IPO Winners & Losers: Summer of SpaceX

Welcome back to Renaissance Capital’s IPO Winners and Losers — the weekly podcast breaking down the biggest stories shaping the IPO market, new stocks, and Wall Street sentiment.

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This week:
• SpaceX files for what could be the largest IPO in history
• The post-Memorial Day IPO window gets crowded as issuers race to price before SpaceX dominates attention
• Starlink, AI infrastructure, cash burn, governance, and Mars incentives define the SpaceX S-1
• OpenAI reportedly files confidentially, setting up a potential fall mega-IPO
• The IPO Index surges as AI-linked new stocks rally on Nvidia momentum

We also discuss why the “Summer of SpaceX” could reshape the IPO calendar, what investors should watch in the filing, and why the next wave of IPOs may reveal whether this market has real depth — or is simply chasing the biggest names.

If you follow IPOs, AI infrastructure, market psychology, or disruptive growth companies, this is the place to stay ahead of the next wave of public market stories.

Transcript

SPEAKER_00 0:01

This week's winner, every issuer who got their roach to ready in time for the post-Memorial Day window. This week's loser, anyone hoping to compete with SpaceX for investor attention in June.

SPEAKER_01 0:12

With the largest IPO in history now officially filed, the conversation just changed entirely. Let's get into it in this week's winners and losers.

SPEAKER_00 0:24

Quick note before we dive in, this podcast is for informational purposes only, and nothing we discuss should be taken as investment advice or a recommendation to buy, sell, or hold any security. Past performance does not guarantee future results, and one cannot invest directly in an index. For the full disclosure, check the end of this recording. So let's walk through the week, even if there is one story that dominates everything. And of course, I'm talking about SpaceX filing its S1. It's reportedly targeting a June 12th listing, raising $75 plus billion dollars. So obviously the largest IPO in history when it does price.

SPEAKER_01 1:00

And uh Avery, I'm not just wearing this t-shirt because I'm ready for the Memorial Day weekend. I uh I've got a space shirt in honor of SpaceX. But uh yeah, it's not just SpaceX that's dominating the news this week. The post-Memorial Day calendar is suddenly packed. Up to eight IPOs could potentially launch roachos on Tuesday. Everyone is trying to get out before SpaceX consumes all the oxygen in the room.

SPEAKER_00 1:24

Good that you pointed out the shirt, Matt. It looks nice. Very custom. Um and we also had the IPO index rocket 8.2% this week. So lapping the SP uh at 0.9%. Um sentiment is fully risk-on right now.

SPEAKER_01 1:39

So you've got the biggest deal ever queued up, a packed calendar racing ahead of it, and index ripping. This is the most charge the IPO market has felt in years. I don't say that lightly.

SPEAKER_00 1:52

Yeah, and we obviously have to start with the filing because there's a lot in those pages as expected. It's a very dense prospectus. The filing outlines three pillars of business space at 30% of Q1 revenue, connectivity, which is Starlink at 69%, and AI at 17%. So it's a mix, but less surprising when you remember all of the mashups that created this modern-day SpaceX.

SPEAKER_01 2:18

And I think a key takeaway here is Starlink is the financial engine. That's probably a surprise for casual observers. Uh for now, this is fundamentally a satellite internet company that also does rockets and AI.

SPEAKER_00 2:31

Yeah, and the language in this prospectus is something else. Uh, we have multiplanetary life, the light of consciousness, um, not sharing the same fate as the dinosaurs. Um, and of course, nearly 800 mentions of AI. The quote on the very first page from Musk about wanting to be excited for a future that's better than the past and pinning that hope on becoming a space-faring civilization, um, it really brings me back to many of those 2020, 2021 era filings when every founder CEO suddenly became a philosopher overnight.

SPEAKER_01 3:04

Definitely a lot of uh Musk quotes in the prospectus. So lofty even by tech standards. I hate to say it gives me we work vibes, but once you start talking about elevating consciousness, I just can't help it. Uh but behind the buzz, there is some data that we can talk about. Let's start with the financials and uh dig into it here.

SPEAKER_00 3:25

Mm-hmm. Yeah, uh SpaceX, $19.3 billion in LTM revenue. Um, though Q1 growth slowed to 15%, and the operating margin was at a negative 41%. So anyone expecting NVIDIA like financials had to be disappointed.

SPEAKER_01 3:41

Yeah, um, NVIDIA, obviously, 85% growing, huge profits, not the case with SpaceX. So that's the key framing from the newsletter here. This is a bet on the next decade, not the next quarter. If you're buying SpaceX, you're buying a 10-year thesis at least. It's kind of like they're telling investors buy the stock now and don't look at it until 2050.

SPEAKER_00 4:06

Yeah, and uh if that didn't kind of make your eyes pop out of your head, the free cash flow definitely will. Um, it is stunningly negative. Um, nearly $20 billion burned in the LTM period. There's $26 billion in CapEx, two-thirds of it going to AI infrastructure. So that is a lot of spending.

SPEAKER_01 4:24

Right. Interesting that the largest IPO of all time will also be burning through more cash than any other listing ever before. Uh but an important here, an important point here is that SpaceX is about to monetize a massive AI build-out that hasn't really shown up in the revenue yet. So that's a key bull case. Obviously, investor alarm bells should start ringing when you hear something like, oh, you can't pay attention to the quarterly results. But the fact that they're about to start getting nearly $4 billion a quarter from Anthropic in that data deal means that the AI business really is starting to ramp up soon.

SPEAKER_00 5:00

Mm-hmm. That's a good point. Um, and it kind of leads us into the next point, which is it is a complex story. Uh, multiple business lines, all connected um with pretty uneven financials. Uh, you have the XAI acquisition, the upcoming cursory purchase, the new anthropic deal. There's just a lot of moving parts. Um, and then of course, Starship, which is central to this long-term thesis, but that's still in development. So a lot is riding on that program working.

SPEAKER_01 5:28

I think that's all absolutely correct. Uh now, I I think there's also two possible approaches that the majority of investors will take for this deal. And I think it ties into your point about complexity. So, approach one is SpaceX is just a monster to tackle and untangle. So, some investors, and I'm sure Renaissance analysts will no doubt spend the next three weeks modeling out the growth rate, the margin profile, the capex requirements of each business line. So, where is the Starlink ARPU headed? What's the subscription growth rate? What's the breakdown of Grok versus compute and the AI business line? What about Cursory and how does that impact the numbers? Uh, what are the implications of Starship delivering payloads in the second half of 2026, as they expect, versus 2027, 2028? All of that is approach number one. Approach number two, ignore all of that and just buy SpaceX stock. Avery, does that sound about right to you? I think that's how probably investors are going to be approaching this deal, either one way or the other.

SPEAKER_00 6:28

Yeah, I think so. I think, yeah, either getting really into it or looking at the name and just going for it. Yeah. And then of course we have the governance picture. And as expected, it's not without some hair. Musk is effectively unremovable. He's not making the same mistake he made with Tesla. So he owns 94% of Class B shares, which is the only class that can vote him out.

SPEAKER_01 6:51

And uh that incentive package, whoo! Up to 1 billion shares for establishing a permanent human colony on Mars with at least 1 million inhabitants. That is an actual line from the filing. Uh now the board, which Musk controls, will determine when that condition is met. Avery, could a robot count as an inhabitant? I've read that Starship is it's designed to take 100 passengers. So will that take 10,000 trips to Mars before he can get that payout package?

SPEAKER_00 7:22

Well, to your first question, uh, robot or human, I think you could argue that the details don't matter as much to someone who willingly make that journey, because I know I wouldn't, unless I'm going to be meeting uh Marvin the Martian from Looney Tunes. Um, but whatever you think about it, I guess you could say it's directionally honest. Investors definitely know what they're signing up for.

SPEAKER_01 7:42

Yes, this is the Musk show. Uh and I will say the lockup structure is also interesting. We've got 10 distinct lockup releases following the Cerebrus model. Uh the uh leak out lockup or dribble lockup is becoming a trend, it appears. Musk himself is locked in for a year post-IPO, so uh double the length of a normal lockup. I think that's a reasonable concession. I mean, it's not like he needs the money. Uh sure looks like this will make him possibly the world's first trillionaire.

SPEAKER_00 8:12

Yeah, I guess we'll see. That's kind of a sickening number to uh think about.

SPEAKER_01 8:18

But he's not a quad, he's not a quadrillionaire. Call me when someone becomes a quadrillionaire.

SPEAKER_00 8:23

Yeah, yeah. So looking on the deal side, it's likely that everyone else is racing to get out ahead of SpaceX right now. Um, and that's clear with the up to eight IPOs that could launch roadshows on Tuesday. So that is a stampede by any standard, uh, and definitely not a coincidence.

SPEAKER_01 8:40

The logic is obvious here. Once SpaceX is in the roadshow, no one else gets airtime. Uh better to price the week before than try to compete for attention.

SPEAKER_00 8:50

Yeah, and the land up is pretty diverse, uh, but for the most part, falling into those kind of clear thematic buckets we've been seeing. Um, we have continuum and quantum computing, Ineo and natural gas engines, applied aerospace and defense, uh, and Lyme and scooter rentals.

SPEAKER_01 9:05

Lime is interesting. Uh, originally planned to go public in 2022, kind of a big name. A lot of people know that one. So I guess they're finally getting their window. Uh AI resistant business, which is a quiet selling point right now.

SPEAKER_00 9:19

Yeah, I definitely uh know them from the scooters strewn across the streets. Um but yeah, then we have continuum, which is kind of a speculative one. Quantum computing is still kind of that lottery ticket category, but the market has shown appetite for those lately. Um, and this one is also interesting because it would be the first quantum computing company to go public through traditional IPO versus a SPAC. So, along with X Energy, that nuclear tech company we had a few weeks ago, um, starting to see more of those speculative, typical SPAC plays coming to the IPO market.

SPEAKER_01 9:52

And then uh in INEO and applied aerospace, those are the more grounded plays. Uh, natural gas engines tie into the AI power demand story, and then defense is a second that just keeps on working. And uh lastly, I'm wondering if we'll see Liftoff Mobile return. That one uh refiled uh a couple months ago, uh kept its filing fresh. Avery, maybe we can finally get a software IPO in 2026. I was amazed. I looked this up last week. Only two technology IPOs have listed this year, uh BitGo and Cerebrus. So we haven't even gotten uh one software deal. Maybe liftoff will be the first.

SPEAKER_00 10:28

Yeah, that is surprising given how prevalent software typically is uh or has been in the last, I guess, before 2022.

SPEAKER_01 10:37

Last upcycles.

SPEAKER_00 10:39

Yeah. Um so yeah, eight deals in one week would be a striking pace on its own, but with the SpaceX framing, it seems pretty deliberate. Um and in the news that would normally headline any other week, we have OpenAI reportedly filing confidentially this week, um targeting a September IPO.

SPEAKER_01 10:56

Right. Two months ago, the chatter was about OpenAI missing internal growth targets and maybe now targeting 2027 IPO timeline. Now they're filing uh targeting a September.

SPEAKER_00 11:07

That's a fast pivot. Um, but looking at this Rubers pop, the SpaceX filing, the index absolutely ripping, uh it's clear that the window is open and OpenAI is reading the room.

SPEAKER_01 11:18

That is absolutely correct. But I'm gonna give you my conspiracy theory moment. Part of me is wondering, did OpenAI intentionally downplay its IPO plans to try and get out of it, uh get out ahead of Anthropic? Because we know that they were both in a race trying to go public. Part of me made me wonder that. I don't know. But in any case, September would give them spacing from SpaceX in June. It's a smart calendar play.

SPEAKER_00 11:42

Mm-hmm. And it sets up a fall mega IPO season that could rival anything we've probably ever seen. SpaceX in June, and then potentially OpenAI in September. Maybe we'll see about Anthropic. Um, and then the broader pipeline filling in around them.

SPEAKER_01 11:56

Yeah, I mean, those two IPOs alone could raise what, over a hundred billion. Uh could two IPOs raise more than any other year combined, more than 2021, possibly. Uh so this is the moment the mega IPO era stops being theoretical. We are here. Let's go.

SPEAKER_00 12:18

Yeah. And so let's look to the scoreboard because this was a banner week for the IPO index. Um, yeah, like I said, I think earlier, the IPU index was up 8.2%, SP was just up 0.9%. Um, that is an enormous gap.

SPEAKER_01 12:33

That would have also been the headline this week, if not for SpaceX and OpenAI. Uh so looking at the index, AI names led. We've got ARM and Estera Labs both being the winners this week following NVIDIA's stellar earnings report. Uh the NVIDIA number was definitely the macro catalyst there.

SPEAKER_00 12:50

When NVIDIA beats everything, AI adjacent re-rates higher. Um, that's a dynamic we keep seeing at least most of the time, I'd say.

SPEAKER_01 12:58

And then uh figure, the uh blockchain lender, was at the bottom of the index. These crypto adjacent names are still volatile in both directions.

SPEAKER_00 13:07

But the broader read is clear. Recent IPOs are actively participating in the AI rally, not just sitting on the sidelines. So zooming all the way out, where are we right now? The summer of SpaceX officially starts now. The S1 is filed, the date is all but set, and the rest of the IPO calendar is restructuring itself around that listing.

SPEAKER_01 13:30

Yeah, and it's happening in to a market that's clearly risk-on. Uh the IPO index just outperformed the SP 500 by over seven percentage points this week. That is not a normal tape, but hey, we're not complaining.

SPEAKER_00 13:43

And the OpenAI confidential filing tells you that the mega IPO era is no longer theoretical. June for SpaceX, September for OpenAI, with eight deals trying to price next week alone.

SPEAKER_01 13:53

So the risk is that all of this is priced for AI demand continuing uninterrupted. Any stumble, uh, NVIDIA disappointing, Starship setbacks, geopolitical shock, and the whole structure starts to wobble a bit.

SPEAKER_00 14:06

But for now, the issuers are reading it right and moving. The window is wide open, and they know it might not stay that way. Alright, so what are we watching as we head into a huge week? First up, Tuesday's Roadshow launches, uh, continuum, Ineo, applied aerospace, and Lyme potentially leading the pack. Um, and how the market absorbs that volume tells us a lot about the depth.

SPEAKER_01 14:30

Uh and then more breakdown is basics. I mean, the market has plenty to unpack here until the deal sets terms. Uh, that's supposed to happen maybe on June 4th.

SPEAKER_00 14:40

And any open AI updates may be anthropic. Confidential filings move quietly, but leaks happen fast when the deal is this big.

SPEAKER_01 14:49

So summer is officially underway. Buckle up.

SPEAKER_00 14:52

Yep. So that's it for this week's winners and losers. Get the full newsletter in your inbox by clicking the link in the description. Thanks for listening. And before we go, please listen carefully to our full disclosure. This podcast is for informational purposes only. Renaissance Capital statements should not be considered investment advice or a recommendation to buy, sell, or hold any particular security. Certain of the statements contained may be statements of future expectations and other forward looking statements that are based on Renaissance Capital's current views and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance, or events to differ materially from those expressed or implied in such statements. Past performance does not guarantee future results. One cannot invest directly in an index.