Barron’s had an article this weekend about three huge pending initial public offerings. SpaceX (aka Space Exploration Technologies Corp.) has drawn much attention, but initial public offerings are also expected to follow soon for OpenAI and Anthropic.
Andy Serwer, who writes the “Up and Down Wall Street” column for Barron’s, offered his assessment of the SpaceX IPO: the “S-1 IPO filing is a monument to unbridled ambition – a sorcerer’s space dream of norm-stretching finance, massive capital spending on chips and data centers, and billions of dollars of losses.” The S-1 lists some major technological accomplishments. Among their accomplishments, SpaceX lists the following by year:
- 2012 First private company to dock a spacecraft with the International Space Station.
- 2015 First to propulsively land an orbital class booster.
- 2017 First to re-fly an orbital class booster.
- 2019 First to begin deploying a large-scale low-Earth orbit broadband satellite constellation.
- 2025 First to deploy a large-scale low-Earth orbit satellite-to-mobile constellation.
- SpaceX now has more than 9,600 StarLink and mobile satellites deployed and serves approximately 10.3 million subscribers in 164 countries.
The 12/31/2025 balance sheet in the prospectus shows that since inception, SpaceX has raised $76.5 billion in capital and has cumulative losses of $37.0 billion. In 2025, the company reported a net loss of $4.9 billion on revenue of $18.7 billion.
Only 3-5% of the total shares are expected to be sold for the SpaceX IPO, but it is expected to establish a market capitalization of $1.75 trillion. Instead of a typical fixed lock-up period that prohibits pre-IPO shareholders from selling for 180 days, SpaceX has rolling lock-up periods. 20% of pre-IPO shares can be sold after the second quarter earnings report + another 10% if the shares are trading at 30% or more above the IPO price. There are also time-based releases in 7% increments at 70, 90, 105, 120, and 135 days after the IPO. The remaining shares can be sold after the third quarter earnings report and 180 days. Some large shareholders, including Elon Musk, are restricted from selling their stock for one year. Since the pre-IPO shareholders have large positions (due to price appreciation) with unrealized gains in a company that is losing money, they are likely to be eager sellers of the stock. Many of the venture capital firms involved are expected to have large windfall profits.
Neither OpenAI nor Anthropic have released a public prospectus. However, both have filed confidential S-1 drafts for SEC review prior to initial public offerings. Since they are both currently private companies, limited financial estimates are available from investors, media, or company sources.
In early 2026, OpenAI had an annualized revenue run rate of $25 billion and a projected loss of $14 billion in 2026. According to Tom Liptay and Dan Schwarz, who write for FutureSearch.ai, OpenAI is expected to have cumulative losses of $44 billion before it reaches profitability in 2029. In the meantime, competition is intensifying from Meta, Inflection AI, Claude Sonnet, Gemini Flash, and xAI. Despite the financial challenges, OpenAI is expected to sell 6% of the company for $60 billion at its initial public offering, which would represent a market valuation of $1 trillion.
Anthropic is a competitor of OpenAI but with a strong emphasis on safety, reliability, and enterprise use. According to Michael Masters & Claude at SoftwareThug.com, Anthropic is projected to have a net operating loss of $8.6 billion on $26 billion of revenue for calendar year 2026. Like OpenAI, analysts expect Anthropic to sell 6% of the company to raise $60 billion, resulting in a market valuation of $1 trillion.
After the initial public offerings, SpaceX, OpenAI, and Anthropic are unlikely to be added to the S&P 500 Index for several years unless the rules change. Under current rules for S&P 500 Index inclusion, a company must be public for more than 12 months, be profitable for the last quarter and trailing 4 quarters combined, and have sufficient public float (>10%) and liquidity. However, the rules are currently under review for changes that would allow the inclusion of the mega-IPOs.
Benjamin Graham was Warren Buffet’s teacher at Columbia University and authored a book called The Intelligent Investor in which he advocated investing with a “margin of safety” and discouraged speculation. While strange things sometimes happen in financial markets, speculators in the three mega-IPOs are likely to be deeply disappointed.
If you have any questions or comments, please contact me.
Robert G. Kahl,
CFA, CPA, MBA