Tom Lee thinks fears that the market won’t have the liquidity to handle the huge IPOs planned for this year, including Friday’s SpaceX Inc., are overdone. Fundstrat’s managing partner and head of research appeared on CNBC’s “Power Lunch” on Monday and said clients are concerned that SpaceX’s IPO will top a market that has soared on the strength of artificial intelligence. He said such concerns were “misplaced”. “There’s still $7 trillion in cash sitting around,” he said. “We think the market will not only absorb this IPO well, but the post-IPO market will also do well, as wealthy customers have enough cash to buy this IPO,” he said, adding that the overall market is likely to be volatile leading up to Elon Musk’s company debut. The Nasdaq Composite Index rose 1.25% in midday trading Monday, after falling more than 4% on Friday. Some investors attributed Friday’s decline to investors selling popular semiconductor stocks to free up money to buy SpaceX’s IPO. .IXIC YTD Mountain Nasdaq Composite Index, YTD Lee added that he has heard concerns about when SpaceX’s lockup could expire and insiders could start selling the company’s stock. He said nervous investors were comparing it to 1999. At the time, many companies that went public that year reached their lock-up deadlines, contributing to the peak of the dot-com bubble. Again, Lee believes such concerns are unwarranted and that he does not believe history will repeat itself. “One of the reasons I think it’s less likely that they’ll sell everything once the lockup expires is that these AI companies, including SpaceX, don’t have enough capital,” he said. “So they will be looking to maintain some level of information and public market relationships to ensure that they have access to capital markets over the next five years.”
