SpaceX and Anthropic are gearing up for potentially the biggest public-market launches in U.S. history, with OpenAI reportedly close behind. This puts their CEOs in the crosshairs of Wall Street, even as they sell ambitious visions of rockets and AI.
The IPO process is a high-stakes series of meetings where investors probe for growth and profitability, while executives must project trustworthiness. Past debuts offer cautionary tales.
During Google's 2004 IPO, co-founders Sergey Brin and Larry Page gave an interview to Playboy during the SEC's quiet period, forcing the company to include the article in its filing. Salesforce CEO Marc Benioff committed a similar infraction, delaying its IPO by a month.
For the 2012 Facebook IPO, CEO Mark Zuckerberg appeared at investor meetings in a hoodie and sneakers, raising questions about his maturity. The stock dropped 20% in early trading, though it later became one of the world's most valuable companies.
SpaceX CEO Elon Musk's uninhibited social media presence poses risks. Professor Timothy Loughran of Notre Dame questions whether Musk can restrain himself during the IPO process. Musk met with investors during Tesla's 2010 IPO, which soared 40% on its first day.
Anthropic and OpenAI's chatbots, known for hallucinations, may face skepticism from Wall Street investors who demand hard numbers.
Regulatory missteps also abound. Groupon invented a financial metric excluding marketing costs, forcing a rework of its S-1. WeWork's 2019 IPO collapsed after disclosing huge losses and CEO Adam Neumann's trademark ownership of the word 'We'. BATS, an exchange operator, suffered a computer glitch during its 2012 IPO, causing its shares to plummet from $16 to a penny, leading to an unprecedented withdrawal.