Space Exploration Technologies landed in the Nasdaq-100 on July 7, and Morgan Stanley followed with a $300 price target on the same day. The stock was still falling, though, even as exchange-traded funds tied to the index, including the Invesco QQQ Trust, prepared to start buying shares.
That matters because the Nasdaq-100 tracks the 100 largest non-financial companies listed on the Nasdaq stock exchange, and inclusion can force index funds to adjust quickly. Space Exploration Technologies entered after its 15th trading day, a fast-track move made possible by newer rules for large IPOs, and its size gave it the kind of weight that can move a benchmark even before the float opens up fully.
The catch is the float. Space Exploration Technologies has a market value of around $2 trillion, but only about 5% of that is freely tradable right now. Even so, the stock should clear the Nasdaq-100’s free-float threshold, which means passive funds will still need to buy enough shares to match its index weight. Because the company is already the world’s seventh-most valuable, that buying could be meaningful even before more shares unlock.
What makes the setup unusual is how much supply is still locked away. Elon Musk and other significant investors agreed to hold shares for at least 366 days after May 20, when the Form S-1 was filed with the Securities and Exchange Commission, while Space Exploration Technologies is also planning a tiered release of early-release-eligible shares over the next 180 days. Twenty percent becomes available two days after the release of results for the quarter ended June 30, up to 30% can open if the stock trades at least $175.50, and all of those early-release shares are due to be available by Dec. 9.
That leaves the market with a stock that index funds must buy, analysts are lifting, and traders are still pushing lower. The immediate question is not whether Space Exploration Technologies gets added demand from the QQQM family of Nasdaq-100 trackers — it does — but how much of that demand arrives before the next wave of shares starts to loosen the float. For now, the index inclusion is real, the target is higher, and the market is pricing the gap between them.
