Sell-side research on a big new listing is written by the banks that earned (or want) the deal’s fees — so every report is bullish, independent of the merits. Jim Mellon on the SpaceX IPO (08/2026, per 51bodila’s transcription): all the underwriters published bullish initiations while the price target dispersion ran from $80 to $300 against a $115 price — “the highest dispersion range in the history of stock markets… they all wrote bullish reports because they all got the investment banking deals.” Dispersion that wide is the honest signal: nobody knows, and the uniform buy ratings measure the fee pool, not the company. The stock’s 50% post-IPO fall is the specimen.
Symmetric caveat: Mellon is short and giving interviews about it — his “I can’t see any reason why it would go up” is a book being talked as much as the banks’ buys were. Discount both directions; the structural fact (who paid for the research) is the part that survives.
Related
cited by
- noteFloat and lockup overhang
- pageTopics