I don’t think Nasdaq is free float based.

Also, I would be a lot more pessimistic of the index tracking fund managers’ ability or willingness to find extra shares: their goal is to match the index, not beat it. If the index includes the new firm at a blown-up price because everyone sent their buy orders at the same closing auction, then all the index-tracking funds still track their underlying index. They do not care that after that closing auction, the price of the new firm—and likely the index itself—is going to drop.

>I don’t think Nasdaq is free float based.

I recommend the NDX proposal from February which the whole discussion is based upon:

"To balance index integrity and investability, Nasdaq proposes a new approach for including and weighting low-float securities (those below 20% free float). Each low-float security’s weight will be adjusted to five times its free float percentage, capped at 100%. Securities with more than 20% free float will continue to be weighted at full, eligible listed market capitalization, while those below 20% free float will be weighted proportionally to preserve investability."

The document includes a scenario with the rules applied to SpaceX. "Company C" in the table is SpaceX (with some estimated numbers).

https://indexes.nasdaqomx.com/docs/NDX_Consultation-February...