IPO Winners & Losers: SpaceX Terms, Selective Investors, and the AI IPO Race

Welcome back to Renaissance Capital's IPO Winners and Losers — the weekly podcast breaking down the biggest stories shaping the IPO market, new stocks, and Wall Street sentiment.

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This week:
• SpaceX sets terms for what could be the largest IPO in history
• Retail investors may get a record allocation in the SpaceX offering
• INNIO pops while Quantinuum gives quantum IPOs a reality check
• Liftoff Mobile opens the door for the first major software IPO of the year
• Anthropic confidentially files as the mega-IPO race accelerates

We also discuss why SpaceX's $1.75 trillion target market cap is only part of the story, how a shakier tape could affect IPO demand, and why this week’s winners, losers, and pulled deals show a market that is open — but still selective.

If you follow IPOs, AI infrastructure, market psychology, or disruptive growth companies, this is the place to stay ahead of the next wave of public market stories.

Transcript

SPEAKER_01 0:01

This week's winner, SpaceX, Ineo, and anyone with an AI power story. This week's loser, Quantium, Circle, and the two deals that couldn't get done.

SPEAKER_00 0:10

And with the largest IPO in history now officially targeting a $1.75 trillion market cap, the question isn't if anymore, it's how would the markets digest such a big deal? Let's get into it with this week's winners and losers.

SPEAKER_01 0:26

Quick note before we dive in, this podcast is for informational purposes only, and nothing we discuss should be taken as investment advice or a recommendation to buy, sell, or hold any security. Past performance does not guarantee future results, and one cannot invest directly in an index. For the full disclosure, check the end of this recording. So let's walk through the week because SpaceX is the headline, but there's a lot underneath. Yeah, SpaceX at terms, $75 billion raise at a $1.75 trillion market cap, expected to list next Friday, June 12th. So exactly what the market expected.

SPEAKER_00 1:00

Yeah, and uh beyond the launch, five IPOs priced this week. We had two billion dollar deals, the first major software IPO of the year, and anthropic confidentially filing.

SPEAKER_01 1:10

Yeah, the tape was rough though. Losses in both the IPO index and the SP 500 on a chip sell-off.

SPEAKER_00 1:17

So the calendar is exploding and SpaceX is pricing right as the tape gets a bit shaky. Uh that's the tension worth watching. Last week we said that SpaceX couldn't have asked for a better market. This week put a dent in that, but I think conditions are still mostly good.

SPEAKER_01 1:32

Yeah, and digging into the week, we obviously have to start with SpaceX uh because, like everything else with this deal so far, the terms tell a story. Uh one of the most interesting points is that there is no price range. Um, they just set a proposed price at 135 per share for 556 million dollars or million shares. So that's pretty unusual.

SPEAKER_00 1:55

Right. I think the translation here is they've got the book covered. Uh, you don't skip a range unless you know the demand is there.

SPEAKER_01 2:01

Mm-hmm. And it wasn't disclosed outright in the prospectus, but retail allocation is expected to be up to 30%. So that's roughly $23 billion offered through five different platforms. That would be record retail participation if that's where it lands.

SPEAKER_00 2:18

Yeah. Schwab, Fidelity, Robinhood, SoFi, eTrade, uh, these are all offering uh shares. That's a structural shift. Mega IPOs used to be institutional events. This one is genuinely a public market debut.

SPEAKER_01 2:33

Yeah, and one question being asked, a big question, is who makes the money here? Uh looking at that, the underwriters are poised to take home over $500 million. So that's the biggest fee haul ever. Not really a shock on the biggest IPO ever. Um, but within that, looking at Goldman leading, again, might not be a huge shock. Um, but what's often overlooked, and the newsletter points this out, banking stocks are an indirect play on this whole IPO rebound. Um, and that's definitely worth highlighting right now, given this massive fee haul.

SPEAKER_00 3:06

And uh who else makes money? Well, obviously existing shareholders. Uh the prospectus tells us that the average cost basis is around $7 per share. That's looking like a $1.5 trillion unrealized gain. Uh obviously, most of that is going to Elon Musk. Uh, but yeah, those shares are locked up for now. Uh eventually, those lockup releases will matter.

SPEAKER_01 3:29

Yeah, which brings us to the lockup structure. At the IPO, 5% float, 95% of those shares locked up. Um, that is a lot. Those are a lot of shares that can and are going to be released into the market and kind of lends to this ridiculously complicated release schedule.

SPEAKER_00 3:46

Yeah, Avery, I think I saw 17 distinct lockup releases. So uh don't think I've ever seen that before. Cerebris had maybe uh 11 or 12, but uh you know, let's just keep on making records there. Uh uh, but yeah, the lockup is a good point. On the other side, we've got the uh index funds that are drawing up fast entry plans. So you've got forced buying and eventually unlock uh and eventual unlocking colliding on a timeline, the forced buying and then the selling.

SPEAKER_01 4:16

Yep, I mean, we did say it's an unusual deal, and uh nothing has changed at this point, I think. Um so pivoting away from SpaceX, if we can do that. Uh on the deal side, it was a pretty busy week, slightly less busy than we'd expected, um, but five sizable IPOs priced. The leaders there were natural gas engine maker Ineo and Honeywell's Quantum Carve Out Continuum, both upsized, both priced above the midpoint. So there was enthusiasm on the book building side. Um, trading was another story.

SPEAKER_00 4:46

Yeah, INEO popped 23%, strong debut there. That's uh natural gas engines that are producing electricity that feeds into AI data centers. So AI infrastructure is the trade that keeps on working. Quantinuum, on the other hand, fell flat. Quantum computing, a pure moonshot category, and investors didn't bite.

SPEAKER_01 5:07

That's a really useful data point when we're evaluating this rebound. Um, because a few weeks ago we were saying the market was rewarding lottery tickets, but with Quantinuum, public investors told us it's not all of them. Um and there is that separation there, like you mentioned, the AI power story that I think has substance behind it, whereas quantum really is still speculative. Um, if this is one-off or something broader, the wave of disruptive tech IPOs on the horizon are definitely going to tell us more.

SPEAKER_00 5:34

Yeah, and uh Avery, I think now's a good time. Why don't you just explain to the listeners what is quantum computing?

SPEAKER_01 5:41

Oh, Matt.

SPEAKER_00 5:43

I'm just kidding. Um I'm thinking of uh I always think of that Simpsons episode where Homer becomes a missionary and he uh builds a casino and the guy says, How can ace be one and eleven? So something like that, right? A qubit is both one and zero, or some probability of that. Uh more than that, I can't tell you.

SPEAKER_01 6:06

Yeah. Yeah. More than I think I could say.

SPEAKER_00 6:08

So but uh yeah, I think the the takeaway here is that when a company has no earnings and in fact very little revenue, well, there isn't much of a valuation floor. This felt to me like traders just kind of betting on this being a hot deal without much conviction in the underlying business, and then running for the exit when it wasn't a smash hit. Uh and then on the flip side, we did have lift off mobile, Blackstone's mobile ad tech play. So first major software IP of the year, it came at a very clear valuation discount and it was well received. So that's the one that we flagged a couple weeks back as the canary in the coal mine. It got through. Software window is reopening again.

SPEAKER_01 6:46

Yeah, that is a great data point after this kind of darth of software that we've had, um, geez, for I don't know, weeks, months, years now. So yeah, rounding out the week, we had more defense with applied airspace um and also early stage mining with Sunshine Silver. Uh, and then there were two that didn't get done. Um, we had Insurer Safe Point, which was the first postponement since since February, the first major one at least. Um, and then Whitehawk, which was another uh natural gas play.

SPEAKER_00 7:12

Yeah, so I think pulled deals matter. It tells you that the bar is real. Despite the rally in April and May, the market isn't taking everything. The IP market is still in the process of reopening, and investors really can't bank on a strong debut from every deal. I I know I've heard from some people, you know, is this the is this market like 2021? I think these tell us, you know, we're still far, far away from the 2021 uh mania.

SPEAKER_01 7:35

Mm-hmm. Yeah, there's still a lot of discernment in the market right now. Um, and now onto some news that would otherwise normally headline. Um we had Anthropic announcing its confidential filing. Can't say when it will actually go, but if it did kind of an accelerated timeline like SpaceX, that could mean a late July listing.

SPEAKER_00 7:54

Yeah, that could put them ahead of open AI in the uh race to go public. A couple of weeks ago, we were talking about you know fall for anthropic. Now it could be summer. End of end of July would be tight but doable.

SPEAKER_01 8:05

I guess you call that the Cerebrus and SpaceX effect, uh, even with the recent noise when the window is open like this. That's incentive for every mega IPO candidate to move faster.

SPEAKER_00 8:16

And it reshuffles the calendar yet again. Uh SpaceX in June, potentially Anthropic in the summer, open AI sometime after. The uh big three in 2026 story keeps on tightening.

SPEAKER_01 8:28

Mm-hmm. So looking ahead, not quite that far, but uh coming up, we have three other deals trying to price alongside SpaceX. Uh, we have another power generation play with EROC, um, this well-funded cancer biotech with parabolas, if I'm saying that right, and digital bank forbright. So, some similar themes with the AI data center demand and biotech, um, as well as maybe this possible FinTech angle with Forebrite.

SPEAKER_00 8:53

That uh that takes some confidence. Historically, mega deals starve the rest of the calendar. Uh, thinking back to uh Facebook, for example, these issuers are betting that demand is going to be deep enough.

SPEAKER_01 9:04

Yeah, and pricing in the same week as SpaceX could be risky. Attention is finite, and some of these might get uh a pretty cold shoulder. Mm-hmm. So, on to the scoreboard. Uh, we had the first down week in a while, not not uh anything we really want to talk about, but the IPU index ended the week off 5.3% versus a loss of 2.6% for the SP 500. Um, what's really weighing on those both was the sell-off in chip stocks late in the week. Um, I think that's really tied to the Broadcom forecasts, um, which kind of reminds you earnings can be good, but if your forecasts aren't perfect, um it can be pretty uh pretty challenging.

SPEAKER_00 9:45

Absolutely. A lot of uh hope built into the chip stocks right now. And then uh on the upside, though, we did have Forgent Power Solutions actually up 8.2% on the uh data center tailwinds. So the AI power trade held even as chips wobbled. Uh Service Titan took the number two spot in the index.

SPEAKER_01 10:04

Yeah, and on the flip side, we have Circle down about 29% on uh reports of a new stablecoin platform that might be formed in competition. I think I saw that was Stripe and Visa and maybe MasterCard. Um, so just more strain on top of this broader pullback in the crypto space. So yeah, circle volatile stock having some tough time.

SPEAKER_00 10:25

I think I'll call it the Mr. Miyagi market. Risk on, risk off. Risk on, risk off.

SPEAKER_01 10:33

Yeah.

SPEAKER_00 10:33

Sorry.

SPEAKER_01 10:34

Well uh so zooming out, what does this all add up to? So SpaceX is officially on the calendar, and by this time next week, its $75 billion deal will be in the books. So that's the headline that really defines the year.

SPEAKER_00 10:49

Yeah, 2026 uh headline is definitely going to be SpaceX. Uh, but the week underneath the launch does tell you about market health. Uh Ineo worked, liftoff worked, quitinuum didn't, two deals pulled. That is a functioning market, but not a euphoric one.

SPEAKER_01 11:03

Mm-hmm. And anthropic taking concrete concrete steps toward IPO means that the mega i mega pipeline is real if you didn't believe it at this point. Uh so looking at maybe late July and beyond, uh, the calendar really keeps filling in. Uh but the issuers are reading it right. You go public when you can, and that means it's not always comfortable.

SPEAKER_00 11:24

Right. Uh after this week, we're looking at some real cracks in the rally, but uh zooming out, the three-month performance is still very strong. So the question is now that investors are taking a hard look at valuations, will that impact the SpaceX deal or is this company kind of in a league of its own?

SPEAKER_01 11:41

Yeah, that's a good question. Um, I think talking with a reporter this week, I said, yeah, this is a difficult one to call a bellwether because it is just so uh unusual.

SPEAKER_00 11:51

Right.

SPEAKER_01 11:52

Um but all right. What are we watching as SpaceX lists? Obviously, the SpaceX listing, pricing dynamics, the actual retail allocation, the day one trading. And if this really does suck all the oxygen out of the IPO market.

SPEAKER_00 12:07

Yeah, and then beyond that, we've got several other deals. Uh EROC, Parabolis, Forbright. Uh, can they get attention alongside SpaceX? And how do they price and trade?

SPEAKER_01 12:16

Mm-hmm. Uh, and then keeping tabs on Anthropic for any leaks or updates, or maybe we get some news from OpenAI.

SPEAKER_00 12:24

Yeah, well, watch out for that. I'm sure OpenAI would love to have some headline that tops anthropic. It seems like they're fighting for attention. Uh don't forget about me. Um so then what else we're looking for? You know, what happens to the tape next week? Does the chip sell off deepen, or is that kind of a one-week wobble? So, you know, we're looking at we've got launch week, so SpaceX coming up. Strap in, buckle up, and one week we're going to the moon, maybe.

SPEAKER_01 12:51

Yeah, moon, Mars, we'll see.

SPEAKER_00 12:54

Rocket launch.

SPEAKER_01 12:56

So, yeah, that's it for this week's winners and losers. Uh, get the full newsletter in your inbox by clicking the link in the description. Thanks for listening. And before we go, please listen carefully to our full disclosure. This podcast is for informational purposes only. Renaissance Capital statements should not be considered advancement advice or a recommendation to buy, sell, or hold any particular security. Certain of the statements contained may be statements of future expectations and other forward looking statements that are based on Renaissance Capital's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance, or events to differ materially from those expressed or implied in such statements. Past performance does not guarantee future results. One cannot invest directly in an index.