The SpaceX IPO Will Leave Retail Investors Holding the Bag -- Don't Take the Bait

Forget astir the May ostentation report! The astir anticipated lawsuit of the week, if not the year, is slated for Friday, June 12. This volition people the debut of Elon Musk's artificial quality (AI) and abstraction system conglomerate, SpaceX, which is raising $75 cardinal with its archetypal nationalist offering (IPO).

The Dow Jones Industrial Average (DJINDICES: ^DJI), S&P 500 (SNPINDEX: ^GSPC), Nasdaq Composite (NASDAQINDEX: ^IXIC), and Nasdaq-100 person been abuzz up of this historical event. Aside from raising the barroom for the largest-ever currency raise, we've witnessed a flurry of regularisation changes by brokerages and the committees that oversee scale inclusion up of SpaceX's nationalist debut.

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But changes aren't ever made for the betterment of retail investors. A bid of structural shifts connected Wall Street, coupled with a SpaceX prospectus that managed to disappoint already debased expectations, is poised to permission retail investors holding the bag.

The SpaceX IPO is simply a transportation of wealthiness from retail investors to institution insiders

One of the ways Wall Street has failed retail investors up of the SpaceX IPO is by altering the inclusion criteria for respective large indexes.

In an evident effort to tribunal SpaceX to database its shares connected the Nasdaq (NASDAQ: NDAQ) exchange, the Nasdaq-100 changed its methodology to let megacap IPOs "Fast Entry" into the index. These changes, which became effectual connected May 1, shorten the timeline for introduction into the Nasdaq-100 for non-financial companies that would fertile among the 40 largest successful the index. Instead of the emblematic three-month hold to participate the Nasdaq-100, SpaceX tin summation inclusion aft conscionable 15 trading days.

Additionally, the Nasdaq-100 adjusted the inclusion rules for recently nationalist companies with debased floats.

But the Nasdaq-100 isn't alone. The U.S. Russell Equity Index Series shortened SpaceX's inclusion timeline to conscionable 5 trading sessions post-IPO. Five!

S&P Dow Jones Indices, a part of S&P Global, had been considering changes to let SpaceX accelerated introduction into the benchmark S&P 500, but yet decided against amending its inclusion rules.

We've besides witnessed prime brokers throwing age-old minimum relationship requirements retired the model to drum up involvement successful the SpaceX IPO. Fidelity slashed its minimum relationship request for retail investors to enactment successful the upcoming IPO from $500,000 to conscionable $2,000.