The Biggest IPO Wave in Years Is Coming
It's hard to scroll through financial news right now without running into another headline about a massive tech company going public. SpaceX, Anthropic, and OpenAI — three of the most closely watched private companies in the world — have all signalled moves toward initial public offerings, setting off a frenzy of speculation among retail and institutional investors alike.
But before you rush to open a brokerage account, it's worth taking a breath and understanding what's actually happening — and what history tells us about the gap between IPO hype and IPO reality.
What Is an IPO, and Why Does It Matter?
An IPO, or initial public offering, is when a private company sells shares to the public for the first time on a stock exchange. It's a major milestone — it gives founders and early investors a way to cash out, and gives everyday people a chance to own a piece of a company they couldn't access before.
For companies like SpaceX, the numbers being thrown around are staggering. The Elon Musk-led rocket company has been valued at over $350 billion USD in private markets, making it one of the most valuable private companies ever. Anthropic, the AI safety startup backed by Google and Amazon, and OpenAI, the company behind ChatGPT, are both navigating their own paths toward public listings.
Should Canadian Investors Be Excited — or Cautious?
The short answer: both.
On one hand, these companies represent genuinely transformative technology. AI and space exploration are sectors with enormous long-term potential, and getting in early on a publicly traded version of an industry leader can pay off handsomely.
On the other hand, IPOs have a complicated track record. Many of the most hyped tech IPOs of the past decade — from Uber to WeWork (which never made it) to Rivian — disappointed investors who bought in at or near the opening price. The initial excitement tends to inflate valuations, and post-IPO sell-offs are common.
Canadian investors should also be aware of currency risk when buying U.S.-listed stocks, and the tax implications of holding foreign equities in non-registered accounts.
The AI Investment Question
Anthropics and OpenAI's potential IPOs are particularly interesting given the current AI arms race. Canadian tech workers and entrepreneurs — including a growing cluster in Ottawa's Kanata North tech corridor — are watching these listings closely, both as potential investors and as signals of where the industry is heading.
If these companies go public at sky-high valuations, it could spur more venture capital into Canadian AI startups, which have been growing steadily. It could also put pressure on Canadian firms to compete for talent against newly flush American rivals.
What to Do With the Hype
Financial advisors generally recommend a few things when a major IPO is approaching:
- Don't chase the opening pop. Retail investors rarely get shares at the IPO price — by the time you can buy, the stock has usually already jumped.
- Wait for the lock-up period to end. Insiders are typically restricted from selling for 90–180 days after an IPO. When that period ends, prices often dip as early investors take profits.
- Assess the fundamentals. Hype is not a business model. Look at revenue, growth trajectory, and path to profitability.
- Diversify. Even if SpaceX is compelling, no single stock should dominate a portfolio.
The IPO wave is real, and these are genuinely interesting companies. Just make sure the excitement doesn't outrun your due diligence.
Source: CBC News Business
