SpaceX, OpenAI, and the Allure of Investing in Mega-IPOs
The wisdom in choosing Patience Over Prowess
Every market cycle seems to produce a handful of companies that capture the imagination of the public. Today, those names are hard to miss: SpaceX, OpenAI, and Anthropic — three of the most anticipated mega-IPOs in market history.
These aren’t merely businesses. They are reshaping industries, redefining technology, and influencing the future in ways that feel both exciting and inevitable. It is entirely natural for investors to ask the question: “Should I invest in the SpaceX IPO, or OpenAI when it goes public?”
That instinct makes sense. Investors should want exposure to innovation and long-term economic growth. But there is an important caution that often gets lost amid the excitement: A great company is not always a great investment at a given price.
That difference matters most during periods of hype — especially around mega-IPOs.
Why a Great Company Isn’t Always a Great IPO Investment
When iconic private companies eventually go public, excitement tends to arrive all at once. Media coverage intensifies, investor demand surges, and expectations climb rapidly. Newly public companies often become cultural phenomena long before markets have had time to fully establish a durable valuation.
This enthusiasm can also create elevated pricing and increased volatility during the early months of trading. Investors are no longer simply buying a business; they are often paying a premium for the story, the momentum, and the fear of missing out. This is one reason we tend to favor a disciplined, evidence-based approach to investing rather than chasing market excitement.
At Financial Plan our investment philosophy approaches newly public companies with patience. Rather than rushing to join the initial frenzy, we allow time for valuations and financial reporting to stabilize before adding exposure through diversified funds. It’s not about avoiding innovation. It is about avoiding unnecessary risk.
Why We Wait Before Investing in IPOs
Our approach is not based on predicting which company will succeed. Many of these firms may become transformative businesses. Instead, our discipline focuses on the relationship between expected return and risk.
There are several reasons we believe patience can benefit investors when investing in IPOs.
1. Financial Transparency For Newly Public Companies
Newly public companies often have limited histories of public financial disclosure. Investors may still be evaluating the durability of profits, cash flows, margins, and long-term capital requirements. We prefer to evaluate companies after public reporting becomes more standardized and transparent. Waiting allows markets to better distinguish between compelling narratives and durable economics.
2. IPO Lockup Expirations Can Create Volatility
Most IPOs include lockup agreements that prevent insiders and early investors from selling shares for several months after the offering. When those lockups expire — often around the six-month mark — a large number of additional shares can suddenly enter the market. That increase in supply can pressure stock prices lower, particularly if early investors choose to realize gains. Patience often allows investors to avoid this period of uncertainty.
3. Diversification Is a Discipline, Not a Prediction
Perhaps most importantly, our investment philosophy is not built around identifying a single “winner.”
The future is difficult to forecast, even when a company appears revolutionary. Many businesses that once seemed unstoppable ultimately disappointed investors, while others exceeded even the most optimistic expectations.
Rather than concentrating risk in a small number of high-expectation companies, we believe investors are generally better served by participating broadly in global market growth through diversified portfolios designed to minimize uncompensated risks — especially the volatility associated with individual stocks and speculative pricing.
The Role of a Fiduciary in Investing
As wealth managers, our responsibility is not to chase headlines or compete in prediction markets. Our responsibility is to steward capital thoughtfully and align investment decisions with long-term financial goals. That often means acknowledging when enthusiasm may be outrunning fundamentals. It means resisting the pressure to act simply because a company dominates the cultural conversation. And it means recognizing that discipline is often more valuable than excitement.
The goal is not to find the next “moonshot” at the risk of a client’s financial plan. The goal is to capture the returns that markets provide through a disciplined, diversified, and evidence-based approach. Sometimes, the most profitable move an investor can make is simply to wait for the dust to settle.
In the following report, you can see a full breakdown of the historical realities of including IPOs in a portfolio as well as where the current IPO buzz fits into the puzzle.
Download Beyond the Hype: What Investors Need to Know About Mega-IPOS
