SpaceX plans to allocate 30% of its IPO shares to retail investors, with Musk breaking Wall Street conventions.

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

On March 26, according to Reuters, citing sources familiar with the matter, Elon Musk is discussing allocating up to 30% of SpaceX’s IPO shares to individual investors, more than three times the usual proportion.

Reports indicate that this move aims to leverage Musk’s large base of loyal supporters to stabilize the stock price and prevent sharp fluctuations typical of “pump and dump” scenarios after listing. Meanwhile, SpaceX is distributing banking functions in a highly customized way, breaking the traditional model of broad competition among institutions for investors.

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

Market observers compare retail demand for this IPO to the excitement surrounding Google’s listing twenty years ago, expecting extremely strong interest from a broad group—from wealthy family offices that have long followed SpaceX to small and medium investors attracted by Musk’s personal charisma.

Record-breaking retail share allocation, loyal shareholders seen as stabilizers

According to Reuters, Musk has communicated this plan to Wall Street through SpaceX CFO Bret Johnsen, proposing to allocate up to 30% of the IPO shares to individual investors. In contrast, typical retail allocations in public offerings are only 5% to 10%.

There is a clear market logic behind this move: Investors who have long tracked the company in private markets are less likely to sell immediately after listing, helping to reduce sharp stock price swings.

The report cites sources saying the plan is not final and may still change.

Tech media The Information previously reported that the allocation to individual investors could exceed 20%, with banks assigned specific roles. Reuters’s latest report citing sources suggests a 30% cap, further confirming this direction.

Banks with precise roles, Musk personally leading underwriting

Unlike the traditional model where large investment banks compete broadly and take on the entire underwriting, SpaceX is adopting what market participants call a “track” structure, guiding different banks to specific investor groups and regions.

Sources familiar with the matter reveal that Musk personally designated the roles of different banks:

• Bank of America handles domestic retail distribution, focusing on high-net-worth individuals and family offices;
• Morgan Stanley primarily services retail clients via its E*Trade platform;
• UBS is responsible for international market expansion for these investor groups;
• Citibank coordinates the distribution to international retail and institutional investors, leveraging regional partner banks to promote shares overseas.

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

The core logic behind this arrangement is based on personal relationships and past collaborations rather than pure market competition, indicating that SpaceX is actively controlling its IPO capital structure and investor composition.

Elon Musk’s brand influence boosts retail investor confidence

SpaceX’s retail strategy is built on the long-standing base of individual investors associated with Musk’s companies.

Rowan Taylor, managing partner at Liberty Hall Capital Partners, a private equity firm in aerospace and defense, said:

This is one of those once-in-a-lifetime moments that you feel you must participate in.

He compared the excitement around this IPO to Google’s market debut twenty years ago, noting that “investor enthusiasm itself is a sign of confidence in Musk.”

Musk previously propelled Tesla from a niche electric vehicle brand to mass production and transformed Starlink from a high-cost experiment into a sustainable, profitable satellite network. These experiences have fostered strong investor trust in his ability to pioneer emerging technologies.

In the rocket launch sector, SpaceX has established a dominant position and continues to pursue Musk’s long-term vision of making humanity a multiplanetary species. This combination of commercial success and grand narrative has built a solid foundation of institutional and individual investors over the years, providing natural support for the retail strategy in this IPO.

SpaceX has not yet finalized the issuance size or schedule. The world’s largest IPO record is held by Saudi Aramco, which raised about $29 billion in 2019.

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