Blockbuster IPOs to take Wall Street by storm

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0:17Good morning from the Financial Times. Today is Friday, May 22nd, and this is your FT News Briefing. Wall Street is getting pumped about three blockbuster IPOs, and Turkey's president just got a big boost from a court in Ankara. Plus, we'll take a look at the U.S.'s pressure campaign on Cuba. I'm Mark Filippino, and here's the news you need to start your day.

0:58Elon Musk's SpaceX is going public, and it's about to trigger a trading frenzy on Wall Street. SpaceX filed for an initial public offering on Wednesday. tech giants OpenAI and Anthropic are expected to file their IPOs shortly. And the arrival of three new major companies on Wall Street has analysts talking about an unprecedented wave of stock market buying and selling. George Steer is a markets correspondent for the FT, and he's here to tell us more. Hi, George. Hey. So, George, tell me why the SpaceX IPO is such a big deal. So, the IPO is expected to be the largest of all time. It's going to hopefully, for Elon Musk, raise around$75 billion.

1:42And SpaceX is targeting a valuation of around$1.75 trillion, which would immediately rank it within the top 10 biggest companies in the world. The way I understand it is that SpaceX isn't actually planning to release a lot of shares at the beginning, right? No. The proportion of its total shares that will actually be traded on IPO day next month is relatively small. So less than 5 % of its total share count, which is unusually small. But companies over the last few years have been slowly reducing the proportion of the shares that they list because the fewer shares, the greater demand, the bigger the potential price jump on the first day of trading, which is something that the bankers and the company itself wants to see.

2:28So we've got the SpaceX IPO. Then there was news this week that OpenAI is preparing to file. Anthropic is expected to follow suit. What is this frenzy going to look like on Wall Street, this buying and trading frenzy? Well, these are three of the most hyped private companies in the world right now for various reasons. One, space is interesting. SpaceX has almost a monopoly on commercial space travel and is working with NASA on that. OpenAI and Anthropic, along with a few of their slightly smaller rivals, have a stranglehold on the LLM, large language model AI market right now. And that is where all of the growth and all of the interest investor appetite has been over the last few years, basically since ChatGBC was released a few years ago.

3:12So the three companies, when they do eventually all trade on U.S. public markets, probably by the end of the year, it's expected that there will be huge investor demand for those shares, the prices of which could go crazy based on how the stock market itself has performed over the last two or three years. But in order for investors to make room to buy these stocks, I'm assuming that they're going to have to dump other stocks along the way, who might be left holding the bag? Investors have told me and my colleagues that, you know, there's plenty of capital out there. There's plenty of demand and that the market won't struggle to absorb these three new huge companies once they list.

3:49There may be some selling at the margins of some of the magnificent seven tech stocks that have done so well recently, some of the semiconductor stocks that have done especially well this year. But I think the market is relatively well prepared. These IPOs have been long in the works. What does this say about the IPO market generally, that these three stocks are going public around the same time and there's so much hype around them? My interpretation is that executives at all three companies realize that there is huge investor demand right now for AI and anything connected to space travel. The US stock market, at least, has been almost entirely driven by the AI hype story over the last few years and in the last month, basically since the end of March, especially.

4:41You know, a cynic could say that these three companies are capitalizing on peak excitement, peak demand for the industries in which they operate. George Steer reports on markets from New York. Thanks, George. Thank you.

5:00A court in Ankara has ruled to remove the leadership of Turkey's biggest opposition party. It's a landmark decision that could damage Turkey's Republican People's Party, or CHP, the main opposition force in the country, all in the run-up to the next presidential election in 2028. The court ruling means that an unpopular figure will take over as the head of the party. Kemal Kilic Darolu lost to President Recep Tayyip Erdogan in a landslide election in 2023. Turkish stocks fell more than 6 % after the ruling on Thursday afternoon. The lira dropped sharply, but quickly bounced back to trade broadly unchanged against the dollar.

5:43Cuba has been subject to U.S. sanctions and embargoes for the better part of 70 years. But now, President Donald Trump is sharply escalating the American pressure campaign on the communist island. Here to explain how and why is the FT's Jude Weber. She's been reporting on this for us. Hi, Jude. Hi, Mark. So remind us of the situation Cuba's been in lately. It's desperate. The energy situation is just incredibly dire at the moment, and it's been getting worse all year. So in January, President Trump threatened sanctions on any country that sent oil or gas or fuel to Cuba. And then in the middle of this month, fuel oil and diesel ran out completely.

6:26And this has knock-on effects on everything. I mean, it's not just that they don't have petrol for cars, they don't have electricity for up to 22 hours a day. They don't have electricity for hospitals. So, I mean, just in every way that you think life could be very difficult, I think the lack of energy has really, really compounded it. It sounds pretty dire. You know, aside from this brutal energy blockade, how else is the Trump administration escalating things with Havana? Well, we saw the indictment of Raul Castro, who is 94. He's the brother of Fidel Castro. He's, you know, a stalwart of the revolution.

7:01He's the sort of supreme leader figure in Cuba. He's no longer the president, but the president is seen as somebody, Miguel Diaz-Canel. He's somebody who's seen to do the bidding of the Castros, essentially. So he's an enormously important figure. So this week, Raúl Castro was indicted for murder, conspiracy to kill US nationals, destruction of aircraft. It relates to the downing of two civilian aircraft in 1996. Four people were killed, three Americans and one resident. So they've really upped the ante with this indictment. And so now this is just sort of the latest in a drip, drip, drip of points of pressure to try and get the...

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8:27Strategic Alternatives, the RBC Capital Markets podcast, explores how corporates and investors are navigating new pathways to raise capital, create value, and drive growth. When conditions change, alternatives matter. Listen to Strategic Alternatives, available wherever you get your podcasts. Regime to bend to Trump's will. Yeah, but what does Trump want here? Well, Donald Trump hasn't been terribly clear about this. He has said over the past weeks and months that he could be looking at a friendly takeover. He said he could take Cuba. Now he's saying he wants to help Cuba. And Marco Rubio, who is the Secretary of State, who's a Cuban American himself, he said this week as well that he was interested in a new Cuba, that the US was trying to cooperate with Cuba.

9:18So they're saying that Cuba represents a national security threat 90 miles away from Florida and they can't have this. They just don't want a communist neighbor, I think. Jude, it's really hard to think of this situation with Cuba and not be reminded of what happened in Venezuela earlier this year in the U.S. extraction of President Nicolas Maduro. Is it fair to make that comparison? Are these similar situations? Yeah, I think one thing that draws an immediate parallel that I didn't mention earlier was that an aircraft carrier has just arrived in the Caribbean near to Cuba. And if you remember, in the buildup to the extraction of Nicolás Maduro in January, there was an intense military buildup in the waters around Venezuela.

10:01And then also we saw Nicolás Maduro was indicted. But in the case of Nicolás Maduro, he was indicted on drug trafficking charges. So there are parallels, but Raul Castro is 94. He'll be 95 on June the 3rd. It's not clear at all that the U.S. will swoop in and try and take this man. But then really, we don't know. And almost anything can happen. The playbook does seem to change, doesn't it, with the Trump administration? Yeah, it's definitely moving by the minute. One thing I'm curious about, Jude, is whether Cuba can still function without Raul Castro, given that he's not the president and the U.S.

10:40hasn't threatened to remove the president in any way so far. I mean, it's an existential question. He's not running the country, but he's the ultimate arbiter of things. And he's a Castro, you know, so it's huge symbolism. So if he isn't there, if the main symbol of that regime is no longer there, well, then I think it's actually very, very difficult for the regime to continue. That's the FT's Jude Weber. Thanks so much, Jude. Thank you.

11:10It's that time when we bring in Victoria Craig to talk about what's on tap for next week. Hey, Victoria. Hey, Mark. So Monday and Tuesday are going to send a little different around here. Do me a favor and tell the people what we have in store. Yeah, well, Monday is Memorial Day here in the U.S. It's also the May bank holiday over in the UK, which means quite a lot of us will not be working. So we wanted to sort of switch up the content just a bit for our audience, too. So on Monday, we're doing a fun little swap with Slate, which is an online daily news magazine based here in New York. That episode is going to focus on the conversation about threats from billionaires to leave New York and California, since both of those states have floated this idea of raising more revenue through higher taxes on wealthier residents.

11:56And then on Tuesday, we're dropping a conversation that I had with our colleague, John Byrne Murdoch, on global population decline. Which is just a huge topic right now, no matter where you are. Victoria, I'm curious, what did John tell you about the reason that it's picking up? Yeah, I'm so curious about this, too. I'll give you a quick taste, no huge spoilers here. It's all the usual suspects that are contributing to this trend. Economic factors that we've talked about a lot on this show that relate to job security, home ownership, affordability. But really, it's this device that we keep in our purses and our pockets and we use to communicate with the outside world every single day that our phones is playing a bigger and bigger role in population decline, particularly in high and middle income countries.

12:40I don't want to say anymore. You're going to have to tune in to the show on Tuesday to hear why. Are you saying our smartphones are making us less social? Because I find that shocking. I know. It's such a shocker, Mark. I don't think anybody saw that one coming. Catch Victoria Tuesday, not Monday, Tuesday of next week with that conversation here in the podcast feed. Thank you as always, Victoria. A pleasure. Thanks, Mark.

13:07You can read more on all these stories for free when you click the links in our show notes. This has been your daily FT News Briefing. Check back next week for the latest business news. The FT News Briefing was produced this week by Safiya Ahmed, Katya Kumkova, Fiona Simon and Victoria Craig. It was edited by me, Mark Filippino. Our show is mixed by Alex Higgins and Sam Giovinco. We had help this week from Peter Barber, Michael Lello, David Da Silva, and Gavin Common. Our executive producer is Topher Forges, and our theme song is by Metaphor Music.