The SpaceX IPO, the largest in history at $75 billion, succeeded despite the company losing money. As investors await IPOs from Anthropic and OpenAI, three key takeaways from SpaceX's debut offer important context for those considering buying into the next wave of high-profile offerings.
Story Beats Profits—for Now
SpaceX is unprofitable overall, even though its Starlink business generates profits that subsidize investments in space and AI. Investors bought into Elon Musk's long-term vision rather than current earnings. This pattern bodes well for Anthropic and OpenAI, which are early-stage AI startups requiring massive capital to compete. Their compelling narratives may be enough to carry their IPOs, even if profitability remains years away.
Wall Street Can Handle Big Deals
SpaceX's $75 billion IPO was the largest ever, yet the market absorbed it without disruption. This suggests that Anthropic and OpenAI, which are also expected to be sizable offerings, will likely find ample demand—provided the AI boom continues. There is no reason to believe Wall Street cannot accommodate additional large IPOs in the near future.
Buying After the IPO Isn't a Sure Win
Many investors hoped for quick gains from SpaceX, but data from CNBC shows that those who bought shares after trading began have seen minimal returns based on volume-weighted average price. The dream of swift profits often fails to materialize with IPOs, and Anthropic and OpenAI are unlikely to be exceptions. Long-term thinking may be more prudent than chasing immediate returns.
Investors do not have to participate in every hot IPO. Waiting for the dust to settle before buying into a money-losing startup can be a wise strategy, even when Wall Street enthusiasm is high. If you do invest, a long-term horizon is essential, as quick riches are harder to come by than they appear.