Goldman, Morgan Stanley each take $100M from SpaceX IPO

SpaceX paid about $500 million in underwriting fees on its $75 billion initial public offering, a fee rate near 0.7%. Goldman Sachs and Morgan Stanley, which led the offering, each received roughly $100 million from the fee pool.

The company sold 555.6 million shares at $135 apiece, raising $75 billion and valuing the company near $1.77 trillion at pricing. Shares rose about 19% on the first day of trading to close near $161, pushing the market value above $2 trillion on debut.

The underwriting fee pool was split across 21 banks. Bank of America, Citigroup and JPMorgan Chase each received about $75 million. Smaller syndicate members were paid $10 million or less. SpaceX also negotiated a zero-fee arrangement on an approximately $11 billion greenshoe option.

At 0.7%, the underwriting rate was below the 1.2% paid on a prior large listing in 2014 and well under the gross spreads typically seen on smaller deals, which often cluster near 7%. The dollar sum of roughly $500 million is among the largest underwriting paydays from a single stock listing.

Investor demand for the offering was strong. The order book exceeded $350 billion, with institutional bids topping $250 billion; one large asset manager sought roughly $5 billion of shares.

Banks that took part in the deal expect follow-on revenue from trading commissions as the stock changes hands, from lending and financing tied to the shares, and from future advisory work linked to the company’s higher public profile. The coming quarters will show how much additional business the banks capture from the listing.