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Why the Enormous IPOs Won’t Sink the Market
By Jack Hough
June 12, 2026, 1:54 pm EDT
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Will trillicorns break the stock market? I’ll come to that, but let me start with how we got here–linguistically and financially.
Wall Street loves an ugly portmanteau, or jamming together of two words in a way that sows confusion, followed closely by dislike. Until recently, its crowning achievements were “shrinkflation,” where companies subtly reduce product sizes to raise unit prices, and “garbatrage,” when a takeover announcement sends shares of low-quality companies in the same industry higher.
Then along came SpaceX. Back in a 2013 article, a venture capitalist named Aileen Lee came up with a term for private companies valued over $1 billion. She called them unicorns to denote their exceptional rareness. She found just 39 U.S.-based ones. Today there are more than 800–roughly the population of Tapanuli orangutans or wild Bactrian camels, but it’s too late to change metaphors.
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Even more striking than the population growth of unicorns has been their swelling sizes, which has set off a portmantavalanche of hideous new classifications. Today there are decacorns valued at over $10 billion, such as artificial-intelligence search engine Perplexity and Fortnite maker Epic Games. There are hectocorns worth over $100 billion, like fintech Stripe, TikTok owner ByteDance, and Databricks, a platform for organizing data for AI applications. And there are trillicorns. Still. Probably.
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SPCX\ \ +19.22% was a trillicorn, but it went public Friday at a deal price that valued the company at over $1.7 trillion, so it’s now out of the unicorn herd altogether, since unicorns are private. There are still some high hectocorns, and maybe even trillicorns—private companies are valued infrequently during funding events, so we can only extrapolate their current values. OpenAI, creator of ChatGPT, was valued at $852 billion in a March funding round, and over $1 trillion in some private share transactions. Anthropic, owner of the Claude AI model and coding tool, was valued at $965 billion during a May fund-raising.
OpenAI and Antropic have filed confidential paperwork to go public, and could begin trading late this year. More AI companies are expected to follow soon, since the infrastructure they’re building is extraordinarily expensive, and the stock market offers a key funding advantage. Long-public companies can tap the market for more money, too. Alphabet
GOOGL\ \ +0.53% is raising $90 billion for AI in a stock offering.
This is a potential stock market sea change. For the past 23 years, the supply of shares has been shrinking. Companies have bought back gobs of stock while turning stingy on dividends—they like that buybacks don’t require an ongoing commitment. Fewer companies have gone public, and more have been taken private, resulting in thousands fewer listed companies since the mid-1990s.
To the extent that falling supply leads to higher prices, a shrinking U.S. stock market might have juiced investor returns for decades. But this year’s parade of plus-size initial public offerings could increase stock market supply. Should investors be worried? No, for 3½ reasons. Also, maybe a little, for one reason.
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Past stock-issuance waves have coincided with handsome returns. Deutsche Bank has studied the matter and found that returns averaged 8% in the first three months of IPO sprees, and 20% in the first 12 months. A notable exception was the global financial crisis of 2008-09, when some companies sold stock out of desperation. In general, strong stock markets beget IPO booms, and cycles can be long-lasting.
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Also, it’s a big stock market in terms of value, if not listings. The Wilshire 5000 Total Market Index—which these days, due to shrinking supply, tracks just over 3,400 stocks—has a market value of around $74 trillion. It can absorb a trillicorn or two. Deutsche Bank uses a supply/demand model for stocks covering issuance, buybacks, and fund flows, and it says that the largest IPOs in isolation could drag the market lower by 1%, but investors are unlikely to notice, because declines of 3% tend to occur every month or two.
A third reason not to panic is that, while this will surely be a record year for IPOs, buybacks have been hitting record levels, too, which helps offset new stock supply. A half reason is that newly traded stocks won’t hit index funds all at once. SpaceX actually sold less than 5% of itself to the public. This “float” of shares available for trading is what most indexes track, not total market value. This one is only half a reason, because some indexes have scrambled to change their rules for SpaceX and its tiny float. Both the Nasdaq 100 and Russell 1000 recently loosened float requirements and fast-tracked inclusion timing. The S&P 500 is sticking with its rules, and SpaceX falls short of inclusion on three counts: It hasn’t been trading for at least a year, it doesn’t have at least a 10% float, and it isn’t profitable.
Put it all together, and the march of trillicorn IPOs doesn’t portend doom for investors. But it’s worth keeping an eye on. The stock market already trades at an ambitious 22 times this year’s projected earnings, and bonds offer competition: 10-year Treasuries pay 4.5%, up from 1.5% five years ago. Newly public companies typically have lockup periods that prevent insiders from dumping shares for a while, often six months or so. Eventually, lockups expire, and float increases, along with index fund exposure. That’s fine, unless shares are outrageously expensive to begin with.
SpaceX trading will likely be volatile in early days, but suppose the share price gets to $175, up about 30% from the offering price. There are 12.7 billion total shares outstanding. Revenue this year is estimated at $34.5 billion. Those numbers make for a price/sales ratio of 64, compared with 3.3 for the S&P 500.
SpaceX growth projections are otherworldly, but those can be subject to revision. Three years ago, the consensus estimate for Tesla
TSLA\ \ +1.82%’s 2025 revenue was $163 billion. The actual number was $94.8 billion. Then again, investors don’t seem to mind too much. Tesla shares are up 59% in three years, only 18 points behind the S&P 500.
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Write to Jack Hough at jack.hough@barrons.comExternal link and subscribe to his Barron’s StreetwiseExternal link podcast.
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The Stock Market Survived the SpaceX IPO. What to Watch for Next.
By Teresa Rivas
Updated June 13, 2026, 10:51 am EDT / Original June 12, 2026, 2:55 pm EDT
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The SpaceX initial public offering didn’t mean all that much to the stock market this past week—but it could mark the start of the countdown to the end of the bull market sometime in the year ahead.
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SpaceX’s IPO Is a Done Deal. What History Says Happens Next.
By Doug Busch
Updated June 13, 2026, 10:07 am EDT / Original June 13, 2026, 2:30 am EDT
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With SpaceX
SPCX\ \ +19.22% debuting on public markets Friday and rival AI giants entering the IPO pipeline, 2026 could become one of the most consequential years for capital markets in decades.
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