Tom Lee says trillions in tech IPO supply won’t crash the S&P 500
Fundstrat’s Tom Lee argues that trillions in new IPO supply from SpaceX, Anthropic, and OpenAI could ultimately be absorbed by underallocated investors.
What to know:
- SpaceX, OpenAI, and Anthropic are all reportedly looking to IPO in the U.S. market.
- Tom Lee estimates the three IPOs could create trillions in post lock-up supply, equivalent to 5% to 6% of the S&P 500’s market capitalization.
- Lee says Wall Street sees tokenisation as a major opportunity because blockchain technology enables instant settlement, 24/7 trading, and borrowing against assets such as real estate and art.
In inflation adjusted terms, Elon Musk’s SpaceX alone could become the second largest IPO ever, seeking a market valuation above $1.5 trillion, behind only Saudi Aramco.
Lee acknowledged concerns about the amount of supply these listings could introduce into public markets, especially after the standard 90-day lock-up periods expire. He noted that SpaceX is likely the most anticipated IPO ever, Lee estimates the three IPOs could generate trillions in supply, equivalent to roughly 5% to 6% of the S&P 500’s total market capitalization.
Despite the scale, Lee does not believe the situation is necessarily outright bearish for the markets. He argues that family offices, pensions, and high net worth investors currently hold historically low allocations to public equities after years of favoring private markets and alternative investments.
