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FT : US offshore wind farms try to withstand the force of Trump’s wrath

US offshore wind farms try to withstand the force of Trump’s wrath
Companies are racing to finish projects that can keep the industry alive in the face of high-profile opposition

US offshore wind companies are racing to bring projects online that can withstand Donald Trump’s efforts to cripple the multibillion-dollar industry.

After winning a clean sweep of legal victories over the past month, the industry is redoubling efforts to get projects over the finish line so they can start producing power and develop the financing and supply lines needed to keep the sector afloat until Trump leaves office.

“The vibe is more positive,” said Abby Watson, president at Groundwire Group, a consulting firm. “You can’t ask for better evidence than producing electrons at a time when people are panicking about not having enough electrons.”

In December, the Department of the Interior shut down five projects under construction on the east coast, citing national security concerns beccause of radar interference. Each project sued and was given permission to restart construction while the underlying legal challenges continue, in a series of district court cases spanning January and early February.

Judge Royce Lamberth of the District of Columbia found the government’s reasoning was “arbitrary and capricious”, in the case of Ørsted’s $6.2bn Revolution Wind project off the coast of Rhode Island.

Now developers such as Dominion Energy, whose 2.6 gigawatt project off the coast of Virginia is due to start producing power before the end of March, are “laser focused” on completion, according to a source close to the company. Revolution Wind is expected to power up “within weeks”, according to the company, while its other project, Sunrise, will produce its first power in the second half of the year.

While Trump has attacked a wide range of clean energy technologies since taking office for the second time in 2025, none have experienced the administration’s wrath like offshore wind, which the president has described as the “worst”.

In response, the industry has engaged in negotiations and lobbying, often with the help of Republican politicians, which led to the reversal of previous stop work orders. The strategy has since shifted to using legal action to buy as much time as possible for the projects to come online and prove their worth.

“The [government’s] whole theme was, ‘we have national security, so we win’. Fortunately no judge bought it,” said Janice Schneider, a partner at Latham and Watkins, who represented Revolution Wind.

“In terms of what’s next . . . we’ll be ready to go.”

Industry and state leaders are also planning a sweep of measures to ensure projects can access funding and shore up the supply chain.

Speaking at the International Partnering Forum on Tuesday, New York State Energy Research and Development Authority President Doreen Harris said the state had pledged $300mn to prepare ports for offshore wind development and announced a request for information on how the state can prop up the industry amid attacks from Washington.

“We know that the market has been tested in ways that we could not have anticipated in just one year,” she said, adding that “one potential approach is to take co-investment in these projects.”

The industry is also looking north of the border to sustain itself while Trump scuppers development in the US.

Tim Houston, premier of Nova Scotia, pitched his province as a safe harbour for developers and suppliers to do business in.

“We are a predictable and reliable regulatory jurisdiction,” he said.

The province is gauging industry interest in bidding on tracts of its ocean, as part of its “Wind West” initiative, which aims to develop up to 60 gigawatts of offshore wind energy for use and export.

But some fear the industry could still be stopped in its tracks and risks total investment and supply chain collapse.

The positive sentiment is “optimistic but not realistic,” said Juan Gabriel Sanchez, a business development manager at Jan De Nul group, the Belgian offshore energy company.

The administration has signalled it will continue using the courts and its own authority to disrupt projects, running up costs for developers further. Dominion said in its filing that the delay was costing it $5mn per day, while Revolution and Sunrise Wind accrued $1.44mn and $1mn in daily losses.

On Wednesday, interior secretary Doug Burgum pledged to “absolutely” appeal the decisions that allowed the projects to continue construction.

The projects “represent real national security risks”, Burgum told Bloomberg News. “As we get into court and share classified information, there will be further discussions on this.”


The industry was locked in a “perpetual battle”, said Joshua Weinstein, a managing partner at Global Business Alliances LLC. “You have an administration that’s hell-bent on fighting this particular energy technology — seemingly for no reason.”

Investment in new offshore wind is projected to collapse, with BloombergNEF cutting its 2035 forecast by 85 per cent after Trump’s election, and predicting the delay or cancellation of $114bn of investment.

Suppliers say they are turning their focus to markets outside the US.

“We are concentrating in Europe and other places which will pick up this year like Australia, New Zealand and Taiwan,” said Tomas Fertig, vice-president of business development at Entrion Wind, which develops offshore wind foundations.

“I don’t think the [US] market is dead, but it will be in a couple of years.”

FT : Germany vows more defence tech funding after backlash over tanks

Germany vows more defence tech funding after backlash over tanks
Senior officials will direct more money towards innovation following criticism of reliance on ‘legacy’ systems

Senior German defence officials have pledged to channel more money into innovation and start-ups amid mounting criticism over how the country’s vast military budget is being spent.

After years of missing its Nato spending targets, Berlin has unleashed hundreds of billions of euros on rearmament following Vladimir Putin’s full-scale invasion of Ukraine in 2022.

But much of the spending has gone on big-ticket items, including 35 US-made F-35s, Eurofighter Typhoons, Chinook helicopters and new warships and submarines. Orders for thousands of tanks and armoured vehicles are also being prepared.

The decisions have prompted some analysts and new entrants to raise concerns over Germany for ploughing too much money into conventional weapons such as tanks — mostly to the benefit of established arms makers — rather than unmanned weapons powered by AI. 

Acknowledging the debate, defence minister Boris Pistorius said that the EU’s largest nation would do “more and more investment in innovation, more investment in new technologies, more co-operation with start-ups, and more co-operation between start-ups and the Bundeswehr”.

Speaking at this weekend’s Munich Security Conference, where he was challenged over whether Berlin was preparing “for the old war or for the new one”, Pistorius promised that he and officials “learn every day” from the war in Ukraine and the fast pace of innovation on the battlefield.

“If anybody had told us five years ago that drones would play such a relevant and crucial role, nobody would have believed or could have imagined that,” he said.

The head of the German army Christian Freuding said that soldiers still needed “traditional systems like battle tanks, howitzers”. But he added that the military must also “foster our innovative spirit” and think “unthinkable thoughts”.

Düsseldorf-based Rheinmetall estimates that it secured about 40 per cent of a €100bn special defence fund announced by Germany in 2022, and hopes to keep up that rate as hundreds of billions more are contracted in the years ahead.

Florian Seibel, co-founder of German surveillance drone company Quantum Systems, singled out Rheinmetall as he warned that Berlin was failing to spend enough on autonomous systems and AI.

“Spending €500bn out of Germany alone, of which €495bn would go to Rheinmetall and the like is not what is needed . . . there is enough money but we are spending it on the wrong things,” he said.

“We’re going to spend hundreds of billions in equipment that will sit in graveyards and my kids and my grandchildren will still have to work for the debt to pay back to the banks.”

Although Quantum is one of several start-ups to have won drone contracts from the Bundeswehr in recent months, the sums represent a fraction of the total spending in a nation with a total defence budget of €118bn this year.

Moritz Schularick, head of the Kiel Institute for the World Economy, estimates that “95 or 98 per cent” of German defence spending since 2022 has gone into “traditional legacy procurement”.

Schularick, who is also an adviser to Germany’s economy ministry on the defence industry, warned at the conference that the current approach was failing to make Europe ready to confront Russian aggression as well as missing out on the wider economic benefits of supporting agile and innovative young companies.  

“We need to reserve a much bigger share for the procurement of innovation, knowing that some of these things are not going to work out.”

“You define the problem and you let the private sector figure out how to get there instead of having very long bureaucratic processes top down, specifying to the last screw how the problem is solved,” he added.

>>> Barrons Weekend Summmary

Cover:
-Steak and hamburgers are experiencing a surge in prices, becoming luxury items rather than everyday staples. At a recent cattle auction in Texas, prices reached $1.30 per pound, which, although lower than premium cattle, is significantly higher than prices five years ago. The auction highlights the growing demand for quality breeding stock amidst a declining U.S. cattle population, now at a 75-year low, resulting in skyrocketing steak prices—up by 55% and ground beef by 69% over five years. Despite these high prices, demand for beef remains strong, driven by marketing shifts that have repositioned protein's value in dietary guidelines. Larger restaurant chains, like Texas Roadhouse and LongHorn Steakhouse, adapt by managing costs effectively, while smaller establishments, such as San Antonio's Barn Door steakhouse, are struggling to maintain competitiveness within a value-driven market. Contributing to the increasing price are factors such as cattle supply constraints, notably due to screwworm outbreaks affecting cattle exports and reduced US herd sizes.

Interview:
-No update

Tech Trader:
-As large technology companies prepare for fourth-quarter earnings, attention has shifted from sales growth to the significant capital expenditures (capex) on artificial intelligence (AI) data centers. In 2025, Amazon, Microsoft, Alphabet, and Meta Platforms collectively spent over $400 B, approximately equivalent to Pakistan's GDP. Projections indicate that this expenditure will rise sharply in 2026, with Amazon forecasting $200 B in capex, followed by $180 B for Alphabet and $125 B for Meta. Microsoft, on a different fiscal calendar, reported $72 B in the first half of 2026, suggesting a total capex of about $650 B for these four companies—comparable to Argentina's economy. This level of spending is expected to significantly impact the companies' financial statements. Capital expenditures are reflected in income statements through depreciation costs, which are spread over several years.

The Trader:
-Hasbro and Mattel, both reporting earnings on February 10, exhibited contrasting results. Hasbro's fourth-quarter earnings exceeded forecasts, resulting in a nearly 25% stock increase in 2026 and reaching a multiyear high. In contrast, Mattel's sales missed analyst expectations, leading to a 25% drop in its stock. Following Hasbro's earnings report, six Wall Street analysts raised their price targets, with ROTH's Eric Handler setting a target of $120, which is 17% higher than the current share price. He emphasized the growing popularity of role-playing games, noting an 86% sales surge in Hasbro's Wizards of the Coast and digital gaming sectors, which includes franchises like Magic and D&D. Hasbro's success extends to traditional toys, bolstered by its partnership with Disney, with key releases such as Toy Story 5 and Marvel movies expected to drive sales. Additionally, Hasbro announced licensing deals with HBO for Harry Potter toys and action figures for a live-action Voltron movie, set to stream on Prime Video later this year.
--As fourth-quarter Big Tech earnings reports emerged, the focus shifted from traditional sales growth and profits to the significant capital expenditures (capex) in artificial intelligence (AI) data centers. In 2025, Amazon, Microsoft, Alphabet, and Meta Platforms collectively spent over $400B, akin to Pakistan's GDP. Projections indicate this will escalate to approximately $650B in 2026, with Amazon forecasting $200B, followed by Alphabet and Meta at $180B and $125B, respectively. Microsoft, with a fiscal year ending in June, spent $72B in the first half of 2026. Such expansive spending is poised to alter the financial landscapes of these tech giants. On income statements, capex is reflected through depreciation over several years. For instance, Alphabet’s AI data center expenditures will allocate about $108B to servers, leading to annual depreciation costs of approximately $18B, which could double Alphabet's 2025 depreciation expense to nearly $42B by 2026, impacting gross margins.

Features:
-Stellantis experienced a significant decline of 24% in stock value following a management update on February 6, which revealed substantial one-time charges totaling EUR 22B (approximately $25.9B) due to electric-vehicle asset write-downs and warranty-related expenses. The forecast for operating profit for the second half of 2025 has also been revised to fall below previous guidance, along with the announcement of no dividends in 2026 and the sale of €5B in convertible debt intended to strengthen the balance sheet. Analysts, including Oxcap Analytics' Stuart Pearson, expressed concerns regarding the poor operational performance and ongoing cash generation issues, suggesting this could lead to a value trap characterized by continuous cash burn, dividend cuts, and the necessity for capital raises. Nevertheless, the fundamentals of the car business remain intact, and analysts predict that with improved product offerings and distribution, Stellantis could see its stock price rise by 50% from current lows. Notably, there appears to be a significant effort by new CEO Antonio Filosa, appointed in May after Carlos Tavares' departure, to address and rectify the company's financial challenges and set realistic expectations moving forward.
-Energy stocks have significantly outperformed the broader market in 2023, surging 20% while the S&P 500 has only climbed 1.4%. Key factors driving this rise include geopolitical tensions, with US military interventions in Venezuela and potential actions in Iran, creating a favorable environment for energy investments. Additionally, as tech stocks face volatility and declines due to concerns over artificial intelligence impacting market shares, investors have sought refuge in energy, which remains largely insulated from such disruptions. This sector exhibits a low correlation to the overall market, as noted by Nicholas Colas of DataTrek. Furthermore, the resurgence of sectors that underperformed in the previous year, such as consumer staples (up approximately 13%), suggests a broader investor strategy dubbed a "dash for trash," where poorly performing assets recover. Analysts highlight that the shift towards hard assets, including commodities, has contributed to rising oil prices, with benchmarks currently increasing by about $9 to reach $69 per barrel.

Europe:
-Exor is a European investment company controlled by the Agnelli family of Italy, holding significant stakes in notable public and private firms, including approximately 20% of Ferrari and interests in Stellantis, CNH Industrial, and Philips. However, Exor has experienced a challenging period, with shares declining over 20% in the past year, paralleled by a 25% drop in Ferrari stock and struggles within Stellantis following a substantial write-down of its electric-vehicle business. Currently, Exor shares are priced at 72 euros ($85.75) on the Euronext exchange and about $86 for its American depositary receipts, reflecting a more than 50% discount to its estimated net asset value (NAV) of $190 based on its public and private holdings. CEO John Elkann, who has been at the helm since 2009, has demonstrated a robust track record with a nearly 18% growth in NAV, surpassing the MSCI World Index's 11%. Market analysts, like Ross Glotzbach from Southeastern Asset Management, express confidence that this significant discount is not sustainable and that Exor's portfolio companies could recover, potentially turning Exor into a favorable investment.

Emerging Markets:
-No update

Commodities:
-Signet Jewelers is positioned for growth with Valentine's Day spending anticipated to reach a record $29.1B, including a significant $7B allocated to jewelry. As the leading specialty jewelry retailer in the US, Signet operates approximately 2,600 stores under various brands such as Kay Jewelers and Zales. According to the National Retail Federation, jewelry is expected to comprise the largest share of Valentine's Day expenditures, with 25% of consumers planning to gift jewelry this year. This marks an increase from 22% in the previous year, translating to around $6.5B in jewelry purchases. Despite challenges in the jewelry industry, including declining demand for diamond jewelry and competition from lab-grown diamonds, Signet's stock has risen by 7.8% year-to-date and 69.5% over the past year. Meanwhile, Anglo American faces difficulties with its De Beers mining business, including significant write-downs.

Streetwise:
-In the context of the recent decline in software stocks, two significant points can be highlighted. Firstly, catchy phrases like “SaaSpocalypse” are prevalent, indicating a dramatic downturn for software-as-a-service firms. Other creative names did not fit as well, showing the pervasiveness of the sentiment. Secondly, while the software market crash appears to be over, analysts suggest there may still be further declines ahead. BTIG notes that capitulation was observed, but if stocks fall below recent lows, a deeper downturn might ensue. UBS also mentions that uncertainty hangs over the sector, primarily driven by fears of artificial intelligence potentially disrupting the market. This recognition suggests AI's capacity for profitability could benefit software at various operational levels. Deutsche Bank, while not as definitive, has a target list of undervalued software stocks to consider in light of this selloff. The author illustrates this landscape through a personal anecdote involving a podcast collaborator's shift to an industrial composting startup that incorporates software tools for waste management, showcasing the evolving applications within the sector.

Electrek : Tesla (TSLA) US sales estimated to have dropped 17% in January

Tesla (TSLA) US sales estimated to have dropped 17% in January

Tesla’s US sales fell an estimated 17% year-over-year in January 2026, according to registration data from Motor Intelligence.

The automaker moved an estimated 40,100 vehicles during the month, down from 48,500 in January 2025. Tesla doesn’t report monthly US sales figures, so third-party registration estimates are the best available proxy — and they point to a fourth consecutive month of declining domestic demand.

A domestic market in retreat
The January estimates continue a trend that has now defined the better part of two years for Tesla’s US business. Based on Motor Intelligence data, domestic registrations have declined year-over-year in nine of the past twelve months, with only the July-September 2025 window posting gains, a burst driven almost entirely by consumers rushing to buy before the $7,500 federal EV tax credit expired on September 30. Once that artificial demand pull-forward ended, the bottom fell out.

Motor Intelligence estimates that full-year 2025 US registrations totaled 568,454 units, down 10% from 2024’s 625,712. That tracks closely with Tesla’s global story: the company delivered 1.636 million vehicles worldwide in 2025, an 8.6% decline and the second consecutive year of falling deliveries.

The January drop also follows an ugly close to 2025. In November, Tesla’s US sales fell to under 40,000 units, the lowest monthly total since January 2022. December brought a modest sequential recovery to 48,300 units, but that number was still below year-ago levels.

Tax credit hangover meets brand erosion
Two forces are converging against Tesla’s US demand. The first is structural: the expiration of the $7,500 federal EV tax credit effectively raised the cost of every Tesla by that amount overnight. According to Cox Automotive, the average EV transaction price rose 18.1% year-over-year to $51,981 in January 2026.

The impact on the broader EV market has been severe. EV market share in the US collapsed to just 6.6% of retail sales, down from 9.5% a year earlier. Kelley Blue Book estimates that total US EV sales in January 2026 fell nearly 30% year-over-year. Tesla is far from the only automaker hurting, but its estimated 17% decline is notable because the company had already been losing ground before the credit disappeared.

The second force is Tesla-specific. The brand damage from Elon Musk’s political activities, and now his links to Epstein, which is a story that doesn’t appear to go away, continues to compound.

Tesla’s brand value crashed 36% in 2025, falling to $27.6 billion — less than half its $66.2 billion peak in 2023, according to Brand Finance.

In California, Tesla’s most important US market, Experian data shows market share fell from 11.6% of all vehicle registrations in 2024 to 9.9% in 2025. Tesla’s California sales have been dropping by double digits while the rest of the state’s EV market grew. That is a devastating signal for a brand that built its identity in the Bay Area.

Tesla launched the lower-priced Model Y Standard ($39,990) and Model 3 Standard ($36,990) in Q4 2025 to address affordability concerns. But as Electrek reported earlier this week, price cuts alone aren’t pulling buyers back in. The problem is no longer just price, it is the brand itself.

Competitors closing the gap
Tesla still holds 46% of the US EV market, down from 49% in 2024 and 75% in early 2022. The automaker that gained the most ground is GM, whose EV sales surged 48% in 2025 to nearly 170,000 units, lifting its US EV share from 8.8% to 13.2%. The Chevrolet Equinox EV alone sold nearly 58,000 units, making it the third best-selling EV in America behind only the Model Y and Model 3.

While GM is gaining, the overall US EV market contracted for the first time in years. Total 2025 EV sales landed at roughly 1.28 million units, down about 2% from 2024, according to Cox Automotive. Ford’s EV business slipped further, with sales dropping 14% to about 84,000 units. Hyundai-Kia also retreated, falling from 124,000 to fewer than 104,000 EV sales.

A global problem, not just a US one
The picture is far worse internationally. BYD overtook Tesla as the world’s largest EV seller in 2025, moving 2.26 million battery-electric vehicles compared to Tesla’s 1.64 million. That gap is widening, not closing.

In Europe, where Tesla’s sales collapsed 27.8% for the full year, 2026 has started even worse. Registrations across five major markets are down 44% year-over-year in January, with the UK plunging 57% and Norway cratering 88%. In the UK alone, BYD nearly doubled Tesla’s volume last month, selling 1,326 battery-electric vehicles versus Tesla’s 647.

Tesla’s response to this multi-market collapse has been to pivot away from traditional auto sales entirely. On its Q4 2025 earnings call, the company announced the discontinuation of the Model S and Model X, and Tesla executives told investors to focus on “transportation as a service” through robotaxis and Optimus robots rather than vehicle deliveries. The company plans to more than double capital expenditures to $20 billion in 2026, directed almost entirely at AI and autonomous driving infrastructure, not new car models.

The Information : Anduril Discusses New Funding at $60 Billion-Plus Valuation

Anduril Discusses New Funding at $60 Billion-Plus Valuation

The Takeaway
  • Defense tech startup Anduril in talks for funding at $60 billion-plus valuation.
  • Funding will support a new weapons factory and autonomous fighter jet development.
  • Anduril’s revenue was expected to double to $2 billion last year amid high cash burn.

Defense tech startup Anduril is in talks to raise billions in new funding at a valuation of at least $60 billion including the new investment, according to a person with knowledge of the plans. The valuation would be roughly double the figure from its last private funding round in June.

The funding would give the company more leeway to fund its first major weapons manufacturing facility and the development of an autonomous fighter jet. It expected to double its revenue last year, to roughly $2 billion, from contracts with the Department of Defense and U.S. allies, but it is also burning cash.

The eight-year-old startup, founded by former Palantir employees as well as virtual reality entrepreneur Palmer Luckey, has already raised billions of dollars over the years to develop or buy more modern software, drones and submarines that can win over government buyers.

The company could further benefit from a shift in tone from the Trump administration toward more tech-leaning defense contractors, while it urges Anduril’s older, bigger rivals to curb stock buybacks and deliver weapons more quickly. Some of Anduril’s major backers have also been some of the Trump administration’s largest supporters in tech. Those include Peter Thiel’s Founders Fund, which has poured $2 billion into the company over the years, as well as Andreessen Horowitz and Joe Lonsdale’s 8VC.

Anduril CEO Brian Schimpf told The Information in October that it would double revenue last year. It also doubled revenue the year prior. Its latest slate of expansion is particularly expensive, as it builds out a major factory in Columbus, Ohio. The startup told investors last year it expected to burn between $800 million and $900 million last year.

The Information : SpaceX IPO Could Tap Hordes of Individual Investors

SpaceX IPO Could Tap Hordes of Individual Investors

The Takeaway
  • The SpaceX IPO could raise $50 billion, a watershed for individual investors
  • Musk companies like Tesla have benefited from these investors
  • But investment banks tend to prefer mutual funds that hang on to the shares

A potential record-setting SpaceX initial public offering has sent Wall Street into overdrive. Main Street wants a cut of the action.

Bankers and institutional investors who talk to SpaceX executives have been debating how much the company should set aside for individual investors to buy at the IPO price—through brokerages including Robinhood, SoFi and Morgan Stanley’s E-Trade—as well as for wealthy clients who can buy directly through the banks.

That’s in part because they are expecting a surge of interest from the kind of individual investors who stampeded into Tesla, drawn by the outsize internet presence of Elon Musk, CEO of the electric car maker and SpaceX. What’s more, retail brokerages that could benefit from a surge of excitement around the IPO are hoping to get a significant share of the sales.

The investment banks that handle IPOs, on the other hand, tend to prefer offering shares in mutual funds over offering them to individual traders, because they say the mutual funds are more likely to hold on to the stock after the first months of trading.

Nonetheless, the portion reserved for individual investors in SpaceX is likely to be higher than the customary 10% to 15% of IPO shares, say bankers.

The size of the SpaceX IPO may require their buy-in. SpaceX executives have told investors they plan to raise about $50 billion, which would roughly double the largest IPO in history. Many of the largest institutional investors and mutual funds in the world already bought shares while SpaceX was private, potentially limiting their appetite for more.

“For the upcoming megacap IPOs, there’s going to be a need for wider distribution,” said Gregor Feige, co-head of Americas equity capital markets at UBS.

“The trend we’re seeing is much more openness from companies [going public] to allocate globally whether it’s to sovereign wealth funds, family offices, ultra-high-net-worth individuals, and retail investors,” he said.

The extent to which individual investors can participate hangs over what is already set to be a complicated IPO. SpaceX is no longer just a rocket and satellite internet company, thanks to a recent merger with Musk’s xAI, which is trying to catch up with OpenAI, Anthropic and Google in the expensive race to develop AI. XAI’s costs could dampen investor enthusiasm.

Meanwhile, two other major AI competitors, OpenAI and Anthropic, are also taking steps toward huge IPOs that could compete for investors’ attention and dollars.

SpaceX’s ability to raise money directly from individual investors, as well as index funds, is a strong inducement to breaking a nearly quarter-century-long streak of staying private.


Musk has spoken publicly about capital-intensive projects the company plans to take on, like building factories on the moon and launching data centers into space to address potential power and land shortages on Earth.

The public markets “obviously [have] a lot more capital” than the private markets, Musk said on the “Cheeky Pints” podcast last week. “It might not be 100 times more capital, but it’s at least way more than 10 times.”

There’s a long history of consumer companies making sure their long-time users get a chance to buy into an IPO before the first day of trading, when enthusiasm can double or triple the price of the stock. These companies can set aside stock through what’s known as directed share programs.

Airbnb, for instance, reserved up to 7% of its 2020 IPO for U.S. residents who rented their homes on the platform, according to its securities filings. In 2024, Reddit allocated 8% of its shares to users and moderators of its online forums in the U.S.

Executives at retail brokerages have pushed to have more access to the SpaceX IPO before shares start trading. The brokerages argue that these individual investors can benefit the company’s stock performance.

Robinhood CEO Vlad Tenev, for instance, has pointed to the premium valuation companies with heavy individual shareholder bases, like Palantir and Robinhood itself, have seen in recent years of trading.

Individual investors who get shares in the IPO can get burned, however. Crypto exchanges Gemini and Bullish gave individual investors a higher allocation than usual, up to 30% and 20% respectively, last year. But both companies, which surged on their first day of trading, have now dropped more than 50% from their IPO price.

Musk’s Tesla, valued at $1.3 trillion, has leaned on individual investors to keep the stock rising in recent years even as its vehicle sales have declined. The general public owns about 40% of Tesla’s stock available for trading, compared to about 30% for other tech stocks such as Apple, Alphabet and Nvidia, according to S&P Global Market Intelligence.

Musk said in a 2024 interview: “I love retail investors. They have decided to support the company, which is very much appreciated.”