> they will be taking a lot of people's 401k's with them
We had that happen in the late 90s/early 2000s with Nortel. Before they collapsed (and infamously devastated their current and former employees' pensions in doing so), Nortel represented a THIRD of the TSX. The TSX responded by capping any individual stock at 10% of the exchange's overall value, with a forced rebalancing in the event that cap is struck.
At this point, that 10% is probably higher than it should be, since it doesn't account for entire extremely-well-funded sectors being caught up in a hype cycle like AI's, the sum of whose component stocks could easily exceed 10%.
The US needs to stop allowing this kind of thing to happen
Agreed. I have no idea how to stop it. People push for legislation and then there is always some loophole that quietly appears.
Forced breakup of any company that gets too big to fail. Give them 1 year to produce and execute a plan to do so or the government takes receivership and does it for them.
I know, I know, I’m delusional.
I'd really love to see a version of this that wouldn't get gutted between wild swings in government sentiment towards corporations (goes for a number of countries, though certainly the US more than most).