The IPO Supply Wave Meets Its Lockup Cliff

The US IPO market enters the second half of 2026 at an extraordinary inflection point. Through July 2, 194 IPOs have raised $155.8 billion on American exchanges — and even excluding the historic SpaceX offering, the remaining $69.9 billion is more than double the $31.6 billion printed year-to-date in 2025.{{cite:d13e2e3621f4}} Now two forces are converging in July that will test whether this pace is sustainable: SK hynix is pricing a $28.1 billion Nasdaq listing this week, and SpaceX insider lockups are beginning to expire. Together they represent the first real stress test of whether the market’s record corporate buyback machine can absorb a $200 billion-plus supply wave without triggering a broader sell-off.

SK hynix: The Second-Largest US IPO on Record

South Korea’s SK hynix announced terms on July 6 for a $28.1 billion US offering of 177.9 million American Depositary Shares at $158.14 — the as-converted July 3 close of its shares on the Korea Exchange’s KOSPI market.{{cite:1bf4724c8f98}} At that price, SK hynix would command a market capitalization of approximately $1.2 trillion, making it the second-largest US IPO in history behind only SpaceX.{{cite:1bf4724c8f98}}

The deal is underwritten by a syndicate of 15 bookrunners led by BofA Securities, Citi, Goldman Sachs, and J.P. Morgan, and is expected to price during the week of July 6.{{cite:1bf4724c8f98}} Cornerstone investors Baillie Gifford, Coatue Management, and Situational Awareness Partners have indicated interest on $7 billion of the offering, representing 24.9% of the deal — a meaningful pre-committed anchor that reduces placement risk.{{cite:1bf4724c8f98}}

The investment thesis is tightly linked to AI infrastructure. SK hynix ranked first or second globally in DRAM, high-bandwidth memory (HBM), and NAND flash by revenue in Q1 2026, and booked $84.9 billion in revenue for the 12 months ended March 31, 2026.{{cite:1bf4724c8f98}} The company is the dominant supplier of HBM — the specialized stacked memory inside every major AI accelerator — and persistent HBM shortages have locked in its position as the memory bottleneck for the AI buildout.{{cite:f22d47ebef11}} The listing gives US investors their first direct access to that franchise, which is why the deal is being positioned as an AI-infrastructure play rather than a cyclical semiconductor listing.

SpaceX: From Debut Euphoria to Lockup Cliff

SpaceX raised $75 billion in its June 12 Nasdaq debut at $135 per share, valuing the company at nearly $1.77 trillion.{{cite:a1ae6bf57ef3}} Underwriters later exercised their over-allotment option, bringing total proceeds to $85.7 billion — the largest IPO ever recorded.{{cite:a1ae6bf57ef3}} The stock surged past $225 in the sessions following the listing but reversed sharply through late June, falling to roughly $153 — an approximately 32% decline from its post-listing peak.{{cite:a1ae6bf57ef3}}

The next chapter begins now. SpaceX’s first insider lockups start expiring in July, concurrent with the company’s first reported earnings as a public entity expected in late July or early August.{{cite:d13e2e3621f4}} This is the moment ECM bankers are watching most closely: if SpaceX trades down as insider selling pressure materializes, it could narrow the new-issue window for the AI-themed issuers queued behind it.{{cite:d13e2e3621f4}}

The warning is explicit. As one ECM banker told ION Analytics: “If SpaceX starts to trade down that could close the door for other AI issuers.”{{cite:d13e2e3621f4}}

The $200B Supply Wave and the Inelastic Markets Hypothesis

The deeper concern running through Street analysis is not the cash these offerings raise but how prices respond when capital rotates from existing holdings into newly listed companies. Researchers Xavier Gabaix and Ralph Koijen, in their “inelastic markets hypothesis” published through the National Bureau of Economic Research, found that every $1 flowing into or out of equities can shift total market value by approximately $5.{{cite:a1ae6bf57ef3}}

Applying that multiplier to a $200 billion IPO wave implies roughly $1 trillion in aggregate market value at risk.{{cite:a1ae6bf57ef3}} The mechanism is straightforward: index funds, pension funds, and insurance companies hold the bulk of equities under mandates that limit their ability to absorb sudden demand shifts. When investors sell established positions to fund allocations in new listings, the selling pressure far exceeds the cash transferred.

So far in 2026, 79 US IPOs have raised $112.5 billion, up 625% from a year ago, according to Renaissance Capital.{{cite:a1ae6bf57ef3}} SpaceX alone accounted for approximately two-thirds of those proceeds.{{cite:a1ae6bf57ef3}} JPMorgan projects total equity issuance will surpass $260 billion this year — a threshold not crossed since 2021.{{cite:a1ae6bf57ef3}}

The Buyback Buffer: $1.5T vs. $260B

The counterargument is substantial. JPMorgan Private Bank strategist Abigail Yoder argued in a June note that corporate share buybacks are on pace to reach approximately $1.5 trillion this year — nearly six times the projected $260 billion in new equity issuance.{{cite:a1ae6bf57ef3}}

“Even in a scenario where IPO volumes rise more than expected, and lockup expiries add incremental pressure, corporate demand alone may have the capacity to absorb a large share of equity supply coming to market,” JPMorgan’s strategists wrote.{{cite:a1ae6bf57ef3}}

US merger and acquisition deal value reached $1.2 trillion in the first five months of 2026, nearly double the $603 billion recorded in the same period of 2025, according to PwC — with cash-financed transactions adding to corporate equity demand alongside buybacks.{{cite:a1ae6bf57ef3}} The S&P 500’s total market capitalization has grown to over $65 trillion, roughly 55% larger than in 2021, the last comparable issuance cycle.{{cite:a1ae6bf57ef3}}

I would put the probability that buybacks and M&A demand fully absorb the supply wave without a material market drawdown at roughly 60/40. The buyback buffer is real and historically unprecedented in scale, but the inelastic-markets multiplier means even a modest mispricing of the rotation — say, $50 billion in net selling from existing positions — could translate into $250 billion in market-value erosion. The 40% case is not a crash scenario; it is a scenario where the supply arrives faster than corporate demand schedules can flex, particularly in July and August when lockup expirations cluster.

The Anthropic and OpenAI Pipeline

Behind SpaceX, the next two megacap listings are already in motion. Anthropic confidentially filed its S-1 registration with the SEC on June 1, following a $65 billion funding round that valued the AI company at $965 billion.{{cite:a1ae6bf57ef3}} OpenAI submitted its own confidential filing on June 8, though a listing may not arrive until 2027 at the earliest, with CEO Sam Altman holding to a $1 trillion valuation target above the company’s $852 billion private mark.{{cite:a1ae6bf57ef3}}

Former Nasdaq chief Robert Greifeld told CNBC he expects both OpenAI and Anthropic to go public before the end of 2026.{{cite:a1ae6bf57ef3}} Full index inclusion of SpaceX, Anthropic, and OpenAI would push the S&P 500’s effective technology weighting to 54% from its current 51%, increasing concentration risk for passive index holders.{{cite:a1ae6bf57ef3}} For context, the technology sector’s weight peaked at approximately 35% in early 2000, just before the dot-com crash.{{cite:a1ae6bf57ef3}}

One ECM banker framed the sequencing risk plainly: “I think Anthropic comes first, and then OpenAI. It all comes down to each individual company’s ability to demonstrate their ROI on that investment.”{{cite:d13e2e3621f4}} A US investor expressed a sharper concern — that if both list in close succession (September and October, for instance) while skepticism toward large language model providers is growing, “that sounds terrible for the broader market.”{{cite:d13e2e3621f4}}

Europe: The Mirror Image

The contrast with European listings is stark. While US ECM is near post-2021 highs on Dealogic’s IPO Health Index, the EMEA equivalent remains close to its post-2021 nadir.{{cite:d13e2e3621f4}} The most high-profile European IPO expected before the summer break — Franco-German tank manufacturer KNDS — was postponed after family shareholders demanded a valuation of at least EUR 12.5 billion while investors insisted on a substantial discount to falling defence-sector peers.{{cite:d13e2e3621f4}}

The structural diagnosis from bankers is that Europe relies on a far smaller, more selective investor base of mutual funds and hedge funds, without the legions of retail investors and institutional FOMO that powered the SpaceX deal.{{cite:d13e2e3621f4}} European investors are demanding at least a 30% discount to peers to participate in new listings.{{cite:d13e2e3621f4}} Without deeper pension-fund and retail participation, that gap is unlikely to close.

What to Watch Next

The base case is that the market absorbs this supply. Corporate demand is at an unprecedented scale, the S&P 500 is 55% larger than in 2021, and two-thirds of the 25 largest IPOs in history were followed by positive S&P 500 returns over the following 12 months, with gains ranging from 5% to 20%.{{cite:a1ae6bf57ef3}} Mega-offerings tend to accompany uptrends rather than end them.

But the tail risk is concentrated and time-specific. If SpaceX trades down on its first earnings and lockup expiration — and if Anthropic prices into a market already digesting SK hynix’s $28 billion — the inelastic-markets multiplier means the damage would not be confined to newly listed shares. The 40% case is a coordinated supply shock where the rotation from existing holdings into new issuance outpaces the buyback absorption rate, and the $1 trillion market-value-at-risk figure from the inelastic markets hypothesis moves from a theoretical calculation to a realized drawdown.

The next four weeks will calibrate which side of that 60/40 the market is on.