BCA finds that a surge in IPO activity is historically associated with weaker forward S&P 500 returns and less multiple expansion.
Source: BCA Research
What a day for semiconductors
Source: Finviz
While AI has fueled a surge in EM technology stocks, India’s IT sector has been left behind.
Source: Alpine Macro
This chart is why you should be careful with the SpaceX IPO.
Five of the most hyped IPOs of the last 15 years, and every single one collapsed after listing. - UBER lost 70% of its IPO price. - META crashed 77% from its peak. - Robin Hood fell 92%. - Coinbase fell 93%. - Rivian fell 95%. The hype is often priced in on day one. And the people who bought the hype got crushed. But look at where the real money was made. At the bottom, when nobody wanted these stocks. Robinhood went up 22x from its low. Meta went up 45x. Uber 7x. Patience beat hype. Although Rivian reminds us that even patience doesn't save every company... SpaceX will be the most hyped IPO of the decade. History tells me I don't need to be there on day one. If it's a great business, there will be a better price later. First they fall. Then they fly. Source: @moninvestor
With unprecedented investor demand for the largest IPO in history (SpaceX), it's worth remembering a simple lesson:
A great company doesn't always make for a great investment at any price. The median major IPO lost 31% in its first year & suffered a 53% drawdown along the way. Source: Charlie Bilello
Nvidia $NVDA is now worth more than India 🇮🇳
Source: Bloomberg, Barchart
One of the biggest fears on Wall Street right now? That the surge in IPOs and equity issuance could trigger a market sell-off.
But history says the opposite. According to Deutsche Bank’s Jim Reid and strategists Binky Chadha & Parag Thatte, issuance waves usually happen because markets are strong — not because they’re about to crash. Companies raise capital when: • Investor demand is high • Earnings momentum is strong • Risk appetite is elevated Since early 2023, US equity issuance has jumped from ~$30bn to ~$120bn per quarter. Mega-IPOs are coming. Yet even the largest deals are only ~0.1% of the S&P 500 market cap. Past issuance cycles? Median returns were: • +8% over 3 months • +20% over 12 months The only major exception: 2008. Bottom line: strong demand is absorbing new supply. This market still feels a lot more like 1999 than 2008. Source: Zerohedge, DB
ProShares issued press release indicating it plans to launch 2x leveraged SpaceX ETF on *same day* as IPO.
Source: Nate Geraci
