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

Caixin News, March 27 (Editor: Shi Zhengcheng) - The world’s richest man, Elon Musk, known for his unconventional thinking, seems to be preparing to break the norms on Wall Street with the listing of SpaceX.

According to the latest information 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 IPO practices, companies usually allocate only 5% to 10% of shares to retail investors without lock-up restrictions.

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

Sources added that Musk’s plan, communicated to Wall Street by SpaceX CFO Brett Johnson, combines a large-scale retail offering 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 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 investor outreach. Citigroup is coordinating distribution to international retail and institutional investors and working with regional banks 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 regional markets.

Sources say all parties expect SpaceX’s IPO to attract very strong retail investor demand, 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 sell immediately after receiving their shares, avoiding what is known as “pop-and-dump” trading.

Ron Taylor, managing partner of Liberty Hall Capital Partners, a private equity firm focused on aerospace and defense, said, “This is a once-in-a-lifetime moment; people might 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.