The New York Times (NYT) reported on the 21st (local time) that SpaceX, the aerospace corporations of Elon Musk, is set to go public next month and that major Wall Street investment banks fiercely competed to secure the lead underwriter spot.
In the IPO prospectus released the previous day, U.S. investment bank Goldman Sachs appeared at the far left of the list of joint bookrunners. The industry calls this the "lead left," which typically means lead underwriter. Rival Morgan Stanley was listed immediately to the right in the second position.
Having a name appear first at the top left of an IPO prospectus is regarded on Wall Street as a convention symbolizing the lead underwriter. NYT estimated that the fees underwriters will earn from the SpaceX listing will exceed $1 billion (about 1.5 trillion won).
Although the listing fees are shared among the 22 joint bookrunners participating in this IPO, the lead underwriter generally takes the largest share. After it became known that Goldman Sachs had secured the lead left status, investment banking (IB) institutional sector executives held a brief celebratory party on the 33rd floor of the Manhattan headquarters on the 19th, NYT reported, citing sources.
There was also a report that David Solomon, the Goldman Sachs chief executive officer (CEO), used the direct message (DM) function on X, the social media service formerly known as Twitter, to communicate directly with Musk. Bloomberg said Solomon's moves show how aggressively investment banks act to gain client trust. Before becoming CEO in 2018, Solomon led Goldman Sachs' investment banking institutional sector.
Morgan Stanley, which has maintained a long transaction relationship with Musk, was said to hold the position that it is serving as co-lead underwriter together with Goldman Sachs. Citing an internal source at Morgan Stanley, Bloomberg reported that "the reason Goldman Sachs' name appeared first was simply alphabetical order."
Underwriters recruit investors to purchase newly issued shares and manage initial share price volatility after listing.
NYT explained that the reason Wall Street banks compete fiercely for the lead underwriter spot is "because they are likely to secure lending and various advisory mandates even after the IPO." The fact that executives and employees who gain massive asset through the listing can be secured as new wealth management clients is also cited as a major reason.
SpaceX plans to raise $75 billion (about 112 trillion won) through the listing. If the listing succeeds, the corporations value is expected to reach $1.75 trillion (about 2,635 trillion won). The company will start a roadshow for institutional investors on the 4th of next month and is expected to list as early as the 12th of the same month.