When Massive Private Companies Go Public
4/23/20261 hr 11 min
In this episode, the Rational Reminder team unpacks the mechanics and implications of mega IPOs like SpaceX, OpenAI, and Anthropic potentially entering public indices. They explore how index funds handle IPO inclusion, why newly public stocks tend to underperform, and how structural features of indexing can lead to systematically buying high and selling low. The conversation dives into academic research on IPO returns, the role of free float in index construction, and how evolving market dynamics are forcing index providers to reconsider long-standing rules. They also examine alternative approaches from firms like Dimensional and Avantis, and whether investors are...
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First 90 secondsBenjamin Felix· Host0:00
[upbeat music] This is the Rational Reminder Podcast, a weekly reality check on sensible investing and financial decision-making from three Canadians. We are hosted by me, Benjamin Felix, Chief Investment Officer, Dan Bortolotti, Portfolio Manager, and Ben Wilson, Head of M&A at PWL Capital.
Dan Bortolotti· Host0:17
Good to be back.
Ben Wilson· Host0:18
Yeah, good to be back. It's episode four oh six. Exciting to get into the main topic later on this episode. But before we get to that, exciting news that many people have probably already heard by the time this episode's coming out, but PWL made a pretty cool acquisition in Vancouver, BC, partnered up with the Macdonald-Shimko and Company team out in Vancouver. So we now have a, a great team out there and officially a PWL office space. So as we continue to grow and find like-minded advisors that are implementing a similar philosophy and financial planning driven approach to their clients, we are expanding our presence across the country, and this is a great team to be partnered with.
Dan Bortolotti· Host1:04
Pretty well-known financial planning firm, has been around for a long time, and pioneers in that industry, specifically fee-only planning, I think originally. It's fitting to have them on board.
Benjamin Felix· Host1:16
A fee-only planning pedigree, and they went into portfolio management, and on that side of the business, they're super, super aligned with the way that PWL operates. You said pioneers, Dan. I was gonna say OGs, but you know.
Dan Bortolotti· Host1:27
Yeah.
Benjamin Felix· Host1:27
[chuckles] They're one of the oldest