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What SpaceX, OpenAI and Anthropic's IPOs mean for investors | The Economist
- SpaceX, OpenAI, and Anthropic are projected to contribute up to $4 trillion to the U.S. stock market value upon their listings, with SpaceX specifically targeting a $1.75 trillion valuation achieved at 90 times annual sales.
- SpaceX is scheduled to list on June 12th with an initial public offering designed to raise approximately $75 billion, contingent on investors being willing to fund this valuation through rapid sales and earnings growth.
- Long-term revenue streams for SpaceX are expected to rely on speculative trajectories including space-based data centers, Earth-bound compute sales, or Mars colonization monetization.
- Index providers may incorporate these "giga IPOs" into market indices as early as five days post-listing, creating a risk that index funds purchase shares at inflated, volatile prices.
- Historical data indicates that IPOs underperform the broader market by approximately 20 percentage points over the three years following issuance, a gap likely to widen for high-valuation firms like SpaceX.
- Market sellers appear to anticipate reaching the peak of the current bull cycle, potentially exposing buyers to a downturn immediately following the IPOs.
- A massive inflow of capital from index funds could deplete the natural pool of buyers within days, raising the possibility of subsequent share price declines.
- Broader market risks include a reversal of capital flows, where tech giants issue bonds and follow-on shares to absorb capital rather than returning it via buybacks, potentially pushing stock markets downward.