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Comment by cmiles8 | Hacker News Reader

It’s going to be an interesting period ahead. The market is going to struggle to absorb SpaceX, OpenAI, Anthropic and others. They’re just massive relative to typical IPOs. Maybe one can sneak through but not all. Someone is going to have to have a very bad day and it’s not clear who yet.

Separately there’s a big battle to keep these folks out of the S&P index, because many funds (some of whom are required to buy index stocks) think they’re horribly over valued and will tank once floating.

Get your popcorn ready.

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>The market is going to struggle to absorb

It's very unlikely, part of the reason why valuations are so high is because there is so much money, not just in the US, but globally, that is desperately seeking a place to park.

See why it doesn’t trickle down?

Has anyone done a first-order estimate of the tax windfall about to hit state and federal coffers?

It is trickled down money.

Liquid cash looking for a home is overwhelmingly white/blue collar retirement money. Billionaire money is almost always a totally undiversified portfolio of their own company. There are billions of people globally who save money and want it to grow, so they hand it over weekly to institutions that do asset management. It's these institutions that are seeking new investments, but the money isn't their own, it's largely everyday people's savings.

Can you elaborate on what you mean?

You're thinking backwards. The money is parked in these companies. They basically figured out a strategy to maximize return in an environment where the public market is dominated by passive capital.

It's time for Google/Elon/Softbank/sovereign wealth funds, etc to cash out.

For you, it's time to tilt to bond and value.

> an environment where the public market is dominated by passive capital

While by "the end of May 2024, passive mutual funds and ETF assets" had "grown to nearly 60% of the equity fund market" (emphasis mine) [1], only about a third of American stocks are held by passive capital [2]. (Index funds are about 16%.)

> For you, it's time to tilt to bond and value

Or just buy the market and watch the show.

[1] https://www.americancentury.com/institutional-investors/insi...

[2] https://alexchinco.com/double-what-you-think-it-is.pdf

Fair, that was a flippant response on my part. I'm of the age where sequence of returns is a impactful risk.

Buying bonds in this day and age is asinine when Bitcoin has outperformed stocks and bonds by magnitudes and will continue to do so as more countries seek to distance themselves from the dollar and the federal reserve gets more desperate with its printing.

> For you, it's time to tilt to bond

Do you know anything about the state of bond markets?

Yes FOMO and cash looking for a home did help drive up valuations to irrational levels.

Public markets are a different animal all together.

There are some concerned there won’t be enough willing to invest. That is a real risk given people smell a bubble about to pop.

The other ironic risk is if the float is too small it creates an artificially high valuation by letting a thin, momentum-driven market price 100% of the cap table, which then collapses when lockups expire, supply floods in, and the real market discovers the stock is worth far less than the marginal buyers said it was.

For example there’s talk that in that scenario SpaceX could end up with a 5T valuation… for a company that did only $18.5B in revenue last year. Thats beyond irrational even under the most aggressive growth scenarios.

> There are some concerned there won’t be enough willing to invest

I say this as a former public-equity derivatives guy, and now a private capital markets guy: I'm not seeing this seriously argued.

There is a real risk these companies are going out overvalued. But they're already overvalued in the private markets and arguably were even before near-term IPOs were on the horizon.

Markets can go risk off for any reason. If they do between now and these companies' IPOs, that spoils the party. But if they don't, there is no reason to suspect the risk capital driving into all manner of speculative equities, to say nothig of structured products and weird debt creatures, is suddenly going to hold the line at the darlings of the private markets.

> there’s talk that in that scenario SpaceX could end up with a 5T valuation

Where?

Curious.

What would you consider a fair value? Would be interested to see your valuation approach

> part of the reason why valuations are so high is because there is so much money

The primary mechanism behind that is liquidity; Passively held assets decrease liquidity, and with there being a lot of passively held assets, liquidity isn't so great.

There are some warning signs that demand for AI companies, especially OpenAI, may not be so high as expected. https://www.bloomberg.com/news/articles/2026-04-01/openai-de... (Though OpenAI asserts that the demand is low because the seller isn't trusted)

On the other hand, it also seems like OpenAI and Anthropic are seeking to have a relatively "small" IPO by not selling too many shares. The market may absorb a few tens of billions. The big questio is how long it'll take for more of those companies to hit the market afterwards; They're burning through their money awfully quickly, and the earlier investors will want out as well.

Regarding S&P: That is my acute concern. For individual investors, they can be removed by taking an a short position corresponding to the stock's index weight. (I do this for TSLA). More broadly, it exposes people who only use index funds or don't have shorting in their tool box (passive investors for example) to big risk.

Tesla is currently 2.2% of S&P 500. If it halves, losing $800,000,000,000 usd market cap, the index will go down by 1.1%. What big risk?

1.1% is about 15% of the typical returns for a year in the S&P500, from a single stock. Folks and funds invest here for diversity precisely to limit such impacts.

It’s a big risk and that’s why there’s a big fuss right now to keep these guys out of the index.

> What big risk?

Tesla doesn't drag everyone else down.

>50% of the S&P 500 is involved with these AI providers. There will be a cascading effect.

The risk is no longer a single company with a dumb CEO tanking.

Now the risk is a massive stockmarket wide collapse. Over a third of the S&P 500 is AI heavy tech stocks. With how reliant Nvidia is on AI compute sales, there's a real risk that at least 7% of the market disappears instantly, and everything else will hurt massively as well.

You can't hedge against that. There's a good chance this will have contagion solely from the sheer size of a dotcom style crash in our current stock market. Pension funds would start selling off their unrelated assets to cover their losses.

Nevermind any secondary concerns; How balls deep private equity and private credit are in AI. How useless the current US administration is at both economic and monetary policy.

Those are great points. Regarding > You can't hedge against that:

Not by shorting individual stocks, but you can by deleveraging in general. Stop using margins or options, hold a larger portion of your money outside the blast zone like account balance (hopefully with interest), bonds, international.

How is that an issue? Many funds that replicate an index are not doing full replication anyway. They do some kind of sampling that includes way fewer stocks than defined in the index.

What would stop a fund from just not including those stocks because of sampling?

Or waiting for time to settle, since even with full physical replication, they are not required to jump in and buy immediately after IPO.

Index funds make legal commitments to replicate the entire index. I have no idea why you think they use sampling.

The whole point of an index fund is I'm not paying someone to try to guess what stocks are going to under/over perform the S&P.

And when they are required to buy is not really a mystery either. they have very little discretion.

But normally they wait a year for new companies, whereas Sam and friends have managed to buy some officials and have made it a day-one-rug-pull.

NASDAQ did changes to be able to fast track SpaceX, S&P is looking at the same as far as I understood: https://finance.yahoo.com/news/new-rule-could-fast-track-spa...

Many Vanguard index funds use sampling, in fact. It's more complicated than you think.

Interesting yes.

Money wouldn’t just be diverted from other US stocks though.

Foreign money has increasing buying power as USD weakens against certain currencies and the upside of these IPOs is certainly more attractive to global investors than parking money is lack luster real-estate or bond or cash alternatives.

TINA (to US stock market) and all that.

I think that SpaceX and OpenAI will be ok. Ukraine war showed that Starlink is the real deal - all of Ukraine's successes (or reversed losses) in the last few months are mostly due to Starlink cutting off Russia.

OpenAI seem to have the tech on par with Anthropic and world class con artist at the top and access to more compute. So when the tsunami of Chinese models and silicone materializes - Anthropic will be most vulnerable.

> Ukraine war showed that Starlink is the real deal

That held before SpaceX merged X, xAI and friends. Those are bleeding way more money than Starlink can recover.

Huh. Anthropic seems like they are in a significantly better position tech and finance-wise.

there is certainty more than just starlink going dark that is driving AFU success.

that said, it definitely helped

Then Anthropic will gain, people will profit take, and it'll all flow back out to everything else.

> because many funds (some of whom are required to buy index stocks) think they’re horribly over valued and will tank once floating

Most of S&P 500 have shares in these anyway e.g. Microsoft and OpenAI. Not really making THAT much of a difference.

Not to mention Tesla.

? No.

These companies are not publicly traded yet so they are not in these indices. Funds are fighting to keep them out so they’re not required to buy stocks they think will tank.

There is indirect exposure to Anthropic/OpenAI through all the incestuous partnerships between hyperscalers and NVDA

Exactly. Google has SpaceX stock.

To make matters worse all the banks, insurers and investment firms in that S&P list are likely in there somewhere too.

I'm sure I'm missing a whole lot more.

Indirect exposure is just a completely different beast than direct exposure. It’s a different level of risk altogether

> It’s a different level of risk altogether

In this case, really? Between Nvidia, Microsoft, AMD, Amazon and everyone else in that S&P 500 there's not >50% of OpenAI already? It's not that indirect.

Microsoft alone is 27%.

Hmm, actually I would be interested to get actual number regarding the exposure to OpenAI and Anthropic in S&Py you might be right, completely possible that I underestimated

True, but that’s tiny relative to these companies going public themselves. Totally different ballgames

lol don’t compare private market pricing where the line only goes up and to the right.

Anthropic, OpenAI and SpaceX all want to IPO within this year. There's just not enough money in the market to buy all those shares. So people might sell their shares in other companies to buy in at the IPO, then when the next one goes public they might sell the shares they just bought to jump onto the next one and so on. I don't think that there was a situation like this ever before.

Another scenario would be that they release very little shares but because of their market cap they make up a significant portion of an index so index funds are forced to buy a lot of their shares which would drive prices to insane heights.

> There's just not enough money in the market to buy all those shares

What are you basing this on?

They might be conflating the valuation of these three companies with one of the recent analyses that the presumed valuation of the current “AI Economy” is an order of magnitude over the valuation of the total wealth of the world.

The amount of new shares for sale could be very large in those three IPOs:

SpaceX: up to $75B [1]

OpenAI: at least $60B [2]

Anthropic: more than $60B [3]

Together, that would be about $195B+ of IPO shares to buy.

For comparison, all U.S. IPOs together raised $44.0B in 2025 [4].

All IPOs in the world together raised $171.8B in 2025 [5].

So where should the money come from? Either from selling shares in other companies or from loaning money which would only make sense if the Fed brings back ZIRP.

[1] https://www.reuters.com/business/aerospace-defense/spacex-ta...

[2] https://www.reuters.com/business/openai-lays-groundwork-jugg...

[3] https://www.investing.com/news/stock-market-news/anthropic-c...

[4] https://www.renaissancecapital.com/review/2025USReview_Publi...

[5] https://www.ey.com/en_ie/newsroom/2026/01/global-ipo-market-...

>So where should the money come from?

Selling shares of other companies. If you think there isn't enough capital headroom, it's not SpaceX/OpenAI/Anthropic you should be worried about.

> Together, that would be about $195B+ of IPO shares to buy...For comparison, all U.S. IPOs together raised $44.0B in 2025

Net buying of corporate equities by American households, trusts, funds and non-profits has averaged $660bn per year for the last few years [1].

[1] https://www.federalreserve.gov/releases/z1/20260319/html/f22... line 26, 2023 to 2025

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