Good thing is that index funds don't hold stocks at market capitalization but only at free float value. So a company whose shares are mostly held by founders, employees, and strategic investors gets a weight well below its headline valuation.
Good thing is that index funds don't hold stocks at market capitalization but only at free float value. So a company whose shares are mostly held by founders, employees, and strategic investors gets a weight well below its headline valuation.
Most don’t. The one that is the center of much of the controversy around these IPOs, NASDAQ-100, doesn’t use float adjustments.
A lot of people have been using it to passively invest in AI (via QQQ).
It’s nonsensical for a variety of reasons but we live an era of the stock market just being another casino…