Elon Musk is breaking away from traditional Wall Street practices by considering a plan to reserve up to 30% of SpaceX’s upcoming public stock offering for individual investors — a portion that’s at least triple what companies typically set aside for retail buyers, according to a source with knowledge of the discussions.
This unconventional approach for what’s anticipated to be among the most watched initial public offerings in recent memory highlights Musk’s intent to control both the ownership structure of SpaceX and how its shares will perform once they begin trading publicly, according to individuals close to the planning process who requested anonymity due to the confidential nature of the discussions.
The strategy, communicated to Wall Street through SpaceX Chief Financial Officer Bret Johnsen, combines this unusually large retail portion with a highly selective process for choosing investment banks, these sources revealed. Rather than allowing financial firms to compete broadly for investor clients, SpaceX is giving banks specific, narrowly focused responsibilities based on personal connections and historical relationships, though they cautioned the plan remains subject to change.
In one example of this targeted approach, Musk personally selected Bank of America to concentrate on distributing shares to domestic retail investors, according to four sources familiar with the decision.
Neither SpaceX nor Bank of America provided responses to requests for comment.
Individual investors have historically shown strong loyalty to Musk’s ventures, a phenomenon SpaceX hopes to capitalize on as it prepares for its market debut with a potential valuation reaching $1.75 trillion.
Dedicated supporters have gained confidence from Musk’s track record of transforming entire sectors through bold, early investments that skeptics initially questioned. He guided Tesla’s evolution from specialty electric vehicles to mainstream manufacturing and transformed Starlink from an expensive experiment into a profitable satellite network.
Through SpaceX, he has established the company as a leading player in rocket launches while pursuing his goal of enabling human life on other planets.
Strong interest from individual investors is anticipated, encompassing both wealthy family investment offices that have supported SpaceX for years and smaller investors attracted to Musk’s business ventures, sources indicated.
“This is one of those lifetime moments in which people may say they just have to get in,” said Rowan Taylor, managing partner of Liberty Hall Capital Partners, a private equity firm focused on aerospace and defense. The firm is not involved in the IPO.
The excitement surrounding this offering resembles the public launch of Google twenty years ago, he noted. “The appetite is a statement about investor confidence in Elon Musk.”
SpaceX believes these investors — many who have followed the company’s progress in private markets for years — will be less inclined to sell immediately after the stock begins trading or participate in quick profit-taking strategies, sources explained.
Traditional public offerings usually designate between 5% and 10% of shares for retail investors.
Technology news publication The Information previously reported that individual investor allocation might surpass 20%, with banks receiving specific assignments.
SpaceX has designated financial institutions to target particular investor groups and geographic regions in what industry professionals call a “lane” approach, directing firms to concentrate on specific segments of the offering instead of competing across the entire deal.
Morgan Stanley is expected to serve smaller individual investors through its E*Trade platform, among other responsibilities. Bank of America will focus on wealthy individuals and family offices within the United States, while UBS will market to similar investors internationally, according to sources.
Citi is managing international retail and institutional distribution, collaborating with banks that have regional knowledge to assist in selling shares to individual investors overseas, they said.
Additional banks have received regional assignments, with Mizuho covering Japan, Barclays handling the United Kingdom, Deutsche Bank managing Germany, and Royal Bank of Canada overseeing Canada, according to the sources.
SpaceX has not yet determined the final size or timeline for the offering, which is expected to gauge investor interest in what could become one of history’s largest IPOs.
Barclays, Citi, Deutsche Bank, Mizuho, Morgan Stanley, and RBC declined to provide comments.
UBS did not immediately respond to comment requests.
The current record holder for largest IPO remains Saudi Aramco, which generated approximately $29 billion in 2019.
