Nasdaq's Shame

6 hours ago

Nasdaq proposes changes to its index methodology to favor immediate inclusion of large IPOs like SpaceX.
New 'Fast Entry' rule allows companies to join the Nasdaq-100 index after just 15 trading days, bypassing standard liquidity and seasoning requirements.
A '5x Multiplier' for low-float stocks artificially inflates their index weight, potentially forcing passive funds to overpay during a liquidity squeeze.
The proposed changes could benefit corporate insiders by timing lock-up expirations with index rebalances, creating forced buying pressure.
Criticism centers on Nasdaq's potential conflict of interest in attracting high-profile listings like SpaceX at the expense of market integrity.
The article suggests these changes may distort price discovery and disadvantage passive investors.

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