Goldman Sachs to Lead Underwriting of SpaceX IPO with Record-Low Gross Spread

SpaceX has filed an amended S-1 to sell 555.6 million shares at $135 each, targeting a valuation of about $1.75 trillion. Including a 15 percent overallotment option, the total raise could reach roughly $86 billion, making it the largest U.S. IPO by proceeds. The underwriting syndicate, led by Goldman Sachs as the "lead left underwriter," also includes Morgan Stanley, Bank of America Securities, Citigroup, JPMorgan, and several boutique and foreign banks. The banks will share an estimated $646 million in gross-spread fees, proportionate to the share allocations they receive.

Goldman Sachs, as the lead underwriter, will have primary authority over the allocation of shares to institutional investors, while the other book-runners will receive larger-than-average share portions for the institutional segment. The underwriting agreement provides an overallotment of up to 15 percent, expected to be exercised given anticipated demand.

Analysts note that IPOs are often priced below the expected market price on the first trading day. SpaceX has reserved 5 percent of the shares for employees, friends, family, and business partners at the offering price, and these participants are exempt from the standard lock-up period. If the stock opens above the $135 price, a portion of the first-day gains is typically returned to the underwriters as "soft dollars," a practice whereby banks receive additional compensation beyond execution costs. Estimates suggest that soft-dollar payments could amount to a significant multiple of the underwriting fees, with Goldman Sachs likely receiving the largest share.

The scale of the offering and the associated fee structure highlight the potential for substantial revenue for the participating banks, particularly for Goldman Sachs, which stands to benefit from both the gross spread and any soft-dollar arrangements tied to first-day price performance.