Patient Capital Management is a Baltimore asset manager founded in 2020 by Samantha McLemore, CFA — Bill Miller's long-time co-manager (working together since 2002, running the flagship Opportunity Equity strategy since 2014). Continuing the Miller-school contrarian tradition, it practices "time arbitrage": exploiting behavioral mispricing to concentrate in controversial growth names (tech, healthcare, Bitcoin-related) at deep discounts to intrinsic value. Its site preserves Bill Miller's complete 1995-2022 market letters, alongside ongoing quarterly letters and webinars.
This article explains why investor patient_capital is cautious about hot IPOs: private-market enthusiasm often clashes with public-market reality. Using 2025 data, the ten biggest IPOs returned -18% on average, and 70% fell over 40%. SpaceX, reportedly valued at $1.75 trillion—about 94 times its annual sales—doesn't meet the firm's bar and looks risky. Meanwhile, Amazon's satellite business, which competes directly with Starlink but gets little attention, is seen as an attractive risk-reward trade. Tesla is flagged as a long-term valuation worry, though not an immediate one.
The author's market view this period: overall cautious on hot new listings—private-market enthusiasm is severely disconnected from public-market reality, and he advocates using historical base rates to counter the inside view. [Cautious]
Using 2025 IPO data, the article shows that private market enthusiasm and public market reality are severely disconnected, and conveys an overall cautious stance toward hot new listings. The author states at the outset that he is often asked for his views on SpaceX, OpenAI, and Anthropic, but admits he has not researched these companies deeply enough to form a strong judgment; what truly warrants caution is the historical performance of the largest IPOs of 2025.
| Metric | Average Return | Performance Distribution |
|---|---|---|
| Top 10 IPOs by market cap | -18% | 70% down more than 40% |
| Top 50 IPOs by market cap | -8% | 46% down more than 30% |
Among the top 10 IPOs, only CoreWeave (CRWV) and Circle (CRCL) have generated positive returns since listing. The author writes, "The gap between private market enthusiasm and public market reality has rarely been more visible," meaning that the gap between private market enthusiasm and public market reality is rarely as pronounced as it is now.
The author treats Michael Mauboussin's base rate as a key tool for countering intuition, advocating that the "outside view" replace the default "inside view." Mauboussin defines the base rate as the distribution of past outcomes in a particular reference class — a statistical baseline for how frequently certain outcomes occur under similar conditions. The author explains that the default mode of thinking is what Mauboussin and Nobel laureate Daniel Kahneman call the "inside view" — focusing only on the unique details of a single situation and constructing a forecast solely from those inputs; it is intuitive and fast, but prone to systematic bias. In contrast, the "outside view" requires temporarily setting aside knowledge of the specific case and instead asking what the historical record says about similar situations.
In Thinking, Fast and Slow, Kahneman documented the curriculum project case: the team expected completion in 2 years, but when asked about the historical durations of similar projects, the answer was 7 to 10 years, and roughly 40% of the projects were ultimately never completed; Kahneman called this the planning fallacy. The author quotes his definition — "the planning fallacy: forecasts that trend toward the best case precisely because similar situations were never consulted" — that is, forecasts trend toward the best-case scenario precisely because similar situations were never referenced. The author judges that in a market full of compelling narratives, the base rate is often the most important data point.
The author cites the "quasi-public" concept of Brad Gerstner at Altimeter, noting that hot late-stage companies have already completed price discovery before listing. Gerstner uses this term to describe a category of late-stage companies marketed to a large number of major investors; before these companies officially make their IPO debut, pricing has in effect already occurred, and the cap table is already full of public market participants. This has a tangible impact on post-listing valuations, market expectations, and supply-demand dynamics. The author does not believe current public market conditions will create a "Tech Bubble 2.0"-style risk, but does see hidden risks in late-stage private markets: venture investors publicly complain that the competition to get into the hottest deals often gives little consideration to valuation. The author judges that this competitive dynamic typically does not create attractive entry prices.
The article clearly states that a SpaceX IPO would not meet Patient Capital's investment criteria. SpaceX is scheduled to price on June 11. Based on a rumored valuation of $1.75 trillion and sales of $18.7 billion, this corresponds to 94x trailing sales; the author believes this pricing requires an extremely optimistic picture of the future, and the optimism comes more from Musk, space, and AI hype than from company fundamentals — 2025 revenue growth has already decelerated, and the company has returned to losses. The author also names Tesla, arguing that SpaceX's and Tesla's valuations relative to current fundamentals could constitute one of the largest sources of risk at the end of the long bull market, though the author judges that the end of the bull market is still far off.
As for historical evidence, the 1980-2024 IPO database of University of Florida professor Jay Ritter (known as "Mr. IPO") shows that companies with a price-to-sales ratio above 40x at listing returned just 3% on average over the subsequent three years, underperforming the market by 15%; when measured from the first-day closing price (closer to the price retail investors can actually obtain), the return was -45%. The rumored price-to-sales ratio for SpaceX is near 100x. The author judges that valuation levels like this have not historically been rewarded.
The author prefers targets with low expectations or where the market undervalues true potential, citing Amazon's low-Earth-orbit satellite business as a specific example. The author says he would rather invest where expectations are low, or where he has strong conviction that the market undervalues a company's true potential, and believes such opportunities lie elsewhere; Amazon, for example, has a low-Earth-orbit satellite business that directly competes with Starlink (SpaceX's satellite network) yet has received no recognition from the market at all — precisely the asymmetry Patient Capital looks for. It should be noted that the author, as a stock-picking institution that advocates "buying into low expectations," adopts a methodological stance in the SpaceX-versus-Amazon contrast here, rather than offering a neutral market assessment; the original text does not mention any executed actions to open new positions or add to existing ones.
| Position | Direction | Author's One-Sentence View | Key Data |
|---|---|---|---|
| SpaceX | Not stated | Clearly fails to meet investment criteria; pricing requires an extremely optimistic future picture | Reported valuation of $1.75 trillion, 94x trailing sales; 2025 revenue growth decelerating and returning to losses |
| Amazon | Not stated | LEO satellite business competes directly with Starlink yet has not gained market recognition — the "asymmetric" opportunity the author is looking for | — |
| CoreWeave (CRWV) | Not stated | One of the few top-10 IPOs of 2025 to deliver positive returns | Positive returns since listing |
| Circle (CRCL) | Not stated | One of the few top-10 IPOs of 2025 to deliver positive returns | Positive returns since listing |
| Tesla | Not stated | Alongside SpaceX, valuation relative to current fundamentals could be one of the largest sources of risk when the long bull market ends | — |
| OpenAI | Not stated | The author has not yet researched it in depth, insufficient to form a strong judgment | — |
| Anthropic | Not stated | The author has not yet researched it in depth, insufficient to form a strong judgment | — |
| Starlink | Not stated | As SpaceX's satellite network, used as the competitive reference for Amazon's LEO satellite business | — |