Jay Ritter

SpaceX stock fell below its $135 IPO price, dropping nearly 60% from its peak, despite Wall Street analysts setting bullish price targets ranging from $190 to $800. Underwriters for the IPO earned $500 million in fees, but the stock's decline left early investors facing losses.

Anthropic alleges Alibaba used fake accounts to distill its AI capabilities, potentially undermining Anthropic’s competitive edge and IPO prospects. U.S. policymakers are considering updated export controls to address such 'distillation attacks,' with Rep. Michael Lawler’s Remote Access Security Act aiming to restrict foreign access to sensitive AI technology via cloud services.

SpaceX's June 12 IPO achieved a $2 trillion valuation but left $16.7 billion in potential proceeds uncollected due to pricing strategies and the Green Shoe option. The first-day stock price rose 19%, aligning with historical averages, though the total 'left on the table' amount shattered previous IPO records.

SpaceX is offering its underwriters a record-low 0.75% gross spread for its historic IPO, but Wall Street banks, led by Goldman Sachs, will still earn the largest dollar fees ever due to the massive $86 billion deal. This mirrors Goldman's 2010 strategy to win the GM IPO by matching a low fee, and the underwriters will split approximately $646 million in fees.

Goldman Sachs and Morgan Stanley are competing for the 'lead left' underwriter position in upcoming OpenAI and Anthropic IPOs, a role that grants significant share allocation control and financial advantages. Both banks already serve as top book runners for these deals, with the lead left designation determining substantial profit disparities. University of Florida professor Jay Ritter highlights the strategic importance of 'soft dollars' paid by funds to secure maximum IPO share allocations.

The S&P 500 Index maintains a requirement for companies to be profitable, delaying the entry of mega-IPO candidates like SpaceX until they meet this criterion. SpaceX is projected to achieve profitability by 2027, potentially joining the index by 2028, while other AI-focused companies like Anthropic and OpenAI may face similar hurdles.

Elon Musk's SpaceX pay package, potentially worth $1.1 trillion, is structured to avoid legal challenges faced during his Tesla compensation. The package is outlined in SpaceX's IPO registration and protected by Texas incorporation, requiring significant shareholder ownership to challenge. The performance targets, including a Martian colony and extraterrestrial data centers, are deemed improbable by SpaceX itself.