Goldman Sachs just secured one of the most lucrative and highly sought-after underwriting roles in Wall Street history. The investment banking giant outmaneuvered its fierce rival, Morgan Stanley,y to win the coveted “lead left” role on SpaceX’s upcoming initial public offering. This major victory represents a devastating blow for Michael Grimes, the legendary Morgan Stanley tech banker who has served as Elon Musk’s closest financial adviser on Wall Street for years.
Grimes previously helped orchestrate massive tech listings like Facebook, Uber, and Palantir, and even supported Musk’s dramatic $44 billion Twitter buyout. However, his influence over Musk’s rocket conglomerate began to fade after he took a temporary leave to serve a stint in the Donald Trump administration. When he finally returned to Morgan Stanley, other banks were already aggressively jockeying for senior positions on the blockbuster SpaceX listing. Instead of focusing entirely on tech IPO work, Grimes spent much of his time advising on strategic government transactions involving semiconductors, rare earths, and other politically sensitive projects.
According to people familiar with the deal, Morgan Stanley ultimately relied too heavily on Grimes’ personal connection with Musk and showed up way too late to the pitching table. Meanwhile, Goldman Sachs worked relentlessly behind the scenes on IPO preparations for years. The bank’s advisory team quietly drafted the S-1 prospectus in December, weeks before the public first heard about the planned listing at the World Economic Forum in Davos in January.
Securing the lead strategic position gives Goldman Sachs massive control over the entire public offering. The bank will direct critical pricing and valuation debates, manage the highly anticipated investor roadshow, and make final decisions on equity allocations to wealthy funds. A team of top Goldman executives leads the historic mandate, including Kim Posnett, the co-head of investment banking; David Ludwig, the head of equity capital markets; their boss, Dan Dees; and senior adviser Susie Scher.
Despite losing the top spot, Morgan Stanley still maintains a significant role in the deal. The firm carried out nearly the same volume of work as Goldman Sachs, with some insiders suggesting it only placed second because of alphabetical listing. Crucially, the regulatory filing states that Morgan Stanley will hold the stabilizing mandate. This unusual public designation gives the firm full responsibility for supporting SpaceX’s stock price during the highly volatile days immediately following its market debut. Companies like Uber and Airbnb, which both chose Morgan Stanley to lead their previous IPOs, did not publicly name their stabilizing agents.
Musk decided to take the spacecraft manufacturer public to raise the massive capital needed for his grandest project: the Starship rocket system designed to reach Mars. Additionally, the company is developing cutting-edge technology to deploy server data centers directly into space. A massive network of 9,400 Starlink satellites will power these floating data hubs. Musk believes this outer-space network is essential for his businesses to compete in the artificial intelligence sector against rivals like Google and OpenAI.
SpaceX’s financial scale has grown to astronomical proportions. The rocket company held private talks in December about a share sale that would have valued the firm at a staggering $800 billion. This target more than doubled its previous private market valuation of nearly $400 billion. The company also heavily supports Musk’s other projects, having invested $2 billion in his artificial intelligence startup, xAI, last year before merging it with social media platform X in March.
Wall Street traders are now bracing for an absolute trading frenzy when SpaceX and other high-profile tech companies, like OpenAI and Anthropic, finally debut on the market. Active portfolio managers at major hedge funds plan to go all-in with maximum size on the highly anticipated listings. However, passive index funds and exchange-traded funds face a difficult challenge. Because the listings are so large, passive funds tracking trillions of dollars must buy up shares immediately to match the indexes, even if the stock price jumps by 100 percent in the volatile first week of trading.
