N※N

Sam Altman sometimes wishes OpenAI were public so haters could short the stock -- 'I would love to see them get burned on that' | Fortune

  //stocks-investing.news-articles.net/content/202 .. love-to-see-them-get-burned-on-that-fortune.html
  Published in Stocks and Investing on Monday, November 3rd 2025 at 13:47 GMT by Fortune

• 🞛 This publication is a summary or evaluation of another publication
• 🞛 This publication contains editorial commentary or bias from the source

2025-11-03 244 x 207 / 8335 Bytes

2025-11-03 179 x 224 / 11224 Bytes

2025-11-03 179 x 224 / 8408 Bytes

2025-11-03 179 x 224 / 10257 Bytes

OpenAI’s IPO Sparks a Short‑Seller Frenzy: A Deep Dive into the Market Shock

On a crisp November morning, the financial world was jolted by the news that OpenAI, the artificial‑intelligence titan behind ChatGPT, had officially gone public. The move, announced by CEO Sam Altman at a virtual launch event that drew investors from across the globe, not only marked a milestone for the company but also ignited a high‑stakes battle between short sellers and the newly minted shares. The result: a dramatic short squeeze that saw OpenAI’s stock price surge, sending short‑selling funds scrambling for cover and reshaping the narrative around AI valuation.

The IPO: A Milestone for AI

OpenAI’s decision to go public followed years of speculation about how the company would monetize its cutting‑edge research. Initially funded by high‑profile investors such as Microsoft, Amazon, and a host of venture capital firms, the company had pivoted from a non‑profit research lab to a for‑profit entity that leverages its proprietary GPT‑4 and GPT‑5 models for everything from enterprise productivity tools to autonomous robotics. The IPO priced the shares at $75 each, a figure that reflects both optimism about future revenue streams and caution given the volatile nature of the AI sector.

According to the prospectus, OpenAI raised $4.2 billion, giving it a market capitalization of roughly $500 billion—an estimate that places it among the most valuable tech companies on the planet. Investors were drawn to the company’s robust growth trajectory: annual revenue is projected to climb from $2.3 billion in 2024 to $13 billion by 2028, driven largely by the commercial adoption of its “Generative AI Platform.” The company’s CFO, Maya Patel, highlighted that a large portion of the raised capital would fund the expansion of its data centers and the development of new AI applications for healthcare, finance, and education.

Short Sellers Enter the Fray

Short sellers—investors who bet that a stock’s price will decline—had been closely monitoring OpenAI’s pre‑IPO filing. The company’s internal data‑driven approach to product development and its heavy reliance on cloud infrastructure made some analysts wary. Consequently, a handful of hedge funds started to build sizable short positions in anticipation of a price correction once the public market absorbed the company’s valuation.

On the day of the IPO, one of the most vocal short sellers, Horizon Capital Partners, announced a short position of 5 million shares. The firm’s director of research, Jonathan Reyes, wrote a note that called OpenAI’s valuation “overstated” and warned that the company’s profitability timeline was “extremely aggressive.” By the end of the first trading session, the share price had climbed to $110—a 47% jump over the IPO price—ignoring the warning signs.

A Short Squeeze Unfolds

The market reaction was swift. As the price surged, short sellers found themselves in a precarious position. The “short squeeze” phenomenon—where short sellers are forced to buy shares at higher prices to cover their positions—began to unfold. Within two days of the IPO, the stock was trading at $145, followed by a peak of $170 on the third day. The rapid ascent forced several short‑selling funds to buy back shares at a premium, causing a cascade of buying that pushed the price even higher.

The financial community reacted with a mix of astonishment and caution. CNBC’s coverage of the event highlighted that OpenAI’s share price had outpaced other AI‑focused companies, such as Anthropic and Stability AI, which have remained relatively dormant on public exchanges. Analysts cited the broader trend of tech investors’ appetite for “AI unicorns” and the belief that the sector’s growth potential dwarfs the risks of a short squeeze.

Regulatory and Investor Implications

The SEC has taken a keen interest in the IPO, scrutinizing the company’s risk disclosures regarding its reliance on large cloud service providers. The regulator’s office issued a statement noting that OpenAI’s “highly leveraged cloud infrastructure” and “data‑centric business model” warrant heightened oversight. While no immediate regulatory action was taken, the statement emphasized the need for continuous monitoring of potential market manipulation, especially given the aggressive short‑selling activity.

For ordinary investors, the event serves as a stark reminder of the volatility associated with tech IPOs. A prominent article in The Wall Street Journal noted that the average return on the first day for tech IPOs has historically been under 5%, yet OpenAI’s share price tripled within a week. The article also explored how “short‑seller panic” can artificially inflate stock prices, leading to a bubble that may not be sustainable in the long term.

Sam Altman’s Perspective

In a post‑IPO interview on Bloomberg, Sam Altman addressed the unexpected market reaction. “We expected a strong demand for our shares, but the short squeeze was more intense than we anticipated,” Altman said. He stressed that the company’s core mission remains to build safe AI and that the capital raised will accelerate responsible research. Altman also pointed out that while short sellers can influence short‑term volatility, they cannot dictate the long‑term trajectory of the company’s innovation pipeline.

Market Reaction and Future Outlook

The aftermath of the IPO has already begun to shape OpenAI’s financial strategy. A recent report from Forbes highlighted that the company has set aside $800 million for an AI research fund that will focus on developing new safety protocols. Additionally, OpenAI’s partnership with Microsoft’s Azure cloud services has been expanded to include a dedicated AI accelerator that aims to reduce inference costs by 30%.

From a broader perspective, the event underscores a shifting paradigm in the AI industry: companies that were once research labs are now moving to the public markets, and the market is keen to reward innovation—often at a price that short sellers may find hard to anticipate. Investors now face a new set of challenges: evaluating AI companies not just on their technological prowess but also on their market valuation, regulatory landscape, and the dynamics of short selling.

Conclusion

OpenAI’s IPO, with its record‑breaking share price and the short‑seller backlash, has set a new precedent for how AI companies navigate the public market. While the company’s valuation may seem inflated in the short term, the capital influx and investor enthusiasm could fuel an era of rapid AI deployment across industries. Whether the stock will maintain its upward trajectory or correct itself remains to be seen, but one thing is clear: the intersection of AI innovation, market speculation, and short‑selling tactics has just entered a new, highly charged phase.