Analysis-Blockbuster SpaceX listing could suck the oxygen out of fragile IPO market

By Manya Saini

April 7 (Reuters) - As Elon Musk's SpaceX closes successful connected a $75 cardinal IPO that could rewrite grounds books, concerns are mounting that others looking to database successful 2026 whitethorn find it harder to get deals done nether the shadiness of the abstraction venture's headline-grabbing debut.

U.S. markets, prized for their depth, look a captious test, arsenic much than fractional a twelve analysts and ‌industry experts told Reuters that the SpaceX woody would apt sorb an outsized stock of capitalist demand, squeezing retired different hopefuls.

"History tells america that a mega IPO similar SpaceX tin suck up the ‌oxygen successful the market. We saw that with Facebook successful 2012," said Matt Kennedy, elder strategist astatine Renaissance Capital, a supplier of IPO-focused probe and ETFs.

"IPOs are a large selling event, and companies wouldn't privation the sound from a SpaceX offering to drown retired sum of their ​own deals. So, listing enactment whitethorn dice down a spot during the weeks surrounding the SpaceX IPO."

Companies person waited years connected the sidelines for favorable IPO conditions aft a prolonged adust spell. A listing similar SpaceX, with its personage billionaire CEO, blistery manufacture and deep-pocketed backers, could person provided the jolt others request to propulsion ahead.

Instead, its sheer standard threatens to overshadow others, with Wall Street banks and investors pouring a bulk of their attention, and money, into the relation of the Starlink constellation of satellites.

Thirty-five IPOs person priced truthful acold this year, according to information from Renaissance Capital, down 37.5% from a twelvemonth earlier. That could worsen successful the months ahead, clouding hopes of a broader marketplace resurgence successful ‌2026.

DISRUPTIONS WEIGH ON IPO MARKET

The IPO marketplace has lined up its biggest pipeline ⁠in decades, analysts and bankers said.

But the warfare successful Iran, spiking lipid prices, backstage recognition concerns and AI-led disruption to bequest bundle firms person acceptable a precocious barroom for which deals successfully interruption done the volatility - and which ones get near behind.

Now, alongside these disruptions, companies eyeing IPOs indispensable besides vie for attraction successful a marketplace dominated by SpaceX headlines.

While ⁠bankers volition astir apt counsel their biggest clients against competing against SpaceX, smaller listings whitethorn benefit, said Michael Ashley Schulman, spouse astatine wealthiness absorption steadfast Cerity Partners.

"Smaller IPO debuts whitethorn payment from a tag-along effect successful retail enthusiasm that could mentally lump IPOs unneurotic nether the presumption that if 1 does well, others volition too," helium said.

MORE MEGA DEALS TO COME