- SpaceX is negotiating IPO fees below 0.75% with its Wall Street underwriters, according to people familiar with the matter — the lowest spread ever attempted on a major US listing, beating the 0.75% charged on GM’s 2010 government-bailout IPO
- Even at sub-0.75%, the absolute payout on a $75B raise amounts to roughly $500 million for the syndicate — likely one of the largest single fee events in Wall Street history
- Goldman Sachs and Morgan Stanley, as lead managers, are positioned to capture a disproportionate share of the fee pool versus the 21 co-managers on the deal
- The razor-thin margin sets a dangerous precedent for OpenAI and Anthropic IPO economics — both companies may now face pressure to offer similarly compressed fee structures given SpaceX’s leverage
What Happened?
SpaceX is in active negotiations with its underwriting syndicate to pay less than 0.75% in fees on its $75 billion IPO — a spread that would shatter records for major US listings. The standard fee range for sub-$1 billion IPOs is 4-7%; even blockbuster mega-IPOs typically command more than 1%. The GM 2010 offering, at 0.75%, was considered extraordinarily low, driven by political pressure to avoid optics of banks profiting from a government-bailout listing. SpaceX has no such political constraint — it simply has leverage. Twenty-three banks, led by Goldman and Morgan Stanley, have competed fiercely for roles, giving Musk the ability to extract terms no prior issuer has achieved. At the negotiated rate, the absolute fee pool is still approximately $500 million.
Why It Matters?
The fee structure matters far beyond SpaceX’s balance sheet. When the history’s largest IPO pays sub-0.75%, it resets market expectations for every mega-deal that follows — and OpenAI and Anthropic are both in advanced IPO preparation. Banks that accept these terms are trading short-term margin compression for the prestige and aftermarket positioning that comes with the decade’s defining listing. Goldman CEO David Solomon famously slid into Musk’s DMs to secure a lead role; the fee was clearly not the primary consideration. For the 21 co-managers splitting the remainder of the pool, the economics are thinner still — but a tombstone on the SpaceX IPO is a calling card worth far more than the fee income in winning future mandates.
What’s Next?
Investor marketing begins June 4 and pricing is expected as early as June 11. With $500 million being distributed across 23 banks, watch for the discretionary “performance fee” component — Bloomberg’s sources noted the sub-0.75% figure is the base, with additional incentive payments possible. Separately, Anthropic has now filed confidential IPO paperwork, and Alphabet just raised $80 billion in equity — all adding to the question of whether public markets can absorb this volume of issuance simultaneously. If the SpaceX book is massively oversubscribed, banks will take the fee hit in stride. If demand is softer than expected, the compressed economics make it harder to justify the resource allocation — and the precedent for future deals becomes more fraught.
Source: Bloomberg
