Good morning The hype about trillion-dollar IPOs is back – and among many investors, so is the fear of missing out on the next Nvidia.
In one new Assets Feature articlemy colleague Amanda Gerut examines what’s driving demand for blockbuster IPOs like SpaceX – and why investor psychology can be just as important as company fundamentals. Financial advisor Jeff Barnett sums up the tension: Even disciplined portfolios sometimes make room for “lottery ticket” trading, if only to avoid missing out on what could become a generational wealth event.
Gerut writes: “SpaceX, Anthropic, and eventually OpenAI are the IPOs people dream about, especially when they feel the pain of missing out on Nvidia: $10,000 in Nvidia a decade ago would be worth about $1.8 million today. When SpaceX went public, more than 500 million shares were traded – marking the second-highest first-day IPO volume in Nasdaq history, behind only 580 million from Facebook.” in 2012. But if you missed the first day, all is not lost. And in fact, history shows that you may have better buying opportunities in the future.”
For CFOs, an IPO isn’t just a liquidity event – it’s the ultimate test of an equity story. Finance chiefs spend months refining the narrative, refining the metrics and testing the situation with institutional investors to gauge whether the investment case will hold up once the market opens. History shows that the real measure of an IPO is not day one success, but the company’s ability to earn investor trust over time. While some investors chase allocations in hot trillion-dollar IPOs, CFOs are focused on the other side of the table: building an equity story that stands up to scrutiny long after opening day.
Check out the three rules investment professionals use to evaluate the market’s biggest IPOs—and why these insights matter whether you’re allocating or raising capital—Read Gerut’s full article here.
Sheryl Estrada
sheryl.estrada@fortune.com
Leaderboard
Jennifer Simon was appointed CFO of Upland Software, Inc. (Nasdaq: UPLD), an enterprise intelligence provider, effective August 17. Simon brings more than 20 years of leadership experience in the financial sector. She comes to Upland from NextGen Healthcare, where she served as SVP of Finance. Immediately prior, she spent more than three years at Quest Software, a private equity-backed global software company, where she rose from VP of Finance to Interim CFO. She was also previously CFO of Community Impact Newspaper.
Jamie Schroeder was appointed CFO of Premium Guard Inc. (PGI), a filter manufacturer and supplier. Schroeder comes to PGI with more than 30 years of experience in finance and operational leadership. Most recently, Schroeder held senior finance roles in retail, including at Big Lots. Previously, he spent more than 16 years at Scotts Miracle-Gro. He began his career at Ford Motor Company.
Big deal
The CFA Institute’s Research and Policy Center has launched a new research series to help the investment industry understand how AI-driven structural change will transform capital markets and industry practices. The opening paper “Artificial intelligence and the future of finance“: A Framework for Structural Change” introduces an AI Transition Framework designed to empower investment professionals and regulators to proactively address the growing role of AI in finance.
The research focuses on four structural forces – capability, adoption, substitution and recomposition – and uses them to map how AI could change competitive dynamics, professional norms, market structure and systemic risk. The paper also highlights the importance of model monitoring, explainability, accountability and institutional resilience, and introduces “cognitive convergence” to describe the increasing alignment of models and data between institutions and its impact on market stability.
Go deeper
“OpenAI says its AI models secretly broke out of a secure testing environment and hacked into AI company Hugging Face to cheat on an assessment,” reads one Assets Article by Jeremy Kahn and Emily Forlini.
The authors write: “OpenAI said Tuesday that two of its AI models independently hacked their way out of a controlled environment where they were supposed to be closed off from internet access, and then hacked into the systems of Hugging Face, a company that hosts open-source AI models and testing resources, to cheat on an internal assessment test.” Read more here.
Overheard
“AI is a fantastic tool, but it is not a replacement for creativity.”
— Paul Dergarabedian, senior analyst at Comscore and one of the film industry’s best-known experts, told Assets.