SpaceX, Anthropic, OpenAI: What All the Hype Actually Means
A plain-English look at this year's biggest IPOs — and whether any of it should change what you're doing.
You've probably seen the headlines. SpaceX just went public in the biggest stock market debut ever — raising $75 billion and ending its first day worth over $2 trillion. Two more giants, Anthropic and OpenAI, are next to IPO; as both have filed paperwork to go public later this year, each valued near or above $1T. It’s a lot of noise, but as humans we can’t help but wonder: Does this matter to me? Should I buy these IPOs?
Why employees can't cash out right away
When a company goes public, the people who already own stock — founders, early employees, investors — usually can't sell immediately. SpaceX is releasing those shares in stages over the next several months rather than all at once. ~4,400 current and former employees are expected to become millionaires on paper once this plays out, and about 400 of them could end up worth $100 million or more, according to an analysis reported by The New York Times. As amazing as this sounds (for these folks – some of which are cafeteria workers) it will happen gradually — and how much it's actually worth depends on where the stock is trading at each step along the way.
Why you won't see SpaceX in the S&P 500 anytime soon
A common assumption is that a company of this size gets added to major indexes right away. Not quite. The S&P 500 requires a full year of public trading and proof of real, sustained profit before a company qualifies — and the index recently confirmed it won't make exceptions for size alone, no matter how large the IPO. On the other hand, the Nasdaq-100 is more flexible: very large new companies can be added within weeks. So, SpaceX could show up in a Nasdaq-100 family fairly soon, but it's unlikely to land in an S&P 500 fund for at least another year.
Two stories worth knowing from past IPOs
Visa went public in 2008, just months before the financial crisis hit — about the worst possible timing. The stock still climbed nearly 90% in its first three months and has gone on to become one of the best performing IPOs in history.
NTT DoCoMo, on the other hand, set the world record for the largest IPO back in 1998 and also had a strong first year. But the excitement didn't last: the company lost relevance as the smartphone era took over and was eventually taken off the public market entirely. Similar kind of hype, similar record-breaking headlines — completely different endings. Nobody could have called it in advance.
So, does any of this matter for you?
As exciting as it may be to be part of an IPO for a company that is aiming to make ‘human life multiplanetary’ it is important to understand if / where does this investment fit within your overall investment and financial plan. As legendary Fidelity Manager Peter Lynch liked to say, “stocks are not lottery tickets.”
If SpaceX, Anthropic, or OpenAI come up in conversation, the better question isn't whether to jump in and buy shares but instead It’s whether something like this fits your financial / investment plan, and your comfort with the risk that comes with it. That's always worth a quick check-in with your financial planning team.