IPO fever: how investors might be impacted

Bestinvest does not currently offer the facility for clients to participate in IPOs.

SpaceX (Space Exploration Technologies Corporation) made its long‑anticipated public market debut on Friday 12 June 2026, in what became the largest initial public offering (IPO) in history raising $85.7 billion.

When trading began on the Nasdaq stock exchange, the stock opened at about $150 and climbed through the session, closing the day at roughly $161—up around 19% on its first day. This strong debut pushed SpaceX’s market capitalisation above $2 trillion, instantly making it one of the world’s most valuable publicly listed companies.

Two further companies are expected to follow suit at some time in the near future: Anthropic and OpenAI. These are not ordinary IPO candidates as these private companies are associated with some of the biggest investment themes such as space infrastructure, artificial intelligence and cloud computing.

For investors, the excitement is understandable. These are businesses that many people already recognise. An important question for investors to consider is "how might these companies affect my portfolio, even if I never buy the shares directly?".

Once a company lists, it may eventually enter major equity indices, such as global, US, technology or growth benchmarks and investors are exposed to these indices indirectly through funds that are benchmarked against these major indices.

What is an Initial Public Offering (IPO)?

An Initial Public Offering, (IPO), is when a private company sells shares to public-market investors for the first time. After an IPO, the shares can usually be bought and sold on a stock exchange.

Other important terms to note:

• Market capitalisation is the total value of the company’s shares. If a company has 10 billion shares and the share price is £10, the market capitalisation is £100 billion.
• Free float is the portion of the company’s shares that can be traded by public investors. This is different from total company value. A company might be worth hundreds of billions of dollars on paper, but only a small percentage of its shares may be available to trade immediately after IPO.
• Float-adjusted market capitalisation is the value used by many indices. It focuses on the shares that are realistically available to investors, rather than all shares in existence.
• Lock-up period is a period after an IPO during which “insiders” (employees, early investors and large private shareholders) are restricted from selling their shares. Lock-up agreements prohibit “insiders” from selling for a set period after an IPO. Lock-up information is usually disclosed in the IPO prospectus.

An overview of the three IPO candidates

Why these IPOs are different?

Historically, companies came to market when they were still relatively young and needed public capital to grow. Today, some of the most prominent private companies can raise enormous sums privately before ever listing on a stock exchange. That means public-market investors may be accessing these businesses later in their development, at much higher valuations. This does not automatically make them safer. Larger does not always mean lower risk. But it does make them different from the classic image of an IPO as a small, early-stage business seeking growth capital.

To provide some historic context to the IPO size, we have provided a comparison below of these three Mega Caps versus the current top 10 largest IPOs of all time.

Free Float = IPO size / Market Capitalisation

*SpaceX IPO value of $75bn (555.6m shares at $135) projected a total market capitalisation of $1.77trn on the IPO date, off which the free float is based and represents 4.2%. OpenAI's market cap of $852bn (referencing OpenAI's own funding round post-money valuation) and Anthropic's market cap of $965bn (referencing Anthropic's latest Series H funding round on May 28, 2026).

**Open AI & Anthropic have not disclosed an IPO size so estimates shown are the size of their latest private funding rounds. 

What impact will this have on the composition of equity indices?

The answer here depends on the equity index in question as there are no consistent inclusion rules from one index provider to the next.

A mega-cap IPO can create a problem for index providers. On the one hand, if a company is enormous, excluding it for too long may make the index less representative of the market. On the other hand, including it too quickly may force passive funds to buy a company with limited trading history, limited free float or uncertain profitability.

Different index providers have proposed different approaches:

• MSCI has large-IPO fast-track rules in its Global Investable Market Index methodology dating back to 2007. A large US IPO can be included after 10 trading days if it meets size thresholds.
• S&P DJ Indices has decided not to fast-track mega-cap IPOs into the S&P 500. IPOs still need at least 12 months of trading history, profitability, liquidity, and a minimum 10% investable weight factor/free float before they can even be considered.

Two clients could both say they own "US equities" or "global equities" and still experience different exposure to the same IPO, depending on which index their fund follows.

What impact does this have for equity exposure in an investor's portfolio?

There are some practical considerations to note:

• On the day of index inclusion, the magnitude of change is marginal. As more private investors are released from their lockup periods more shares become publicly available with index weight also increasing, all else equal.
• Timing and extent of impact depends on index provider. MSCI is set to fast-track inclusion whereas S&P has chosen to take a slower, more considered approach so the impact here is delayed.
• US equity exposure likely to increase at the margin. MSCI’s modelling suggests the aggregate of mega-cap IPOs could increase the US weight in global benchmarks.
• Technology exposure could be reorientated. We anticipate larger tilts to AI infrastructure, cloud computing and digital platforms.

What investments already have exposure to these companies in their portfolio makeup?

Some investment trusts have the ability to invest in private companies. As a Bestinvestor, if you hold any of the following investment trusts available on the platform you will have some exposure to these companies already.

Conclusion

The arrival of very large private companies on public markets may be an important development. It may change index composition, fund exposure and the balance between public and private-market growth. But for long-term investors, the right response is not to chase the noise. It is to remain diversified, valuation-aware and focused on the role each investment plays in the overall portfolio.