CNBC’s Jim Cramer raised red flags over rising speculative excess in the initial public offering market on Friday, warning that SpaceX’s anticipated public debut could inflate valuations to dangerous levels.
IPO Sparks Bubble Fears
If underwriters release too few shares, Cramer warned, demand could push SpaceX’s valuation toward $5 trillion. “SpaceX would create a bubble unto its own,” he said on Mad Money.
SpaceX, the parent company of Starlink, the social platform X and the Grok AI chatbot, is said to be planning a June 12 Nasdaq listing, while a 5-for-1 stock split lowers the per-share price. Its IPO prospectus is expected as early as next week.
Reports estimate the company’s valuation at between $1.75 trillion and $2 trillion.
Dot-Com Warning
Cramer warned that the listing could set a precedent for Anthropic and OpenAI, both of which are considering public offerings, adding that a wave of major tech IPOs could lead investors to sell existing holdings and potentially put pressure on broader equity markets.
“The stock market, like any other market, is all about supply and demand,” Cramer said. “Too much supply and the market breaks down.”
He urged underwriters to price deals responsibly and cautioned against creating artificial first-day trading gains, a practice common during the late 1990s dot-com era, when only a small number of shares were made available to create scarcity and drive hype. That bubble later burst between 2000 and 2002, erasing trillions of dollars in market value as overstated valuations fell sharply.
“They did the latter during the dotcom era and that ended horribly,” Cramer said.
IPO Valuation Concerns
Cramer’s warning aligns with venture capitalist Chamath Palihapitiya‘s concerns over speculative excess in a potentially saturated tech IPO market.
Adding to the concern, SpaceX has already delivered roughly 5x appreciation, compounding from approximately $350 billion to its current $1.75 trillion IPO target entirely in private markets, where most retail investors had no access.
SpaceX’s eventual public listing could reset valuation benchmarks across AI, defense and advanced computing, according to private-market analysis.
Anchorage Digital‘s David Lawant also warned that IPOs from SpaceX, OpenAI and Anthropic could “suck air” from crypto markets by absorbing significant institutional liquidity.
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Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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