The SpaceX IPO Just Handed Wall Street’s Big Banks a Huge Payday.
Here’s What It Means for Their Stocks
SpaceX stock has finally gone public with the biggest initial public offering (IPO) ever, with a $75 billion share sale. The underwriting investment banks have made a fortune off the deal, even though their percentage payment was lower than usual. The typical IPO pays 4% to 7% of gross IPO proceeds to the underwriters, going lower as the IPO size increases.
According to PwC, IPOs worth $1 billion and up pay 4%, but SpaceX raised $75 billion, and according to reports, it paid 0.75% as an underwriting fee, worth $560 million. That’s still the largest sum ever paid out in an IPO, and it’s a huge payday for the investment banks involved in the deal. But the implications are more far-reaching than the amount that lands in their coffers.