S&P Global has decided against modifying the eligibility standards for its flagship stock market indices, a move that effectively prevents SpaceX (NASDAQ:SPCX) from gaining rapid entry into the benchmark S&P 500 despite the company’s anticipated blockbuster public offering.
The decision represents a setback for Elon Musk’s aerospace group, which had been expected to challenge conventional IPO practices through a combination of broad retail investor participation, founder-friendly governance structures and efforts to secure earlier inclusion in major equity indices.
Record-Breaking IPO Plans Draw Attention
SpaceX is currently seeking to raise approximately $75 billion and is targeting a valuation of around $1.75 trillion.
At that valuation, the company would rank among the ten most valuable publicly traded businesses in the United States, despite only a relatively small proportion of its shares being available for public trading.
The scale of the planned offering has intensified debate around whether traditional index inclusion rules should be adapted for exceptionally large newly listed companies.
S&P Rejects Calls for Special Treatment
In its announcement, S&P Global made clear that it would continue to apply its established methodology without granting exceptions based solely on company size.
The index provider stated that “exceptions to the financial viability, seasoning, and IWF (investable weight factor) requirements should not be granted solely based on market capitalization”.
As a result, SpaceX will remain subject to the same admission standards as other companies seeking entry into the S&P 500.
Profitability Requirements Remain a Key Obstacle
Among the unchanged criteria is the requirement that companies must be profitable under Generally Accepted Accounting Principles (GAAP) both in their most recent quarter and on a cumulative basis over the previous four quarters.
That rule presents a significant hurdle for SpaceX.
Although the company increased revenue by 33% to $18.67 billion during 2025, it also reported a net loss of $4.94 billion for the year, leaving it short of the profitability threshold required for S&P 500 inclusion.
Investors Were Consulted on Possible Rule Changes
Prior to making its decision, S&P had sought feedback from investors regarding several potential reforms.
Among the options considered were shortening the minimum public listing period for large companies, relaxing minimum free-float requirements and removing profitability criteria altogether.
Had those changes been adopted, SpaceX could have gained earlier access to the S&P 500, forcing passive index funds that track the benchmark to purchase significant amounts of the stock.
Market Participants Welcome Rules-Based Approach
Art Hogan, chief market strategist at B. Riley Wealth, argued that maintaining existing standards helps preserve the integrity of the index.
“It speaks highly of the credibility of S&P Dow Jones Indices to be rules-based and make sure there’s profitability before entrance to the index,” Hogan said.
“Making exceptions because companies are so large and have been private so long yet are still not profitable, didn’t make a great deal of sense.”
Nasdaq and Other Index Providers Take Different Approach
While S&P has opted to retain its current framework, other index providers have introduced measures designed to accelerate index eligibility for newly listed mega-cap companies.
Nasdaq has already adjusted its rules in a way that could make it easier for SpaceX, Anthropic and other large technology groups to qualify for inclusion in the Nasdaq 100.
When SpaceX eventually joins the Nasdaq 100, funds tracking the index will be required to acquire a substantial portion of the company’s publicly traded shares.
Broader Indexes Remain Open to SpaceX
Although immediate entry into the S&P 500 appears unlikely, S&P Global confirmed it will revise eligibility standards for the broader S&P Total Market Index and the Dow Jones U.S. Total Stock Market Index.
Those changes create an alternative route for SpaceX to gain representation within widely used U.S. equity benchmarks.
In addition, the company has already qualified for inclusion in both the Russell U.S. Equity Indexes and the FTSE Global Equity Index Series under recently introduced fast-entry provisions established by FTSE Russell.
Competition Intensifies for Major New Listings
The debate surrounding SpaceX’s index eligibility comes as stock exchanges and index providers increasingly compete to attract high-profile public offerings.
Several highly valued private technology companies, including SpaceX, Anthropic and OpenAI, are moving closer to public listings at a time when policymakers and market participants remain concerned about the long-term decline in the number of publicly traded companies in the United States.
Against that backdrop, the handling of SpaceX’s eventual market debut is likely to remain a closely watched test case for future index inclusion policies.
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