Why did Elon Musk pick Goldman Sachs as its lead-left champion in SpaceX’s next month IPO?

Elon Musk picked Goldman Sachs to sit in the top-left spot on SpaceX’s IPO paperwork because this is the bank that has stayed closest to his biggest public-market deals for years.

As Cryptopolitan reported previously, after Goldman then Morgan Stanley (NYSE: MS), Bank of America (NYSE: BAC), Citigroup (NYSE: C), and JPMorgan Chase (NYSE: JPM).

Goldman’s pick follows the same pattern of choices made by Elon. His most recent initial public offering was in 2010 when Tesla (NASDAQ: TSLA) went public, and Goldman Sachs was the lead underwriter for the transaction.

Goldman Sachs keeps taking the front seat when Elon raises public money

Goldman has already led about $2.2 billion in Tesla public stock sales, including Tesla’s IPO and five later share offerings

The only Tesla equity sale where Goldman did not sit first was a $2.3 billion deal in 2016, where Morgan Stanley led and Goldman came second.

Goldman also led the 2012 IPO for Elon’s SolarCity, later handling two more stock sales for that company. Tesla bought SolarCity in 2016 through a deal valued at about $2 billion.

The bank also earned money from Tesla’s debt work. In 2017, Goldman led Tesla’s first junk bond sale, worth $1.8 billion. Its fee for placing $450 million of that bond sale was not made public. Goldman also led Tesla convertible bond deals in 2014 and made about $12 million in fees from two transactions.

Goldman Sachs also lent money directly to Elon Musk. Specifically, in 2011, Goldman Sachs provided a $35 million loan to Musk, and Tesla’s prospectus filed in 2012 mentioned that Elon Musk used some of this money to buy shares of Tesla. This was followed by another extension of $50 million.

In 2013, the debt Elon owed Goldman Sachs reached $275 million. As for the year before that, in March of 2012, Elon Musk did not owe any money to Goldman Sachs, while he owed about $344 million to Morgan Stanley.

The relation between Goldman Sachs and Elon Musk is not something new for criticism.

In 2016, the analyst of Goldman Sachs, Patrick Archambault upgraded the ratings of Tesla from neutral to buy, shortly before Goldman Sachs and Morgan Stanley became co-managers of the new share issue by Tesla.

At the same time, Goldman Sachs insisted on its policy of separating sales and research.

ARK Venture Fund gives retail buyers SpaceX access

SpaceX has not announced a final listing date, so normal retail buyers still cannot buy SpaceX shares on a public exchange.

But there is still a way to invest before the IPO, which is the ARK Venture Fund, known as ARKVX, managed by Ark Invest, the firm run by Cathie Wood.

ARKVX is a closed-end interval fund registered with the SEC, it does not trade freely on exchanges, can hold private assets such as venture-backed companies, but investors cannot sell whenever they feel like it, they only get quarterly repurchase windows.

Ark’s own website warns buyers about that limit, via a disclosure that says:

“You should not expect to be able to sell your Shares other than through the Fund’s repurchase policy, regardless of how the Fund performs. Although the Fund will offer to repurchase Shares on a quarterly basis, Shares are not redeemable and there is no guarantee that shareholders will be able to sell all of their tendered Shares during a quarterly repurchase offer. Investment in the Fund’s Shares is not suitable for investors that require liquidity, other than liquidity provided through the Fund’s repurchase policy.”

Meanwhile, ARKVX also has annual costs of 3.49%, though after a 0.59% waiver and reimbursement, the net cost still stands at 2.90%. By comparison, many actively managed ETFs charge around 0.5% to 0.75%. That means ARKVX is about 364% higher than the average active ETF cost.

Investors who still want access can buy through platforms such as SoFi Technologies (NASDAQ: SOFI) and Titan with a $500 minimum, based on the prospectus.

SpaceX is ARKVX’s largest holding at 13.76% of the portfolio. The fund also holds private tech names such as OpenAI and Anthropic.

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