Rob Arnott, founder of Research Affiliates, is warning investors that the wave of tech mega-IPOs from SpaceX, Anthropic, and OpenAI is not unambiguously good news for the markets. In a note on June 5, he cautioned these listings could create a prolonged drag on broader equity markets, diverting tens of billions of dollars from existing stocks over several years.
SpaceX's IPO alone is expected to raise about $75 billion, making it the largest public listing in history-more than triple Saudi Aramco's $25.6 billion IPO in 2019. Anthropic has filed confidential IPO paperwork after a funding round that valued the AI firm at nearly $1 trillion. OpenAI is also expected to go public.
Arnott's concern centers on the cumulative effect of so much new equity hitting the market in a compressed timeframe. He described the dynamic as "drip, drip pressure," referencing the ongoing impact of repeated share floats and mechanical index rebalancing that follows each major listing.
He noted on May 28 that SpaceX would be eligible for inclusion in the Nasdaq 100 after just 15 days of trading, and the S&P 500 in about six months. While bullish on SpaceX itself due to its small initial float and rapid index inclusion, Arnott warned that each secondary offering and lock-up expiration releases insider shares, repeating the cycle.
Index funds tracking major indices must maintain specific weightings, so adding a massive new company means mechanically reducing exposure to existing constituents. If SpaceX alone pulls $75 billion and Anthropic follows with a listing near its $1 trillion valuation, the total capital displacement could rival entire asset classes.