SpaceX jumped 19% on its first day as a public company.
Its rivals got crushed the same day. AST SpaceMobile fell more than 12%, Intuitive Machines dropped 11%, and Rocket Lab and Planet Labs lost about 8% each, Reuters reported.
It wasn’t a fluke. I call it the IPO paradox, it shows up around almost every big IPO, and researchers have documented it in one of the top journals in finance.
Anthropic is next in line, and I don’t think its IPO will follow the pattern. I also won’t buy a single share of Anthropic when it lists.
What I expect instead is the reason I plan to trade around this IPO.
The Paradox
When a company goes public, its competitors’ stocks tend to suffer. When a company pulls its IPO, those same competitors tend to rally.
The research behind it was published in the Journal of Finance. The authors found that competitors react negatively to completed IPOs in their industry and positively to withdrawn ones, and that their business performance tends to weaken after a rival lists.
My team charted 4,200 of the largest IPOs in modern history, across every industry, and saw the same pattern. It’s so consistent you can almost set your watch to it.
SpaceX followed the script. 2 weeks after it listed, Rocket Lab was down about 20% from where it was when SpaceX went public.
Why Anthropic Could Break It
I started my career on the floor of the CBOE in 2001, right after the dot-com bubble burst. The first lesson I learned was to question anything that seems certain, and that includes the IPO paradox.
Anthropic doesn’t have normal competitors. The companies it competes with also own pieces of it and sell it the computing power it runs on. Amazon and Google alone have poured billions into Anthropic.
Those companies aren’t rivals so much as partners. So instead of pushing away from Anthropic’s IPO like 2 magnets, I expect a lot of them to move with it, more like gravity.
If I’m right, the usual IPO playbook points the wrong way this time.
What We Covered Last Night
In last night’s briefing, I showed how my team scored every company tied to Anthropic, which ones carry the most weight, and how we traded a version of this around SpaceX’s IPO.
Watch The Briefing Before It’s Too Late
Your only option,
Mark Sebastian
P.S. I won’t buy a single share of Anthropic at its IPO, and in the briefing I lay out the 5 reasons why. But like all bubbles, there’s a lot of money to be made before it’s time to pay the piper. Here’s what those names are.