The rumor mill has been spinning for months, and now it’s official. SpaceX is set to go public in June, and if that’s not enough to get the market buzzing, OpenAI and Anthropic are reportedly waiting in the wings. Investors are genuinely giddy at the prospect of getting into these next-generation Technology giants.
But here’s the uncomfortable question: are we watching history repeat itself?
The parallels are striking. Back in 1999, the market was absolutely smitten with anything internet-related. Companies rushed to IPO, valuations stretched into the stratosphere, and everyone felt like they’d discovered the secret to easy money. Then 2000 hit, and the dot-com bubble burst spectacularly. The S&P 500 didn’t just correct, it melted down over multiple years.
Then came 2021. The SPAC boom brought another wave of companies going public, fueled by mountains of cash and seemingly insatiable investor appetite. The euphoria was real, until it wasn’t. By early 2022, the S&P 500 had dropped as much as 25%.
So What’s Different This Time?
According to market pros who spoke with Business Insider on Friday, today’s IPO environment rhymes more with 1999 than 2021. That’s not exactly comforting.
Molly Pieroni, president at Yacktman Asset Management, put it plainly: the valuations in 1999 were just bonkers. SpaceX’s current valuation sits at roughly 150x revenue, which means the company would need to double its revenue every single year for the next decade just to justify that price tag. That’s a tall order, no matter how you slice it.
But here’s where it gets interesting. Pieroni and other experts acknowledge that the companies going public this time around are fundamentally different from their 1999 counterparts. SpaceX, OpenAI, and Anthropic aren’t just ideas scribbled on napkins. They have real revenue, real customers, and real technological moats. In that sense, this isn’t a fair comparison to the dot-com era.
Eric Schiffer, founder of The Patriarch Organization, takes a more bullish view. While he agrees that investors should stay vigilant given the eye-watering valuations, he thinks the market has room to run. He’s betting on geopolitical stability, specifically expecting the Iran conflict to wrap up, which could remove a key inflation headwind. And perhaps most importantly, corporate earnings continue to beat expectations.
The Bottom Line
Look, there’s no such thing as a perfect mirror in markets. Every cycle has its own flavor of madness. What we can say is this: the ingredients are all there. High valuations, hot demand, and a flood of mega-cap IPOs ready to test investor appetite.
The difference this time might be that the companies actually have the fundamentals to back up some of the hype. Then again, that thought is exactly what made 1999 so dangerous.
Stay cautious, stay curious, and whatever you do, don’t bet the farm just because a rocket company is going public.
