By Andy Serwer
Tim Campbell, CEO of Baillie Gifford -- that paradoxically venerable yet go-go Scottish investment house -- is waxing eloquent about maybe his favorite stock in the entire universe.
"The opportunities for SpaceX are absolutely enormous," Campbell tells me. "Are we going to be facing a world in two or three years time where it makes perfect sense that incremental energy is provided by solar farms in space? It's perfectly possible. What does that mean in terms of the number of launches that SpaceX might be involved in? And that's before we talk about Starlink and all the rest of it."
Campbell is certainly walking his talk. Baillie Gifford owns over $4 billion of SpaceX (out of $260 billion of assets under management), a position the firm began building in 2018, a good bit of which is now up 19-fold, based on a $1.25 trillion valuation.
That's quite the moonshot and exactly what one hopes for in a growth stock manager. One wrinkle is that SpaceX has been private and Baillie Gifford, which used to invest primarily in public stocks, is 40% invested in private companies in some of its flagship funds.
Now. Finally. SpaceX, and the two big artificial-intelligence plays, Anthropic and OpenAI, are in various stages of polishing up their prospectuses and going public. They are gargantuan stocks, each worth more than American Express, Qualcomm, and PepsiCo combined, with the SpaceX IPO looking to eclipse the previous biggest by orders of magnitude.
Those three mega-privates aren't alone, though they do skew the data. PitchBook reports that "the global unicorn universe hit 1,680 companies with an $8.6 trillion aggregate valuation in Q1 2026, but the top 10 by valuation...hold 41.3% of that value." True, $8.6 trillion is about 5.5% of the total value of global equities ($157.3 trillion), but it's certainly where the action is. (Just ask Baillie Gifford.)
By now, you're probably tired of all the tsk-tsking over valuations of these unicorn-thee-stallion companies. Are they worth the $1 trillion or so Mr. Market says they are? Who the heck knows, but it's also besides the point.
The real rub here is that generally speaking, neither me, nor you, nor a dog named Boo has been able to ride the incredible run-ups these companies have enjoyed. But venture capitalists and institutional investors certainly have. While you've been shut out, they have made aircraft carrier-loads of money, and that's just wrong.
Taking a step back and looking at initial public offerings and public equity markets versus privates, I think it's fair to say that somewhere along the line, we've lost our way. An IPO used to mark the beginning of an investible company's life cycle. Now it's a sign of middle age. The movie's half over. Much of the high-octane growth is gone. The sweet juice has been squeezed.
Oh sure, you can try to invest in these companies pre-IPO, including in platforms like Forge Global (owned by Charles Schwab) or Nasdaq Private Market, or in funds that invest directly in private shares or special-purpose vehicles like Destiny Tech100 and the ARK Venture fund, or exchange-traded funds such as Tema Space Innovators.
The problem: "Like Crazy Eddie, for those that remember him, the fees are 'insane,'" says institutional investor Michael Weinberg, an adjunct professor at Columbia Business School. The good professor says his inbox is flooded with examples of this, like one investment with a 10% annual fee and a 10% upfront fee, or another with a 5% fee to get in, 5% to get out, and a 1% to 2% one-time fee.
On May 1, 1975, the Securities and Exchange Commission eliminated fixed-rate brokerage commissions. The costs of trading public stocks have declined ever since. Today they're next to nothing. Now you want to buy some of the world's hottest growth stocks? It's back to 1975.
According to Fidelity documents, the firm has greatly expanded its private investing operations over the past 15 years and now has a private-markets portfolio of $44 billion. As of year-end, its $299 million Fidelity Venture Capital Fund I's biggest holdings were a $34.6 million stake in Anthropic and a $47.7 million slug of SpaceX (the latter via the TCP Exploration Fund 2025).
Fidelity is now looking to raise $750 million in its Fidelity Venture Growth Fund II for qualified investors, minimum investment $250,000 with a 3% annual fee, for a five-year investment period with no early redemptions and a K-1 for tax reporting. Fidelity declined to comment on its private-markets funds.
Fidelity's name gives me comfort, and its fees may be lower than others, but it's all a far cry from buying one of its actively managed equity funds (with fees typically less than 1%), never mind 100 shares of Nvidia.
The institutional side has its own foibles. "It's a frenzy and it's frothy," says one institutional trader. "Anthropic is doing a $30 billion tender offer at a $900 billion valuation, and they say, 'You've got to have it signed by Wednesday and funded by Friday, or you're out.'
"Everybody's trying to get in. Or an existing investor gets a new allocation, he creates a special-purpose vehicle and offers shares to his limited partners but outside the fund because the fund has got a fixed amount of money raised. And he puts 1.75% with a 20% carry on it.
"On Friday, someone asked if I could help him place $200 million [of Anthropic], and then on Sunday night the guy called back and said, 'Forget it, it's all gone.' It's the f -- -- ng wild, wild west. We're tired of being Charlie Brown and Lucy with the football. This stuff falls apart at the 25th hour and everybody accuses everybody because it's a private company.
"It screams for regulation. Above a certain threshold, the SEC should create a structure of best practices."
How did it used to be? Take a look at the Magnificent Seven. When these companies went public, valuations ranged from $340 million for Nvidia in 1999 to $81.2 billion for Meta Platforms (then Facebook) in 2012. Even adjusting for inflation, Meta's IPO value would be $117 billion, less than 10% of SpaceX's valuation. The average time between founding and going public for the Mag 7 was 6.4 years. True, Anthropic is five years old, but OpenAI and Stripe were founded over a decade ago, SpaceX in 2002.
If SpaceX, OpenAI, et al. went public years ago and you didn't buy, you might have still benefited if you owned the Invesco QQQ Trust or an S&P 500 index fund, as those stocks would likely have been included. SpaceX crossed the $1 billion valuation threshold in December 2012. From there, it's up 1,000-fold -- and no average investor could get in.
Companies stay private longer because so much capital has flooded into them. Venture capitalists also insist laws like Dodd-Frank (the co-author of which, Barney Frank, died on Wednesday) and other regulations have made being public onerous. It's unclear if the Trump administration's proposal to reduce reporting requirements from quarterly to semiannually is a solution.
"It would be really nice to have more investors have access to these great companies by bringing them public," Adena Friedman, CEO of Nasdaq, tells me. "We've been on a journey with the government to think about how to make IPOs great again." She describes various reforms, like the "timing of financial disclosures," proxy and litigation reform.
Behind the scenes, Nasdaq has readied a cozy stable for unicorns to go public on its exchange rather than the NYSE. As my colleague Bill Alpert points out, new rules allow large companies to become part of the Nasdaq 100 -- which serves as the benchmark for over $1 trillion in index funds, such as the Invesco QQQ -- in 15 days instead of waiting up to one year. The rules also eliminate the index's requirement that a minimum of 10% of a company's issued shares be free-trading.
Recently, before SpaceX announced it was listing on Nasdaq, Friedman shared her space bona fides with me: "When I grew up, for a while I wanted to be an astronaut," she said.
Ground Control to Elon must have worked. Now let's hope there's still some trajectory left for regular investors.
Write to Andy Serwer at andy.serwer@barrons.com. Follow him on X and subscribe to his At Barron's podcast.
To subscribe to Barron's, visit http://www.barrons.com/subscribe
(END) Dow Jones Newswires
May 22, 2026 21:31 ET (01:31 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
Comments