It’s going to be a big summer for initial public offerings. SpaceX, Elon Musk’s rocket company, goes public Friday, June 12. OpenAI and Anthropic, both artificial intelligence companies, are expected to debut in the coming months.
All three companies are valued at around the trillion-dollar mark — SpaceX is expected to be the largest IPO on record, targeting a valuation of $1.77 trillion. They’ve already garnered a ton of attention. “It’s kind of like movie blockbusters,” said Terrance Odean, Haas School of Business finance professor at the University of California, Berkeley.
All three companies will go public within a short amount of time, which will add a ton of equity to the stock market very quickly.
”On the one hand, we can look at the numbers, and we can say, ‘Wow, in aggregate these companies might raise $200 to $250 billion, that’s an enormous amount of money,’” said Michele Lowry, finance professor at Drexel University. ”However, if we instead look at it as a percent of total market capitalization, you’re talking maybe 0.5%, maybe even less.”
The U.S. stock market all combined is estimated to be valued at $70 trillion. These IPOs, though massive, will make up only a few tenths of a percent of all the money invested in the stock market.
“And that’s actually a lower percent than what we had back in the ‘80s and ‘90s,” Lowry said.
Terrance Odean at UC Berkeley agreed: “It’s not a huge amount of the current market.”
Suhas Sridharan, accounting professor at Emory University, said the people that are buying into these new IPOs are likely already invested in the stock market. Where, might you ask?
“It’s your Nvidias, it’s your, even like, Google, Alphabet, Amazon, right? Companies in the tech sector,” she said.
SpaceX set its debut stock price at $135 a share.
