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Editor’s Note: Whenever Wall Street gets excited about a new theme, everyday investors need to be careful.
And right now, few themes are generating more excitement than the next wave of AI IPOs. Cerebras just went public… and bigger names like SpaceX, Anthropic and OpenAI may not be far behind.
I understand why investors are interested. These are some of the most talked-about companies in the world. But as I’ve learned over my career, excitement is not the same thing as opportunity.
That’s exactly why, over the past few days, I’ve been sharing essays from my InvestorPlace colleague Jonathan Rose. Jonathan doesn’t try to predict every headline months in advance. He looks for where the money is already moving.
In today’s essay, he explains why buying a hot IPO the moment it opens can put everyday investors on the wrong side of the trade – and where the smart money may be positioning instead.
That’s also why Jonathan and my good friend Marc Chaikin went live last night with their new Convergence system.
During the event, they revealed five stocks where their signal is active right now.
The replay is still free to watch, but I wouldn’t wait. These setups are already in motion.
Now, here’s Jonathan…
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Few things create investor FOMO like a hot IPO.
It’s a company everybody recognizes and then the stock doubles before lunch.
Financial media cover it breathlessly and use phrases like, “the next great technology platform.”
Suddenly, it feels like everyone is getting rich except you.
But in reality, that’s usually the moment investors become the most vulnerable.
Let me tell you what happened with Figma Inc. (FIG).
Figma makes design software that creative and engineering teams use to build apps, websites, and products. You may not have heard of it, but I guarantee your design team has.
Adobe Inc. (ADBE) tried to buy them for $20 billion back in 2022, but European and U.K. regulators blocked the deal, and so Figma eventually went public on its own.
There was a lot of the usual buzz around it at the time. It was a big story in the tech world. Exactly the kind of IPO that gets retail investors excited.
Here’s what actually happened on Day 1.
Figma priced at $33 and opened at $115. Everyone got super excited!
But what almost no one knew about was a clause buried deep in the lockup agreement that almost nobody read, stipulating that the insiders didn’t have to wait the standard six months to sell.
A performance-based trigger was in place that said if the stock traded 25% above the IPO price for five consecutive days, the lockup would be released early.
The stock opened 158% above the threshold, and so the trigger fired on Day 1. By 36 days later, the people who understood the structure were selling at $80.
Eight months later, Figma was at $22 – down 81% from the peak and 33% lower than the IPO price itself.
Yes, slowing revenue growth and AI competition hurt Figma’s business too — but that doesn’t explain why insiders were selling at $80 on Day 36 while retail was still buying. The structure was designed to let them out.
They robbed us. That’s the only way I can put it.
And now they’re setting up the exact same trade again, except this time the numbers are bigger by an order of magnitude.
Cerebras Systems Inc. (CBRS) just went public at $185, opened at $350, and dropped 10% the next day.
SpaceX is next, Anthropic is after that, and OpenAI is behind both.
Together, those three offerings represent more than $3 trillion in combined valuation. Every one of them is virtually guaranteed to use a version of the same structural setup that took Figma from $115 to $22 in eight months.
These aren’t bad companies. Some of them are going to be great companies. That’s not the point. The structure is designed to get the early money out and leave the late money holding the bag. That’s it.
I’m talking about company insiders, the VCs that helped bankroll their rise, and the big-money funds that got their allocation at the offering price.
If you don’t understand that structure, you’re going to be on the wrong side of the trade.
Here’s what I’m going to show you in this piece.
First, exactly how the trap works — using Figma as the blueprint, because the details matter.
Then, where the real money is when these deals print.
And finally, where to look right now, before the biggest IPO wave in history hits.
How the Trap Works
On July 31, 2025, Figma priced at $33 despite institutional demand that would have cleared at $85-plus. Only 7% to 9% of shares were offered — well below the typical 10% to 15% float — which sent the stock through the roof.
And then there was the piece almost nobody read.
Figma’s lockup agreement included a performance-based early release condition. If the stock traded 25% above IPO price for five consecutive days, 25% of locked shares would release after 36 days instead of the standard 180.
The stock opened 158% above the threshold. The early release triggered on the first day. Fast forward 36 days after the IPO, Figma employees who understood the lockup architecture were selling at $80. Executives filed 10b5-1 plans within days of the IPO — predetermined sales schedules that gave them legal cover to exit. The CEO authorized the sale of 3 million shares four days after the offering.
By February 2026, the stock was at $22.
That’s not a “failed” IPO. That’s the playbook. And right now, every AI IPO in the pipeline is being structured by the same banks, with the same incentives, using the same tools.
When you’re buying at the open, you are not making a smart investment. You are providing “exit liquidity” for people who got in a decade ago.
Don’t be a sucker.
Where the Real Money Is
Here’s the discipline that works on every IPO, including for SpaceX, Anthropic, and the rest of the AI IPO pipeline.
First: Don’t buy at the open. The opening price on an IPO is the supply-demand imbalance from intentional underpricing. The pop is the gift to insiders. By the time you click “buy,” the gift has already been delivered.
Second (and this is the one most investors miss): Buy the “family,” not the headline. Every AI IPO in this pipeline has publicly traded proxies you can buy today.
SpaceX has Alphabet Inc. (GOOG), which owns 6.11% of the company. Anthropic has Amazon.com Inc. (AMZN) and Nvidia Corp. (NVDA). OpenAI has Microsoft Corp. (MSFT).
They all have supply chain plays you can buy today, the picks and shovels that every one of these companies needs to function.
These names are as easy to buy as a loaf of bread, and there’s no lockup risk, no allocation problem, and no premium built on a float that was way too small.
Third: Watch the lockup calendar. Once a company goes public, the most important dates aren’t earnings dates. They’re the lockup expirations. The biggest declines almost always happen around those windows. That’s when the insider selling hits and the stock finally trades at something closer to what it’s actually worth.
This is exactly the kind of setup my scanner and Marc Chaikin’s tools are designed to find together.
My signal tracks where large, concentrated, institutional bets are showing up — in the supply chain names, in the proxies, before the crowd arrives. Marc’s Money Flow indicator confirms whether the underlying institutional capital is flowing in the same direction. When both signals agree, that’s the Convergence Trigger.
Right now, with the biggest AI IPO wave in history weeks away, the supply chain is already moving, and the family is already trading. Our Convergence Trigger is already finding setups in the names nobody’s talking about — because everyone’s staring at the headlines.
That’s what Marc and I are going public with on at our new event — including five specific stocks where our Convergence Trigger is active right now.
Cerebras was the dress rehearsal… but SpaceX is the main event. The institutions know what’s coming and have already lined up their allocations. They’ll be the sellers on Day 1.
The family and supply-chain stocks are already moving. The trade on the biggest IPO wave in history isn’t waiting for the bell.
The creative trader wins,
Jonathan Rose
Founder, Masters in Trading
P.S. One more thing worth knowing before SpaceX prices. Search the S-1 for “Early Release Condition” or “performance-based release.” If the lockup releases additional shares when the stock is 25% above IPO price — and the company prices low enough to guarantee the trigger — you’re looking at the Figma structure. That’s your signal to step back, not step in.
