to discuss the banker frenzy behind these out of this world evaluations is Jim Neesen, Managing Partner & Founding Executive at Connor Group.
Thank you so much for joining me.
Thank you so much.
Good morning.
Well, first and foremost, let's talk about the American capital markets here and the expectations for the massive IPO pipeline.
So starting out with that, what is your take on the filing?
I mean this.
One of the most consequential IPO activity that's going to happen in the back half of this year.
You look at the S1 with SpaceX and there were so many firsts.
Last valuation ever, largest amount of proceeds raised.
It also has the largest retail participation that you will ever have in an IPO.
Also, it's going to be triggering that kind of fast entry into the Nasdaq index, which is also something that we're really looking forward to.
What I really Like this IPO it's actually 4 companies put together, right?
You have the space, you have the AI piece, you have the data centers, and then you also have the satellite communications.
This is a conglomerate.
It really is an AI first company really packaged as a rocket company and you highlighted a lot of firsts here.
There's a lot of anticipation ahead of SpaceX's IPO, but when we are looking deeper belief.
The surface here.
What are your takeaways and with opportunity does come risk here.
So what do retail investors need to keep in mind you know I think for these type of transactions this is really a future play.
I mean it is a net loss company.
They're making investments in some very substantial businesses.
The AI is going to acquire quite a bit of money.
And if you look at it, the mission of SpaceX is to be the most innovative.
Machine on this Earth and off of this Earth, similar to the Tesla IPO.
It was a lot of products and companies that took years and decades to actually build.
So this is going to be one for retail investors to have some patience.
It's not going to be day one trading, probably won't even be that six month lockup period when a big supply is released.
This is going to be years and potentially decades to see this valuation really grown into.
Yes, and Jim, you and I are here at the New York Stock Exchange, and there's been a lot of criticism when it comes to the IPO pipeline, as well as concerns about liquidity and listing, but I think we need to take a step back and talk about capitalism here in the US and innovation.
So what does all of this tell you, especially since you've advised so many companies and their listings?
Yes, I mean we've worked on 275 IPOs, and that's been over a 20 year period.
If you actually look at it, sometimes the numbers are better than you would expect.
We have had 145 IPOs so far this year.
It is a 15% increase from where we were last year and last year was a rebound period.
I think the thing as well is there's many verticals that often will cycle through over a period of time.
So so far this year you have seen industrials you've seen aerospace and defense tech.
Structure type of places you've seen healthcare as well, right, biotech and med device, but right around the corner you have quite a few tech companies.
It could be softwares, security, hardware.
You also have things like fintech, energy, materials.
So that's the beautiful thing about capitalism is that things will go through cycles at any point in time you might be, oh, there's a high water mark or there's some issues going on, but Companies are working behind the scenes to grow their revenue, to grow their earnings expansion, and they're going to be ready for liquidity events.
1600 unicorns out there, VC private equity backed, 60,000 private companies.
America has the strongest private company pipeline looking for liquidity events in the future by far.
And speaking of which, we know that the US also has the world's deepest capital.
Markets here.
You mentioned the pipeline for IPOs this year.
I do want to get your take on OpenAI.
So what do you make of this?
Yes, you know, so it's an arms race between OpenAI and Anthropic, and you're really seeing it.
OpenAI had a bit of a first mover advantage, right?
They had 30% market share.
It was a lot of individuals and then you have anthropic coming in, and they are now 30% market share.
They've actually increased or improved over OpenAI.
And it's a lot of enterprise customers.
OpenAI is a net loss company.
It is going to require a very substantial amount of capital to raise and grow in scale.
I think Market share is going to be critical for them.
They do have 900 million customers out there, but I think the expectations potentially today will be the confidential filing.
It's going to be a push for both those companies and the institutional investors to bring them in for this long-term journey.
And finally, Jim, before I let you go in New York morning trade, we are looking at the futures for the equity market higher.
Yesterday, the Dow saw an all-time record high.
Right now futures are up by about 380 points.
So that means the Dow will be extending its record run.
So given the IPO pipeline, what are the implications, especially given some of the mass grow risks that are out there right now?
Yes, you know, I think what I love is that.
Rising tide lifts all boats, so valuations no doubt correlate to IPO activity and risk assets, and IPO is a risk asset.
So when you see these valuations get pushed up, it means that both IPOs and M&As are much more on the table.
I think what it also means is that you start to have a lot more of this liquidity.
Think of it like the Lion King circle of life, right?
You have a lot of money that will go into early stage companies, late stage companies, but there are No doubt.
I mean we have over 100 companies preparing right now for liquidity events, IPOs, back half of 26 and 27.
There are companies no doubt where this is on their roadmap, and this is what the investors are looking for.
Well Jim, once these companies start going public, we hope to have you back on so we can discuss all the details.
So thank you so much for joining me and have a great holiday weekend.
Thank you so much.
