Many investors are asking themselves whether a future SpaceX IPO could become a major risk factor for their S&P 500 ETF portfolios.
The numbers suggest something very different: even if SpaceX reaches a valuation of $1.75-2 trillion, only a small portion of the company is expected to be publicly traded. Because the S&P 500 uses float-adjusted market capitalization, SpaceX would likely represent only about 0.08-0.12% of the index - roughly $80-120 in a $100,000 SPY, VOO, or IVV portfolio.
Now consider the nightmare scenario often discussed online: what if SpaceX crashes 50% after joining the index? The impact on that same $100,000 S&P 500 portfolio would be approximately $40-60, or just 0.04-0.06%.