The S&P 500 said no to SpaceX. The biggest IPO in history. The rocket company that actually works. Denied.
Index fund investors just learned something brutal. The people managing trillions in retirement money looked at SpaceX stock and decided it wasn't qualified. Failed to meet the standards. Did not pass the test administered by the same committee that said yes to Spirit Airlines six times.
SpaceX lands rockets on floating platforms in the ocean. Returns them to Earth like boomerangs. Launches satellites faster than Tesla recalls cars. But the S&P 500 index committee took one look at the financials and said we're going to have to go in a different direction.
Your retirement account owns seventeen different pharmaceutical companies that haven't made a profit since Clinton's first term. It owns three separate airlines that required government bailouts in the last four years. It owns retailers that sell exclusively to people who think QR codes are witchcraft. But it cannot own the company with a monopoly on affordable space travel.
The index fund managers made a big call. They called it risk management. They called it fiduciary responsibility. They called it protecting your future.
What they actually called it was we don't understand the business model and we're not going to start now.
Retail traders are furious. They're screaming about missed opportunity. They're writing Reddit posts with rocket emojis. They're calculating how much wealth the index funds left on the table.
They should be writing thank-you notes. The S&P 500 just saved them from themselves. Gave them one less way to accidentally make money. Kept their portfolios precisely where they belong: safely diversified across companies that peaked during the Reagan administration.
SpaceX will go public without them. The stock will do whatever it does. And index fund investors will watch from the sidelines, clutching their Vanguard statements, wondering why their retirement accounts only go to companies that need the f*cking money.
Photo by Olha Ivanova on Unsplash
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