SpaceX (SPCX.US) stock price consolidates while waiting for a breakthrough: The reset of the Nasdaq 100 weightings is imminent, with $15.5 billion in buy orders poised to surge.

Notably, SpaceX (SPCX.US) stock has recently been in a narrow trading range, but with the upcoming quarterly reset of the Nasdaq 100 index's weights later this month, a new wave of buying may soon arrive. The key lies in a little-known provision in the index's compilation rules, which focuses on tech stocks. Coupled with the staggered lock-up expiration faced by shareholders of Elon Musk's satellite and space exploration company, this has jointly limited the number of shares available for trading. When Nasdaq determines a company's weight in the index, it calculates based on the company's market capitalization, comparing it against three times its total outstanding shares or its freely tradable shares, selecting the lower of the two. This means that stocks with a smaller free float (after excluding insider holdings or stocks under lock-up) will not have their entire market capitalization used in the weight calculation. Due to lock-up restrictions, SpaceX has a relatively small free float, resulting in its weight in the Nasdaq 100 index being only 1.25%, ranking 19th, despite its market cap of over $2 trillion, which ranks sixth in the index. Billions of shares of SpaceX stock will unlock next year. However, after the next weight reset of the index, this weight is expected to rise. The results of the reset are scheduled to be announced after the market closes on Friday and will take effect on September 21. This is partly due to the fact that over 1 billion shares have already been freed from lock-up restrictions, increasing the free float to nearly 30% of SpaceX's total shares, up from less than 10% when the IPO was just completed. According to estimates from a team of strategists led by Min Moon at Morgan Stanley, after the reset, SpaceX's weight could reach 2.25%, which would force index funds and ETFs to bring in $15.5 billion in passive net buying. According to Nasdaq data, as of the end of the second quarter, about $1.7 trillion in assets track the Nasdaq 100 index, including the Invesco QQQ Trust Series 1 ETF, better known by its ticker symbol QQQ. As more SpaceX shares become unrestricted over the next year, the company's free float will continue to increase, meaning its weight in the Nasdaq 100 index could rise further. Ed O'Gorman, CEO of River Wealth Advisors, said, To some extent, the market price here will be pushed by forced buying, adding, I think its going to take some time before you can really see what the markets true sentiment is on this stock. After a sensational record-breaking IPO in June that led to weeks of volatility, SpaceX's stock price has settled down. For the past four weeks, the stock has been range-bound, holding between $133 and $150, just around its IPO issuance price of $135. In the short term, the lack of fundamental catalysts may mean that the index weight reset could provide the necessary momentum for a breakout in the stock price. Steve Sosnick, chief strategist at Interactive Brokers Group, Inc. Class A, stated, Either newly unlocked shares will be sold due to anticipated buying, or the massive increase in demand from index funds will push the stock price higher, adding, It should receive more demand from QQQ and similar funds. Nasdaq is not the only index provider that calculates weights this way. S&P Dow Jones Indices, which manages the S&P 500 index, also uses free float-adjusted market cap to determine weights for some of its indices. Two years ago, when Berkshire Hathaway significantly reduced its stake in Apple Inc., it increased the free float value of Apple Inc. stock, leading Piper Sandler analysts to estimate that this would prompt passive funds to bring in $40 billion worth of buying. Although SpaceX was included in the Russell 1000 index in June, the S&P 500 index rules require stocks to have at least one year of trading history before being included. Thus, it wont qualify for inclusion until at least mid-2027. The initial lock-up expiration in August coincided with its first earnings release, when the theory of a sudden supply increase overwhelming demand raised market concerns about a large-scale sell-off. However, after the second release a week later, this sell-off did not materialize, as insiders largely retained their equity, which boosted investor confidence and supported the stock price. By the end of October, over 1 billion shares will be freed from lock-up, and after the company releases its third-quarter earnings in mid-November, an additional 1.3 billion shares will become eligible for trading. O'Gorman of River Wealth stated, More significant eventsthe ones that really matterwill only occur when the third-quarter earnings trigger the release of lock-ups in November, at which point there will be a massive influx of shares into the market.