A Fiduciary Perspective on Mega IPOs

The companies referenced in this article are used solely as illustrative examples of large, widely discussed private companies and should not be viewed as investment recommendations or endorsements.

In the past few weeks, as big companies like SpaceX, OpenAI, and Anthropic have dominated headlines, we’re hearing two types of questions from investors around large, high-profile IPOs (initial public offerings).

One is about access: Can I get in at the IPO price before shares become publicly traded?

The other is more structural: Could a company this large distort the market or affect the funds I already own?

While those sound like two different concerns, they share the same problem. Both focus too much on the IPO day.

As fiduciaries, our goal is to help our clients make thoughtful long-term decisions aligned with their financial plans and goals, rather than headline-driven decisions that are focused on “the next big thing.”

That’s not to say these questions about mega IPOs aren’t worth asking. But they’re more nuanced than the latest news article would have you believe. In this article, we’ll break down how mega IPOs like this actually work, and how investors should consider incorporating them (or not) into their financial goals.

The IPO Price Is Not the Price Most Investors Get

First thing’s first. When it comes to IPOs, it’s a common misconception that the price in the headline is the price most investors can access. It usually isn’t.

The IPO price, also called the offer price, is set before shares begin trading publicly. It’s reserved for institutional investor access. The market price is what appears once trading opens on a stock exchange like NASDAQ or Dow Jones. For most individual investors, that market price is the first realistic opportunity to buy.

That distinction matters because when people talk about an IPO “popping” on day one, they’re often describing a return tied to a price many individual investors never had access to in the first place.

Why Mega IPOs Are So Compelling

High-profile IPOs attract attention because they combine a strong business narrative with the appearance of a rare market opportunity.

Investors often tell themselves they are not chasing hype. They usually say the company is transformative, that the industry is the future, or that the opportunity could compound for decades.

And while in some cases that may ultimately prove true, it’s still worth asking a harder question:

Are you responding to a genuine long-term investment case or to the feeling that this is a moment you can’t afford to miss?

How Does This Support Your Goals?

From a fiduciary perspective, the question does not begin with whether a company is impressive or whether the story is compelling. It begins with fit.

Specifically:

• What role would this investment play in your overall portfolio?
• What additional risk does it introduce?
• What are you giving up to make room for it in your portfolio?
• And if it underperforms, how much does that matter to the broader plan?

Even an interesting opportunity still needs to earn its place in a disciplined, diversified strategy.

What Often Gets Overlooked in IPO Conversations

When interest is high, a few critical realities tend to fade into the background.

1. IPOs Are a Starting Point

An IPO isn’t the finish line for a company. It’s the beginning of a new phase.

Before shares ever reach the open market, investment banks work with the company to gauge investor demand, often collecting early indications of interest from large institutional investors. That demand helps determine the initial offering price.

Once trading begins on a public exchange, that initial IPO price is typically short-lived. It can fluctuate significantly as the broader market reacts in real time. This process, often called price discovery, can introduce meaningful volatility in the market price, especially in the early days.

That means the price in the headline and the price available to everyday investors are often not the same.

2. Lock-Up Periods and Liquidity

Another important factor to consider is the lock-up period.

After an IPO, early investors, employees, and insiders are often restricted from selling their shares for a set period of time. When that lock-up period ends, a large number of shares may suddenly enter the market.

That increase in available shares can impact liquidity and potentially create additional price movement. This is often overlooked by many investors when first evaluating an IPO.

3. A Great Company Can Still Be a Risky Investment

One of the most common disconnects in investing is this: A great company does not automatically equal a great investment at any price.

Buying into a high-profile IPO can also create concentration risk, especially if it pulls capital away from more diversified holdings like mutual funds or broad market investments.

Over time, concentrated positions can grow into a dominant portion of someone’s wealth and introduce risks that may not be obvious at first glance.

This is especially important when evaluating a single idea tied to a specific narrative.

4. Timing Feels Urgent

IPO conversations almost always carry a sense of urgency:

1. “If I don’t act now, I’ll miss it”
2. “This is the moment before it takes off”

But that urgency is often driven by emotion, not long-term strategy. Many long-term investment approaches emphasize consistency, diversification, and discipline rather than one-off moments tied to trying to time the market.

The Real Question Behind IPO Interest

The questions we see aren’t actually about the mechanics or potential of the investment opportunity, they’re usually driven by something deeper:

1. “Am I missing opportunities?”
2. “Is my portfolio too conservative or too passive?”
3. “Do I need to change my goals or timeline?”
4. “Should I be doing something different to improve long-term outcomes?”

Those are valuable questions. But they are broader than any single IPO. They are questions about the design of the portfolio, the expectations behind it, and whether the strategy already in place is doing the job it is supposed to do.

Why a Disciplined Long-Term Strategy Still Matters

At Plancorp, we don’t believe that discipline requires dismissing every new or interesting opportunity.

But we do believe every investment decision should be evaluated through a process designed to support your broader goals. We often say we’re more worried about making a harmful decision to include something in a portfolio than missing out on one over-performer out of thousands in a balanced portfolio.

That means grounding decisions in:

• Your time horizon
• Your risk tolerance
• Your tax considerations
• Your liquidity needs
• The role each investment plays in the broader allocation

Opportunities shouldn’t get a pass simply because they are popular, innovative, or widely discussed. They still need to earn their place.

Final Thoughts

There’s nothing wrong with being interested in IPOs like SpaceX, OpenAI, or Anthropic. In fact, that curiosity is healthy. It shows engagement and awareness.

A strong investment process does not rely on access to every exciting story in the market.

The goal shouldn’t be to catch every headline, but to build a portfolio that can support your life across a wide range of outcomes that aren’t dependent on any single company, trend, or moment.

If you're looking to dive deeper on mega IPOs, we recommend listening to this recent episode of The Long Term Investor, hosted by Plancorp's chief investment officer Peter Lazaroff.

A Next Step: Building a More Disciplined Framework

If IPO conversations have raised broader questions about whether your portfolio is built the right way, that may be a sign the bigger issue is not the IPO itself — it’s whether your investment strategy is aligned with your goals, risk tolerance, and long-term plan.

Many investors benefit from having a clear framework to filter opportunities, especially when excitement and uncertainty are both high.

We’ve outlined those principles in our guide: Evidence-Based Investing Insights: 12 Essential Ideas for Building Wise Wealth

It walks through:

• How markets price information
• Why you should diversify your portfolio
• How behavior impacts outcomes
• What it takes to invest with clarity and confidence

Download the guide to explore a framework behind smarter investing decisions.