SpaceX (SPAX.PVT) has finally given investors their first look at its massive IPO, setting up what could be one of the most lucrative stock listings ever handled by Wall Street banks.
The rocket maker’s preliminary S-1 filing offered an inside look at Wall Street’s lineup behind a reported $75 billion share sale. An offering of that size would shatter the world’s previous IPO record, a $26 billion raise set by Saudi Aramco in 2019.
Goldman Sachs (GS) and Morgan Stanley (MS) will serve as the two lead investment banks on the IPO, which includes a total of 23 investment banks.
It’s far from clear what fees any Wall Street firm stands to make from the transaction. But hypothetically, the deal would be a cash cow to banks. Based on the listing size, the total fee pool for bankers could range anywhere between $800 million and more than $1 billion, according to Yahoo Finance’s estimate.
With its name appearing first on the list of banks advising and underwriting the offering, Goldman Sachs landed the coveted “lead left” position. The role garners prized status on Wall Street, which means bragging rights for the investment banking giant.
A bank in that position holds the most prominent IPO adviser role leading up to the day of a company’s listing. It comes with extra responsibility, often the biggest financial stake in the deal, and ultimately the key role for telling the company’s market story.
The lead left bank’s job is to oversee all bookrunning ahead of an IPO. This includes planning around how many shares potential institutional investors want to buy and drafting the company’s regulatory filing. That means it also calls the shots on day one share allocations, which is expected to be very complicated in a deal of this magnitude.
Morgan Stanley, seen as a longtime Wall Street ally to SpaceX CEO Elon Musk, is playing an important role as “stabilization agent,” according to the filing.
Its core responsibility is overseeing the stock’s early trading, including stabilizing the stock price through a range of activities subject to securities rules.
Additionally, Morgan Stanley holds a special role for SpaceX’s retail investor allocation by running its directed share program, an IPO share pool normally reserved for company-designated participants, according to a person familiar with the matter.
SpaceX is also planning a broader share allocation to everyday investors through Morgan Stanley’s E-Trade and other investing platforms, including Charles Schwab (SCHW), Fidelity, Robinhood (HOOD), and SoFi (SOFI).
SpaceX hasn’t disclosed its total allocation to retail investors yet, but Musk may allocate as much as 30%, according to Reuters. That portion would be roughly three times what’s normally set aside in an IPO for everyday investors.
