Top IPO Scholar on Unprecedented IPO Wave & Why IPOs Underperform the Market | Jay Ritter

June 30, 2026

AI Summary

5 min read

In 1987, Japan privatized NTT, raising about $45 billion in inflation-adjusted terms—the world’s largest IPO until this month. Now SpaceX alone is roughly twice that size, and if it weren’t for SpaceX, Anthropic and OpenAI would likely be the first and second biggest IPOs ever. Jay Ritter, director of the IPO initiative at the University of Florida, has spent decades studying these patterns, and he sees reasons for caution even as the numbers make headlines.

What makes this IPO wave different

The three mega-IPOs—SpaceX, Anthropic, and OpenAI—are historic in nominal and inflation-adjusted terms. But Ritter emphasizes that the total proceeds as a percentage of U.S. market cap are in the same ballpark as 1999–2000 and 2021. What is different is the number of companies going public. In 2021, 311 operating companies went public. This year, the count will be nowhere near that. Software-as-a-service and biotech IPOs are scarce, partly because AI is threatening the business models of many smaller firms and partly because venture capital has kept winners private longer. The current wave is concentrated in a handful of mega-cap names, not a broad boom.

Why IPOs underperform—and when they don’t

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What you'll learn

1 (00:02) **Three Historic IPOs & How to Measure Them** - Jay Ritter explains why the potential SpaceX, Anthropic, and OpenAI IPOs are historic even after adjusting for inflation, and compares them to past records like Japan's NTT in 1987.
2 (03:20) **Do Mega-IPOs Signal Market Tops?** - Ritter addresses whether huge IPOs tend to mark market turning points, noting they are about as accurate as other predictors.
3 (04:44) **How IPOs Are Valued & Why They Underperform** - Ritter explains the standard IPO valuation process and the key distinction between small and large IPOs.
4 (07:02) **The SpaceX Valuation Case Study** - Ritter breaks down the math behind SpaceX's ~$2 trillion valuation and what must go right.
5 (13:45) **Comparing the Current Wave to 1999 and 2021** - Ritter explains how the current IPO wave is unique: three mega-cap IPOs but a low total number of companies going public.
6 (16:32) **Do Large IPOs Outperform? The Hedging Demand vs. History** - Ritter addresses the narrative that investors must have exposure to AI companies or be left behind.
7 (19:53) **Regulatory Risk & Unintended Consequences** - Ritter discusses the unique regulatory risks facing AI companies and the historical context of technological disruption.

+ Full timestamped outline available in the app

Show Notes

Leading IPO researcher Jay Ritter, widely known as "Mr. IPO" and the director of the IPO Initiative at the University of Florida's Warrington College of Business breaks down the historic 2026 public market landscape. Ritter analyzes the unprecedented potential for a wave of mega-IPOs from tech giants like SpaceX, OpenAI, and Anthropic. He dives into the realities of staggering price-to-sales ratios, warning that while AI offers immense technological promise, eye-watering trillion-dollar valuations leave very little room for error. Ritter also cuts through the hype surrounding retail access to venture capital and private equity, explaining why extra layers of middlemen, "volatility washing," and an evaporating illiquidity premium mean average investors aren't actually missing out on a free lunch.

Professor Ritter’s IPO Data: https://site.warrington.ufl.edu/ritter/ipo-data/

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Timestamps:

00:00 Intro

00:58 Meet Mr IPO

01:40 2026 is Unprecedented

02:52 Do IPOs Signal Tops

04:27 How IPO Pricing Works

05:57 SpaceX Valuation Risks

09:26 TAM Hype and Cursor

13:27 2026 Versus Past Waves

16:17 Must Own AI Exposure

19:46 Regulation and Unintended Effects

27:29 Geopolitics and Dual Use

29:10 Will IPO Volume Boom?

32:40 VC/PE = No Free Lunch

35:36 Retail Access Fee Stacking

39:14 Volatility Washing and Perps

49:09 Sentiment and Final Takeaways