IPO Winners & Losers: SpaceX's Goldilocks Debut, OpenAI's Move, and IPO Discipline

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 IPO makes history and delivers a "Goldilocks" debut
• The stock rises 19% on day one, validating demand without flashing obvious froth
• OpenAI officially joins the IPO backlog after SpaceX validates the playbook
• Parabilis completes a record biotech IPO while other deals fall flat in SpaceX’s shadow
• The IPO Index keeps outperforming, but software remains a fragile spot in the market

We also discuss why SpaceX's debut may have reopened the mega-IPO window, why missing the day-one trade may not be the end of the story, and why the mixed results beneath the surface show a market that is selective — not euphoric.

Transcript

SPEAKER_01 0:01

This week's winner, SpaceX, and the lucky few who got a piece of the largest IPO in history. This week's loser, the deals that priced in its shadow, and found out a rising rocket doesn't lift at all.

SPEAKER_02 0:12

And with a Goldilocks debut in the books and OpenAI officially in the backlog, there's no longer any question about whether mega IPOs can work. Instead, it's just a matter of who runs the playbook next. Let's get into it with this week's winners and losers.

SPEAKER_01 0:30

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 the countdown is over and we have lipped off. I took that right from the newsletter because I loved it so much. SpaceX priced its record-breaking offering, and it's now officially the largest IPO of all time.

SPEAKER_02 1:00

Yeah, up 19.2% on day one. I think the newsletter just nails the framing here. Uh Goldilocks, much less, and the headlines would say it's a bust, much more, and it's just pure fantasyland hype.

SPEAKER_01 1:14

Yeah, and the tape backed it up. Uh the IPO index outpaced the SP 500 on a late week rally. Uh so risk on, but not the fraught that some were concerned about.

SPEAKER_02 1:24

Yeah, though, under the surface, not everything flew. Uh, four other deals priced this week, and only one of them really worked. So that's the tension that we'll keep coming back to. And I think it's the clear signal that the broader IPO market isn't really in bubble territory just yet.

SPEAKER_01 1:38

Mm-hmm. Uh, but pivoting back to that headline event, uh, we have to talk about the SpaceX pricing. Um, it priced a full-size deal at $135 per share, so exactly as expected. $75 billion raised at a $1.7 trillion market cap, uh, and a solid kind of best case scenario for a stay of trading.

SPEAKER_02 1:57

Yeah, I think a 19% gain is almost the ideal outcome for everyone involved. So there's there's real demand, real aftermarket gain here, uh, roughly $15 billion in paper gains for new public investors, without the kind of moonshot pop that screams a mispricing. And the underwriters even left some money on the table for buyers at the open of the market with initial trade of $150. So all good things all around.

SPEAKER_01 2:22

Yeah, and compare it to the kind of the hottest deal before this, we had Cerebrus with that really big pop, and then the pullback. Um, so at least right now, SpaceX looks pretty measured by comparison.

SPEAKER_02 2:34

Evaluation question though. I think our read was expensive but justifiable.

SPEAKER_01 2:40

I'd argue that justifiable still requires Starship, Starlink growth, the AI monetization story, all working. Uh AI will make up the majority of earnings growth as those data centers come online. Um, but dollar for dollar, Starlink is very important given its 60% plus EBITDA margins. Uh, that means we need to see Starlink ARPU stabilizing after last quarter's decline. Uh and like you said, Matt, when we were doing our first take of the S1, this is a 10-year thesis at least.

SPEAKER_02 3:07

Absolutely. Uh you really need to value this company on its 2029, 2030 numbers, and that's risky when the AI business is moving this fast. I love the rocket technology, I love Starlink. But while AI data centers are all the rage right now, it's not too hard to imagine some potential overcapacity in the years ahead. Uh but the market has just told us that it's willing to underwrite that 10-year thesis at this price. It's it's one day, but it's an important data point.

SPEAKER_01 3:34

Now, for everyone who didn't get an allocation, and that's almost everyone considering retail indications alone, reportedly more than $100 billion. The key point from the newsletter is don't kick yourself if you didn't buy day one. Uh, that's when hype often peaks. And this is a long-term story.

SPEAKER_02 3:51

Yeah, and the float math matters here too. Only about 5% of shares are trading, and then the other 95% becomes tradable over the next year or so. So that's a lot of future supply.

SPEAKER_01 4:03

Mm-hmm. Yeah. Entry points will come. Uh the lockup releases, the dribble out structure we've seen on these really large deals means that patient buyers still get chances.

SPEAKER_02 4:12

Uh, and the selling pressure could be real. Uh but there's also new uh two nearer-term catalysts as well on the other side, the buying side. Street research initiations begin on July 7th, and then index inclusion over the next month or so. A lot of people will end up owning SpaceX through index funds, whether they think about it or not.

SPEAKER_01 4:32

Mm-hmm. That's an underappreciated point for sure. Something like 50% plus of US households have exposure to passive funds. And for a deal this size, should I buy it, eventually becomes I already own it.

SPEAKER_02 4:45

And here we should say that SpaceX will be evaluated for inclusion in the Renaissance IPO index at the next quarterly rebalance. Unlike a few others, our rules have remained the same.

SPEAKER_01 4:56

Excellent point, Matt. Uh, and there's a bigger theme here. Uh, SpaceX didn't just price a deal, it published a playbook. Uh, the newsletter says it directly. The 2026 IPO rebound is back, and SpaceX just handed the playbook to Anthropic and OpenAI.

SPEAKER_02 5:12

And OpenAI is moving fast. It officially announced its confidential filing this week. That gives them the option to go public as soon as late summer. Avery, didn't I say last week that I expected OpenAI to try and one-up Anthropic? This is turning into a heated rivalry, not the book.

SPEAKER_01 5:29

Yeah, and I think that you're probably right, Matt. Uh, although Altman's own framing was a listing within a year. Um, is he downplaying it? I don't know. But it seems the window is variable, but at this point, definitely not the decision.

SPEAKER_02 5:43

Yeah, I've definitely floated the theory that open AI was downplaying its timeline. That confidential filing makes the fall mega IPO season real, but they're still giving themselves some optionality.

SPEAKER_01 5:54

The sequencing logic holds too. SpaceX proves the market can absorb this really large deal. OpenAI follows into validated demand. Anthropic watches both. Though I'm not totally convinced Anthropic doesn't try to make it to market first and set the bar for what a successful AI listing looks like.

SPEAKER_02 6:12

Yeah, it feels like each one kind of de-risks the next. That's the structural story of 2026 so far. Uh besides Anthropic and OpenAI, we have a ton of other names too. Uh Bending Spoons is the big one in the public pipeline. I'll also throw out SK Heinex, the create listed chip company valued at roughly $1 trillion that's exploring a US listing. Also restaurants like Inspire Brands, Jersey Mics, there's fitness devices, uh Strava and Aura. And there's a long lineup from the software group, unless this week's software softness scared them off.

SPEAKER_01 6:44

Mm-hmm. Yeah, with the bending spoons filing. It was definitely a throwback uh seeing AOL.

SPEAKER_02 6:49

I know.

SPEAKER_01 6:50

Yeah, I haven't I haven't thought about AOL in a long time.

SPEAKER_02 6:54

Those CDs.

SPEAKER_01 6:56

Oh my gosh. I'm thinking of like my older sister with uh AOL instant message, the aim chat. Yeah, haven't thought about that in probably like 10 or 15 years. Um and then yeah, SK Heinex is definitely worth highlighting um because DRAM is really having a moment. Um and yeah, as you said, $1 trillion. Uh that's really not making headlines right now. So that's pretty crazy. Um but here's another part of the week that didn't make the headlines. Uh, and it's still an interesting read. We had four other IPOs priced alongside SpaceX, one soared, and three landed flat.

SPEAKER_02 7:30

Nice transition there, Avery. So let me talk about the winner. Parabolis Medicines, $670 million, the largest biotech IPO ever, and a 50% pop on day one. Engineered peptides for cancer therapies. That's records in two categories in one week.

SPEAKER_01 7:48

Mm-hmm. Uh, and yeah, that largest biotech record we already saw this year. Uh, so definitely seeing some tailwinds in biotech uh and another monster biotech with a monster debut tells you that the risk appetite is there for the right story.

SPEAKER_02 8:02

Yeah, but then we had Fourbright, E Rock, and White Hawk Minerals. We got a bank, a flower equipment, and energy. Those three didn't get much demand. Uh, I think E Rock really trying to ride in any of those tailwinds, but not quite succeeding.

SPEAKER_01 8:15

Mm-hmm. So the SpaceX Halo has its limits. And maybe just telling us that demand is deep for exceptional stories and indifferent to the rest.

SPEAKER_02 8:23

At the same time, pricing into SpaceX week means competing with a black hole for attention. Some of this could be calendar, not quality.

SPEAKER_01 8:31

Mm-hmm. That's a good point. Uh, but I think maybe both. But either way, the lesson for issuers is the same. A hot market is not necessarily a forgiving market. Uh, but let's turn to the scoreboard for existing new stocks because it was a very strong week, uh, even though it had a familiar sore spot. The IPO index ended the week up 4% versus a 0.6% .6% gain for the SP 500. So it really feels like the IPO index is kind of falling into this pattern of outperforming.

SPEAKER_02 9:02

Yeah, and we had the uh surprise leader here, Kava, Mediterranean chain, up 25.3% after management raised its restaurant unit expansion plans. Uh a restaurant chain topping the index for the week and uh when the in the week of SpaceX IPO, something you don't ext uh exactly expect, but here we are.

SPEAKER_01 9:20

Yeah, kind of refreshing. Uh consumer name winning on fundamentals and not a theme. Growth guidance goes up, stock goes up. It's really kind of a classic move.

SPEAKER_02 9:30

We also saw some AI infrastructure names in there uh in the winners column. That trade just keeps on working.

SPEAKER_01 9:37

But as you mentioned, software uh did not do so hot. Uh we had sale point at the bottom, down 19.9% on lower guidance after Q1 earnings. Big Mac close behind as well.

SPEAKER_02 9:48

Yeah, that stings given the software revival thesis we've been tracking and hoping for. Uh the sector showing life one week and then getting punished on guidance the next, that recovery is looking pretty fragile so far.

SPEAKER_01 10:01

Yeah, it feels like the SAS pocalypse is still upon us in some senses. But I think the read is that everything is really guidance dependent right now, and software names get no benefit of the doubt. Uh, but zooming out, what did this week actually settle? The 2026 rebound has moved from thesis to fact. The largest IPO in history priced, traded well, and the index beat the SP again.

SPEAKER_02 10:27

Yeah, and the mega IPO era moved from forecast to schedule. SpaceX is now done. OpenAI and Anthropic both confidentially filed. The playbook exists and it works.

SPEAKER_01 10:38

Mm-hmm. But the selectivity beneath the surface is a real signal. Parabolis flew, three others stalled, sale point got hammered. So this isn't 2021. Thank God. Buyers are still discerning.

SPEAKER_02 10:51

Which honestly is the bullish version of discipline. A market that rewards conviction stories and punishes weak ones can sustain this a lot longer than a market that just buys everything.

SPEAKER_01 11:01

The open question now, I think, is the depth below the mega caps. SpaceX proved the top of the market, and the next two weeks is going to test the middle. So, all right. What are we watching in a pretty quiet holiday week? First, the SpaceX aftermarket. Uh as we said, hype peaks on day one. So does this Goldilocks debut hold through week two? Uh and mark your calendars because we are watching July 7th for those research initiations.

SPEAKER_02 11:29

Yeah, Avery, I got a call from a journalist saying, I want to talk about SpaceX trading on day two. So I was like, oh yeah, we had a lot of coverage on day one, but not as many people talk about day two. And uh maybe we'll just talk about SpaceX trading every day.

SPEAKER_01 11:43

Yeah, every day for like uh what, a year.

SPEAKER_02 11:46

Just when we thought we were out, they pull us back in. Uh so next week on the calendar, uh, two deals testing the post-SpaceX market. We've got Cardigan, the cardiovascular biotech. Uh, that's looking to ride the Parabolis biotech momentum, and then Community Bank First Carolina. So short week, small deals, useful reads.

SPEAKER_01 12:08

Mm-hmm. And of course, watching for any open AI leaks, uh, evaluation, timing, bankers, uh, anything. Because confidential filings don't stay quiet when the deal is this big. I think we learned our lesson definitely with SpaceX.

SPEAKER_02 12:21

Yep. So, lift off achieved. Now we'll find out if the orbit holds.

SPEAKER_01 12:28

Yep. And 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's statements should not be considered investment 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.

SPEAKER_02 13:11

And now, Avery, let's just let the tape run a little bit, uh, kick back our legs, and uh let me ramble about some things. Um as you know, we both probably created a ton of notes this week about SpaceX, some of which didn't really fit into the podcast. So uh wanted to bring up something that I thought was interesting. Uh first thing being the law of large numbers. Uh now, a lot of people don't know this, but this is not actually a criminal law. You can't go to jail for violating the law of large numbers. It's frowned upon, but it's not criminal.

SPEAKER_00 13:46

Yeah, I'm frowning upon it.

SPEAKER_02 13:47

You're frowning upon it. But now, for my point, there are plenty of examples of a company going from a market cap of 5 billion to 55 billion. That is a 1,000% return. A 1,000% return for SpaceX would mean a nearly $20 trillion market cap. That's two-thirds of US GDP. So with SpaceX, you're not getting in on the ground floor like you think of with most IPOs. It could be a solid investment, and I'm not poo-pooing a potential 3x return. Alphabet could be a solid investment too, multi-trillion dollar market cap, but nobody is buying it hoping for a 10Xer. And I think part of the reason that people buy IPOs traditionally is the potential for a 10Xer or more. So, you know, looking at Statup in the 20 years since Google Google went public, a very big deal at the time, it has delivered a 13,000% return. So the question is, can SpaceX become a $200 trillion company in 20 years? Can it get the Tesla-like returns and become a $600 trillion or close to one quadrillion dollar company? So uh five at five years from now, does SpaceX look like a smart buy or do you think it's gonna look like a cautionary tale?

SPEAKER_01 15:08

I'd say call me in five years and I'll let you know. Uh I definitely don't have I definitely don't have a crystal ball. Um, but I think a lot depends on how well they can actually execute their plans post-IPO. That means the completion of Starship, ramping up of that AI business. But uh kind of what you alluded to, Matt, the reality of every IPO is that a company needs to prove to public investors that they're worth at least what they price at. And then they need to keep proving it. So a trillion dollars as a starting point, I think brings up concerns about uh what the sustainable stock birth is going to look like. Because yeah, uh 200, unless you're like not counting inflation or double counting inflation or something, $200 trillion uh is uh I can't even like think about that much.

SPEAKER_02 15:55

Yeah. Uh well, a million humans on Mars uh will do it, I guess. No. Maybe the profit is uh on that one. Um yeah, I know when I was, you know, first looking at the financials, looking at the recent quarterly growth, I was like, how is this company gonna justify that valuation? It wasn't really until I saw our model and the rapid revenue ramp up, and then the Google deal and the anthropic deal, and so saying, oh, those two alone could are going to double revenue next year, uh, it looks like. So I think that finally gave me a little bit of confidence, and then yeah, talking to the analyst here, uh looking at the model.

SPEAKER_01 16:32

Yeah, but then you have to wonder, yeah, these other two big deals coming possibly near at a trillion. It's I don't know, when is it gonna stop? So speaking of anthropic and open AI, pin those two head to head. What's the advantage of moving first?

SPEAKER_02 16:47

Right, because we keep on seeing this back and forth headline of, you know, open AI does this, anthropic does that, each are moving closer to an IPO. It looks like they're trying to one-up each other each week. And I thought about this, I think I came to the conclusion that you always want to move first. I was thinking of uh Alibaba and uh JD.com in 2014, uh uh Facebook and Twitter, uh, 2012-2013, Lyft and Uber in 2019. So uh I think uh I think this is what the deal is. Uh if you are a strong company, if you're the stronger of the two, you know that there's no clear comparable. Investors don't usually like this, but in an especially hot area that becomes less looking like a lack of a floor and more looking like a lack of a ceiling. So it can kind of work to the company's favor. So if you're the stronger of the two, going first will maybe cut the legs out of the competition since investors will kind of shrug when they see uh the follow-ons numbers. Like, oh, I like the first ones better. And if you're the weaker of the two, well, you just don't want the stronger one to come first and cut you off. So uh it I also wanted to say it's really funny that they're racing, you know. It seems like these companies just stay private as long as possible, and then once it's IPO time, it's like they're moving at light speed, gotta go public now.

SPEAKER_01 18:14

Yeah. I feel like for Anthropic, uh to me, that one seems more like your kind of classic IPO. I mean, you have so many companies like Stripe and Databricks, I mean, and SpaceX that stayed private for like as long as possible. That's true. And even OpenAI is like at least 10 years old now. Um, so Anthropic is kind of younger. Uh and uh I don't know, from what we can tell so far, it seems like it might be the uh the better of the two, but yeah, we won't know for sure.

SPEAKER_02 18:47

On the operating profit side for sure. Yeah. Um on that point too, someone did ask me like, oh, is it really like responsible for indexes to be adding uh SpaceX, uh company that's kind of like a venture style investment? Um, which I thought was kind of a funny question because I was like, they've stayed private for 20 years.

SPEAKER_01 19:06

I mean uh Yeah, they're not really it's not really like this unproven business.

SPEAKER_02 19:11

I mean, I I get it though, like you know, it's you kind of wince when you see the 40 billion and accumulated deficit. So it would have been nice if we saw some profits there, but uh at the same time, it's time for this, it's time for a lot of these companies to go public. I mean, you named Stripe. That's just not ever gonna go public, though. Let's uh yeah, let's be real.

SPEAKER_01 19:32

How long have we been like thinking about or uh talking about that now? I mean, to response like seven years ago.

SPEAKER_02 19:39

Yeah, I'll I'll never say Stripe's gonna be an upcoming IPO until uh it actually files. Um one last point. This one got a lot of hubbub. The world's first trillionaire, Elon Musk. Uh I don't have a whole lot to add here beyond what's already been said, but I just wanted to take a moment and put it in perspective. One trillion is a lot, it's hard to conceptualize. So that one trillion dollars is one trillion dollar pizza slices.

SPEAKER_00 20:07

Sounds good.

SPEAKER_02 20:08

Sounds pretty good. Some additional context for you. You could buy six Disneys or one Elon Musk. Avery, you're thinking about it.

SPEAKER_00 20:21

I'm thinking about it. I'm thinking about owning six Disneys. That sounds nice.

SPEAKER_02 20:25

Oh, okay. Yeah, you want with the six Disneys there?

SPEAKER_00 20:27

Actually, I think I'm gonna go back to the trillion dollar pizza slices. That is like that's gotta be enough food for like ever, right?

SPEAKER_02 20:35

Well, actually, uh in New York now, those are all but gone. It's it's dollar fifty slice now, so they're harder to find. You there's a few dollar slice places left, and I like to uh frequent them. But uh nothing else.

SPEAKER_01 20:52

Yeah, that's our that's our rambling for for the week. Yep. All right. Thanks everybody for listening.

SPEAKER_02 20:59

All right, thanks every thanks everyone else too.