by The financial media is currently in a state of feverish anticipation.
Nasdaq and FTSE Russell are rewriting their rulebooks to allow “fast-track” entry for three looming giants: SpaceX, OpenAI, and Databricks.
The goal is to get these names into the Nasdaq-100 in as little as 15 days after they list.
For the “buy-and-hope” crowd, this looks like the opportunity of a decade.
For the North Tech Capital, it looks like a classic valuation trap.
What gives us pause
Our primary job is to avoid permanent capital loss.
Before making an investment decision, longer-term context matters.
The Morningstar and PitchBook data reveals a “quality inversion” in these private giants.
A quality inversion occurs when the companies with the highest brand recognition and private valuations actually possess the weakest business fundamentals.
The “hype” surrounding a famous name masks a heavy reliance on burning billions in cash to stay functional.
For a long-term investor, this creates a trap where you are asked to pay a “trophy price” for a business that lacks the capital efficiency of the established giants.
Why this is not risk-free
Investors are being asked to price businesses whose most critical metrics like Net Revenue Retention (NRR), are currently withheld.
Consider the specifics:
- OpenAI: At a staggering $840 billion private valuation, it scores weakly on capital efficiency, it is burning billions on compute, yet roughly 85% of its 900 million users pay nothing.
- SpaceX: While it dominates the skies, a $1.75 trillion IPO valuation would make it one of the largest companies on earth instantly. There is zero room for error at that price.
Investing in an IPO with undisclosed retention metrics is not a strategy; it is a gamble.
For those of us managing managing funds for the future, the risk of a “day one” valuation collapse is a risk we don’t need to take.
The uncomfortable questions
We are often asked why we prefer the “Sovereign Foundation” over these exciting new names.
Our answer is simple: we value the “House” more than the person living in it.
Consider Alphabet ($GOOGL).
While the market chases OpenAI, Alphabet already owns the full vertical stack: the Gemini models, the TPU hardware, and the hyperscale cloud.
More importantly, they own a 10% stake in Anthropic.
If Anthropic wins, Google wins.
If Anthropic fails, Google still earns from the cloud infrastructure Anthropic used.
That is a Sovereign Advantage.
What needs to hold for this to work
For our current 100% cash position to be the right move for now, we need to see these IPOs face the cold reality of public earnings.
We value the Reset Button.
By staying in cash, we are not distracted by the “Fast Entry” rules or the hype of the Nasdaq-100.
We are waiting for the geopolitical dust to settle.
In 2026, the winners won’t be those who caught the “hottest” IPO.
The winners will be those who owned the machines that made those IPOs possible.
We are watching for the IPOs, but remain patient.
Our judgement remains with the infrastructure.
Good investing is about owning the plumbing, not just the “trophy” on the mantelpiece.