Investor interest in initial public offerings (IPOs) has greatly increased, due in part to SpaceX successfully launching on June 12, 2026, and follow-up IPOs of OpenAI and Anthropic likely occurring later this year or 2027.1 With so much market buzz, context for this heightened investor focus can be helpful to understand the IPO process dynamics at play and how upcoming IPOs are rewriting the index inclusion rules.
IPO Process Overview
To begin, it can be beneficial to consider the differences between private and public markets. Simply put, private investments are not traded on a public exchange or market, meaning the average investor cannot easily buy them.2
In general, to be able to buy private investments, an investor needs to qualify as either an accredited investor or a qualified purchaser. An accredited investor is someone who meets specific income or net worth criteria set by regulators,3 while a qualified purchaser typically has an even higher level of financial resources. Conversely, in the public markets, if a company’s stock trades on an exchange, it can be easily purchased by almost any investor.4
Another important difference between private and public markets is reporting and regulation requirements. For example, public companies must regularly disclose their financial statements and significant events to the public, whereas private companies are not required to share this information.5
IPO Process Evolution & Impacts
The IPO process was originally established under the Investment Securities Act of 1933. However, the subsequent legislative reforms over the last 25 years have significantly shaped the IPO landscape by increasing transparency and accountability for companies seeking to go public.6
The Sarbanes-Oxley Act of 2002, for example, required companies pursuing an IPO to implement stricter internal controls and undergo more rigorous audits, increasing both preparation time and costs.7 This act also mandated regular certification of financial statements by senior executives and introduced heightened penalties for misreporting.
Why Go Public?
Considering the extra effort and expense required for public companies to adhere to more onerous rules and regulations, one might wonder why companies decide to go public. The primary reason is to raise capital in the public markets by selling stock ownership in the company.8 This additional capital can be used to invest in new product development, send a rocket to Mars, or acquire other businesses to accelerate growth.9
A secondary reason is to provide early investors with a way to monetize their investments, often referred to as an “exit.”10 In addition, going public allows other shareholders, like employees who receive compensation in stock, an opportunity to gain liquidity in their holdings and to realize the value of their equity compensation.11
How IPOs Work With Syndicates
The IPO process is typically managed by a group of investment banks, collectively called the underwriting syndicate (syndicate).12 This syndicate is run by the lead underwriter, i.e., the investment bank earning the most fees, and other co-underwriters that play a smaller role but support the process.13
One of the first major steps is preparing the S-1 filing, which is a detailed registration document required by regulators that offers investors a thorough look at the company.14 The S-1 will include the business story (how the company plans to generate revenue), audited financials showing profit or loss, risk factors (potential challenges or uncertainties), the use of proceeds (how the funds raised from the IPO will be spent), and the ownership structure.15 Since private companies are not obligated to disclose their financials, the S-1 is often the first opportunity for investors to gain an in-depth understanding of the company’s operations,16 revealing what drives revenue and internal costs.
The syndicate also plays a pivotal role in marketing the company to investors and helping to determine the pricing of the offering. This marketing (often called a roadshow) is generally targeted at institutional investors, such as mutual funds, hedge funds, or large clients of the investment banks, who are expected to purchase the largest portion of shares.17
In most IPOs, the majority of shares available in the public offering are allocated to these large investors, while a much smaller share is allocated to retail investors.18 The combined interest from both institutional and retail investors is used to determine the pricing for the deal. The company generally seeks to raise the highest dollar amount with the fewest shares offered, i.e., a higher price per share, while the investment banks aim for an IPO price that encourages more demand for shares than supply, helping to support the stock’s price after the IPO is complete.19
Ultimately, the syndicate attempts to balance the interests of the company and investors to increase the chance of a successful public offering.20
The Role of Private Equity in IPOs
Traditionally, the IPO process was designed to give smaller companies access to public capital markets, enabling them to raise funds from new investors to support growth with the goal of eventually becoming a large cap company.
Over time, this dynamic has shifted as private equity (PE) firms have stepped in to provide capital to private companies outside of public markets.21 The growth in PE markets has allowed companies to remain private longer while still securing substantial growth funding.22
As a result of these changes, staying private has become more appealing, especially since public companies must follow stricter reporting rules and regulations.23 Consequently, when these companies finally decide to go public, they often debut as large cap companies right from the start.24 For instance, the current private market values of SpaceX, OpenAI, and Anthropic would rank these companies in the top 15 of the largest U.S. publicly traded companies today.25
Index Providers & the Changing Landscape
The increased size of these IPOs creates a new issue for index providers. Typical requirements for a company to be included in an index, such as the S&P 500, have included a 12-month trading period after the IPO, profitability based on U.S. GAAP reporting standards, and a meaningful public float (shares available to trade).26 These requirements are designed to safeguard that companies included in major indexes are stable, transparent, and have sufficient liquidity,27 which helps protect investors and maintain the integrity of the index. Under these rules, even companies with large IPOs (such as Facebook in 2012, which debuted with a market cap of $104 billion and was the largest tech IPO in history at the time), have to wait a year before being included in S&P stock indexes.28
However, the anticipated IPOs of SpaceX, OpenAI, and Anthropic are so massive (combining to nearly $3.5 trillion of market value29) that index providers are rethinking their rules.
One key rule being considered is the waiting period, which is the time before a newly public company can be added to an index. In particular, some index providers are carving out exceptions to the waiting period for mega cap companies, which are defined as companies with market capitalization of at least $200 billion.30
NASDAQ, which previously required companies to wait three months before inclusion, announced on May 1, 2026 that it will now allow companies whose market cap places them among the top 40 holdings of the NASDAQ 100 to be added after just 15 trading days.31 In contrast, the S&P Dow Jones Indices announced there would be no changes to the criteria for S&P 500 inclusion and related indexes.32
As a result, SpaceX is expected to be included in the NASDAQ index roughly a year before it will join the S&P 500 index. As index providers compete to stay relevant and represent the broad market, consider monitoring if those indexes with longer waiting periods for mega cap IPOs adapt to allow shorter timelines set by other indexes.
How Forvis Mazars Can Help
It’s a countdown to ignition for mega cap IPOs from companies like SpaceX, OpenAI, and Anthropic. These tech juggernauts are not only fueling investor interest in IPOs, but also prompting major changes in index inclusion rules.
The team at Forvis Mazars Private Client can help manage complex financial matters so you can pursue what’s important to you. From wealth management to consultative tax and more, our professionals are ready to assist with your financial strategy. For more information, please reach out to the team at Forvis Mazars Private Client.
- 1 “SpaceX Closes Up 19% - Secures MSCI, FTSE Fast-Track Index Inclusion,” finance.yahoo.com, June 12, 2026.
- 2 “Accredited Investor Definition and Private Securities Markets, IF11278.1,” congress.gov, August 1, 2019.
- 3 “Accredited Investors,” sec.gov, 2026.
- 4 “Investor Bulletin: Investing in an IPO, sec.gov, 2026.
- 5 Ibid.
- 6 “Sarbanes-Oxley Act Summary: Key Provisions and Requirements,” legalclarity.org, April 1, 2026.
- 7 Ibid.
- 8 “Accredited Investor Definition and Private Securities Markets, IF11278.1,” congress.gov, August 1, 2019.
- 9 “The IPO Process Step by Step: Timeline, Requirements, and What to Expect,” vcbeast.com, April 4, 2026.
- 10 “Investor Bulletin: Investing in an IPO, sec.gov, 2026.
- 11 Ibid.
- 12 “The IPO Process Step by Step: Timeline, Requirements, and What to Expect,” vcbeast.com, April 4, 2026.
- 13 Ibid.
- 14 Ibid.
- 15 Ibid.
- 16 Ibid.
- 17 “Investor Bulletin: Investing in an IPO, sec.gov, 2026.
- 18 Ibid.
- 19 Ibid.
- 20 “Accredited Investor Definition and Private Securities Markets, IF11278.1,” congress.gov, August 1, 2019.
- 21 Ibid.
- 22 Ibid.
- 23 “Sarbanes-Oxley Act Summary: Key Provisions and Requirements,” legalclarity.org, April 1, 2026.
- 24 “SpaceX IPO Is Forcing Changes to Index And Underwriting Rules,” forbes.com, April 25, 2026.
- 25 Ibid.
- 26 “The SpaceX IPO is Days Away: Could the Stock Join the S&P 500, and How Soon?,” fool.com, June 10, 2026.
- 27 Ibid.
- 28 Ibid.
- 29 “SpaceX Just Had the Biggest IPO In History. Here’s What It Tells Investors About Buying Anthropic and OpenAI When They Go Public,” finance.yahoo.com, June 1, 2026.
- 30 “SpaceX IPO Is Forcing Changes to Index And Underwriting Rules,” forbes.com, April 25, 2026.
- 31 Ibid.
- 32 “S&P Dow Jones Indices Consultation on Treatment of MegaCap Companies – Results,” press.spglobal.com, June 4, 2026.
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