Thanks @profplum99 for motivating me to take a moment to write in as well. The Nasdaq 100 index committee risks tainting the US capital formation system that is the envy of the world. Dear Sirs, I am writing to comment on Proposal 2 (“Fast Entry”) and Proposal 3 (the “5x Free Float Multiplier”) in the February 2026 Nasdaq 100 Consultation. I have spent over 30 years in capital markets. 25 years of which were in investment banking where I led ECM businesses for Goldman Sachs, Citi and Jefferies in Europe and Asia. In that period, I led or advised on hundreds of IPOs and equity offerings, including numerous SEC registered (foreign issuer) deals on the Nasdaq. - I can see exactly how rule changes like this will be gamed and abused by issuers and insiders. - These proposed rule changes do not represent progress - they make a mockery of price discovery and dump concept valuation securities on unsuspecting retail investors. 5x Free Float Multiplier - Low float IPOs are already creating a negative view of US IPOs. To reward low float deals with robotic flows is absurd - The 5x uplift for stocks with less than 20% free float tears up one of the traditional and necessary trade-offs that companies made when going public. - Historically, if you want index inclusion and a lower cost of capital, you need to put real float into real public hands. - This rule creates the opposite effect. You are effectively telling issuers: keep 80–90% of the stock locked up and we will treat you, for index flows, like a 50% float company. That is a built‑in short squeeze on passive investors. - Insider shares, options, and RSUs go deep in the money, not because fundamentals improved, but because the rulebook forces passive capital to chase an artificially scarce float. Fast Entry - “Fast Entry” collapses seasoning for very large new listings. A mega‑cap IPO that hits the size threshold is pulled into the index after a token trading history. - Everyone in the market will know roughly when the forced buyer (such as the QQQ ETF) shows up. - Early listing of listed options on new IPOs can and will exaggerate this effect. I would not rule out insider involvement in that activity. - That is an invitation to structure deals, allocations, and lock‑ups around predictable index flows - This is clearly being teed up for the SpaceX and OpenAI / Anthropic IPOs. I predict that retail investors and unwitting passive investors will be harmed. Why This Matters for a Systemic Benchmark - The Nasdaq 100 / QQQ sits at the center of global ETF complex, driving trillions of dollars of futures, options, and structured product activity. - Embedding low‑float amplifiers and rapid inclusion of unseasoned giants increases concentration in names with untested liquidity and makes a mockery of price discovery. - Disorderly moves around IPOs and rebalance dates. - The use of passive capital as an insider liquidity tool, not a neutral allocator. What You Should Do - Drop the 5x low‑float multiplier. Index weight should follow freely tradable equity, not scarcity. - Tighten or rethink Fast Entry so that very large new listings prove liquidity and trading history before inclusion. - Reaffirm that the purpose of the index is investability and credible price discovery—not maximizing monetization for tightly held new issues. If you proceed with these changes as drafted, the message will be clear: Nasdaq is willing to subordinate price discovery and market integrity to the interests of insiders and deal‑makers. You are now writing that preference directly into the rules. Yours faithfully, Rupert Mitchell Former senior ECM banker, over 25 years advising issuers and investors on IPOs and capital markets offerings as a Managing Director at Goldman Sachs, Citi and Jefferies.
