Nearly $100 billion of selling pressure imminent! The largest IPO in U.S. stock market history is coming, but the Mag7 are in danger.

```

SpaceX, OpenAI, and Anthropic—three tech giants—are crowded together in plans to go public, coupled with Nasdaq's newly introduced "fast-to-index" mechanism, brewing an unprecedented massive reshuffling of passive capital.

On Wednesday, Elon Musk's SpaceX officially filed for IPO, expected to become the largest IPO in history. On the same day, OpenAI's listing plans surfaced, and rival Anthropic also announced it is about to turn profitable, actively paving the way for its own listing. The concentrated efforts of these three giants have put Wall Street on high alert.

The market's main concern is the impact on current index constituents. SpaceX's target valuation is $1.75 trillion; JPMorgan calculates that if 50% of its shares end up tradable and its valuation reaches $2 trillion, passive funds will have to sell about $95 billion worth of holdings in the eight major Wall Street tech stocks (Nvidia, Apple, Microsoft, Amazon, Google, Broadcom, Meta, Tesla) to make room, with the affected range highly overlapping with the "Mag7".

The driving force behind this rearrangement is Nasdaq's rules change that just came into effect this month. To compete for SpaceX’s listing resources and suppress rival NYSE, Nasdaq significantly loosened its index inclusion criteria, allowing SpaceX to join the Nasdaq 100 Index just 15 days after its IPO. S&P Dow Jones Indices is also soliciting feedback on similar revisions, which may smooth the way for SpaceX’s fast inclusion into the S&P 500 Index.

Hundred-Billion Selloff: Mag7 as the Biggest Outlet

JPMorgan’s calculations reveal the potential impact of this capital reshuffling on current index constituents. If SpaceX reaches the above valuation and tradability goal, passive investors would need to sell about $95 billion of the eight major tech stocks to accommodate SpaceX’s share of the index.

Syz Group trading head Valérie Noël stated that around SpaceX’s IPO, the market’s “most heated trading strategies” include: shorting the “marginal index constituents” likely to be dropped from the Nasdaq 100 and betting that current blue-chip stocks will come under downward pressure.

Strategas chief ETF strategist Todd Sohn pointed out that after the IPO, share prices may surge, leaving passive investors with no choice but to buy at high levels. “If SpaceX doubles in the week after going public, passive funds still have to buy—they’ll have to buy at that price… They have no right to refuse,” he said.

Liquidity Dilemma: Small Float Leveraging Trillions

SpaceX’s IPO will initially have a tradable share ratio of about 5%, with lock-up periods to gradually lift within 180 days as per the prospectus. Sohn said this means the index inclusion process will be “somewhat crazy, because ETFs and passive products track assets in the trillions, but only 5% of shares are tradable.”

Citi Markets trading strategy head Christian Raute also warned that the time window between SpaceX’s IPO and its inclusion in the index will be extremely short, making for a “very noisy” situation. “At this scale, it’s a big challenge—share prices may get very expensive,” he said. However, Raute also pointed out that ultimately “the market won’t have problems digesting these IPOs,” and “the whole industry is prepared, and participants are fully trained.”

Faced with this historic capital reshuffle, some institutional investors are very positive. A portfolio manager at a large US hedge fund said: “We will fully participate in all three companies, betting at maximum scale… We are not constrained by liquidity at all.”

For ordinary investors holding index funds or ETFs, this game is harder to avoid: whether actively or passively, their portfolios will be reshaped by the rule changes.

Risk Warning and DisclaimerThe market carries risks; investment must be approached with caution. This article does not constitute personal investment advice and does not take into account the special investment goals, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article fit their specific circumstances. Investing based on this content is at your own risk. ```