Jim Cramer fears SpaceX’s IPO could be ‘destructive’ for the rest of market
CNBC’s Jim Cramer said Friday he is increasingly concerned about signs of speculative excess in the IPO market.
The “Mad Money” host warned that he doesn’t want to “face another Cerebras,” arguing that the highly anticipated debut of Elon Musk’s SpaceX could spark a new wave of speculative buying.
SpaceX is expected to go public in June and could release its disclosure as soon as next week, CNBC reported Thursday. But after the AI chip maker’s blockbuster debut Cerebras Systems On Thursday, Cramer said demand for shares of Elon Musk’s rocket company could be even stronger.
Cramer noted that various media reports suggest the bid could value SpaceX, home to Starlink satellite internet, social media site X and the Grok chatbot, at between $1.75 trillion and $2 trillion. While he said he understands investors’ interest in Musk and the company’s business, he warned that the stock could quickly break away from fundamentals if underwriters release too few shares to the public.
“If SpaceX just issues some stock… this company could be worth $5 trillion,” he said. “SpaceX will create a bubble on its own,” he said.
Cramer warned that this could be a precedent-setting event for other high-profile AI companies, such as OpenAI and Anthropic, which are considering their own IPOs. A massive wave of tech IPOs could begin to weigh on the overall market as investors sell existing holdings to raise cash to buy new bonds, Cramer said.
“Remember what I always say,” he said. “The stock market, like any other market, is all about supply and demand. Too much supply and the market will crash.”
Still, Cramer said the outcome will depend largely on how insurers structure the deal, urging them to avoid engineering the explosive first-day pop that fueled speculative excess in the dot-com era.
“We hope insurers act responsibly rather than engineer the explosions of a lifetime,” he said. “They did the second one during the dotcom era, and that ended horribly.”
