Space X IPO, Musk wants to learn from "Teacher Ma"

SpaceX is preparing for an IPO that could rewrite the history of U.S. IPOs, and the approach chosen by Musk is strikingly similar to the strategy used by Alibaba during its U.S. listing a decade ago.

On Saturday, The Information reported, citing informed sources, that SpaceX is discussing splitting the IPO underwriting function among multiple investment banks, rather than following the traditional model of one or two lead underwriters. The banks currently involved in the discussions include Morgan Stanley, Goldman Sachs, Bank of America, Citigroup, and JPMorgan Chase, along with several international banks joining the lineup.

This arrangement is highly reminiscent of the multi-bank parallel structure that Alibaba employed when it completed a $25 billion IPO in 2014, which remains the largest IPO in U.S. history to date.

The potential financing scale of this IPO could reach hundreds of billions of dollars, far exceeding the vast majority of IPO transactions, which is the core reason SpaceX needs to mobilize such a large banking consortium. For investors, this means a rare super-sized tech stock IPO is rapidly taking shape.

Division of Labor Among Multiple Banks

According to The Information, SpaceX executives have informed relevant parties that the company is considering having Morgan Stanley and Goldman Sachs handle the allocation of shares to institutional investors, while Bank of America and Citigroup will lead the sales to individual investors. JPMorgan Chase is positioned as the overall advisor for the IPO.

In the division of labor for individual investor channels, Bank of America is expected to primarily cover domestic U.S. investors, while Citigroup will coordinate with international banks to sell shares to overseas individual investors. SpaceX has also brought in Barclays, Deutsche Bank, Mizuho, Royal Bank of Canada, and UBS to assist in tapping into international investor resources in their respective domestic markets.

Informed sources indicate that discussions are still ongoing, and specific details may change, with more banks expected to join the underwriting syndicate.

Replicating Alibaba's Model, Breaking Traditional Norms

This multi-bank parallel structure closely echoes the arrangement used by Alibaba during its U.S. listing in 2014.

At that time, Alibaba hired six banks—Credit Suisse, Deutsche Bank, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Citigroup—to operate as joint equal lead underwriters, essentially listing them in alphabetical order in the prospectus to deliberately downplay the distinction between primary and secondary roles. Each bank was assigned at least one key function—such as Credit Suisse and Morgan Stanley responsible for drafting the main content of the prospectus, while JPMorgan Chase and Goldman Sachs handled the issuance structure and communication with existing shareholders.

In contrast, other large tech IPOs over the past two decades have typically adopted a more traditional model. For example, Facebook designated Morgan Stanley as the sole lead underwriter during its IPO. SpaceX's choice of structure is clearly a proactive adaptation to the demands of super-sized financing.

Intense Competition for the Stabilization Agent Role

Among the various underwriting functions, the role of "stabilization agent" is particularly coveted by many banks. According to informed sources, Morgan Stanley and JPMorgan Chase are competing for this role, and other banks may also participate in the contest The stabilizing agent is responsible for overseeing trading in the initial hours after a stock's listing and holds the most authority within the underwriting syndicate, potentially bringing additional fees and trading commission income to participating banks.

Specifically, this agent has the authority to decide whether to buy additional shares in the open market to prevent the stock price from falling below the issue price; at the same time, they also have the dominant role in exercising the overallotment option (green shoe option)—that is, purchasing additional shares from the company beyond the original issuance size to meet excess demand. The competition for this position reflects the immense appeal of this IPO to major Wall Street firms