Jul. 4 at 11:46 AM
$ASTS $LUNR $RKLB $SPCE $SPCX You're correct that index funds don't short constituents, but that's not the bearish argument.
Nasdaq-100 inclusion typically increases institutional ownership, and many institutions lend shares. That can increase borrow availability and lower borrow costs, making it easier for existing short sellers to maintain or expand positions.
The question isn't whether index funds will short the stock, they won't. The question is whether inclusion increases the supply of lendable shares enough to reduce the scarcity that was constraining shorts.For stocks where borrow availability and high fees are a major part of the bull thesis, that's a legitimate consideration.
"Index inclusion is bullish because passive funds must buy" and "Index inclusion can indirectly help shorts through share lending" are not mutually exclusive. Both can be true at the same time. The debate is which effect is larger.
