When I was a kid, I begged my parents to go to Golden Corral. It’s a Southern staple. Not because it has good food, but because it has ALL the food. With SpaceX (SPCX) debuting this Friday with what could be $75 billion in new shares, it’s totally fair to wonder who will actually be hungry for the coming mega-IPOs, observes Callie Cox, chief market strategist at Ritholtz Wealth Management.
Restraint isn’t your strong suit when you’re 10 years old and staring down a bottomless sundae bar. I wanted it, and the lovely line workers of Golden Corral served it right up. In a way, that’s how Wall Street operates.
You can get all high and mighty about what’s prudent for a long-term investor, but people want what they want. And all kinds of firms, brokerages, and TikTok influencers from varying shades of legitimacy will give it to you for the right price.
AI pushed this all-you-can-invest dynamic into overdrive. Hyperscalers, venture funds, data center deals – come and get it. Everybody wants your money for their next AI project, to the tune of trillions of dollars. We’ve been gorging for years now. And after a raucous selloff last Friday – the worst for the Nasdaq 100 in 14 months – I have to wonder: Are we getting too full?
At this size, SpaceX would be the biggest common-stock IPO for a US-based company in history – four times the size of Visa Inc.’s (V) $18 billion debut in 2008. So…yeah. And this all-you-can-invest story stretches far beyond SpaceX, Anthropic, and OpenAI.
Wall Street has been conservative on IPOs for a few years after the high-flying days of 2021. Now, AI spending is huge, and businesses of all sizes will need to fund their ambitious plans for the future. We’re fat and happy off the buffet, yet AI companies think we’re hungry for more.
Some market experts have evoked the memory of the 2000s tech go-go years, implying that the SpaceX IPO is a sign of market-topping excess. I’m not here to call a bubble. Nobody can do that, so why even play the game?
Instead, I think it’s important to remember that you can have too much of a good thing. And it’s hard to say where the line is until you get sick.
