GMO, the asset manager founded by Jeremy Grantham, warns that a surge in stock supply will drag on the market for years. In a quarterly note, GMO said equity supply is on track to grow 5% annually, compared to a prior 1% yearly decline, due to factors like SpaceX unlocking insider shares, mega-IPOs, and secondary issuances. SpaceX stock sales make up about 1% of the US stock market's total value, while OpenAI and Anthropic, expected to go public soon, represent around 5% of the investable market cap. GMO estimates a potential 20% hit to the market over the next several years.
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