For much of market history, the initial public offering was the moment when an ambitious young company opened its next stage of growth to public investors. A business would raise capital, list its shares, and then spend years proving itself in the public markets. Investors who bought early were not guaranteed success, but they were often participating closer to the beginning of the company’s growth curve.
That pattern has changed. Many companies are now staying private for far longer, raising large sums from venture capital, sovereign wealth funds, and other institutional investors before most public-market investors ever have a chance to participate. By the time these companies finally list, they may already be enormous businesses and household names.
That shift matters now because several prominent private companies, including SpaceX, OpenAI, and Anthropic, are expected to IPO in the coming months. Their stories are compelling, and speculation is rampant about how they’ll impact many facets of life and business. When it comes to how they’ll perform as investments, it’s more complicated.
What Changed and Why
Research from Jay Ritter at the University of Florida, who has tracked IPO activity since 1980, shows how much this has shifted. In 2024, the median company reached the public market at fourteen years old, compared to roughly eight or nine years in prior decades.[1] The IPO, once a tool for early-stage financing, now increasingly functions as a liquidity event for founders and early investors, rather than a primary vehicle for growth.
This shift reflects a change in how companies access capital, particularly as private markets have grown substantially. Large pension funds, endowments, venture capital, and sovereign wealth funds now routinely invest in private companies at valuations that would have seemed implausible a generation ago. In practical terms, this means companies can now raise billions of dollars privately without accepting the disclosure requirements, investor scrutiny, or market volatility that come with being public.[2]
The result is that by the time a highly anticipated company finally goes public, it may already be enormous. The valuation placed on it at IPO will reflect expectations not just for current performance, but for years of future success. The public market is increasingly a later-stage milestone rather than the first major bridge to growth capital.
A Great Company is Not Always a Great Investment
This distinction matters more than it might appear. Research by Ritter covering IPOs from 1980 through 2024 found that newly public companies have underperformed compared to the broader market in the years after listing, especially when they come public at very high revenue multiples.[3]
Recent reporting suggests SpaceX is targeting a valuation near $1.75 trillion in its upcoming IPO. SpaceX was not profitable last year, and the proposed IPO target price would be upwards of 93x its trailing 12-month revenue (the current average for S&P 500 companies is 3.8x trailing revenue). Morningstar, a prominent independent research firm in the investment industry, recently published its own fair-value estimate of roughly $780 billion for SpaceX, less than half the IPO target. Morningstar noted that while the stock could initially rise, given strong investor appetite, long-term investors will likely have opportunities to participate at a better price after the initial excitement settles.[4] This is not meant to be a prediction about the performance of this particular IPO, but rather it highlights how wide the gap can be between a compelling story and a compelling price.
The question is not whether a company appears impressive. The question is whether the financial return for new shareholders justifies the price being asked. A familiar name and a durable business can still struggle as an investment if the valuation already assumes significant future growth.
Your Portfolio is Already Participating
One of the more useful reminders we can offer to clients is that we do not need to chase these IPOs for portfolios to have exposure to future growth. The innovation story that makes SpaceX, OpenAI, Anthropic, and similar companies so compelling is already playing out across many of the companies in client portfolios. Diversified portfolios already own semiconductor firms, cloud providers, software businesses, industrial automation companies, communications infrastructure, and other public companies that benefit from the same forces driving private-market excitement.
Highly anticipated IPOs also carry a specific behavioral risk – FOMO (fear of missing out). When a famous company becomes publicly available for the first time, it can feel urgent to act. History reminds us that the initial story is rarely the whole story. Some high-profile offerings have delivered strong long-term returns. Many others have disappointed, particularly when enthusiasm at listing drove prices well beyond what the fundamentals could support.
Staying Curious, Staying Disciplined
A portfolio does not need to chase every high-profile IPO to remain forward-looking. If and when these companies enter major market indexes, clients may gain exposure through diversified funds, alongside many other businesses and sectors. That approach helps portfolios participate in long-term innovation without turning any single headline into an outsized bet.
We pay attention to these changes because they shape how innovation moves through markets. Investors can be curious about companies like SpaceX, OpenAI, and Anthropic while still asking disciplined questions about valuation, concentration risk, and fit within a diversified portfolio.
Our goal at North Berkeley is not to react to every headline; it is to work with clients to stay invested in long-term growth while remaining grounded in diversification, valuation discipline, and personal planning priorities.
Resources
[1] Jay R. Ritter, University of Florida IPO Data, February 2026. University of Florida
[2] Companies Are Staying Private Longer: Why It Matters. VanEck
[3] Can the stock market swallow Anthropic, SpaceX and OpenAI? June 1, 2026. Economist
[4] SpaceX: What Investors Need to Know About Its Enormous Upcoming IPO, Nicolas Owens, June 2026. Morningstar.com
