SpaceX is reportedly considering allocating as much as 30% of its initial public offering (IPO) to individual investors, a move that departs from standard Wall Street practice. This strategy, potentially driven by Elon Musk, aims to leverage his strong fan base and loyal backers to stabilise the stock post-debut. SpaceX is a space exploration and transportation company. It designs, manufactures, and launches advanced rockets and spacecraft.
Musk’s plan, communicated to Wall Street by SpaceX Chief Financial Officer Bret Johnsen, involves pairing the oversized retail allocation with a hands-on approach to selecting bankers. Instead of open competition for investors, SpaceX is assigning firms narrowly defined roles based on existing relationships and past ties. Bank of America has been specifically chosen to focus on domestic retail distribution, while other banks like Morgan Stanley, UBS, and Citi will handle different segments and geographies.
Several banks have been assigned regional roles, with Mizuho covering Japan, Barclays handling the UK, Deutsche Bank in charge of Germany, and Royal Bank of Canada covering Canada. This targeted approach is designed to tap into specific investor pools and leverage regional expertise. SpaceX hopes that long-term retail investors, who have tracked the company privately, will be less prone to immediate post-listing sell-offs.
The IPO’s size and timing are not yet finalised, but it is anticipated to gauge investor enthusiasm for what could be one of the largest IPOs ever. The largest IPO to date is Saudi Aramco, which raised around $29 billion in 2019. SpaceX has not commented on the details of the IPO.
