States Protest Nasdaq, FTSE Russell Over Expedited SpaceX Listing Process
State Officials Urge Nasdaq and FTSE to Pause Rule Changes Pending Risk Review
June 11 (Reuters) - Investment leaders from four large states, including New York, Illinois, Maryland, and Oregon, have pressed Nasdaq and FTSE Russell for details about recent rule changes favoring SpaceX and other megacap IPOs. The officials, who oversee state retirement assets, including passive funds, have raised concerns about the impact that Elon Musk's rocket and satellite communications company could have on other investors through its record-breaking $75 billion debut.
Concerns have been raised about the high volatility and conflicts of interest that could arise from SpaceX's huge valuation and tight governance structure. The officials warn that passive funds are poised to buy billions of dollars of SpaceX shares, depending on when it joins high-profile indexes. Both Nasdaq and FTSE relaxed their entry criteria, such as shortening trading-history requirements, while S&P Dow Jones stuck to tradition.
The letters to Nasdaq and FTSE were signed by New York State Comptroller , New York City Comptroller Mark Levine, Illinois State Treasurer Michael Frerichs, and Maryland Comptroller Brooke Lierman. The officials have requested that the index providers put the rule changes on pause unless they have reviewed risks to investors. They also asked for an explanation of how Nasdaq balanced internal tensions and whether any companies, including SpaceX or its advisers, played any role in the development of the new rule.
