SpaceX Super IPO Approaching, Robinhood Reportedly Competing for Retail Allocation Shares

According to media reports citing sources, online broker Robinhood is striving to play a key role in the initial public offering (IPO) of space exploration company SpaceX.

Sources say Robinhood is competing with multiple Wall Street investment banks to acquire a large amount of SpaceX stock for direct sale to its retail investors. Robinhood is likely to offer these shares through its IPO Access platform, which allows users to purchase at IPO price before the stock is publicly traded.

Robinhood launched the IPO Access program in 2021, with apparel manufacturer Figs Inc. becoming the first company to use the program. At its IPO, about 1% of Figs’ shares were allocated to Robinhood users.

As a star enterprise under the world’s richest man Elon Musk, SpaceX is reportedly considering reserving a significant portion of shares for retail investors. The listing could take place as early as mid-year, but the timing remains subject to change.

Sources also said that Robinhood’s move has upset major Wall Street banks competing for the IPO underwriting role, which typically also handles retail allocations.

As of November 30 last year, Robinhood had approximately 27 million funded accounts.

Robinhood may also participate in SpaceX’s high-profile IPO, highlighting how, over the past decade, this retail trading app has grown into an influential force on Wall Street, driven by the popularity of mobile-first, zero-commission trading models.

According to media reports, SpaceX plans to IPO with a valuation of $1.5 trillion, raising up to $50 billion. If true, this would be the largest IPO in history. Major underwriters are expected to include Bank of America, Goldman Sachs, JPMorgan Chase, and Morgan Stanley.

It is reported that Musk hopes SpaceX can go public as soon as possible, aiming to beat AI companies OpenAI and Anthropic, both of which are also likely to go public this year. Musk’s AI company xAI is in competition with OpenAI and Anthropic.

Reports indicate Musk suggested that SpaceX should IPO in June, as his birthday is in June, and there will be a rare planetary conjunction event this June.

For a long time, retail investors have often played a secondary role in the IPO process.

Large companies usually sell shares first to institutional investors, who decide the offering price. After the stock begins trading on the open market, ordinary investors can then participate in buying and selling.

However, some tech companies, including Robinhood itself, Airbnb, and Uber, are starting to disrupt this model by reserving IPO allocation shares for users.