Mega I.P.O. Frenzy Could Be a Harbinger of a Stock Bubble

https://www.nytimes.com/2026/06/13/business/spacex-ipo-musk-stock-bubble.html

Mega I.P.O. Frenzy Could Be a Harbinger of a Stock Bubble
Rampant enthusiasm is buoying tech shares to levels that defy gravity. Invest with caution, our columnist says.
By Jeff Sommer
June 13, 2026, 5:01 a.m. ET

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As I’ve pointed out, the price being asked for SpaceX shares was exorbitant, and it rose even higher on its first day of trading. That said, the company’s stock might well rise further over the next few weeks, driven by sheer market enthusiasm. Mr. Musk reserved a double-digit percentage of the I.P.O. shares for “retail,” or ordinary, investors — as opposed to big institutions. A retail allocation of 5 percent or less has been customary in most recent public offerings, according to Jay Ritter, an economist and I.P.O. expert at the University of Florida.

But SpaceX’s price is so high that, for investors coming late to the party, the probability of a solid return in the next several years is low. Historical data provided by Mr. Ritter bears that out.

SpaceX set its own valuation way above an important threshold, a 40-to-one price-to-sales ratio, meaning it would take 40 years of sales to equal the market value at that share price. Stocks valued above that level have rarely made money over the next three years. Because the Anthropic and OpenAI public offerings are still at a preliminary stage, there’s less information about them. But their valuations imply richly priced shares, too.

For investors to accept these prices — as well as those of many other big tech stocks — is, in itself, troubling. It suggests that the stock market has entered perilous territory. If this isn’t already a full-blown bubble, it could easily become one.

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