IPO Winners & Losers: Great Tape, OpenAI Leaks, and the Filing Gap

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:
• The IPO Index keeps surging, up more than triple the S&P 500 year-to-date
• SpaceX holds up in the aftermarket and reaches a market cap near Amazon
• The IPO rally looks strong, but new filings remain the missing piece
• Kardigan leads a mixed holiday-week IPO lineup as biotech stays hot
• OpenAI’s leaked financials show huge growth — and massive losses

We also discuss why new stocks are separating from the broader market, whether the SpaceX IPO is a true bellwether for the broader IPO rebound, and why the next few weeks of filings could determine whether July has real momentum — or starts to thin out.

Transcript

SPEAKER_01 0:01

This week's winner, the IPO index, which is blowing the SP 500 out of the water right now. This week's loser, anyone who thought the prospect of a Fed rate hike could slow down new stocks.

SPEAKER_00 0:13

With a solid foundation in place for a broader IPO rebound, the only thing missing is filing. Let's get into it with this week's winners and losers.

SPEAKER_01 0:24

Quick note before we dive in, this podcast is for informational purposes only, and nothing we discussed 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 story is the gap and what's missing from the pipeline. So we had that big macro news. The Fed held rates flat, but hinted at a future hike, and that kind of rattled markets. That said, the IPO index still ended the week up 6.8%. So completely dwarfing the SP's 0.9% return.

SPEAKER_00 1:03

Yeah, just stepping back a bit here, the year to date on the IPO index is a 30% rally. That is triple the SP 500. So we are now back to where we were uh before the 2022 sell-off, highest point since 2021.

SPEAKER_01 1:18

There's some nuance here though. Um we definitely can look to growth stocks and kind of that renewed interest as a potential driver. But not every growth index joined the party this week. Um the NASDAQ 100, Russell 1000 growth just didn't see the same gains.

SPEAKER_00 1:32

Yeah, and I think differentiated returns are exactly why new stocks earn a seat in a balanced portfolio. This isn't just, you know, tech went up. New stocks behave a certain way, in part because they're underrepresented in many portfolios.

SPEAKER_01 1:46

Yeah, that's a great point. Um, and we do have this kind of one flaw in this really rosy picture. It's that if we don't see a pickup in filing soon, the whole outlook for July gets a bit shaky. It's the rally's there. It's just the supply hasn't caught up yet. Uh, but digging in now, let's start where everyone's still looking, and that is the SpaceX aftermarket. Uh, we saw this surge on Monday, a kind of continued rise on Tuesday, and then just a retreat. Um, it still finished the week up about 15%, closed at a $2.4 trillion market cap, putting it right behind Amazon.

SPEAKER_00 2:24

Yeah, that was a nice stat from the newsletter. Uh, let's sit with that for a second. The largest IPO ever is now jostling with Amazon by market value. That's surreal.

SPEAKER_01 2:34

Yeah. Uh how is it? Three, four days old, and it's one of the biggest companies on US markets. Um there's certainly volatility though. And we expect to see that uh in the near term. And we have that first lockup release uh in August. So it seems like all this is kind of conviction trading for now.

SPEAKER_00 2:53

And here's the real debate that I've been wrestling with. You know, is SpaceX a bellwether for the whole IPO market, or is it just for a handful of mega IPOs or anthropics or open AIs?

SPEAKER_01 3:06

Can we say bellwether light? Uh I know one deal definitely doesn't broaden a market, um, but the index rally underneath sets a foundation for a wider rebound.

SPEAKER_00 3:16

Yeah, that's a fair point. Uh the mega deal did prove that demand exists. Uh so the question is whether it trickles down to everyone else on file. And uh while we're on the topic of SpaceX, Avery, did you see how many of those daily 2X leveraged bowl and bear SpaceX ETFs have launched? Uh just you know, browsing the internet, I found six. I was not looking for them. They just presented themselves to me through ads. Uh I I looked it up just now. I think there was 10 total that people were counting.

SPEAKER_01 3:46

I think that's some targeted advertising doing that.

SPEAKER_00 3:50

I'm gonna I Google a lot of SpaceX stocks.

SPEAKER_01 3:52

I was gonna say you've said SpaceX one too many times, and your phone has been listening.

SPEAKER_00 3:57

Yep.

SPEAKER_01 3:58

Yeah. Um, but on the supply side, um, the pipeline was actually soft spot this week. Uh I know you're talking about uh trickling down to these filings. We really just had one major new one, um that's C Square, a data center data center owner.

SPEAKER_00 4:14

Yeah, uh data centers, that's the right theme. Uh AI power demand just keeps on uh rising higher and higher, keeping the category hot. But uh one name is not yet a wave. Uh filing this week would allow for a post-July 4th launch. So we were kind of expecting or looking out for some filings uh because that July 4th period does tend to be a seasonally strong uh time for launches.

SPEAKER_01 4:43

Yeah, getting getting out right ahead of that August slowdown. Um we're there's still plenty of notable names on file, uh, but it it's not the flow of new editions we expected. Um what we hoped for, I think what would have made us optimistic about a stronger July.

SPEAKER_00 4:59

Yeah, I think that's the July story for now. Uh the outlook really does hinge on seeing some filings in the next week or two. And if they don't come, the calendar starts to thin up pretty fast.

SPEAKER_01 5:09

Yeah, it's like we've got the index returns. Uh we've got this really strong backdrop, and the issuers really just need to read the tape and move.

SPEAKER_00 5:18

Yeah. Uh I was wondering how much of this is due to possibly SpaceX. Um, we were getting questions about whether the IPO market would slow down around the time that it went public, and that didn't happen. Uh, there were several other IPOs the same week that SpaceX went public, and then several IPOs this week. Uh, but uh maybe we're still seeing a little bit of an overhang. Maybe that just thins out the calendar a bit uh over the next month. Uh but I should note too that we are recording this 15 minutes before the SEC site closes. So who knows? Maybe we'll get 10 filings as soon as we stop recording. Hopefully not.

SPEAKER_01 5:55

Yeah, not. But that definitely would not uh that that tracks with uh the way that filing activity is. It's definitely possible that come 520 we see this like huge spike. So I don't know. A little bit uh hope we see them for the calendar, hope we don't, so that uh we can start this holiday week pretty early.

SPEAKER_00 6:16

Yeah.

SPEAKER_01 6:17

Um and speaking of that holiday week on the deal side, we did have three deals priced this week. Uh and the lineup tells a story. Uh, we had Cardigan in the lead, a cardiovascular biotech. It upsized, priced at the high end, and then traded up. So it's another clean win for drug developers and kind of this trend we've been seeing with biotechs.

SPEAKER_00 6:36

Yeah, confident biotech print, uh, upsizing in a short holiday week. The market clearly rewarded it. Um, just a note on Cardigan. I thought this was funny. So this is coming from the team that brought us Myocardia, a 2015 IPO, uh bought by Bristol Meyer Squib in 2020 for $13 billion. Uh, I know that the director of research during the call, he said, is it cardigan because they're doing like myocardia again? Uh that was clever.

SPEAKER_01 7:02

Yeah, that is clever. Uh, or they just really uh love sweaters, I guess.

SPEAKER_00 7:07

Yeah, it could be that.

SPEAKER_01 7:09

Uh yeah, and that was joined by these two smaller names. Um we had a community bank, uh, First Carolina, and then Deep Fission, which is a pre-revenue nuclear tech firm. Uh so First Carolina kind of falling into this regional banking mini theme we've seen and traded about flat. Uh, and then Deep Fission, which kind of looked like X Energy from a couple of weeks ago, a month ago, but worse. Uh, and public investors seem to think the same thing, traded down 9% on day one.

SPEAKER_00 7:38

Yeah, I think we've talked about how uh some of these IPOs are following the same playbook that others, uh the same path that others tread before them. So uh, you know, with uh First Carolina, you've got Forebright last week. With uh Deep Vision, you've got Xenergy. Um but on that note, obviously didn't help that X Energy has broken issue since going public. Uh but yeah, broadly speaking, it's an interesting spread this week. A biotech, a regional bank, and a nuclear moonshot. Uh at least some of that moonshot appetite that we've been tracking is still alive and well. But uh based on this trading, it's not exactly a blank check either. Mm-hmm.

SPEAKER_01 8:17

Yeah, and that nuclear theme kind of ties straight back to this AI power thesis. Um, and in that space, we've seen some pre-revenue issuers find a window. It's just, yeah, not in this case. Um, risk the risk appetite is still there, uh, but investors are definitely discerning. Um, which, yeah, I think is a good sign. Yeah. Um, and in that AI theme, we have uh more news from the next potential mega IPO. Um, open AI had a leak in its financials, uh, and we saw a $21 billion operating loss on $13 billion in revenue for 2025. Not a pretty picture.

SPEAKER_00 8:57

Yeah, I mean, we've been talking about anthropic and open AI basically every week. Uh clearly, I think they want to be in the news. Although with this financial leak, I was not too sure if that was coming from them, if they really wanted to be uh known for that, because it is a heavy loss. Um, I mean, people were wringing their hands over how much uh SpaceX was losing, but uh, you know, based on this, OpenAI's operating loss is about eight times larger. Uh but I think the number that matters here too is that 250% growth rate. So the whole bull case really rides on whether that number is sustainable.

SPEAKER_01 9:38

So I think there's a silver lining here, uh, like you mentioned, about maybe the company, you know, putting it out to public investors before it preloads the expectations. There are gonna be fewer surprises when the actual S1 hits. Um, nobody is going to get that like we work style surprise we had in 2019.

SPEAKER_00 9:57

Yeah, I think that's true. Um, you know, when the company files, you don't want the headline to be $21 billion loss. Maybe they can uh yeah, get out ahead of, although it is a lot to get out ahead of. Um a staggering amount of losses. Uh at the same time, I think it helps that uh investors uh are willing to underwrite the SpaceX IPO, and uh they are obviously planning on ramping up CapEx, staying unprofitable, at least for the very near term. So I think investors will want to see a path to the operating losses narrowing and maybe sometimes sometime by 2028, hopefully getting positive. But it's also possible that they won't, and they'll just buy it because of the name.

SPEAKER_01 10:42

Yeah, I think this really follows the same idea as SpaceX by the decade, not the quarter framing. Um I feel like can have to almost certainly make a similar pitch. Or you're right, and it doesn't really matter. They'll see the name, and uh that'll kind of keep them going initially. So moving to the scoreboard for existing new stocks, as we mentioned, it was a strong week. Um, but we had a surprise at the the top. A quick rehash, IPO index up 6.8%, SP up 0.9%. Uh, and the winners in the IPO index were a mix of AI-related names mostly, but the top wasn't AI.

SPEAKER_00 11:21

Right. The crown this week went to Equipment Share, a uh construction rental company. That was up 32% on a wave of insider buying. So insiders putting their own money in, that's a signal worth noting, of course.

SPEAKER_01 11:34

Yeah, when management buys, the market listens. Um, and it is nice to see a non-AI, non-thematic name lead every once in a while.

SPEAKER_00 11:42

Yeah. Of course, those did appear as well. Uh top IPO index holding arm was among the winners, as was Core Weave, a pretty direct AI infrastructure play. Uh, and then at the bottom, Venture Global off 16%.

SPEAKER_01 11:56

Yeah, and that was one that we, I think just a few weeks ago uh had at the top uh on that AI power trade. So energy volatility cuts both ways, I think with this name in particular. So zooming out, what does this whole setup actually tell us? The index is absolutely the story. Up 30% year to date, triple the SP, shrugging off a Fed hint. So the new stock asset class is proving its differentiation.

SPEAKER_00 12:24

And of course, SpaceX sitting on that $2.4 trillion market cap, not too far behind Amazon, shows that the mega deals are holding up post debut. That foundation matters. Of course, it's still early innings, but the stock was able to hold up even after the IPO day hype started to fade.

SPEAKER_01 12:41

Mm-hmm. But the honest gap here is the pipeline. One major filing this week, uh, a roaring index with the new supply is an opportunity that needs issuers to act.

SPEAKER_00 12:52

So if the filings don't materialize, all this momentum has really nothing to feed on.

SPEAKER_01 12:58

Yes, and that is exactly why issuers should be reading this tape and filing now. Uh the window is about as wide open as they could hope for.

SPEAKER_00 13:07

Yeah, not for every sector. I think software is still, as we mentioned, a little soft there, but definitely uh much wider than it was even uh a couple of weeks ago.

SPEAKER_01 13:17

Mm-hmm. Yeah, and there's plenty of names in that private backlog that could play on these themes that are working. So what are we watching as we head into this next week? And I think you can imagine what the first thing will be filings and filings and filings. July's whole outlook hinges on new names hitting the pipeline in the next week or two.

SPEAKER_00 13:38

And uh probably we'll be watching SpaceX aftermarket. Uh of course we'll still be keeping an eye on it. Does the volatility settle or do we just keep on getting these surge and retreat weeks ahead of the August lockup release? I'm looking for a day where the stock does not move more than 5%.

SPEAKER_01 13:55

Mm-hmm. Yeah, and I bet uh OpenAI will be looking at that as well. And I'm sure we will be watching OpenAI as well. Now that the financials leaked, uh will we see any more concrete details start to materialize?

SPEAKER_00 14:08

Will anthropic release their own leaked financials or something? But uh yeah, and just to sum up, also, of course, hitting on this a strong week for the index. We just need the paper to match it. And uh that's it for this week's winners and losers.

SPEAKER_01 14:23

Mm-hmm. 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 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.