SpaceX IPO Sets Stage for Clash of Wall Street Titans over Mega-Cap Debuts

It’s news everyone saw coming from 239,000 miles away (that’s the distance to the moon, where SpaceX plans to begin sending commercial cargo flights as soon as 2028).

The Elon Musk-led aerospace firm filed a prospectus with the Securities and Exchange Commission on Wednesday to list on the Nasdaq under the ticker symbol SPCX. The stage is now set for the biggest initial public offering in history, with a listing as early as June 12. On Wall Street, the IPO set up a heated contest to be the underwriter nonpareil.

The Underwrite One

There are a whopping 23 banks named on the cover of the SpaceX prospectus, including groups headquartered in the Netherlands (ING), Japan (Mizuho), Spain (Santander), the UK (Barclays), Canada (RBC Capital Markets) and France (Société Générale).

The top line, though, is as American as free refills. In order, there’s Goldman Sachs, Morgan Stanley, Bank of America, Citigroup and JPMorgan. Goldman Sachs holds the coveted lead-left slot, indicating it’s the premier underwriter. It marks a reunion of sorts, as Goldman was the lead on the 2010 Nasdaq debut of Tesla, the other trillion-dollar company Musk leads. It’s an important win for the bank because the fees for this listing, with SpaceX planning a record-breaking raise up to $80 billion at a valuation of roughly $2 trillion, are going to reach the exosphere. And Goldman is looking to shore up a position as high tech’s underwriting bank of choice as more megacap debuts loom, creating the most competitive jostling for IPOs among banks in recent years — OpenAI, for example, is planning to file for an IPO as early as Friday. Goldman, however, wasn’t the only Wall Street major to be tasked with a prestigious job:

• SpaceX named Morgan Stanley as the IPO’s stabilization agent, putting the bank in charge of transactions to steady or preserve the stock price. Basically, it says Musk’s firm trusts the bank to help steer its all-important early weeks of public trading.
• Last year, Morgan Stanley led all Wall Street banks in equity capital markets revenue, a measure of how much a firm earns from equity-based transactions like IPOs and follow-on offerings, garnering just shy of $2 billion. But Goldman Sachs leapfrogged its rival in the fourth quarter and maintained pole position in the first quarter of this year with a $535 million haul, a 45% year-over-year increase, compared with Morgan Stanley’s $396 million.

Fee Glee Club: The underwriting fees for the SpaceX IPO could total $1 billion, according to some estimates. For comparison, when Goldman and Morgan Stanley led Medline’s $7.2 billion listing in December, they took home more than a third of the $156.5 million in fees. In other words, someone’s getting a nice bonus this year.