For senior advisors, the next wave of high-profile IPOs is unlikely to arrive quietly.
SpaceX has already filed registration documents ahead of a planned June listing, while market attention around potential OpenAI and Anthropic IPOs has intensified.
Many investors are looking for public-market access to the companies shaping artificial intelligence, space infrastructure, and the next phase of technology-led growth. The details will change as filings, pricing, and market conditions evolve. But the advisory issue is already clear: clients will not wait for perfect information before asking whether they should buy.
That creates a familiar challenge for wealth managers. The companies may be extraordinary, and the investment case may be compelling over a decade. But the stock-market experience after an IPO can be shaped as much by structure, supply, and incentives as by the long-term business story.
Lock-Up Period: Defined
We already covered EBITDA (https://modernamericanadvisor.com/net-income-vs-ebitda-spacex/) But one of the most important, and least well-understood, features is the lock-up period.
An IPO lock-up restricts insiders, founders, employees, and early investors from selling shares immediately after a company goes public. In the U.S., these restrictions often last 90 to 180 days, though terms can vary and must be disclosed in the prospectus.
The purpose is simple: prevent a sudden flood of insider stock from hitting the market immediately after listing, driving down the price.
For clients, however, the practical meaning is more nuanced. A lock-up does not eliminate future insider sales, it delays them. That distinction matters.
Supply and Demand
When a company lists on an exchange, the tradable float may represent only a small portion of the total equity base. The stock can trade for weeks or months in an environment where supply is artificially constrained. Demand, meanwhile, can be amplified by media attention, brand loyalty, thematic excitement, and the fear of missing out. That combination can produce a price that reflects scarcity as much as fundamentals.
As lock-ups expire, insiders can sell their shares. This increases the supply of shares available for sale, which impacts the stock price.
That does not mean every IPO share price collapses after the lock-up expires. Some strong companies absorb insider selling without major disruption. Others use phased release structures to reduce the risk of sharp price decline due to too much supply.
CNBC reports these details regarding the SpaceX IPO: “After reporting earnings for the three months through June – the company’s first results as a public company – insiders can sell up to 20% of their eligible locked-up shares. If this stock is also trading at least 30% above the IPO price at that point, they can sell an additional 10%.
Then there’s a rolling schedule, comprising 70, 90, 105, 120, and 135 days post-IPO, where another 7% unlocks at each of those interviews.”
But for advisors, lock-up schedules are not technical footnotes. They are part of the investment case, and clients need to understand how a lock-up may affect the stock price.
Client Interest in Tech IPOs
The market is preparing for a new generation of mega-IPOs linked to artificial intelligence, space, advanced computing, and private-market technology platforms. These companies have become household names, private-market institutions, and core holdings for some venture funds, strategic investors, and secondary-market buyers.
That creates powerful client interest, and advisors will receive calls on the IPOs.
Staying private longer
Many high-net-worth investors have watched the private markets create enormous value before ordinary investors can participate. Companies have remained private longer and raised vast sums outside public markets. When they IPO, business valuations reflect years of institutional enthusiasm.
By the time retail and advisory clients can buy in the open market, the early-stage upside has often already been captured elsewhere. That does not make the IPO unattractive, but it does make the entry point more complicated.
Timing of purchases
The first wave of public-market buyers is often buying from a position of information imbalance and emotional momentum. They know the brand, the story, and possibly the founder. They may understand the products and possibly be customers.
The financial details are another story.
Investors may not fully understand the capital structure, dilution risk, voting control, insider incentives, loss profile, or lock-up timetable. They may not be willing to dig through issue documents and instead ask you for guidance.
SpaceX is a useful example because the prospective IPO is not simply a listing of a conventional growth company. Its filings and related new stories describe a business of enormous ambition, significant operating complexity, and substantial long-term capital requirements.
Fortune reports that: “All told, the consolidated enterprise posted $18.7 billion revenue and booked an operating loss of $2.6 billion” for 2025. The IPO filing included extensive disclosures around its long-term mission, related-party activity, and legal risks.
That does not invalidate the investment case. Many transformative companies consumed capital for years before becoming highly profitable. But it does shift the question advisors should ask.
The issue is not: “Is this a great company?”
The better question is: “At this price, with this float, this lock-up schedule, this insider ownership, and this level of uncertainty, is this a suitable investment for this client’s portfolio?”
Those are very different conversations.
Why It Matters To Advisors
High-profile IPOs test the advisory relationship because they combine three forces that can pull clients away from discipline: narrative, social proof, and urgency.
Narrative
Narrative is the belief that a company is not merely a company, but a gateway to the future. Artificial intelligence, space, robotics, quantum computing, and next-generation infrastructure all carry that emotional charge. Clients are not just buying expected cash flows. They are buying proximity to a theme.
Social proof
Social proof comes from headlines, peer conversations, and the sense that “everyone” is watching the same deal. A client may not care about most IPOs. But when the company is famous enough, the IPO becomes a cultural event as much as a market transaction.
Urgency
Urgency is created by the listing itself. Clients feel that the window is opening and they do not want to miss the next Amazon, Nvidia, or Tesla. In those moments, careful portfolio construction can feel slow, boring, or defensive.
This is precisely where advisors earn their fee by managing client perceptions and emotions.
Managing the Client Relationship
The lock-up period gives advisors a practical way to move the conversation from excitement to structure.
Clear guidance helps clients understand that the IPO price and early trading range may not represent a fully seasoned market price. It also provides a timeline for review. Rather than saying “no” reflexively, advisors can say: “Let’s understand when more supply may enter the market, who may want to sell, and what we will know after the first one or two public earnings reports.”
That is a more credible answer.
It also avoids the trap of sounding dismissive. Many clients who ask about these companies are not reckless. They may be sophisticated, entrepreneurial, and genuinely interested in innovation. A patronising response — “IPOs are risky, don’t touch them” — is unlikely to land well.
A better response is to separate admiration from allocation.
An advisor might say:
“You can believe this is an exceptional company and still decide that the first few months after IPO are not the most attractive entry point. The early trading price may be affected by limited float, enthusiasm, and the fact that many insiders are not yet able to sell. We should look at the business, but also at the supply schedule.”
That is a reasonable advisory position.
The 1999 Comparison Is Useful, But Imperfect
Comparisons with 1999 are already appearing, and they are not baseless. Periods of heavy IPO activity often reflect abundant liquidity, investor optimism, and a strong appetite for growth stories.
Paul Tudor Jones has warned that today’s market carries echoes of the late-1990s environment, including the potential for future lock-up expirations to add significant equity supply and drive prices lower.
The comparison is useful because it reminds investors that supply matters. When many companies list within a short period, and large insider holdings become eligible for sale months later, the market may face repeated waves of selling pressure. Even strong demand can be tested when early investors, employees and venture backers begin to diversify.
But advisors should also be careful with lazy analogies.
Today’s leading private companies are not identical to the dot-com listings of 1999. Some have real revenue, dominant market positions, deep technical advantages, and strategic importance. Public markets are also structurally different, with more passive capital, greater institutional sophistication, and a larger private-market ecosystem feeding into IPO supply.
The lesson from 1999 is not that every high-profile IPO is a bubble.
The lesson is that valuation, liquidity, and insider selling pressure can overwhelm a good story when expectations become extreme.
That is the message clients need to hear.
Not All IPOs Are Bad Investments
Advisors should avoid turning the IPO conversation into a blanket warning. Some IPOs become outstanding long-term investments. The problem is not the IPO label itself. Instead, the problem is buying without understanding price, timing, and risk.
The best post-IPO outcomes usually require some combination of durable growth, improving margins, expanding addressable markets, and the ability to meet or exceed public-market expectations. They also require investors to tolerate volatility.
That last point is often underestimated.
Clients may say they want exposure to transformational companies. What they may actually want is the upside of transformational companies without the drawdowns that often come with them. The advisor’s job is to make that trade-off explicit before the order is placed.
This is particularly important for clients with concentrated wealth, business-owner backgrounds, or existing exposure to technology through public equities, private funds, venture vehicles or employer stock.
A new IPO may look like diversification because the company is different. In risk-factor terms, it may simply add more growth, momentum, technology, and valuation sensitivity to an already crowded part of the portfolio.
What Advisors Should Do Now
The first step is to prepare for useful discussions before the client calls arrive.
That does not require a definitive buy, hold, or avoid recommendation. It does require a framework. Firms should be ready to explain how they evaluate IPOs, how lock-ups work, what information is still missing, and how any position would fit within the broader portfolio.
Second, advisors should read the prospectus rather than rely on media summaries. The registration statement will disclose the lock-up terms, share classes, voting rights, risk factors, use of proceeds, related-party transactions, and financial history.
For high-profile companies, these details matter enormously. A famous brand can still come with governance structures or shareholder rights that are unsuitable for some clients.
Third, create a lock-up calendar. If a client buys after listing, the advisor should know when restricted shares may become eligible for sale and whether the structure includes phased releases, performance triggers, or extended restrictions for founders and major holders. That calendar should sit alongside earnings dates, analyst coverage initiation, and any major product, regulatory or funding milestones.
Fourth, size positions with humility. For most clients, if an IPO belongs in the portfolio at all, it should be treated as a satellite allocation rather than a core holding. That allows participation without allowing enthusiasm to distort the financial plan.
Fifth, give clients language they can use themselves. Many high-net-worth clients discuss these opportunities with friends, colleagues, and family members. A simple explanation can help them feel informed rather than excluded:
“The company may be exceptional, but the first few months after IPO can be distorted by limited supply. When lock-ups expire, more shares may come to market. We want to understand that timetable before deciding how much to buy and when.”
That explanation is practical, calm, and credible.
The Real Advisory Opportunity
The next generation of IPOs will create excitement. That is inevitable. They may also create genuine long-term opportunities. Advisors should not dismiss them simply because they are fashionable. But nor should they allow clients to confuse access with advantage.
In public markets, the fact that a client can finally buy a celebrated private company does not mean the odds have shifted in their favour. By the time the IPO arrives, early investors may already have significant embedded gains, employees may be waiting for liquidity, and the public buyer may be entering at a valuation shaped by years of private-market enthusiasm.
Lock-ups are the bridge between that private-market past and the public-market future.
For advisors, understanding them is not a technical exercise. It is part of protecting clients from buying a story without understanding the supply behind it.
The firms that handle this well will not sound negative. They will sound prepared. These advisors will acknowledge the excitement, respect the client’s intelligence, and bring the conversation back to discipline.
That is exactly the role modern advice firms should play.
