The IPO hype cycle returns

The IPO frenzy has returned, with tech giants boasting billion- and even trillion-dollar valuations. Fortune magazine's February 1, 2016 cover warned of a looming reckoning for the sector's unicorn IPOs, depicting a stampede of unicorns fleeing the market. Lending Club's IPO was 20-times oversubscribed but saw its price plummet by 50% within a year, while GoPro's peak of $94 per share has since collapsed to $0.68.

This year, dubbed the era of trillion-dollar IPOs, SpaceX became the first to go public in June, followed by OpenAI and Anthropic. The fervor surrounding SpaceX's IPO pushed its share price to an all-time high of $176, making it the largest IPO in history. However, SpaceX's share price has since declined, erasing $1 trillion from its peak value.

Experts advise investors to focus on revenue, scrutinize the prospectus, and remain patient. Despite the hype, it seems that while IPOs can generate record-breaking valuations, they cannot sustain billion- or trillion-dollar valuations. This article appears in the August/September 2026: Europe issue of Fortune, originally published on Fortune.com.