June 5 (Reuters) - SpaceX's entry into the S&P 500 will

take longer after S&P Dow Jones Indices declined to relax rules

for megacap IPOs, delaying billions in passive fund inflows from

the potential inclusion.

The decision keeps several barriers intact. To join the S&P

500, a company must trade publicly for at least 12

months, be profitable under U.S. accounting standards and hold a

free float of at least 10%. SpaceX, expected to debut on June

12, meets none.

The company that runs the S&P 500 index said on

Thursday it was not changing the requirements for entry into its

major indices, in contrast to other index providers Nasdaq and

FTSE Russell, which have tweaked their requirements recently.

Here's what that means for SpaceX as it approaches its

market debut:

WHAT ARE S&P'S CRITERIA AND WHERE DOES SPACEX STAND?

A company needs to trade on public markets for at least 12

months before it is even considered. That means SpaceX would not

be eligible before June 2027 at the earliest for entry into any

S&P indexes.

S&P requires a generally accepted accounting principles

(GAAP) profit in the company's most recent quarter and across

the trailing four quarters. SpaceX posted a net loss of $4.94

billion in 2025, while revenue rose 33% to $18.67 billion. It

has never been profitable.

The current metrics imply a free-float of 3%-4%, according

to Reuters calculations, far below S&P's requirement of at least

10%.

SpaceX clears S&P's rule of $22.7 billion minimum market

capitalization or more, having targeted a valuation of $1.75

trillion in its initial public offering.

WHAT PASSIVE INFLOWS WERE EXPECTED?

J.P.Morgan in a May 11 note estimated that SpaceX would have

drawn about $10 billion of passive inflows on S&P inclusion,

assuming a $2 trillion market cap and a 5% float, and would

carry a weight of roughly 0.15%.

On the same assumptions, Russell 1000 inclusion would

draw about $4 billion and Nasdaq 100 about $4.3 billion.

WHAT ARE SPACEX'S CHANCES OF JOINING S&P 500 NOW?

For the S&P 500, not before June 2027, and only if it also

turns profitable and lifts its float above 10%. The Nasdaq and

FTSE Russell have shortened their trading-history requirements,

opening a faster route into the Nasdaq 100 and Russell indexes.

A Nasdaq listing would place SpaceX in the broad Nasdaq

Composite automatically. Because the Composite is

tech-heavy, the addition could widen performance gaps between

Nasdaq trackers and the S&P 500.

"Every retail investor holding an S&P 500 ETF in their

401(k) would become an involuntary SpaceX shareholder,

regardless of whether they believe in the story, understand the

business, or are comfortable with the risk of a $1.75 trillion

unprofitable company," said Jay Woods, chief strategist at

Freedom Capital Markets.

"The index wasn't designed to do that. It was designed to

reward companies that have already earned their place through

profitability, staying power, and the patience of real markets."

WILL THIS THREATEN S&P 500'S DOMINANCE?

The Nasdaq and FTSE Russell have already changed their

methodologies to fast-track large IPOs into their indexes,

raising the question of whether institutional benchmarking could

shift away from the S&P 500.

"The omission of SpaceX in the S&P 500 is just not a strong

enough incentive to drive institutions to... change their

benchmarks," said Peter Andersen, founder of Andersen Capital

Management, in Boston. Institutional benchmarks are too

deliberately constructed to be reset over a single absent stock,

Andersen said.

The S&P 500 is widely considered to be the benchmark for

U.S. equities with more than $20 trillion in assets tracking the

index, compared to the Nasdaq 100's $1.4 trillion.