I wonder if profitable means that investment must be recouped or just if your operational expenses must be compensated by your earnings.
Anthropic is becoming "profitable" while burning a series H of 69 bns usd. Does it count as profitable?
I'm curious if someone well versed in finance can answer, because from my uneducated perspective, it's not profitable to burn billions in order to make a billion.
Big relief for me. As a passive investor, I want the indices to follow the same passive strategy they always have, and specifically not make exceptions for specific companies like SpaceX wanted.
Plenty of ways to get exposure to that stock without it going into the indices it is not qualified for.
Why is that relevant? The rules are in place for a reason, why does it matter what the percentage is? They're not profitable. When they prove they're worth the dollars, they can be included, per the rules.
Also, S&P500 has a current market cap of $67 trillion, 0.3% of that is some $200billion. That is essentially a wealth transfer to the rich. They don't need it.
> That is essentially a wealth transfer to the rich. They don't need it.
These are not valid arguments. The companies that get added to the S&P are always owned in some fraction by rich people.
SpaceX is obviously majorly owned by Elon, but it’s also owned by regular employees, a bunch of private investors and other funds that regular people invest in.
> They're not profitable.
Right
> When they prove they're worth the dollars,
Profitable isn’t related to “worth the dollars”. You need to look at income and how much is being reinvested into growth. Amazon famously remained unprofitable due to reinvestment and waiting for them to become profitable before investing was a bad bet.
The only substantial effect I've seen of the influencers who were doomsplaining this decision was some minor churn in retirement assets from low-cost S&P 500 followers to higher-cost funds. (The market, broadly, never priced in a rebalancing of the S&P 500. So this was almost entirely whipped up by influencers.)
Broadly speaking, if you were actually considering trading on the back of S&P's decision, or worse, if you actually did, consider trimming who you follow for financial advice.
The market may not have ever priced in a rebalancing of the S&P 500, but the S&P 500 also has never allowed entry of companies that may never become profitable.
> the S&P 500 also has never allowed entry of companies that may never become profitable
Yup. Which is why it was always a long shot. I personally thought they'd adopt some of the seasoning rules, but they were more conservative than even that.
> Major W. Regular people were going to get robbed blind
Not really. One, it was unlikely to happen. The market not pricing in any rebalancing communicated that. Two, the magnitude–even for the S&P 500–would have been small. About a third of stocks are in passive strategies, about 15% in any index, and while most of that is the S&P 500, the index market is incredibly competitive.
S&P made the right move. But the tragedy this episode has revealed, at least to me, is in how venal and influential this new breed of financial influencers on YouTube and X are, and the degree to which they're willing to misinform to get clicks.
What was unlikely to happen? It already happened in Nasdaq. It’s nice that it didn’t for S&P but for most investors it already did happen, so I’m not sure the ‘whatever’ attitude is warranted.
Also, since when is it appropriate/intellectually OK to respond to allegations of corruption by saying ‘stop freaking out, it’s only a small amount of corruption PER PERSON’.
The S&P adopting these rule changes as originally proposed.
> It already happened in Nasdaq
NASDAQ 100 is marketed as a tech-focussed fund. It's also way smaller.
> for most investors it already did happen
What do you mean? For the vast, vast majority of investors, nothing happened. If S&P had adoped these rules, the majority of investors would still be unaffected.
> when is it appropriate/intellectually OK to respond to allegations of corruption by saying ‘stop freaking out, it’s only a small amount of corruption PER PERSON’
I'm saying the allegations of corruption were misplaced. The rule changes have been mooted for years. Did Musk et al try to put their thumbs on the scale? Sure. That should be called out. But the scaremongering that capitalised on that, which then extended into encouraging people to make expensive financial decisions like changing out their retirement portfolio, was crap.
Kudos to S&P 500. Vast majority of the world has no clue how trillions of $ from their pension funds is being funneled to the select few. Absolutely pathetic.
> no clue how trillions of $ from their pension funds
Pension funds don't tend to follow the S&P 500, much less automatically. They're sophisticated institutional investors like CalPERS [1] who dabble in everything from public stocks to private equity.
It's other retirement assets, e.g. 401(k)s and IRAs, that tend to follow the S&P 500. But again, with substantial variation.
S&P including these companies would have driven a lot of money towards them. But there was a lot of misinformation around the magnitude of that drive, as well as the breadth of whom it would affect.
In the US at least, many pension funds are not sophisticated, they're small, underfunded, and getting taken for a ride by expensive advisors who promise fantastical returns that will help dig them out of their funding ratio hole. Many would be better off using an S&P 500 index fund for their equity component instead of getting wined and dined into an illiquid, opaque private equity investment.
Telling that among OECD countries, the US is an outlier in having a much lower average funding ratio, and this despite the fantastic performance of the US stock market over the last 15 years.
I wonder if profitable means that investment must be recouped or just if your operational expenses must be compensated by your earnings.
Anthropic is becoming "profitable" while burning a series H of 69 bns usd. Does it count as profitable?
I'm curious if someone well versed in finance can answer, because from my uneducated perspective, it's not profitable to burn billions in order to make a billion.
https://www.cnbc.com/2026/05/20/anthropic-revenue-explosive-...
Big relief for me. As a passive investor, I want the indices to follow the same passive strategy they always have, and specifically not make exceptions for specific companies like SpaceX wanted.
Plenty of ways to get exposure to that stock without it going into the indices it is not qualified for.
This news tanked 5% off the Nasdaq yesterday so it’s still not exactly a cause for joy. We’ve hit the p of the pop of the AI bubble in stocks.
> This news tanked 5% off the Nasdaq yesterday
No, it did not. The market moved in reaction to earnings misses from e.g. Broadcom.
Yep!! Respect to them. I was planning to move to an equal weight index but this gives me a little more time to evaluate options.
They weight by free float so it would been something like 0.3%. Hardly the end of the world
Why is that relevant? The rules are in place for a reason, why does it matter what the percentage is? They're not profitable. When they prove they're worth the dollars, they can be included, per the rules.
Also, S&P500 has a current market cap of $67 trillion, 0.3% of that is some $200billion. That is essentially a wealth transfer to the rich. They don't need it.
> That is essentially a wealth transfer to the rich. They don't need it.
These are not valid arguments. The companies that get added to the S&P are always owned in some fraction by rich people.
SpaceX is obviously majorly owned by Elon, but it’s also owned by regular employees, a bunch of private investors and other funds that regular people invest in.
> They're not profitable.
Right
> When they prove they're worth the dollars,
Profitable isn’t related to “worth the dollars”. You need to look at income and how much is being reinvested into growth. Amazon famously remained unprofitable due to reinvestment and waiting for them to become profitable before investing was a bad bet.
"they only be stealing a tiny amount so not worth doing anything"
> I was planning to move to an equal weight index
The only substantial effect I've seen of the influencers who were doomsplaining this decision was some minor churn in retirement assets from low-cost S&P 500 followers to higher-cost funds. (The market, broadly, never priced in a rebalancing of the S&P 500. So this was almost entirely whipped up by influencers.)
Broadly speaking, if you were actually considering trading on the back of S&P's decision, or worse, if you actually did, consider trimming who you follow for financial advice.
> The market, broadly, never priced in a rebalancing of the S&P 500
And if you had seen it what would have that pricing looked like?
> if you had seen it what would have that pricing looked like?
Look up rebalancing trades, or, less graciously, rebalancing front running.
The market may not have ever priced in a rebalancing of the S&P 500, but the S&P 500 also has never allowed entry of companies that may never become profitable.
> the S&P 500 also has never allowed entry of companies that may never become profitable
Yup. Which is why it was always a long shot. I personally thought they'd adopt some of the seasoning rules, but they were more conservative than even that.
Crazy to see the Twitter behavior here of really smart, well conveyed top level comments replied to by weird propaganda pushing bottom feeders.
HN discussion quality has deteriorated dramatically, especially for anything AI related.
Related discussion here: https://news.ycombinator.com/item?id=48405718
Nice to see others are thinking the same, as I just posted the same article as a dupe of this one.
It's a risky investment, yes there's a chance it could go to the moon, but it could also plummet to earth.
Stocks and money. It's so boring.
I will go drive my old German car now, and get a bit drunk in a bottle of Nebbiolo while listening to some French lunatic with a piano.
Enjoy your trip to Mars and your self driving toy cars. The world is off its rails. Bit time.
just be sure do it in that order and not the other way around
What's your SKILLS.md? Is your flow multi-agentic?
Sir this is a message board run by an US-American venture capitalist organisation; frankly what do you expect
Duplicate: https://news.ycombinator.com/item?id=48405718
[dupe] https://news.ycombinator.com/item?id=48405718
Major W. Regular people were going to get robbed blind.
> Major W. Regular people were going to get robbed blind
Not really. One, it was unlikely to happen. The market not pricing in any rebalancing communicated that. Two, the magnitude–even for the S&P 500–would have been small. About a third of stocks are in passive strategies, about 15% in any index, and while most of that is the S&P 500, the index market is incredibly competitive.
S&P made the right move. But the tragedy this episode has revealed, at least to me, is in how venal and influential this new breed of financial influencers on YouTube and X are, and the degree to which they're willing to misinform to get clicks.
What was unlikely to happen? It already happened in Nasdaq. It’s nice that it didn’t for S&P but for most investors it already did happen, so I’m not sure the ‘whatever’ attitude is warranted.
Also, since when is it appropriate/intellectually OK to respond to allegations of corruption by saying ‘stop freaking out, it’s only a small amount of corruption PER PERSON’.
> What was unlikely to happen?
The S&P adopting these rule changes as originally proposed.
> It already happened in Nasdaq
NASDAQ 100 is marketed as a tech-focussed fund. It's also way smaller.
> for most investors it already did happen
What do you mean? For the vast, vast majority of investors, nothing happened. If S&P had adoped these rules, the majority of investors would still be unaffected.
> when is it appropriate/intellectually OK to respond to allegations of corruption by saying ‘stop freaking out, it’s only a small amount of corruption PER PERSON’
I'm saying the allegations of corruption were misplaced. The rule changes have been mooted for years. Did Musk et al try to put their thumbs on the scale? Sure. That should be called out. But the scaremongering that capitalised on that, which then extended into encouraging people to make expensive financial decisions like changing out their retirement portfolio, was crap.
Kudos to S&P 500. Vast majority of the world has no clue how trillions of $ from their pension funds is being funneled to the select few. Absolutely pathetic.
> no clue how trillions of $ from their pension funds
Pension funds don't tend to follow the S&P 500, much less automatically. They're sophisticated institutional investors like CalPERS [1] who dabble in everything from public stocks to private equity.
It's other retirement assets, e.g. 401(k)s and IRAs, that tend to follow the S&P 500. But again, with substantial variation.
S&P including these companies would have driven a lot of money towards them. But there was a lot of misinformation around the magnitude of that drive, as well as the breadth of whom it would affect.
[1] https://en.wikipedia.org/wiki/CalPERS
In the US at least, many pension funds are not sophisticated, they're small, underfunded, and getting taken for a ride by expensive advisors who promise fantastical returns that will help dig them out of their funding ratio hole. Many would be better off using an S&P 500 index fund for their equity component instead of getting wined and dined into an illiquid, opaque private equity investment.
Telling that among OECD countries, the US is an outlier in having a much lower average funding ratio, and this despite the fantastic performance of the US stock market over the last 15 years.