JPMorgan eases approach on lending against shares to court AI’s new wealth

JPMorgan Chase is adjusting its lending criteria to accept shares from employees and early investors in fresh public companies like SpaceX. Traditionally, the bank refrained from accepting shares as collateral for 135 days post a company's initial public offering. However, ahead of SpaceX's IPO in June, JPMorgan permitted lending against its shares before the 135-day mark, according to the Financial Times.

The bank's approach may extend to Anthropic, the creator of the Claude chatbot, if it files for an IPO. JPMorgan generated roughly $75 million from assisting with the SpaceX listing. This shift in lending policy highlights a broader change in how wealth is managed, with an emphasis on liquidity and reliable price discovery rather than the duration of share ownership.

Artem Ponomarev, founder of XPlace, noted that the focus now is on whether the asset possesses ample liquidity and credible price discovery for borrowing purposes. Employees of prominent AI firms can receive sizable stock stakes, sometimes worth tens of millions, making their equity a prime target for private banks and wealth managers.

Borrowing against shares enables wealthy investors to acquire cash without selling their assets, potentially avoiding substantial tax consequences. However, lending against newly listed securities poses risks such as significant price volatility, limited trading volumes, and restrictions on sales post-IPO. JPMorgan clarified that its policy remains unchanged, with lending decisions being made on a case-by-case basis, considering factors like market liquidity.

Ponomarev also suggested that digital assets could potentially offer similar flexibility, as they trade continuously and their on-chain collateral can be monitored in real-time.