A team is currently working on the most watched IPO the street has ever attempted somewhere on the 200 West Street campus in lower Manhattan, in one of the trading floors or conference rooms that Goldman Sachs occupies with the quiet authority of a firm that has managed to position itself at the center of nearly every major financial event for decades. In April, SpaceX submitted their confidential prospectus to the SEC. Roadshows plan to begin on June 8. The destination is the Nasdaq. And Goldman won the lead left position—the top of the tombstone, the most coveted seat in the underwriting hierarchy—after what sources characterize as a truly competitive process.
Morgan Stanley is positioned as the second underwriter in the syndicate that Goldman is directing, which consists of over twenty institutions. This placement, which has been seen on a number of the biggest transactions in recent memory, with Goldman at the top and Morgan Stanley directly below, is not coincidental. SpaceX sought credibility, depth, and distribution in all of the world’s main institutional investment channels. This kind of syndicate provides that. The real prize for Goldman is the positioning this mandate represents: if the deal succeeds and the stock trades well, this is the transaction that will be mentioned for the next ten years every time a big private company considers going public. This also means that the fee pool, although large in absolute terms, will be distributed widely.
The real uncertainty lies in the valuation question, which has a broad range. According to private market transactions, SpaceX is worth more than $300 billion. Estimates have risen to $1.25 trillion due to certain calculations that take a broader perspective of Starlink’s potential for subscriber growth, Starship’s commercial possibilities, and the pipeline of government and defense contracts. It’s not a rounding error.
A spread of that size between the floor and the ceiling illustrates how challenging it is to value a business that operates in several industries at once, such as defense contracting, satellite internet, and commercial launch, and is intricately linked to the personal brand and decision-making of a founder who also manages two other significant businesses and holds a government advisory position. Investors appear to think the narrative is worth more. The difficult element is deciding on a premium’s size.
Outside of Wall Street, the subject that has garnered the most attention is retail access, and the answer is rather ambiguous. The per-share price and the mechanics of IPO allocation still tend to favor institutional buyers who can commit large blocks, but the sheer size of the offering may allow some room for retail allocation—large IPOs occasionally direct a portion of shares to brokerage platforms accessible to everyday investors. The 2012 Facebook IPO was publicly available and is now renowned for both its record size and its tumultuous first day of trading.
Although Saudi citizens showed a great deal of interest in the Saudi Aramco offering in 2019, it was much less accessible outside. It is plausible for SpaceX to land in the middle of those two precedents. Whether this IPO is being planned as a Wall Street event or a wider public one will be largely determined by how Goldman and the firm manage the allocation matter.
It’s difficult to ignore how ambitious the timeline is. This is a condensed window for a deal of this complexity and a company of this profile: filing in April, roadshowing in June, and pricing soon after. Every big IPO has times when an unforeseen circumstance necessitates a repricing, a structural reevaluation, or a delay.
The state of the market, the speed of SEC reviews, and the lack of any significant disruption that would cause institutional investors to withdraw from commitments will determine if the June objective is met. On several occasions, SpaceX has presented timescales as optimistic. The question that Goldman’s equity capital markets team is probably worrying about at the moment is whether that pattern applies to its own stock market debut.
