Does Elon Musk break Wall Street rules? SpaceX reportedly plans to allocate up to 30% of new shares to retail investors.

The world’s richest man, Elon Musk, known for his ability to break conventional rules, seems to be preparing to shake up Wall Street with the listing of SpaceX.

According to the latest news early Friday Beijing time, Musk is discussing allocating up to 30% of new SpaceX shares to individual investors, relying on his enthusiastic fan base to help stabilize the stock price after the IPO. In typical U.S. stock IPOs, companies usually allocate only 5% to 10% of shares to retail investors without lock-up restrictions.

Previously leaked information suggests that the fundraising scale for SpaceX’s IPO could reach $70-75 billion, with a target valuation of $1.75 trillion. The previous global IPO fundraising record was Saudi Aramco’s $29 billion in 2019 on its home market.

Sources added that Musk’s plan, communicated by SpaceX CFO Brett Johnson to Wall Street, combines a large-scale retail allocation with an unusually hands-on approach to investment banks. The private aerospace giant is strictly limiting the roles of various banks based on personal relationships and past connections, rather than allowing broad competition.

Market participants say that SpaceX has already designated “lanes” for each bank, instructing them to focus on specific parts of the stock issuance.

It is reported that Musk’s “favorite” bank, Morgan Stanley, is expected to handle small retail investors through its E*TRADE platform. Bank of America will focus on high-net-worth individuals and family offices in the U.S., while UBS will be responsible for international investors. Citigroup is coordinating distribution to international retail and institutional investors and working with regional market experts to assist in selling shares overseas.

In the international markets, Mizuho Financial Group, Barclays, Deutsche Bank, and Royal Bank of Canada will be responsible for their respective regions.

Sources say all parties expect strong retail investor demand for SpaceX’s IPO, including wealthy family offices that have supported Musk for years, as well as small retail investors attracted by Musk’s technological vision.

SpaceX is also betting that these investors will not immediately sell their shares upon receipt, avoiding what is known as “pop-and-dump” trading.

Ron Taylor, managing partner at Liberty Hall Capital Partners, a private equity firm focused on aerospace and defense, said: “This kind of moment is rare in a lifetime; people may feel they have to participate.”

He also noted that this market enthusiasm can be compared to the time when Google went public twenty years ago, fundamentally reflecting investor confidence in Elon Musk.

(Source: Cailian Press)