SpaceX Paid Just 0.7% in IPO Fees, Yet Wall Street Banks Rushed In

SpaceX paid Wall Street about $500 million in underwriting fees on its $75 billion listing, near 0.7% of the deal. That ranks among the lowest rates ever for a mega-IPO.

Goldman Sachs and Morgan Stanley led the offering and took the largest cut. Even so, the slim percentage left bankers chasing softer rewards beyond the headline payday.

A Record Raise With a Discount Fee

SpaceX raised $75 billion by selling 555.6 million shares at $135 each. The deal valued the rocket maker near $1.77 trillion at pricing.

The offering surpassed Saudi Aramco’s $29.4 billion sale from 2019. That made it the largest IPO on record by money raised.

Shares jumped about 19% on the first day, closing near $161. By the close, SpaceX carried a market value above $2 trillion in its $2 trillion debut.

The fee pool reached roughly $500 million, split across 21 underwriters. At 0.7%, the rate undercut the 1.2% that Alibaba’s banks earned in 2014, long a benchmark for mega-deals.

Most listings pay far more. Gross spreads cluster near 7% on smaller deals and rarely dip under 1% even on the largest offerings.

The low rate still produced a record sum. The $500 million pool ranks as the largest underwriting payday Wall Street has drawn from a single stock listing.

How SpaceX IPO Fees Were Split Among Banks

Goldman Sachs and Morgan Stanley each claimed about 20% of the pool, or $100 million apiece. Goldman held the lead-left spot on the prospectus.

Bank of America, Citigroup and JPMorgan Chase each took about $75 million. Smaller syndicate members received $10 million or less.

SpaceX also negotiated a rare zero-fee arrangement on the roughly $11 billion greenshoe option. That term saved the company tens of millions more.

The structure rewarded the lead banks for heavier work on pricing, the roadshow and allocation, after shares opened higher than the set price.

Why Banks Accepted Thin Margins

Despite the slim cut, the deal drew fierce competition. The offering attracted more than $350 billion in orders, with institutions bidding over $250 billion. BlackRock alone sought about $5 billion.

The squeeze had precedent. Saudi Aramco, whose 2019 listing held the prior size record, paid its banks just $64 million, near 0.25% of the money raised.

Bankers still treated the mandate as a trophy. League-table standing and the tie to Elon Musk’s companies carried weight beyond the fee, even as the listing minted employee millionaires.

The real upside may sit elsewhere. Trading commissions, lending and future advisory work, such as a possible Tesla merger thesis, could dwarf the fees.

Goldman, in particular, stands to capture heavy trading flow as the stock changes hands in the months ahead. Banks also deepen ties to Musk’s wider business empire for the next mandate.

For now, the 0.7% rate marks the founder leverage behind Musk’s record fortune. The coming quarters will show whether the relationship pays off as banks expect.