Wall Street Preps for the SpaceX IPO

The SpaceX IPO is massive and well-anticipated, with demand exceeding supply. While AI-related IPOs are thriving, smaller companies face a tough market. Recent Nasdaq pullbacks have not persisted, giving bankers confidence.

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Sridhar Natarajan 5.0

Wall Street Preps for the SpaceX IPO

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Sridhar notes a 5% drop on Friday that did not persist, with stability returning by Monday, indicating short-term volatility but no sustained downturn.

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Smaller companies (B/C list) are being advised not to IPO, and private equity-backed firms face a tough exit environment, suggesting a cautious outlook for small caps.

The SpaceX IPO is historic; bankers are pulling orders with demand exceeding supply. The key question is distribution of the $75 billion IPO and how it will trade on Friday.

Bailey Lipschultz
Sridhar Natarajan

The IPO market is bifurcated: mega AI deals like SpaceX, Anthropic, and OpenAI are thriving, but smaller companies are being advised to wait. The market has good absorption capacity despite recent pullbacks.

Alphabet's $85 billion raise (partly ATM) shows capacity. Recent 5% Nasdaq drop didn't persist, boosting banker confidence.
Private equity executives are being told not to IPO now unless they are AI-related. This has been a multi-year trend.

Bailey Lipschultz
Sridhar Natarajan

AI-flavored companies are performing well (e.g., Sienna's convertible bond), but B/C list companies with debt face a tougher environment.

The market's ability to absorb large deals without major impact suggests underlying strength.
Sources were worried about the 5% Nasdaq drop on Friday, but stability returned by Monday.

Bailey Lipschultz
Sridhar Natarajan

The pullbacks have not persisted, giving bankers more confidence than usual. The year of the IPO may be true only for a handful of huge AI companies.

2020 was a broader IPO year; 2024 is concentrated on mega AI deals.

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