SpaceX's historic public offering on June 11 raised $75 billion, making it the largest IPO ever. The company sold 555,555,555 shares at $135 each. Morgan Stanley bankers collected roughly $100 million in fees from the deal, according to Bloomberg. The IPO was led by a syndicate of ten banks including Goldman Sachs, Morgan Stanley, BofA Securities, Citigroup, and J.P. Morgan.
The Banker's Windfall
Morgan Stanley's Workplace unit, which handles stock plans for corporate clients, took in $148.1 billion of new client money last quarter. Just over half of that came from IPOs of stock plan clients, with a large share attributed to SpaceX. The unit serves more than half of the S&P 500 and about 70% of the 100 biggest private companies worth over $1 billion. Bloomberg estimates the yearly revenue from SpaceX-linked assets at over $100 million, though that depends on locked shares staying with the firm.
Total client assets at Morgan Stanley's wealth business have now passed $10 trillion. But the bank is also returning capital to shareholders: it raised its dividend by 15 cents to $1.15 and approved $20 billion in share buybacks.
The Lockup Countdown
About 911.5 million locked shares become free to sell on August 6, just two trading days after SpaceX's first earnings report on August 4. At current prices, those shares are worth roughly $99 billion. SpaceX stock closed at $108.37 on July 31, 20% below the IPO price and 33% below its first-day close of $161. Even a $1.6 billion Space Force launch contract through 2027 didn't stop the decline.
Stock Performance and Analyst Expectations
Analysts expect SpaceX to report a loss of 26 cents per share in its debut earnings. The lockup expiration could add further selling pressure, though some of the locked shares are held by insiders and early investors who may not rush to sell. Only 26% of the new money from IPOs went into managed accounts last quarter, down from 72% a year earlier, suggesting many investors are keeping cash on the sidelines.
The big question is whether the August 6 lockup expiration will trigger a wave of selling or if the stock has already priced in the overhang. With the earnings report just two days before, investors will be watching both the numbers and the trading volume closely. No one knows yet how many locked shareholders will hold or fold.
