By Steve Garmhausen

Three blockbuster initial public offerings are in the works, as SpaceX, OpenAI, and Anthropic prepare to sell shares to the public -- and retail investors want in. Financial advisors say they are increasingly fielding questions about IPOs, often from clients who haven't considered whether they are actually a good value. For this week's Barron's Advisor Big Q, we asked a panel of professionals how they are responding.

Erik Kratz, chief investment officer, co-head of wealth, Arena Private Wealth: IPOs have a mixed history. In general, the ones you haven't really heard of are the ones that have done the best. The ones that are overhyped tend to have a big digestion period. Starting points do matter. With SpaceX, if I had to guess, the stock will go higher initially as the fear of missing out continues. The story of SpaceX having such a big total addressable market may be true, but those cash flows are so far out into the future, with data centers in space and all these things, that it creates volatility, uncertainty, and the need to deliver results without any issues whatsoever. Starting at a multiple of 100 times revenue leaves no room for error, no room for anything but explosive growth. In the end, fear of missing out is not an asset class.

I think there will be a digestion period for Anthropic and OpenAI. The growth is explosive, and that's what everyone's investing in. But will there be government intervention across either the U.S. or globally that could inhibit some of the growth? That is to be seen. There is a lot of potential for these companies to become the most valuable in the world. But again, we're starting at IPOs of sizes never before seen in history. So for any of these I tell my clients that if you must own them, you must size appropriately and have enough dry powder to be able to add if the story is intact when significant pullbacks occur -- and I do expect them to occur. At Arena we focus on getting in earlier to these companies. We got our clients access to SpaceX years ago, for example, so they have an option for liquidity, and if they want to take it and get out, that works.

Matthew Smart, director of financial planning and portfolio analysis, WWM Investments: Clients ask us about IPOs often. But unless we're talking to somebody very sophisticated, they're not asking about valuation multiples or earning forecasts. Companies like SpaceX and OpenAI are changing the world, so of course people covet them. But we generally tell investors to first make sure you're looking at the S-1 filing, because that's where you're going to get the most data. You get revenue growth history, balance sheet information, cash-flow statements, things like that. It's fairly limited, but it's going to give us the best gauge of whether the IPO is something we want to participate in at that price.

Just because the company is making incredible advancements in technology, for example, doesn't mean it's a good investment. We try to give that initial perspective before we even talk about what happens when the company goes public. There are a lot of things to consider after the shares start trading, like insider lockup periods and things of that nature. Most retail investors would not receive a meaningful allocation of the IPO. So we ask, "If you have 10 shares or 100 shares, what's that really going to do for you?" A lot of people want to just own an Elon Musk company. It's a fun conversation, and it is an investment conversation. A lot of our financial planning discussions with clients are about, you know, putting in a new kitchen. And the amount of detail a person can tell you about their cabinets and their oven is unbelievable. But when it comes to putting $1,000 into an IPO, it's like they haven't done much research. So we try to offer research and a deep analysis of the company.

Jessica Caruso, executive managing partner, west division, Mercer Advisors: We are actually seeing a huge volume of SpaceX, Anthropic, and OpenAI employees who are seeking us out for advice. These companies have stayed private for so long that those employees are now hitting the public markets with a lot more at stake than in previous IPOs. This is literally life-changing money for many people -- a big, complex wealth event. These employees saw the majority of what we think is the upside when those companies were private, and now that we're on the other side of this IPO happening, they are thinking, "Wow, I just made life-changing money, how do I think about de-risking, and how do I do that in a smart way relative to taxes and these lockups and all the other rules that they have around it?"

Meanwhile, we have all these other retail investors on the other side who are so hyped about getting access to these same companies that it's almost like the smart money is so ready to capture that return that they've received. We're generally recommending that clients let things settle out. There might be a lot of additional upside from here, but we don't know. And this specific time in the market feels like it carries a lot of risk: There could also be a significant downside. We're generally saying that if you're not already in the company, it's not going to hurt to wait and see how things land. Remember, a lot of clients are going to have access to these companies as part of their natural diversified portfolio, because they're going to be added to indexes -- in some cases sooner than we would have expected. It's almost like at this point you should have either gotten into a private investment vehicle years ago or you should get in when they're fully digested into the market.

Matt Michaels, co-chief investment officer, Fidelis Capital: With any prospective new investment, an investor needs to focus on valuation: What are they paying for the company today relative to its long-term potential. Think about buying in to a company like SpaceX when it's at a $500 billion valuation versus a $1.5 trillion to $2 trillion valuation, which is the expected range of the IPO. Those are very different outcomes. With anything that is pre-IPO, there tends to be less visibility into the financials, and so it can be challenging. The benefit of owning companies is when you get in early, pre-IPO, when you invest at a valuation that's well below what that stock might ultimately trade at. And that becomes a difficult thing to do. There are several examples of companies you get into early that have fantastic IPOs, and other ones that don't do well at all. Many times there are very attractive entry points around all that noise in the first six to 12 months, in some cases at better than the pre-IPO valuations, but without the liquidity constraints [such as thin trading volumes, wide bid--ask spreads and volatile prices]. The risk of paying too high of a valuation and taking on all the illiquidity often doesn't make a lot of sense for many investors.

We typically deal with sophisticated, high-net-worth clients, so we invest across public and private markets. When we think about private companies that are growing quickly and that might one day become public, we typically try to access them through private-equity or venture capital-type funds, where you can own a diversified pool of great companies at reasonable valuations. All of them aren't going to be successful, but some may be, and to us that's a better risk/reward than trying to get IPO shares.

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June 10, 2026 12:28 ET (16:28 GMT)

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