SpaceX is set to officially join the Nasdaq 100 index, giving investors new exposure to the stock while triggering billions of dollars in automatic purchases by index funds. The company’s inclusion in the Nasdaq 100 marks a new chapter in the stock’s closely watched post-IPO journey.

Nasdaq 100 Index

The Nasdaq 100 is an index tracking the 100 largest non-financial stocks traded on the Nasdaq exchange. SpaceX debuted for trading on the Nasdaq and Nasdaq Texas exchanges on June 12. The Nasdaq 100 is a tech-heavy index and often includes companies with high growth prospects.

Recent changes to index methodologies to accommodate mega-sized initial public offerings have enabled SpaceX shares to be fast-tracked into different stock market indexes. SpaceX has already joined benchmark indexes offered by FTSE Russell and MSCI, two other major index providers.

Investor Impact

Funds that track the Nasdaq 100 have to buy SpaceX in order to continue mirroring its performance. That means investors who hold Nasdaq 100-related funds will automatically gain exposure to SpaceX. For some investors, CEO Elon Musk has become a polarizing figure. Other investors might be skeptical of SpaceX’s valuation.

Analysts at Morningstar value the company at half of its IPO debut, with one forecast suggesting intense volatility. Since SpaceX will not be eligible for inclusion in the S&P 500 for at least a year, buying the S&P 500 would be one of the simplest methods for those investors who wish to avoid SpaceX.

Original reporting: El Paso News (HLL/CB) — read the source article.