10 May When More is More

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April 2026 Insights

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When More is More

2026 is shaping up to be a landmark year for IPOs. The term “unicorn” was coined in the early 2010s to describe startups valued at over $1 billion, a threshold that once seemed extraordinary. That label may soon feel quaint: companies widely seen as near-term listing candidates, such as SpaceX, OpenAI, and Anthropic, could debut at public market capitalisations above $1 trillion. That would place them among the ten most valuable companies in the S&P 500 from day one, leapfrogging long-standing giants like Berkshire Hathaway, Walmart, and JPMorgan Chase. The only modern listing on a comparable scale is Saudi Aramco at roughly $1.7 trillion, a state-controlled monopoly on some of the world’s most abundant and economically exploitable oil fields.

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However, major IPOs like these create a structural problem for index providers. To ensure benchmarks remain ‘representative,’ providers are aggressively relaxing their inclusion criteria. Nasdaq has already implemented a ‘Fast Entry’ rule that slashes seasoning requirements, the minimum period a stock must trade publicly before qualifying for index inclusion, from 3 months to a mere 15 trading days and, crucially, removed the 10% minimum free-float requirement, meaning at least 10% of shares no longer need to be available for public trading. To muddy the waters further, a new methodology allows a company’s index weight to be calculated at three times its actual public float. For a low-float giant like SpaceX, this creates a demand-supply imbalance as passive trackers are contractually forced to bid for a massive allocation from a tiny sliver of available shares.

According to PitchBook data, the combined IPO capital raised by these three firms could top $100 billion. Whilst that is currently only about 0.15% of the S&P 500’s market capitalisation, this can exacerbate a short-term pull on liquidity just as index trackers sell down other holdings to build positions in the new listings. These dynamics risk turning index funds into a forced exit ramp for insiders and venture backers, who can offload shares at inclusion-driven prices before the market has a chance for real price discovery.

But for High Street investors, more listings are simply more options, and optionality is an advantage. As an active manager, we are not mechanically required to own a stock because it entered an index, nor to buy it on a set date at a set weight. We can wait out inclusion effects, build positions as liquidity improves, or pass when float constraints or valuation make the risk/reward unattractive. Also, more public listings continue to increase the quality of information available across these industries. More frequent reporting and clearer disclosure give better visibility into unit economics, competitive dynamics, and signals for adjacent sectors, which ultimately means more grounded decisions for High Street investors.

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Source: High Street Asset Management, OpenAI, Anthropic, LSEG and Reuters.
Unless otherwise stated, all performance and statistical figures provided in this article have been pulled from Bloomberg by the High Street Asset Management Research Team on 5 May 2026 and all the images provided in this article have been sourced from FreePik and have been used in line with their Acceptable Use Policy. The contents of our newsletters are frequently sourced from or verified through our various product providers and other third parties. Although every effort is made to ensure the accuracy of the information contained in the newsletter, it should not be construed as financial advice as defined in the Financial Advisory and Intermediary Services Act. Links are provided to third-party websites for convenience only. High Street Asset Management (Pty) Ltd cannot accept responsibility and does not endorse any information contained on a third-party site. For our full disclaimer, please see: https://hsam.co.za/legal/.

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© High Street Asset Management (Pty) Ltd. All rights reserved | FSP No. 45210 | Legal Disclaimers

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