According to calculations by Ned Davis Research, these three companies could potentially raise over $170 billion in a short period.
This is particularly noteworthy because they may initially sell only a very small percentage of shares. SpaceX sold less than 5% of its stock, whereas Ned Davis notes the more typical range for IPO stock offerings is 15% to 20%. OpenAI and Anthropic are expected to follow a similar approach. Once their stock lock-up periods expire, a much larger volume of shares will become available for market trading, leading to a potentially overwhelming surge in supply.
With a combined valuation exceeding $3 trillion, Ned Davis calculates that even if these three companies sell only a portion of their shares to the public, it could be enough to offset a full year of share buybacks by companies within the S&P 500 index.
Noah Weisberger, Chief U.S. Equity Strategist at BCA Research, advises particular caution regarding mega-IPOs. After studying 40 years of market history and approximately 12,000 IPOs, he found that in the 12 months following large IPOs, the S&P 500 tends to underperform compared to other periods, with a median gain of just 8%. Declines occurred in roughly one-fifth of cases.
"I think the fact that many massive IPOs are coming will heighten these concerns," Weisberger said. "They are not small deals that will be absorbed quickly; they could pose significant headwinds for the market."
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