The Biggest IPOs in History Are Coming. Should You Care?

SpaceX. OpenAI. Anthropic.

If you follow financial news at all, you’ve probably seen these names everywhere lately. And for good reason. SpaceX is expected to go public at a valuation somewhere between $1.75 and $2 trillion. OpenAI and Anthropic are each expected to be valued near $1 trillion or more.

To put that in perspective, the current record for the largest IPO ever is Saudi Aramco at $1.7 trillion in 2019. SpaceX could shatter that on day one.

Everyone wants a piece of this. I get it. These are genuinely important companies building genuinely important things.

But wanting a piece of something and it being a good investment are two very different things.

The History of “Can’t Miss” IPOs

Let’s go back to May 2012. Facebook goes public. Everyone knows the product. Billions of people use it. The buzz is enormous.

Four months later, the stock is down more than 50%.

It took over a year just to trade back at its IPO price.

Uber. Same story. Down roughly a third in the first five months. More than a year before it held consistently above its offering price.

These weren’t obscure companies. They weren’t bad businesses. The problem was simple: the excitement drove the price to a level that left no room for disappointment.

And these aren’t cherry-picked outliers.

Research covering every U.S. IPO from 1980 to 2024 shows that the average newly-listed company trailed comparable public companies by roughly 2% annualized over the five years following its debut. That’s not a rounding error. Over a decade, 2% per year compounded is a massive gap.

Why Does This Keep Happening?

Two main reasons.

First, profitability. Many companies go public before they’re consistently earning money. OpenAI and Anthropic are currently unprofitable by most public estimates. A company burning cash at scale, priced at a trillion dollars, is asking you to pay today for profits that may be ten years away.

Second, index pressure. S&P is reportedly looking at changing its rules to let mega-cap IPOs into the S&P 500 faster than the current 12-month waiting period. If that happens, every index fund in the world becomes a forced buyer the moment these stocks get added. Forced buyers don’t negotiate on price. They buy whatever the market is charging that day, and that cost gets absorbed by everyday investors in those funds.

What We’re Doing

We’re watching this closely, but we’re not jumping the line.

Our job is to evaluate every investment through the same lens regardless of how exciting the story is: What are we paying? What are we getting? How does the profitability compare to other opportunities at this price?

If and when SpaceX or OpenAI hits public markets, we’ll run the same analysis we’d run on any other company. If the numbers make sense, we’ll consider it. If the market is pricing in perfection at a trillion-dollar valuation with no earnings, we’ll pass and watch from the sidelines.

The companies might be incredible. The investments might not be.

There is a difference, and that difference is your money.

If you want to talk through how any of this affects your portfolio or financial plan, grab some time on my calendar.

As always, keep calm and invest.

Nirav

Risk Disclosures: This general information is not to be considered investment advice. Past performance is no guarantee of future results.