In a definitive move, S&P Global stated on Thursday that it will not alter the inclusion criteria for its primary indices, effectively rejecting a request for the world's largest-ever IPO candidate, Elon Musk's SpaceX, to gain rapid entry into the benchmark S&P 500 index. This decision represents a significant setback for SpaceX, which has been attempting to rewrite the traditional IPO rulebook.
S&P's Unyielding 'Profit Mandate'
A core rule, which S&P Global is maintaining, stipulates that a company must meet stringent profitability requirements for S&P 500 inclusion: it must report positive net income based on Generally Accepted Accounting Principles (GAAP) for the most recent quarter and for the cumulative sum of the most recent four quarters. SpaceX's financials clearly fall short. In 2025, despite a 33% increase in revenue to $18.67 billion, the company recorded a substantial net loss of $4.94 billion. S&P Global explicitly stated that exemptions from requirements concerning financial viability, listing history, and investable weight factor "should not be granted based solely on size." This directly refutes prior market speculation that a mega-IPO could receive a fast-track exception.
The S&P 500 is the most widely tracked benchmark on Wall Street, representing the core of U.S. large-cap stocks. Had the rules been modified to allow SpaceX's inclusion, passive index funds managing trillions of dollars in assets would have been compelled to purchase significant quantities of SpaceX stock, a massive capital boon for the company. However, S&P chose to uphold the integrity of its rules, refusing to make an exception based on market capitalization alone. Art Hogan, Chief Market Strategist at B. Riley Wealth, commented on the decision, stating, "S&P Dow Jones Indices' adherence to a rules-based approach, ensuring profitability before inclusion, underscores its credibility. Granting an exemption simply because a company is large, has been private for a long time, and is not yet profitable doesn't seem entirely reasonable."
SpaceX's IPO plans have diverged from the traditional path from the outset. Musk has sought to rewrite the playbook on multiple fronts: aiming for a greater role for retail investors in the allocation, pushing for early inclusion in major indices, and designing a governance structure to maintain strong founder control. The company is raising $75 billion, targeting a valuation as high as $1.75 trillion—a figure that would place it directly among the top ten most valuable U.S. public companies, despite only a tiny fraction of its shares being available for public trading initially.
Nevertheless, S&P's hard profitability requirement has become the primary obstacle to Musk's "index ambitions." Even with a valuation rivaling tech giants, SpaceX's persistent, substantial losses prevent it from clearing the most basic screening hurdle for the S&P 500.
Nasdaq and FTSE Russell: Divergent Strategies Among Index Providers
In stark contrast to S&P's cautious stance, other index providers have proactively adjusted their rules to accommodate mega-IPOs. Nasdaq has previously amended its rules to make it easier for SpaceX, Anthropic, and other newly listed large companies to join its Nasdaq-100 index. This means that once SpaceX goes public, Nasdaq-100 index funds will be forced to buy a significant portion of the publicly tradable SpaceX shares.
Furthermore, under new fast-track inclusion rules announced by index provider FTSE Russell, SpaceX is already eligible for inclusion in the Russell U.S. Equity Indexes and the FTSE Global Equity Index Series. S&P Global itself has announced it will modify rules for its broader S&P Total Market Index and Dow Jones U.S. Total Market Index, creating a path for SpaceX to be included in these indices with smaller tracking scopes. This indicates a competitive divergence among index providers regarding inclusion rules for "mega-IPOs." Nasdaq and FTSE Russell are seeking to attract more liquidity by lowering barriers, while S&P is choosing to uphold traditional profitability standards to maintain index quality.
Exchange operators have recently intensified efforts to promote initial public offerings, against a backdrop of highly valued tech companies—like SpaceX, AI giant Anthropic, and OpenAI—inching closer to public listings. Concurrently, the ongoing decline in the number of U.S. public companies has raised widespread market concerns. Lowering index inclusion barriers to attract mega-IPOs is seen as a crucial means to invigorate capital market activity. However, S&P Global's decision demonstrates that not all index providers are willing to sacrifice standards for scale.
For SpaceX, while immediate entry into the S&P 500 is off the table, it can still gain allocations from passive funds through other indices. The fundamental question that remains is: given its ongoing massive losses, can SpaceX achieve profitability swiftly after going public to eventually unlock the door to the S&P 500? This will be a focal point for the market in the coming years.
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