{"id":814053,"date":"2026-07-20T11:40:22","date_gmt":"2026-07-20T11:40:22","guid":{"rendered":"https:\/\/www.newsbeep.com\/ca\/814053\/"},"modified":"2026-07-20T11:40:22","modified_gmt":"2026-07-20T11:40:22","slug":"spacex-open-ai-and-anthropic-ipo-waves-could-spark-a-40-crash-why-canadians-cant-afford-to-ignore-it","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/ca\/814053\/","title":{"rendered":"SpaceX, Open AI and Anthropic IPO waves could spark a 40% crash \u2014 why Canadians can\u2019t afford to ignore it"},"content":{"rendered":"

\"SpaceX,<\/a> SpaceX, OpenAI and Anthropic IPOs <\/p>\n

There’s a theory gaining traction in global markets. The biggest initial public offerings (IPOs) in history could pull enough money out of existing stocks to trigger a severe bear market \u2014 and Canadians’ savings, pension plans and investment portfolios may not be spared. <\/p>\n

The warning comes from Mark Hulbert, a veteran market analyst who published a column on the topic (1) in MarketWatch on June 22, drawing on research by Harvard University economist Xavier Gabaix. <\/p>\n

“SpaceX’s massively successful IPO, along with the expected IPOs of artificial-intelligence giants OpenAI and Anthropic, make a severe bear market much more likely,” Hulbert noted. “And by severe, I mean a drop of almost 40%.” <\/p>\n

The stakes are real for Canadian investors. The Ontario Teachers’ Pension Plan (OTPP) invested around US$220M (2) (~C$300M) in SpaceX in 2019 \u2014 a position now estimated to be worth as much as US$11.6B (~C$16.3B). Meanwhile, Canada Pension Plan (CPP) Investments \u2014 which manages C$793.3B on behalf of 22 million Canadians \u2014 has also been examining how mega-IPOs (3) affect its broader portfolio. <\/p>\n

Don’t Miss How huge IPOs can drain the stock market <\/p>\n

The theory behind Hulbert’s warning is as follows: when a massive company goes public, large investors have to sell their existing holdings to raise the cash needed to buy the new shares \u2014 effectively pulling money out of the broader stock market and redirecting it into newly public companies. <\/p>\n

“When a multi-billion-dollar company hits the public market, it doesn’t magically create new investing cash out of thin air,” said stock market expert Dan Ye<\/a>, who teaches an “Investing in the Age of AI” course at Johns Hopkins University. “The money to buy those fresh shares has to come from somewhere.” <\/p>\n

In practice, that means pension funds, hedge funds and everyday investors fund their IPO purchases by selling off their existing holdings. This includes blue-chip stocks, broad market ETFs and index funds, as well as those that track major Canadian benchmarks like the S&P\/TSX Composite Index. <\/p>\n

“If we see a rapid-fire succession of these massive offerings, we are easily looking at an aggregate capital raise north of US$200B,” Ye said. “That is a massive, structural drain on everyday market liquidity.” <\/p>\n

A 2021 NBER working paper (4) by Gabaix (Harvard) and Ralph Koijen (University of Chicago) \u2014 known as the “inelastic markets hypothesis” \u2014 estimated that every US$1 net flow into or out of the U.S. stock market moves total market value by roughly US$5. Financial commentators such as Hulbert have applied that multiplier to the combined fundraising of SpaceX, OpenAI and Anthropic \u2014 together estimated at around US$200B (~C$282B) \u2014 to suggest that a US$1T (~C$1.41T) decline in total market value is possible. However, this specific application is commentary extrapolating from the research, not a conclusion the paper itself makes. <\/p>\n

The SpaceX IPO alone was already historic: the company raised US$75B (5) (~C$106B) on the Nasdaq (SPCX) on June 12, 2026 \u2014 the largest IPO in history \u2014 at a price of US$135 a share, valuing the company at approximately US$1.77T (~C$2.5T). <\/p>\n

OpenAI and Anthropic have since confidentially filed draft IPO registration statements with the SEC in 2026 \u2014 a preparatory step in advance of an actual public offering. Anthropic’s latest private funding round valued the company at US$965B (~C$1.36T), while OpenAI’s last private valuation stands at US$852B (~C$1.20T). Both are said to be targeting a public listing valuation near US$1T. <\/p>\n

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What this means for Canadian investors specifically <\/p>\n

While the Hulbert\/Gabaix thesis focuses on U.S. market dynamics, Canadian investors aren’t watching from a safe distance. <\/p>\n

For context, the Toronto Stock Exchange (TSX) had a total listed market capitalization (6) of approximately C$6.95 trillion in June 2026 (7). While the TSX’s total size still exceeds the combined valuations of SpaceX, OpenAI and Anthropic, Canada’s market is nonetheless closely linked to U.S. equities. In fact, many TSX-listed companies are cross-listed or correlated with U.S. sector performance, so a significant U.S. market move, like the one these mega-IPOs could trigger, tends to ripple into Canadian markets too. <\/p>\n

Canadian institutional investors are already wrestling with this dynamic. According to Benefits Canada, the SpaceX IPO (8) is prompting Canadian pension fund managers to reconsider whether active management might serve them better than passive index-based investing \u2014 a question that strikes at the heart of how billions in retirement savings are managed. <\/p>\n

Stack Capital Group Inc., a TSX-listed investment company, purchased US$8M (~C$11.28M) in SpaceX shares in 2021 and 2025. At the IPO valuation, that position was worth more than US$100M (9) (~C$136M) \u2014 yet the company said it had no plans to sell. Stack also holds a position in OpenAI. <\/p>\n

The situation is more nuanced for individual Canadians. Online brokerage Wealthsimple opened access to select US and Canadian IPOs (10) for retail clients around the time of the SpaceX listing, allowing eligible clients to request shares at offering price with no minimum order. However, US-only IPOs like SpaceX’s remained restricted to accredited investors. <\/p>\n

SpaceX itself had initially targeted up to 30% of its IPO shares for retail investors \u2014 roughly triple the typical 5-10% allocation \u2014 though the final allocation came in at around 20% (11) due to strong institutional demand. <\/p>\n

That being said, SpaceX shares aren’t listed on the TSX. Canadians who want to hold the stock directly need to access the Nasdaq through a Canadian brokerage with U.S. market access, such as Questrade, Wealthsimple (12), or CIBC Investor’s Edge (13). If held inside a registered account like a Registered Retirement Savings Plan<\/a> (RRSP) or Tax-Free Savings Account<\/a> (TFSA), SpaceX shares may qualify as eligible foreign investments \u2014 though currency conversion costs and U.S. withholding taxes may apply. <\/p>\n

Read more: 3 essential money moves to make once you’ve saved $50,000<\/a> <\/p>\n

SpaceX, OpenAI and Anthropic may not be big enough to crash the market <\/p>\n

Not every market expert agrees with the bear-market scenario. <\/p>\n

“While SpaceX’s IPO was the largest in history \u2014 raising a total of US$85.7B (C$120.8B) \u2014 some people overstate its impact, citing that the IPO price valued the firm at US$1.77T,” said Robert R. Johnson<\/a>, founder and CEO at New York City-based Economic Index Associates. He noted the actual cash raised is “a small fraction of the total market capitalization of SpaceX.” <\/p>\n

Johnson pointed out that U.S. stock market capitalization stood at about US$79.4T at the start of 2026. The SpaceX IPO, while enormous, represents roughly 0.1% of total American market capitalization. <\/p>\n

Globalization also provides some cushion. If a significant share of IPO funding comes from international sovereign wealth funds or bond investors \u2014 rather than equity holders selling existing stocks \u2014 the domestic market is spared a direct hit. <\/p>\n

“Today’s stock market has a few modern counter-forces that didn’t exist in past decades,” Ye said. <\/p>\n

Venture capital and private equity funds are also sitting on record levels of undeployed cash. If early SpaceX insiders sell their shares following the IPO, that money may be quickly recycled back into other stocks, softening any liquidity shock to the broader market. <\/p>\n

Research firm Morningstar has also raised serious questions about SpaceX’s valuation, estimating the company’s fair value (14) at US$63 (~C$89) a share, which is a 53% discount to its US$135 (~C$190) IPO price. In its own prospectus, SpaceX acknowledged it has “a history of net losses and may not achieve profitability in the future.” <\/p>\n

On the TSX, Canadian asset managers have quickly moved to give investors exposure to SpaceX. Harvest ETFs launched the Harvest SpaceX Enhanced High Income Shares ETF (15) (SPXE), with a 0.4% management fee, while Ninepoint Partners launched the Ninepoint SpaceX HighShares ETF (16) (SXHI) with a 0.29% management fee \u2014 both were approved by the TSX in mid-June 2026. <\/p>\n

Why investors need to be careful about massive IPOs <\/p>\n

Even with those global market buffers in place, history offers a warning about IPO booms. Hulbert points to the dot-com bubble in 2000 and the market crash of 1929 \u2014 both of which were preceded by surges in major new stock listings. <\/p>\n

“If you look back at 1929 or the peak of the dot-com bubble in 2000, massive waves of IPOs have consistently served as the ultimate canary in the coal mine, signaling the absolute top of a speculative cycle,” Ye said. <\/p>\n

That observation carries extra weight for Canadians who own exchange-traded funds (ETFs) that track major U.S. indexes like the Nasdaq 100 or the S&P 500. Because Nasdaq changed its rules in 2026 to allow large new public companies to join the Nasdaq 100 (17) after just 15 trading days \u2014 far faster than before \u2014 Canadians who hold QQQ or equivalent Nasdaq 100 ETFs automatically gain exposure to SpaceX, whether they chose to or not. <\/p>\n

“This state of IPO activity will likely last at least for the next couple of months, but in the broader perspective, it’s best not to read too much into it,” said Eugenia Mykuliak, founder and executive director of B2PRIME Group, a global financial services provider. <\/p>\n

“Whether SpaceX can successfully execute its growth strategy and justify the valuations in the long run is the more important question,” Mykuliak added. <\/p>\n

What Canadian investors can do now <\/p>\n

Whether or not a 40% market drop materializes, the current IPO environment gives Canadian investors a useful checklist for reviewing their portfolios. <\/p>\n

Review your exposure to U.S. index ETFs <\/p>\n

Many Canadians hold broad U.S. market ETFs inside their RRSP or TFSA. With SpaceX now part of the Nasdaq 100 after only 15 trading days \u2014 and OpenAI and Anthropic potentially following \u2014 the mix of companies inside your index fund may shift without you making any active decision to add these high-priced companies that aren’t yet profitable. <\/p>\n

Understand the foreign content rules in your registered accounts <\/p>\n

There are no foreign content limits in RRSPs or TFSAs \u2014 you can hold U.S.-listed stocks like SpaceX in those accounts. However, U.S. dividends and income may be subject to a 15% U.S. withholding tax if held in a TFSA, but not an RRSP, thanks to the Canada-U.S. Tax Convention. <\/p>\n

Don’t let IPO hype override your plan <\/p>\n

The OTPP’s US$11.6B (~C$16.3B) windfall from SpaceX is extraordinary \u2014 but it was built through early, patient investing long before the IPO. OTPP’s track record also shows that even skilled institutional investors make costly mistakes: The fund wrote off its entire US$95M (~C$134.3M) position in the collapsed cryptocurrency exchange FTX. Diversification, not concentrated bets on individual companies, is what makes long-term portfolios resilient over time. <\/p>\n

Consider Canadian-listed alternatives <\/p>\n

For investors who want exposure to the space sector without direct U.S. stock risk, Canadian options are growing. Brampton-based MDA Space (TSX: MDA) \u2014 the company behind Canadarm 2 \u2014 and Mississauga-based Magellan Aerospace (TSX: MAL) both offer domestic space-economy exposure (18). There’s also the aforementioned Harvest and Ninepoint ETFs. <\/p>\n

Talk to a qualified financial adviser <\/p>\n

Market predictions \u2014 including Hulbert’s 40% scenario \u2014 aren’t certainties. Before making changes to your portfolio in response to IPO news, speak with a licensed financial adviser who can assess your personal situation, including how much risk you’re comfortable with taking, how long you have to invest and what your retirement goals are. <\/p>\n

-With files from Melanie Huddart <\/p>\n

What To Read Next <\/p>\n

The most expensive financial mistakes are often the ones you don’t see coming. Join 19,000+ Canadians who get the money moves, risks and opportunities shaping their finances \u2014 delivered free each week. Subscribe now.<\/a> <\/p>\n

Article Sources <\/p>\n

We rely only on vetted sources and credible third-party reporting. For details, see our ethics and guidelines<\/a>. <\/p>\n

Marketwatch (1<\/a>); Theglobeandmail (2<\/a>), (9<\/a>); Cppinvestments (3<\/a>); Nber (4<\/a>); Cnbc (5<\/a>); Ceicdata (6<\/a>); Stocktitan (7<\/a>); Benefitscanada (8<\/a>); Wealthprofessional (10<\/a>); Ca Finance Yahoo (11<\/a>); Newsroom Wealthsimple (12<\/a>); Investorsedge Cibc (13<\/a>); Morningstar (14<\/a>); Harvestportfolios (15<\/a>); Ninepoint (16<\/a>); Pionline (17<\/a>); Fool (18<\/a>) <\/p>\n

This article originally appeared on Money.ca<\/a> under the title: SpaceX, Open AI and Anthropic IPO waves could spark a 40% crash \u2014 why Canadians can’t afford to ignore it<\/a> <\/p>\n

This article provides information only and should not be construed as advice. It is provided without warranty of any kind. <\/p>\n","protected":false},"excerpt":{"rendered":"SpaceX, OpenAI and Anthropic IPOs There’s a theory gaining traction in global markets. The biggest initial public offerings…\n","protected":false},"author":2,"featured_media":814054,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[20],"tags":[62,1930,276,277,49,48,5437,13742,14822,285635,121,61],"class_list":["post-814053","post","type-post","status-publish","format-standard","has-post-thumbnail","category-artificial-intelligence","tag-ai","tag-anthropic","tag-artificial-intelligence","tag-artificialintelligence","tag-ca","tag-canada","tag-canada-pension-plan","tag-canadian-investors","tag-initial-public-offerings","tag-mark-hulbert","tag-stock-market","tag-technology"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/814053","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/comments?post=814053"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/posts\/814053\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media\/814054"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/media?parent=814053"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/categories?post=814053"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/ca\/wp-json\/wp\/v2\/tags?post=814053"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}