SpaceX just completed the largest IPO in stock market history. OpenAI is circling the public markets, targeting a $1 trillion valuation. Anthropic confidentially filed its S-1 in June. Three of the most hyped companies on Earth are queuing up to go public within months of each other — and at least one credentialed analyst believes it could trigger a market crash of nearly 40%.

That claim is not coming from a doomsday blogger. It comes from Mark Hulbert, a long-standing market analyst writing for MarketWatch, citing research published by Harvard University economist Xavier Gabaix and Ralph Koijen of the University of Chicago. The theory is grounded in market mechanics, historical precedent, and a chain of arithmetic that is difficult to argue with on paper — even if the conclusion sounds extreme.

Here is everything you need to know about the $200 billion IPO pipeline threatening to reshape the market.

The Core Thesis: IPOs Drain the Market

Most investors think of IPOs as new money entering the market. The Gabaix-Koijen research flips that assumption entirely.

The finding: every dollar withdrawn from the U.S. stock market for an IPO causes the total market capitalisation of the entire market to shrink by $5. This is the equity market’s version of a multiplier effect — working in reverse.

Here is why: When a major IPO hits the market, existing investors — pension funds, hedge funds, retail traders — sell portions of their existing holdings (Apple, Microsoft, S&P 500 index funds) to fund participation in the new issue. That selling pressure cascades through the market, amplified by index fund rebalancing and passive fund mechanics. The proceeds from those sales go to the newly public company — not back into other stocks.

The only way for an IPO to be neutral to the stock market, according to Gabaix, is if every dollar raised comes from entirely outside the equity market — from foreign sovereign wealth funds, bond investors, or cash sitting in money market accounts. In practice, that almost never happens entirely.

The Pipeline: Three Mega-IPOs, $200 Billion, $1 Trillion in Potential Market Impact

Run Gabaix’s multiplier through the current IPO pipeline and the numbers become striking:

SpaceX (NASDAQ: SPCX) — Already Public:

• IPO Date: June 12, 2026
• IPO Price: $135/share | Open: $160.95 (19.2% first-day gain)
• Amount Raised: ~$75–$85.7 billion — the largest IPO in financial history, surpassing Saudi Aramco’s $29.4 billion (2019) and Alibaba’s $25 billion (2014) by a wide margin
• IPO Valuation: $1.77 trillion
• Peak Post-IPO Price: $225+/share
• Current Price (as of June 24–26, 2026): ~$153–$156, after a 16% single-session plunge on one Monday that alone wiped more than $915 billion from the company’s peak valuation
• Lead Underwriters: Goldman Sachs, Morgan Stanley, Bank of America, Citi, JPMorgan
• Revenue (2025): $18.67 billion (Starlink: $11.3B, +50% YoY) | Net loss: $4.94B | Adj. EBITDA: $6.58B
• Valuation multiple: ~94x trailing revenue; ~125x sales
• Musk’s control: ~42% equity stake, 85.1% of voting rights via dual-class structure

OpenAI IPO — Filing, Target Valuation $1 Trillion:

• Status: Confidential S-1 filed with the SEC; advisers are cautioning a possible delay to 2027
• Most recent private valuation: $852 billion (March 2026 funding round)
• Sam Altman’s position: Any cut to the $1 trillion IPO valuation is a “nonstarter”
• Revenue: Annualised run rate of ~$20–25 billion at year-end 2025; internal projections target $280 billion by 2030
• Users: ~900 million weekly active users, 50 million paying subscribers
• Operating margin: Approximately −122% — deeply unprofitable
• IPO delay catalyst: SpaceX’s rocky post-IPO performance; choppy tech markets; reports emerging this week from the New York Times

Anthropic — Confidential S-1 Filed June 1, 2026:

• Status: Closest to going public of the two remaining; Kalshi prediction markets favour a fall 2026 IPO
• Last funding round: $65 billion raised at a $965 billion valuation — briefly overtaking OpenAI’s private valuation
• Q2 2026 estimated revenue: ~$10.9 billion (annualised: ~$45 billion)
• Profitability: Already reportedly profitable — the cleanest financial story of the three
• Potential raise: If successful, could challenge or beat SpaceX’s record

The Combined Math:

• SpaceX + OpenAI + Anthropic are collectively targeting approximately $200 billion in IPO proceeds
• Apply Gabaix’s multiplier: $200B × $5 = $1 trillion reduction in total U.S. stock market value
• The three companies represent roughly a 5% increase in U.S. stock market total value
• Per research firm GMO’s historical analysis: a 5% increase in equity supply via new issuance has historically corresponded to below-average market returns of approximately 40% over the following 12 months

The implication, per analysis: a decline in the broad stock market of close to 40% over the next 12 months.

Historical Precedent: The Canary Has Sung Before

The pattern of mega-IPO waves preceding major market downturns is not new. Two historical analogues stand out:

1929 Crash: A wave of record-setting public offerings in the late 1920s preceded the Great Crash by months. Companies rushed to public markets at elevated valuations as investor euphoria reached a fever pitch — and the absorption of capital into those new listings helped drain the liquidity cushion sustaining existing equity prices.

Dot-Com Bubble, 2000: The late 1990s produced an unprecedented surge in technology IPOs, many of them pre-revenue companies valued on “eyeballs” and traffic rather than earnings. When the IPO wave peaked, the Nasdaq subsequently fell approximately 78% from top to bottom. Malcolm Baker of Harvard Business School has documented that heavy IPO volume is a remarkably consistent signal of irrational exuberance — and that markets almost always produce below-average returns in the period immediately following peak issuance.

Goldman Sachs projects total U.S. IPO proceeds in 2026 could exceed $160 billion — surpassing the previous record of $156 billion set in 2021, itself a year that preceded a sharp market correction in 2022.

The SpaceX Story in Full: World’s Biggest IPO, Biggest Retreat

SpaceX’s debut was euphoric. Then reality arrived.

The Bull Case Heading Into the IPO:

• Starlink satellite internet: 10 million+ subscribers across 160 countries; 39%+ operating margins generating $4.4B+ in positive operating income
• Starship program: the only fully reusable heavy-lift vehicle in history, capable of fundamentally restructuring the global launch market
• xAI integration (after February 2026 acquisition): Grok LLM, the 2 GW Colossus supercomputing cluster in Memphis, and social platform X

The Structural Complications:

• The xAI segment generated $3.2B in revenue in 2025 but posted a $2.47 billion operating loss in Q1 2026 alone
• SpaceX holds ~$16 billion in cash against $30 billion in debt, including a $20 billion bridge loan for AI data centre expansion that matures 15 months post-IPO
• Elon Musk controls 85.1% of all votes — public shareholders cannot influence management, board composition, or strategic direction
• The stock trades at 94x trailing revenue — a multiple that assumes flawless execution for many years
• The Colossus data centre’s xAI segment faces active regulatory investigations across eight agencies connected to synthetic imagery concerns

Wall Street Target Spread:

That $127 spread between the most optimistic and most conservative targets encapsulates the enormous uncertainty in valuing a company at 94x sales with an empire spanning rockets, satellites, AI, and social media.

Post-IPO Price Path:

• IPO price: $135 (June 11)
• First-day open: $160.95 (+19.2%)
• Peak: $225+
• As of June 24–26: ~$153–$156
• Value wiped from peak: $915 billion+

A 16% single-session plunge wiped close to a trillion dollars in market value. Those are not small numbers in any frame of reference.

OpenAI Blinks: IPO Delay Signals Emerging

This week brought a significant development: OpenAI is considering delaying its IPO to 2027, according to a New York Times report citing people close to the discussions.

The reasoning: SpaceX’s rocky post-debut performance spooked advisers who worry a public offering may not get the reception Altman is demanding. Given that Altman has explicitly stated a sub-$1 trillion valuation is a non-starter, a market that is currently punishing high-growth, pre-profit tech companies presents a real problem.

The immediate market fallout:

• Oracle (ORCL) fell — OpenAI is a key partner
• CoreWeave (CRWV) fell — another AI infrastructure company that counts OpenAI as a major customer

Any delay compresses the timeline for a meaningful second-wave IPO market in AI, while simultaneously raising the question: if OpenAI itself is nervous about public market reception, what does that say about the market’s appetite for trillion-dollar AI valuations?

The Bull Case Against a Crash: Why Some Experts Are Less Alarmed

Not everyone agrees the maths leads to a 40% decline. Several counterarguments deserve serious consideration:

1. The Market Is Much Larger Than the IPO Pipeline Robert Johnson of Economic Index Associates points out that the U.S. stock market carried a total cap of approximately $79.4 trillion at the start of 2026. SpaceX’s $85 billion raise, while historic, represents roughly 0.1% of that figure. The direct mechanical drag may be smaller than the Gabaix model suggests when scaled against the full market.

2. Global Capital Provides a Buffer If sovereign wealth funds from the Middle East, Asia, or Europe provide a substantial portion of IPO funding, that capital does not come from existing US equity positions. To the extent the money is “new” — from foreign investors or non-equity asset classes — the multiplier effect is neutralised. The global nature of modern capital markets creates structural buffers that didn’t exist in 1929 or even 2000.

3. Institutional Dry Powder US money market funds are currently sitting on an estimated $8 trillion in uninvested cash. Venture capital and private equity firms hold large mountains of uncalled capital. If IPO proceeds allow early SpaceX insiders and venture investors to cash out, that money may be rapidly reinvested into other public equities — partially offsetting the drag.

4. Fundamentals Aren’t Broken The Nasdaq is still up 10% year-to-date despite this week’s selloff. S&P 500 tech sector earnings are projected to grow 22%+ in 2026. Anthropic is reportedly already profitable. These aren’t dot-com-era companies with no revenue model. The corrective pressure may resolve into rotation and consolidation rather than outright collapse.

5. Anthropic’s IPO Strength Of the three companies, Anthropic presents the most compelling public-market case: near-$1 trillion private valuation, ~$45B annualised revenue run rate, already profitable, and a strong enterprise customer base. A successful Anthropic debut could actually boost sentiment across AI stocks — demonstrating that the public market can absorb AI-native companies at scale.

What Investors Should Watch

• SpaceX (SPCX): Can it hold the $135 IPO price as the initial FOMO fades and investors shift focus to fundamentals? At 94x revenue, the valuation premium is extreme — even by current AI market standards. Lock-up expiry (typically 6 months post-IPO) will also be a critical moment when insiders can sell for the first time.
• OpenAI IPO timeline: Any firm announcement — whether it’s a 2026 date or a confirmed 2027 delay — will immediately move AI infrastructure stocks including Nvidia, CoreWeave, Oracle, and Microsoft (which holds a major stake in OpenAI).
• Anthropic IPO: If it goes public this fall at a valuation near $1 trillion, watch how the first few trading sessions go. A strong debut reassures the market; weakness would validate Hulbert’s thesis.
• Total 2026 IPO volume: If Goldman Sachs’ $160 billion+ projection holds, and all three mega-companies price this year, the aggregate liquidity drain becomes very real and may force a test of Gabaix’s multiplier in real time.
• SK Hynix (possible Nasdaq listing by July 10): The South Korean memory chip giant is reportedly planning a $29 billion Nasdaq listing — adding yet another headline raise to an already crowded pipeline.

The Bottom Line

The 40% crash theory is not guaranteed — and several credible economists argue it overstates the mechanical risk. But the conditions for significant market pressure are aligning in ways that deserve serious attention:

• The largest IPO in history just closed and is already down sharply from its peak
• Two more trillion-dollar AI companies are preparing to go public, demanding hundreds of billions in investor capital
• That capital has to come from somewhere
• And historical evidence suggests that the heaviest IPO waves tend to arrive at exactly the wrong time in the market cycle

Whether this ends in a 40% crash, a 10-15% correction, or a successful absorption that keeps the bull market intact depends largely on factors we cannot yet measure — where IPO funding comes from, how quickly earnings catch up to valuations, and whether the Federal Reserve tightens at exactly the moment the market is trying to digest a record-shattering issuance cycle.

The smart money isn’t panicking. But it is paying close attention.

Disclaimer: This publication is entirely for informational and journalistic purposes and does not constitute formal financial, investment, or legal advice. All market investments carry inherent risks of capital loss. Always complete independent due diligence prior to executing equity trades. Predictions about future market performance, including the 40% crash scenario described herein, are based on academic research and analyst opinion and should not be construed as certainty.

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Nichole Miller

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