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

Summary

Professor Jay Ritter analyzes the historic 2026 mega-IPO wave led by SpaceX, Anthropic, and OpenAI. He expresses concern that SpaceX's extreme price-to-sales ratio and overvaluation make it likely to underperform. He also warns that European equities are structurally disadvantaged by heavy regulation, and that retail investors should avoid expensive private equity and venture capital products.

• 2026 features three historic mega-IPOs: SpaceX, Anthropic, and OpenAI with trillion-dollar valuations.
• SpaceX debuted at >90x price-to-sales; Ritter highlights data showing such high-ratio IPOs historically underperform.
• Ritter is concerned SpaceX’s $2T valuation requires extremely optimistic profit scenarios to be justified.
• European equities are expected to underperform due to excessive regulation that lowers stock market returns.
• AI hype may not translate into outsized investor returns; technological benefits often flow to consumers rather than capital owners.
• Retail closed-end funds and private access products carry fee-on-fee layers, adverse selection, and ‘volatility washing’ that mislead investors.
• IPOs alone are poor market-timing signals, and calling market peaks remains highly unreliable.