Ed Elson warns mega-IPO surge could destabilise tech stock prices

Ed Elson has raised concerns about the surge of mega-IPOs hitting the market. He warns that a flood of new shares could destabilise stock prices, particularly in the tech sector. His scepticism extends to major companies like SpaceX, Anthropic, and OpenAI. Elson argues that tech valuations have grown unrealistic. He calls SpaceX’s valuation 'insane' when compared to past IPOs such as Meta and Google. He also suspects AI giants like Anthropic and OpenAI are rushing to go public to capitalise on peak valuations.

According to Elson, the market is bracing for a supply shock. A total of €305 billion ($350 billion) in new equity is expected from SpaceX, Anthropic, OpenAI, and Google alone. Google itself plans to raise €74 billion ($85 billion) through a new share issuance.

He believes investors will need to sell existing stocks to buy into these new offerings. This could push stock prices down as demand struggles to keep up with supply. Elson also suggests Sam Altman’s main aim is to sell OpenAI stock at the highest possible price before the market corrects. Elson’s warnings highlight the strain on the market from the sheer volume of new shares. With so much capital being injected, the ability of the market to absorb it remains uncertain. Tech stocks may face pressure if demand does not match the sudden increase in supply.