SpaceX plans to allocate 30% of its IPO shares to retail investors

SpaceX is reshaping the traditional underwriting logic of Wall Street with an unprecedented IPO plan.

On March 26, Reuters reported, citing informed sources, that Musk is discussing allocating up to 30% of SpaceX’s IPO shares to individual investors, which is more than three times the usual level.

It is reported that this move aims to stabilize the stock price by leveraging Musk’s large and loyal following, preventing severe fluctuations after the listing that could resemble a “pump and dump” scheme. Meanwhile, SpaceX is distributing banking functions in a highly customized manner, breaking away from the traditional model where various institutions compete broadly for investors.

The potential valuation of this IPO could reach $1.75 trillion, potentially making it one of the largest public offerings in history.

Market participants compare the enthusiasm of retail investors for this IPO to the frenzy surrounding Google’s listing twenty years ago, expecting demand to be extremely strong, covering a spectrum from wealthy family offices that have tracked SpaceX for a long time to small and medium investors attracted by Musk’s personal charisma.

Record Retail Shares, Loyal Shareholders Seen as Stabilizers

According to the Reuters report, Musk communicated this plan through SpaceX Chief Financial Officer Bret Johnsen to Wall Street, allocating up to 30% of the IPO shares to individual investors. In contrast, the typical allocation for retail investors in public listings is only 5% to 10%.

The logic behind SpaceX’s move is clear: those investors who have tracked the company in the private market are less likely to sell immediately after the listing, helping to reduce severe price fluctuations.

Reports cite informed sources indicating that the plan has not been finalized and may still change.

Tech media The Information previously reported that the allocation for individual investors could exceed 20%, and that banks would be given clear divisions of labor. Reuters’ report that 30% is a target cap further confirms this direction.

Detailed Bank Division, Musk Personally Leads Underwriting Structure

Unlike the past model where large investment banks competed broadly and took on the entire scope, SpaceX has adopted what market participants call a “track” structure, directing different banks to specific investor groups and geographic regions.

Reports citing informed sources reveal that Musk personally designated the roles of different investment banks:

• Bank of America is responsible for domestic retail distribution, focusing on high-net-worth individual clients and family offices;

• Morgan Stanley primarily serves small and medium retail investors through its E*Trade platform;

• UBS is responsible for international market expansion for the aforementioned two types of investors;

• Citigroup is responsible for coordinating the distribution to international retail and institutional investors, leveraging partner banks with regional expertise to promote shares to overseas individual investors.

In the regional markets, Mizuho is responsible for Japan, Barclays for the UK, Deutsche Bank for Germany, and Royal Bank of Canada for Canada.

The core logic of the above arrangements is personal relationships and past collaborations, rather than pure market competition, marking that SpaceX has taken proactive control of the IPO’s capital structure and investor composition.

Musk’s Brand Effect Drives Retail Investor Confidence

SpaceX’s retail strategy is built on the foundation of individual investors accumulated over the long term by Musk’s companies.

Rowan Taylor, managing partner of aerospace and defense private equity firm Liberty Hall Capital Partners, stated:

This is the kind of moment that feels like a once-in-a-lifetime opportunity, and you must be part of it.

He compared the excitement surrounding this IPO to Google’s entry into the capital market twenty years ago, noting that “investor enthusiasm itself is an expression of confidence in Musk.”

Musk previously transformed Tesla from a niche electric vehicle brand into large-scale mass production and pivoted Starlink from a high-cost experiment to a sustainable and profitable satellite network. This series of experiences has led many investors to maintain high trust in his judgment regarding emerging technologies.

In the field of rocket launches, SpaceX has established a dominant position and continues to advance Musk’s long-term vision of making humanity a multi-planetary species. This characteristic of combining commercial success with a grand narrative has allowed it to build a strong base of institutional and individual investors over the years in private markets, providing a natural foundation for the retail strategy of this IPO.

SpaceX has not yet finalized the issuance scale and timetable. The current record for the largest IPO globally is held by Saudi Aramco, which raised approximately $29 billion in 2019.