules to allow faster inclusion of mega cap IPOs in the S&P 500 The S&P considered shortening the seasoning period, waiving minimum flow requirements and removing its profitability requirement, but ultimately said it wasn't making any changes, dealing a setback to SpaceX. They're keeping the traditional bar, 12 months public plus four consecutive quarters of gap profitability. So what is some of the impact of this change? More than 30 trillion in assets are benchmarked in the S&P 500, Dow Jones, Nasdaq Composite and FTSE Russell Indices. Analysts estimate conservative forced buying of 15 to 30 billion across S&P 500, Nasdaq 100, blah, blah, blah, blah, with more aggressive float-weighted scenarios running far higher or see above being forced to buy these things. Goldman Sachs analysts estimated the Nasdaq fast entry role change alone could trigger up to 60 billion in forced buying across Nasdaq 100 Okay. So I think a lot of the pushback here is people, like I'm a hammer, everything I see is a nail. I think it's income inequality. I think people are just so sick of these people and the amount of money they're making and when they see these outrageous valuations that are difficult to justify and that all of the shareholder gains from zero to a trillion have been captured or in the case of SpaceX trying to go out to retail investors in 1.8 trillion, that all of that juice has been squeezed by private institutional investors and the IPO market has in fact become sort of the last stop on the chump train and that is when Google in public, I think it was an 80 billion dollar market, it's up 500 fold, retail investors have had a chance to garner a tremendous 500 extra return if you get that from SpaceX after it goes public, what would that be? 2 trillion? That'd be, I don't even know what is that, a gazillion? I don't know what that is. So I think people are naturally pissed off and they vent their anger anyway. I don't think any change is an opportunity to ship post these companies. I don't think waving the rules here is necessary. I'm not as excised about that because at the end of the day, these indices are meant to be a reflection of the most important, largest market cap companies. And all three of these companies already are that. If Anthropic was founded 5 years ago, if it had been founded in Europe, it'd be one of the 5 most valuable companies in Europe. So I think including them in these indices, I think can make a pretty rational reason for it. And being forced to buy these companies like you're some victim. Well, you're forced to buy Monsanto, who brought us Agent Orange, at least I think you are. I wonder if Philip Morris is in the S&P 500 Anyways, my point is, these indices probably include a lot of companies that on your own you wouldn't buy shares in. That's why it's an index. It does bring up an interesting point in that, is it unfair that a new public company gets juiced beyond its public market reception because it's automatically included in these indices? Should it go through a hazing period where it shows its fair value once retail investors have some time to play with it before you decide whether it should go into the index? I think that's a viable argument.