Is Wall Street Rigging the Game for SpaceX? Plus, What Investment Banking Really Teaches You

Scott Galloway unpacks whether the S&P and Nasdaq rule changes for mega-cap IPOs mean you're no longer as diversified as you think, gives advice on thriving in a fully remote sales role, and reflects on what investment banking and the corporate world really teach you. Want to be featured in a future episode? Send a voice recording to [email protected], or drop your question in the r/ScottGalloway subreddit. Plus, you can now call or text Scott a question at our new Office Hours hotline: ‪(201) 472-3656‬. Learn more about your ad choices. Visit podcastchoices.com/adchoices

Speaker names marked ? are inferred from speaking time and the show’s known hosts — they are not voice-verified.

• 0:00Speaker 00

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• 0:36Scott Galloway?

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• 1:35Scott Galloway?

  Welcome to Office Hours of Propg. This is the part of the show where we answer your questions about business, big tech, entrepreneurship, and whatever else is on your mind. If you'd like to submit a question for next time, you can send a voice recording to [email protected]. Again, that's [email protected] or post your question on the Scott Galloway subreddit and we just might feature it in our next episode. Plus, now you can call or text us a question at 201-472-3656. Again, that's 201-472-3656. All right, let's bust into it. Our first question comes from a listener who emailed us. Why aren't more alarm bells going off about the rule changes such that SpaceX can get into the Nasdaq and the next ones will be forced to buy shares? It seems like corruption to me. Also, the fact that there's no recourse against Elon, no matter how atrocious his

• 2:20Scott Galloway?

  behavior may become. Thanks. Okay, some context here. Major stock indices are rewriting their inclusion rules specifically, if not explicitly, to accommodate blockbuster IPOs. SpaceX most immediately, but OpenAI and Anthropic are also in the pipeline for 2026. For the NASDAQ 100, their new fast entry rules mean mega cap stocks can be added to the index just 15 trading days after their IPO, down from the historic seasoning period of three months. This applies to companies with market cap ranking within the top 40 members of the NASDAQ 100, and fast entry inclusions won't require an already listed security to be dropped, allowing the index to temporarily exceed 100 constituents. FTSE Russell also changed rules to allow faster inclusion of mega cap IPOs in the S&P 500. The S&P considered shortening the seasoning

• 3:05Scott Galloway?

  period, waiving minimum float requirements and removing its profitability requirement, but ultimately said it wasn't making any changes, dealing a setback to SpaceX. They're keeping the traditional bar, 12 months public plus four consecutive quarters of GAAP profitability. So what is some of the impact of this change? More than 30 trillion in assets are benchmarked in the S&P 500, Dow Jones, NASDAQ Composite, and FTSE Russell indices. Analysts estimate conservative forced buying of 15 to 30 billion across S&P 500, NASDAQ 100, and blah, blah, blah, with more aggressive float weighted scenarios running far, far higher or see above being forced to buy these things. Goldman Sachs analysts estimated the NASDAQ fast entry rule change alone could trigger up to 60 billion in forced buying across NASDAQ 100.

• 3:48Scott Galloway?

  Okay, so I think a lot of the pushback here is people, I'm a hammer, everything I see is a nail. I think it's incremental. I think people are just so sick of these people and the amount of money they're making, and when they see these outrageous valuations that are difficult to justify, and that all of the shareholder gains from zero to a trillion have been captured, or in the case of SpaceX, trying to go out to retail investors at 1.8 trillion, that all of that juice has been squeezed by private institutional investors, and the IPO market has in fact become sort of the last stop on the chump train, and that is, when Google on public, I think it was an $80 billion market cap, it's up 500 fold, retail investors have had a chance to garner tremendous

• 4:33Scott Galloway?

  You know, 500 extra turn, if you get that from SpaceX after it goes public, what would that be? Two trillion? That'd be, I don't even know what it, what is that? A gazillion? I don't know what that is. So I think people are naturally pissed off and, and another, they vent their anger anyway. Any change is an opportunity to shippost these companies. I don't think waiving the rules here is necessary. I'm not as excised about that because at the end of the day, these indices are meant to be a reflection of the most important, largest market cap companies. And all three of these companies already are that. If Anthropic was founded five years ago, if it had been founded in Europe, it'd be one of the five most valuable companies in Europe. So I think including them in these indices, I think you can make a pretty rational reason for it.

• 5:18Scott Galloway?

  And being forced to buy these companies like you're some victim. Well, you're forced to buy Monsanto, who brought us Agent Orange. At least I think you are. I wonder if Philip Morris is in the S and P 500. Anyways, my point is these indices probably include a lot of companies that on your own, you wouldn't buy shares in. That's why it's an index. It does bring up an interesting point in that is it unfair that a new public company gets juiced beyond its public market reception because it's automatically included in these indices? Should it go through a hazing period where it shows its fair value? Once retail investors have, have some time to play with it before you decide whether it should go into the index? I think that's a viable argument.

• 6:03Scott Galloway?

  I don't know if, you know, I, I worry this is going to, this is another technique to get a first pop out of the gates. I would like to see sort of a cooling off period before you decide whether it should go into the indices. But essentially, companies used to take seven years to go public. Now they take 12 and these companies have gone faster. But having the most important companies, and these are important valuable companies in the indices, that doesn't, I think on balance, this kind of makes sense. I probably still would have waited a little bit just to see what that first trade is because it does feel like this is a convenient means of creating demand that hasn't been there for other IPOs, thereby creating a false print on the first print.

• 6:46Scott Galloway?

  If this is, these companies are getting that additional demand right out of the gates that every other company going public hasn't enjoyed. At the same time, You know, one of the big complaints is that retail investors haven't had access to these companies. And also, if you're, if you're in S and P indices or index funds and you don't want to own these companies, then sell your S and P index fund and go into, I'm sure there's a lot of funds that don't include the magnificent 10. My guess is there's probably even an ETF that is the S and P minus these 10 companies because a lot of people think they've been overweighted and now they're responsible for 40% of the S and P. So when you buy the S and P, you're effectively buying the magnificent 10 to

• 7:30Scott Galloway?

  almost 40 or 43%. I think that is not dangerous, but not smart. And that is, the whole point of buying index funds was diversification and the S and P is becoming dramatically less diversified. So in sum, these indices are supposed to reflect the most valuable and important companies. These are those companies even distinct to the fact they're not public yet. But the idea of creating artificial demand upfront, which is, doesn't give you a fair litmus test on the initial trade, I can see some concern there. I would have asked for at least a 30 or 60 day cooling off period to make sure that these companies still qualify. But what this reflects is a broader trend that the S and P 500 is no

• 8:13Scott Galloway?

  longer really diversification as you're concentrated now amongst 10 companies. And what does that mean for you? If you don't like, you know, you don't like Chick-fil-A? Don't eat a Chick-fil-A. You don't want to be an forced investor in SpaceX, Anthropic, and OpenAI? Then sell your S and P index funds and go into other funds, which I'm sure there's a ton of them that don't, that, that avoid these companies. But really, I think the learning here is that to believe you're diversified in an S and P or SBY index fund, you're not. You're all in America. You're mostly in tech. And you may want to think about other index funds that look at other asset classes and other geographies. Thanks for the question. Question number two comes from Reddit.

• 8:54Scott Galloway?

  Spelsad83-52 says, hi Scott, I'm 27 years old and have spent the last three and a half years in construction equipment sales and had lots of success. In a few weeks, I will be starting a new job, also in sales, at a software startup working fully remote. What advice would you give to someone? Number one, on transitioning to a fully remote role, specifically sales? And number two, working at a startup? Gosh. Okay, a 27 boss, I would argue the office is a feature, not a bug, and do everything you can to get around other coworkers. There's evidence saying you're 40% more likely to get promoted if you're in the office. And I think you're in the kill zone, and that is, I think you're in the exact wrong demographic to be working remotely.

• 9:37Scott Galloway?

  I think you want mentors, you want to find friends, mates. HR hates this, but one in three relationships begin at work, and 99.9% of them have been consensual. So I think the office is a feature, not a bug, for a 27-year-old male. Having said that, working remotely, I think you gotta be pretty disciplined about a schedule and deadlines. Setting up deadlines for the number of new business calls you're gonna make, number of meetings you're gonna go to in person. You gotta come out of the gate strong, because you're gonna have to impress everybody, and they're gonna have very, very adroit, anodyne metrics. Number of calls you make, number of deals or conversations you set up, and your close rate. And I think you want to figure out a way to be in person with clients and coworkers as much as possible.

• 10:21Scott Galloway?

  And you may, I don't know, I don't know how, I think being at home, just trolling LinkedIn, trying to set up meetings, I don't think that's good for a 27-year-old man. So I think that, one, try and figure out a way to get out of the office, or get out of your home as much as possible, such that you can meet with clients face-to-face, meet with your boss, meet with your coworkers as often as possible. I think that's hugely important, and in order to do, I would have been a disaster remote work at your age, home alone. I just would have been really good at walking my dog and getting more exercise in, which isn't necessarily a bad thing, but you're gonna have to be very disciplined and set

• 11:05Scott Galloway?

  metrics for yourself every night before you go to bed, or whenever, saying, I need to do the following things. And I guess in sales, especially with remote work, they're good at creating metrics for you. But I would be...

• 11:21Scott Galloway?

  I would be careful not to fall into a world of making good money. Again, I'm preaching here because my way isn't necessarily the right way, but it's my way. But I think the only way you really get ahead is through relationships and remote work doesn't set yourself up for relationships or strong relationships. So the reality is I'm, I'm, I see the glass is half empty here and I would try and figure out a way to show a certain level of performance and then such that you can get to a position that involves more peer-to-peer contact and peer-to-client contact. And if you're going to be at home, you've just got to set up a schedule and deadlines to hold yourself accountable, which is difficult, I find, at your age. I find it difficult at my age.

• 12:03Scott Galloway?

  Anyway, sorry, I'm not more optimistic there, but congratulations on the job. If you know how to sell, you can always make more money than you deserve. The most overcompensated people in any company are the salespeople and everyone resents them because they're willing to do one thing other people aren't, and that is get out a big spoon and eat shit. And that is call people who don't want to hear from you. And when they say, "Don't call me again," you say, "Oh, I think that means I should call you back in three months." And just have, I don't know if salespeople played with the right toys or the wrong toys or if they have exceptionally high or exceptionally low self-esteem. It doesn't matter. If you can sell, you can always make a good living and you develop the ultimate skill set, which is the ability to endure rejection. So clearly you have that skill set if you're doing well in sales. Anyways, congratulations to you and best of luck.

• 12:47Scott Galloway?

  We'll be right back after a quick break.

• 12:56Scott Galloway?

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• 13:40Scott Galloway?

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• 14:13Scott Galloway?

  Support for the show comes from Vanta. As AI adoption grows, so does your company's security risks and requirements. New frameworks, audits, and vendors keep piling on, but your team isn't getting any bigger. Most compliance tools promise automation, but you're really stuck doing all the work by hand, chasing screenshots, validating controls, and playing catch-up when audit season comes around again. Vanta works differently. The Agentic Trust platform is built to scale with you, not slow you down. With over 1,400 automated tests across 400-plus integrations, Vanta collects evidence and monitors your controls year-round, cutting your audit prep by 82%. Plus, you can access the Vanta agent everywhere you work, whether your team is in Vanta every day or living in tools including Claude or Cursor. Want proof?

• 14:58Scott Galloway?

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• 15:19Scott Galloway?

  Support for the show comes from Vanta. As AI adoption grows, so does your company's security risks and requirements. New frameworks, audits, and vendors keep piling on, but your team isn't getting any bigger. Most compliance tools promise automation, but you're really stuck doing all the work by hand, chasing screenshots, validating controls, and playing catch-up when audit season comes around again. Vanta works differently. The regentech trust platform is built to scale with you, not slow you down. With over 1,400 automated tests across 400-plus integrations, Vanta collects evidence and monitors your controls year-round, cutting your audit prep by 82%. Plus, you can access the Vanta agent everywhere you work, whether your team is in Vanta every day or living in tools including Claude or Cursor. Want proof?

• 16:04Scott Galloway?

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• 16:29Scott Galloway?

  Welcome back. Question number three.

• 16:31Speaker 06

  Hey, Scott. I enjoy your podcast, and I don't know if you ever come back to a question and drill down further, but I want to follow up on the value of an investment banking career early in one's path. I heard you tell somebody on a recent podcast that the value of an investment banking experience basically was learning to work hard, attention to detail, getting along with others, and you also referred to an approach to work. My challenge for you is, if you're somebody who's applied himself and gone to college and applied himself in college, you probably know how to work hard. You probably know attention to detail. You probably know how to get along with others. So...

• 17:17Speaker 06

  From my perspective, if you came out of college and did investment banking for a few years, and that were, those were really the primary skills that you walked away with, that just feels sort of redundant and maybe even a loss or a waste of time relative to learning something more applied that you could use in the rest of your life. Now, maybe you do learn some really important applied skills. Maybe there's something about, for in your case, doing fixed income that actually is useful for the rest of your career, whether it's spreadsheets or balance sheets or other economic considerations. But I would love for you to clarify that. Like, which is it? Is it the soft skills? Is it the hard skills?

• 18:01Speaker 06

  But what makes the value of an investment banking career?

• 18:05Scott Galloway?

  Thanks for the question. So I'm trying to increasingly recognize that at my age, a lot of times I don't know what I don't know because the world has obviously changed a lot. I was 21 when I showed up at Morgan Stanley in 1987. And my only skill set was I interview well. Why did I go into investment banking? The only reason I even went into investment, if you asked me what investment banking was the day I showed up, I don't think I could have told you. But I was, I had a roommate my senior year, as a lot of young men are. I was very competitive with him and him with me. And his dream was to be an investment banker. So I thought if he wants to do it, I'm going to do it. That's why I wanted to be an investment banker. Also, I thought it would impress my mom and, and I thought it would impress strange women. I, you know, I had no fucking idea what I wanted to do. So I thought it all would just be awesome to be an investment

• 18:49Scott Galloway?

  banker. And got the job. And I think you're right. I, I think if you have a really strong skill set around finance and discipline, then you won't, you wouldn't have registered or there wouldn't be the same upside as I received. I didn't have those things. At UCLA, my primary skill set garnered was how to make bongs out of household items. And I was not disciplined. I was not. You know, I didn't work hard. And so Morgan Stanley was kind of like the Marines for me. And that is a really sort of was a swift kick in the ass. And also just learning about the capital markets.

• 19:28Scott Galloway?

  You can't learn that strictly from a book. When I showed up, I think two months later, six weeks later, it was Black Friday, October, I forget it was 1987. And one of the MDs in the investment bank group said, we should go down to the trading floor because he knew it was a big day. And it was just mayhem on the trading floor and trying to understand what was going on. I think the S and P went from 1400 to 900 in one morning and everyone thought it was the end of the world. But just trying to understand what was happening and how humans reacted to it. And there were some layoffs in the trading department. You just got to feel for business and then meeting with, you know, the county commissioners for LA and proposing and trying to understand how a quarter percent increase in sales tax

• 20:12Scott Galloway?

  was going to fund this subway in LA that is now still opening stops. You start to connect, at least I did finance and the bond market to

• 20:24Scott Galloway?

  capital formation and building things and tax rebonds versus bonds for real estate and the credit markets. So I think I learned a lot and there's nothing about the hierarchy of the corporate sector that you can replicate in school, I don't think. Could you have shown up with stronger skills if you went to a better school or took school more seriously? Absolutely. But I think those kind of, it was a two-year program when I went. You went two years and then went back to business school. There was 87 analysts in my class and literally I think 84 of us went back to business school. I think that path or that sort of mentorship or trainee program where you work your ass off

• 21:05Scott Galloway?

  and you get decent pay or good pay and you get that stamp on your forehead. I like that model. And unfortunately, I think a lot of investment banks, Goldman doesn't even hire out of business school anymore. They find people out of undergrad and they'd say, don't go back to business school because we'd rather just more, you know, train you in the two years here. We'll give you more skills. So I look back, it's the only kind of job I've ever had since then. I wasn't very good at it and I wasn't very successful at it. And I didn't have the skills to navigate a large organization. What do I mean by that? I was literally too insecure. People go into a conference room and I would think they were talking about me. I resented anybody senior to me that I think was as smart as me. And the reality is they probably are smarter, smarter.

• 21:47Scott Galloway?

  I was just too immature to navigate a corporate environment. And if you can navigate a corporate environment on a risk-adjusted basis, it's a better place to get wealthy. You know, the guy who was my boss is now the vice chairman, and I think he's probably made hundreds of millions of dollars and had much less tumult and indigestion than I've had as an entrepreneur, up and down and up and down. So the American corporation is still the greatest wealth generator in history. And you do need skills to navigate it. You've got to be mature. Occasionally, there's going to be injustice. Someone not as smart or talented as you is going to get promoted over you. You're going to have to put up with bullshit. You're going to have to get emails telling you that we've changed this approach. You don't even know why and it makes no sense. It just, there's that.

• 22:32Scott Galloway?

  In exchange, they'll remove that mole for you. They'll give you health insurance. You get rich slowly. They have their incredible platforms for creating shareholder value. You meet a lot of smart people. So I'm, I think that entrepreneurship is vastly overrated and the corporate world is vastly underrated because it's just cooler and sexier to start your own business, you know, ignoring the fact that six out of seven businesses aren't around in about seven years, or small businesses. So I got a lot out of it. It's kind of like, again, serving in the Marines. I'm glad I did it, past tense. I still think that working for a corporation right out of school, if they have some sort of formal training program, it's a fantastic way to meet peers, get a good training, get a good swift kick in the ass, deepen your skills.

• 23:16Scott Galloway?

  And if you're like me and you don't like it, that's a blessing too. I think your twenties are about figuring out not only what you like, but what you don't like. You want to workshop your twenties to figure out what you're good at. So, and to just to be around that quality of human capital that Morgan Stanley was able to attract was hugely beneficial for me. And my two. I had, there were three analysts in my department in Los Angeles. One went into private, one went into the fish business and rolled up a bunch of fish distribution companies in Chicago and then sold to private equity. The other guy is a personal wealth manager in Connecticut. And then one of my other analysts in my class went on to be the CEO of Hellman and Friedman at the age of 40 or 45. I think he's probably the most successful among us. And I'm sure a lot of people went on to do it.

• 24:01Scott Galloway?

  Another guy owns, my stallmate, another guy is a private equity guy and he owns, God, a boat company. I forget what it's called. Ugh, I'm killing myself. Hinkley, you know, it's Hinkley's, they're like picnic boat. Anyways, so I think these two-year or three-year analyst programs, at least for me, were hugely accretive. I get what you're saying around showing up with more discipline. If I'd shown up with some of the skills you described, I would have been more successful there. But I still think you get a lot from those formal training programs at high caliber companies. The basic compact with those companies and young people is, we own your ass, you're going to have no balance in your life, you're going to work insanely, it's almost borderline

• 24:44Scott Galloway?

  abusive, but in exchange, we're going to pay you more than your parents made when they were 10 years older than you. And guess what? A lot of young people will raise their hand and they want that. They want that trade-off. I wanted that. I just wanted to make money and I wanted to develop the skillset and contacts so I could make more money. So, the most successful organizations in the world typically have that type, at least economically, have that compact with their employees. And that is, you're going to sacrifice a lot and we're going to move you further faster here. And there's a lot of people who'll sign up for that. I don't care if it's Disney, Goldman Sachs, McKinsey, you know, these are, you know, go to Meta and see what your hours are like, at least in the growth stages or the early days. Is that sustainable? Typically not over the long-term. Is it? I don't know. It's just a different culture. It's just what you're looking for.

• 25:28Scott Galloway?

  But I think that apprentice culture, going to work for a great brand, if you have access to those platforms, if you can get into a JB Morgan or a Bain, quite frankly, I think you need to opt towards yes, because you're not going to go do a two-year analyst program at Bain when you're 40. It's a unique time. You don't have dogs or kids or spouses. You can work your ass off, get a lot of experience. And I've carried that brand on my forehead for several decades now and I think it's served me well. I think people take me more seriously when I talk about the credit markets, because I did work in fixed income at an investment bank. Whew, that was a word salad. I appreciate the question.

• 26:06Scott Galloway?

  That's all for this episode. If you'd like to submit a question, please email a voice recording to [email protected]. Again, that's [email protected]. Or if you prefer to ask on Reddit, just post your question on the Scott Galloway subreddit, and we might feature it in an upcoming episode. This episode was produced by Jennifer Sanchez and Laura Janer. Kami Rieke is our social producer, Brad Williams is our editor, and Drew Burrows is our technical director. Thank you for listening to the Prop G Pod from Prop G Media.

• 26:40Speaker 07

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