paid-only post Jun 04, 2026 Memo

Giga-IPOs are coming

Plus: Sullivan & Cromwell leads on $8.5bn deal

Good morning, ZipLawyer!

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Record IPOs are Coming

What's going on?

Three mega-companies, going public at once:

SpaceX — reportedly wants to raise ~$75bn, trading on Nasdaq from mid-June.
Anthropic— filed its draft paperwork on 1 June.
OpenAI — expected to file soon.

The two AI labs are rumoured to want around $60bn each. Add it all up and the trio is chasing roughly $200bn, which could pile up to $4trn onto the value of the US stock market in a matter of months.

Did you know? The old IPO record was Saudi Aramco in 2019 at about $29bn. These three want nearly seven times that between them.

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IPO = the first time a private company sells shares to the public so anyone can buy a slice on a stock exchange.

Wait, so why is everyone freaking out?

When a company joins a big stock market index, every tracker fund that copies that index is basically forced to buy it. There are trillions sitting in those funds.

So the worry goes: these three giants get fast-tracked in, everyone buys at once, the buyers have no money left… and then what?

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Tracker fund = a fund that simply copies an index (like the S&P 500) and buys whatever's in it. Millions of people's pensions sit in these. When the index adds a company, all these funds buy it on autopilot.

So… can the market actually handle it?

Easily. And here's the trick that never makes the headline. 🪄

Indices don't weight a company by what it's worth. They weight it by its free float — only the shares actually floating around for the public to trade.

Watch what that does to the maths:

SpaceX wants a $1.75trn valuation but is only floating ~$75bn of shares. That's about 4% of the company.
So its starting weight in the S&P 500? Roughly 0.1%. A rounding error.

The whole US market (the Russell 3000) is worth around $79trn. Dropping $200bn into it is like pouring a pint into a swimming pool.

What about the other shares?

All the other shares are 'locked-up shares' and they get released slowly.

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Lock-up = a promise that insiders won't dump their shares for a set period after the IPO. It stops a day-one flood that would tank the price. The catch: that flood just arrives later, in waves.

SpaceX is reportedly drip-feeding them: Musk's huge stake is frozen for 366 days, other insiders can start selling after the first set of results, and more unlocks later or once the price hits certain levels.

And buying into hot IPOs has a brutal track record. Stocks listed between 1980 and 2024 returned about 20% less than the market over the following three years, on average. The really pricey ones - valued at over 40 times their sales - lagged by a painful 58%.

SpaceX would start trading at over 90 times its revenue...

Must-Know Trend

For years, the market ran on a sweet setup. Shares were scarce, because big tech kept buying back its own shares. And money was everywhere, because savers kept piling in. Scarce supply plus huge demand equals prices go up. Lovely.

That's now flipping:

Big tech is slowing the buybacks — they'd rather burn the cash building AI.
Some are borrowing in the bond market on top.
And now the new giants are turning up to grab cash from the stock market too.

So shares are about to get more abundant just as the easy money tightens. A "capital diet," if you like.

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Buyback = a company spending its cash to buy and delete its own shares, leaving fewer to go around (which props up the price). Reverse that, and you get the opposite effect.

The problem? The US market is now basically one giant AI bet. The ten biggest AI-linked companies already make up around 40% of the S&P 500. Add three more AI giants, and that "diversified" pension you own quietly becomes… mostly one big wager on AI working out.

And the cruel irony: the everyday workers whose retirement savings hold this market up are the same people AI might automate out of a job 🫠