qqq funds will automatically gain exposure to SpaceX once the Nasdaq-100 adds the new stock, as reported by Motley Fool analyst Stefon Walters.
SpaceX is expected to begin trading on June 12 and its IPO is planned to sell 555,555,555 shares at $135 each, which the second Motley Fool piece says would raise about $75 billion.
The company would start with a valuation reported between about $1.75 trillion and over $1.77 trillion, making it one of the most highly valued public companies at listing, according to the articles.
Nasdaq changed its rules to allow a large nonfinancial listing like SpaceX to join the Nasdaq-100 after just 15 trading days, the second Motley Fool report explains.
Market Impact And Investor Considerations
The quick inclusion means Invesco ETFs that track the Nasdaq-100 such as the Invesco QQQ Trust and the Invesco Nasdaq-100 ETF QQQM will gain immediate exposure whenever the index adds SpaceX, as Stefon Walters noted.
That exposure could lift returns if SpaceX trades strongly, the Motley Fool commentary says, and the Invesco QQQ ETF has already risen about 17 percent this year, outperforming the S&P 500, which the source reports is up around 8 percent so far.
However, Motley Fool writer David Jagielski warns that adding SpaceX may raise volatility and valuation pressure for Nasdaq-100 trackers because SpaceX is expected to remain unprofitable for the foreseeable future.
Jagielski also notes that the Invesco QQQ Trust appears expensive by one measure, with a reported price to earnings ratio averaging about 36, and that the ETF can suffer heavy losses in market downturns.
The articles cite 2022 as an example, when the S&P 500 fell about 19 percent while the Invesco ETF fell about 33 percent, illustrating the risk for investors who cannot tolerate steep drawdowns.
Investors should also note the S&P 500 index kept its existing rules and will not fast track SpaceX, the second Motley Fool article reports, and the S&P requires at least a year of trading, sustained profitability, and a required public float for inclusion, according to Dow Jones Indices commentary cited there.
Finally, the first article provides a snapshot of current trading metrics for the Invesco QQQ Trust, listing a reported intraday change of negative 1.15 percent, a decline of $8.24, and a current price of $707.83, as presented by David Jagielski.
