"The company is seeking a $1.5 trillion valuation - the richest listing in history, per Bloomberg. Combined with other possible listings, Bloomberg estimates that as much as $2.9 trillion worth of private companies could go public next year. Other AI-linked "centicorns" - companies valued at $100-billion plus-are reportedly weighing listings, including Databricks and Anthropic. OpenAI has an implied valuation of over $500 billion, fueling speculation about a future stock listing, though it has attempted to tamp that down."
"Markets are near all-time highs, and there's strong investor enthusiasm surrounding AI, space and crypto companies. "Feed the ducks while they're quacking," says Steve Sosnick, chief strategist at Interactive Brokers. Friction point: Yet investors are also wary that a bubble may have already formed in the shares of existing AI companies, without having to contend with new, richly valued stocks joining the frenzy. And a whiff of weakness in the AI trade is enough to make investors skittish these days. Case in point: Oracle, which has made an enormous bet on an AI data center buildout. Its shares tumbled 11% in late trading Wednesday after the company reported disappointing quarterly sales, while spending increased."
"What they're saying: If "valuations get too ridiculous" we could get a "WeWork moment," notes Jay Ritter, director of the IPO initiative and emeritus professor at the University of Florida. WeWork was valued at $47 billion by SoftBank in 2019, when it was set to go public. But institutional investors decided the office-space coworking company was nowhere near that value. WeWork later filed for bankruptcy."
SpaceX plans an IPO next year and is reportedly seeking a $1.5 trillion valuation, which would be the largest listing on record. Bloomberg estimates that combined potential listings could total as much as $2.9 trillion next year, with other AI-linked centicorns such as Databricks and Anthropic considering public offerings. OpenAI carries an implied valuation above $500 billion. Markets sit near all-time highs and investor enthusiasm for AI, space and crypto is strong. Investors remain wary of a valuation bubble, highlighted by Oracle's 11% share drop after disappointing sales and higher spending. Concerns about extreme valuations evoke comparisons to the WeWork collapse.
Read at Axios
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