> would expect to see a withdrawal of funds from the market by anyone following equal weight funds

Would you see funds reducing their equity exposure and going into cash or what? Which funds would do that? Trackers wouldn’t do that so where would you see that withdrawal of funds?

> New entrant means you have to pull money out of existing stocks to re-allocate to the new entrant to maintain equal weights.

If you mean someone tracking an equal weight index the weights would be essentially the same after the inclusion of SPCX replacing some other constituent. Except for the stock being replaced, of course.