SpaceX pulls money and attention away from the rest of the IPO market

SpaceX’s blockbuster debut on the US stock market could value the company at as much as $2 trillion, putting it in territory no IPO has ever touched. The fear around Wall Street is that a deal that large can swallow money, analyst attention, bank resources, and media coverage all at once.

For every company planning to list in 2026, that is a problem. And for SpaceX’s sister company, Tesla, it could become a second problem at the exact same time.

The IPO market is already weak, according to data from Reuters, which shows only 35 IPOs have priced so far this year, down 37.5% from a year earlier, even though bankers and analysts say the pipeline is one of the biggest seen in decades.

Companies have been waiting for years for better conditions in the US IPO market, following a long freeze on new listings. Instead of getting a clean reopening, they are dealing with the war in Iran, higher oil prices, worries in private credit, and AI pressure hitting older software firms.

SpaceX pulls money and attention away from the rest of the IPO market

Reportedly, more than half a dozen analysts and industry experts expect SpaceX to take an outsized share of demand.

May and June are usually the best months to get a deal done before summer slows everything down. Bankers widely expect SpaceX to hit in June, while OpenAI and Anthropic are reportedly targeting the second half of the year.

PitchBook analyst Kyle Stanford said the pull from these giant offerings could push a broad IPO reopening into 2027. His report said that if SpaceX raises $50 billion to $75 billion, and OpenAI plus Anthropic bring in another $50 billion combined, that would be about equal to the total amount raised by U.S. venture-backed IPOs over the past decade.

But that does not mean the market will hand over whatever price it wants. AJ Bell investment director Russ Mould pointed out that bull IPO markets often end when money runs out and too many new offerings leave sellers overwhelming buyers.

And this is where the Saudi Aramco memory comes in, the largest IPO in the history of the world.

The Saudi government-owned oil company first drew heavy attention in 2016, when Crown Prince Mohammed bin Salman said the plan was to sell 5% of the oil giant at a value of about $2 trillion.

The deal stalled. Some analysts said the business was worth less than that. Before the IPO, rating agencies released financial details in April 2019, right before Aramco sold $12 billion in international bonds. When the IPO finally arrived in 2019, Aramco raised a record $25.6 billion by selling 3 billion shares, then increased the total to $29.4 billion through a greenshoe sale of 450 million extra shares.

Tesla loses support as retail money lines up for SpaceX

The SpaceX debut is also becoming a threat to Tesla’s stock, which Elon Musk doesn’t seem to mind. As you likely know, retail investors hold more of Tesla than Wall Street lords, and that worked nicely for Elon.

Now, those same investors might be pulling out of the automaker to invest in the space company, something Jimmy Cramer noted on X, saying, “People are going to sell this one to buy SpaceX,” referring to Tesla.

To add to Tesla’s pile, JPMorgan kept its underweight rating on Tesla and maintained a $145 price target, implying a 60% decline from Thursday’s close. Analyst Ryan Brinkman said:

“We advise investors approach TSLA shares with a high degree of caution. Although both technology and execution risk seem substantially less than was once feared, expansion into higher volume segments with lower price points seems fraught with greater risk relative to demand, execution, and competition.”

JPMorgan said unsold cars had hit a record and warned about demand, execution, competition, brand controversy, and a valuation that already assumes too much. Of the 54 analysts covering Tesla, only 10 have an underperform or sell rating, according to LSEG. The stock is down nearly 20% this year, though it is still up about 51% over the past 12 months.