Should Investors Be Skeptical of Upcoming Mega-IPOs?
Wall Street is bracing for a wave of mega-IPOs, led by SpaceX on June 12, followed by OpenAI and Anthropic. Analysts highlight circular investing patterns between Big Tech and these startups, urging caution.
US stock markets (DJIA, NASDAQ, S&P 500) are preparing for the public launch of SpaceX (ticker: SPAX.PVT) on June 12, raising questions about how skeptical investors should be of these mega-IPOs expected to sweep Wall Street.
Details
Kevin Thompson, founder and CEO of 9i Capital Group, points to circular investing occurring between Big Tech names (such as Alphabet) and these pre-IPO companies — SpaceX, OpenAI (OPAI.PVT), and Anthropic (ANTH.PVT). OpenAI and Anthropic have also filed to go public in 2026.
Context
"Circular investing" refers to Big Tech companies funneling capital into pre-IPO startups, creating a cycle of inflated valuations that may not reflect underlying fundamentals. This pattern has raised concerns among analysts who believe retail investors could bear the brunt of potential risks.
What This Means for Investors
Investors should exercise caution and scrutinize the valuations of these pre-IPO companies, especially given the limited financial track records of some. It is advisable to focus on available financial data and understand the business model before making investment decisions.
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