SpaceX, a leading internet and rocket company founded by Elon Musk, is set to be added to the Russell U.S. indexes after Friday’s close of trading. This move is expected to add billions of dollars’ worth of SpaceX shares to investment funds tracking these indexes.

Impact on Trading

The addition of SpaceX to the Russell indexes may lead to increased volatility in the company’s stock. With a market capitalization of $2 trillion, SpaceX is almost as valuable as Amazon, but only about $100 billion of its shares are listed for trading on the stock market. The rest are owned by Musk, other insiders, and employees.

Passively managed funds will need to buy almost $3 billion worth of SpaceX shares to match the Russell indexes they track, according to a report by Jefferies. This could lead to a squeeze as Friday’s closing auction approaches, although options positioning appears muted.

Valuation and Market Expectations

SpaceX’s stock has been on a wild ride since its initial public offering, soaring 67% to its June 16 intraday high of $225.64 before tumbling to Thursday’s $153 close. The company remains well above its $135 IPO price as investors assess how to value a company that lost $4.9 billion last year but is expected to dominate the satellite internet, AI, and commercial space launch markets.

SpaceX is also set to be added to the tech-heavy Nasdaq 100 in July, which will force large index funds to buy its shares. The company’s valuation is considered astronomical, trading at 107 times its 2025 sales, compared to Nvidia’s 21 times sales.

Original reporting: Appleton, WI News Feed (HLL/CB) — read the source article.