The AI IPO Scam

Retirees Take the Risk and the Rich Take the Profit

AI stock offerings could endanger retirement accounts. SpaceX, OpenAI, and Anthropic are discussing possible IPOs within the next year, with combined valuations above $3 trillion and fundraising goals of roughly $170 billion to $195 billion. These companies are burning huge amounts of cash but have no clear path to steady profits. That makes them a dangerous place for retirement savings to be pushed automatically.

If only a small slice of IPO shares is sold to the public, demand will send prices sharply higher driven by shortage and hype. When the stocks are added to major indexes, index funds and target-date funds have to buy them right away, meaning retirees could be pushed into these stocks at inflated prices.

When insiders and early investors are free to sell larger amounts of stock, supply will rise and prices will fall. Insiders get to sell high, while retirement funds are left holding shares funds bought at inflated prices.

Once again, the super rich get to loot the middle class.