Morningstar updates index rules for SpaceX and unicorns
Morningstar is updating index rules to better integrate large IPOs like SpaceX. New liquidity screens will allow these firms to join benchmarks more quickly.
MORNINGSTAR INC is evaluating a significant overhaul of its index construction methodology as the financial world prepares for the potential initial public offering of SpaceX. This move highlights the growing pressure on index providers to adapt to a new generation of mega-unicorns that enter the public markets with unprecedented valuations and unique liquidity profiles.
The space exploration firm, led by Elon Musk, is reportedly on track to issue as much as $75 billion in stock, a move that could value the company at $1.75 trillion. Such a massive debut in the United States would represent the largest IPO ever recorded, creating a dilemma for fund managers and index providers regarding how to integrate such a dominant entity into existing benchmarks effectively.
