CNBC’s Jim Cramer said Friday that he is becoming increasingly concerned about signs of over-speculation in the IPO market.
The “Mad Money” host claimed the long-awaited debut of Elon Musk’s SpaceX could spark a new wave of speculative buying, warning he didn’t want to “end up with another celebrity.”
SpaceX plans to go public in June and could release a prospectus as early as next week, CNBC reported Thursday. But after the AI chip maker’s blockbuster debut, cerebral system Cramer said Thursday that demand for shares in Elon Musk’s rocket company could grow even higher.
Cramer noted that various media reports suggest the proposal could value SpaceX, home of satellite internet Starlink, social media site X, and the Grok chatbot, between $1.75 trillion and $2 trillion. He said he understands investors’ enthusiasm for Mr. Musk and the company’s business, but warned that if underwriters offer too few shares to the public, the stock could quickly deviate from its fundamentals.
“If SpaceX were to issue just a few shares…this company could be valued at $5 trillion,” he said. “SpaceX is going to create its own bubble,” he said.
Kramer warned that this could set a precedent for other high-profile artificial intelligence companies considering their own public offerings, such as OpenAI and Anthropic. Cramer said a wave of big technology IPOs could start weighing on the overall market as investors sell existing holdings to raise cash to buy new stocks.
“Remember what I always say,” he said. “Like any other market, the stock market is based on supply and demand. Too much supply will cause the market to collapse.”
Still, Kramer said the outcome will depend largely on how underwriters structure the deal, urging them to avoid the kind of explosive first-day pops that fueled excessive speculation in the dot-com era.
“I hope the underwriters act responsibly instead of planning a once-in-a-lifetime pop,” he said. “They did the latter in the dot-com era, and it ended in disaster.”
