The biggest IPO in history just churned out a major windfall for Wall Street’s biggest banks.
SpaceX (SPCX) is expected to pay underwriting fees of $500 million, or 0.7% of the $75 billion that the rocket maker raised in its Friday stock market debut, according to a filing.
Goldman Sachs (GS) and Morgan Stanley (MS), the two leading banks in the blockbuster offering, each get a 20% cut of that pool or $100 million each, according to people familiar with the matter. Bank of America (BAC), Citigroup (C) and JPMorgan Chase (JPM) will each take $75 million.
Though significant in dollars, the fee was lean by typical dealmaking standards for a cut from a big IPO, underscoring how much banks were willing to give for the relationship to SpaceX and Musk.
“This is a trophy deal,” said Mike Mayo, an equity analyst with Wells Fargo. “The benefits far transcend the IPO fees.”
JPMorgan didn’t score a top position in SpaceX’s listing but it did pull out enough stops in recent days to make onlookers believe otherwise, a striking shift given that Dimon and the world’s richest man haven’t always seen eye to eye.
The two men feuded for several years, beginning in 2016, after JPMorgan refused to underwrite leases for Tesla (TSLA) under Musk’s leadership. However, in January of last year Dimon said in an interview that he and Musk had “settled some of our differences.”
To close out the banner first day of trading, JPMorgan hosted SpaceX’s IPO listing party for over a hundred SpaceX employees and executives on the 57th floor of its Midtown Manhattan headquarters, according to a person familiar with the matter. The affair, initially conjured by Dimon, included branded tomahawk steaks, SpaceX-themed cocktails, a rocket-shaped cake and illuminating the entire top of its skyscraper with a visual rendering of a rocket ship soaring out of the atmosphere.
SpaceX’s newly minted trillionaire, Elon Musk, did not attend.
Earlier this month, JPMorgan put on an interview between Dimon and Musk, who called in remotely, that was attended by some of its top clients as well as Musk’s mother Maye.
Friday’s offering doesn’t just burnish the banks’ reputations in winning future equity deals either, Wells Fargo’s Mayo said. He described a SpaceX “multiplier effect,” pointing to the possibility of future follow-on raises along with better odds for taking on the rocket company’s newly minted millionaires and billionaires as wealth clients.
The $75 billion deal also signals the latest point of support for what Mayo is calling an AI-driven “capital markets supercycle.”
