SpaceX IPO Underwriting Fee Below 0.75%, Yet Wall Street Still Expected to Earn ~$500 Million
N.R. Finch
SpaceX is pushing its underwriting fee below 0.75% on a $75 billion IPO — yet banks still stand to collect roughly $5 billion combined, potentially one of the largest single IPO fee pools in history and a price anchor for every mega-listing behind it this year.
The fee rate is rock-bottom — why do banks still want the deal?
Musk is negotiating the rate below 0.75%, far under the 1%+ typical for large IPOs.
But because the raise is $75 billion, even a razor-thin rate yields roughly $5 billion in total fees.
This means → the banks aren't earning on rate — they're earning on sheer scale. The absolute dollar pool dwarfs most IPO fee pools at standard rates.
How is the fee pool split among 23 banks?
According to Bloomberg, lead underwriters Goldman Sachs and Morgan Stanley will receive a larger share than the remaining 21 co-managers.
These figures cover the base fee only — discretionary incentive arrangements are extra.
In plain terms = twenty-three banks share one pie, but Goldman and Morgan Stanley cut the two biggest slices first; the other twenty-one split what's left.
Where does 0.75% sit in IPO history?
Typical IPOs raising under $1 billion charge 4%–7%; large deals drop significantly but usually stay above 1%.
The closest precedent: General Motors' 2010 IPO at 0.75% — Wall Street had just taken taxpayer bailouts and couldn't afford the optics of a fat fee.
Alibaba's 2014 IPO ($25 billion) paid roughly $300 million including performance fees; Saudi Aramco originally expected a rate above 1%, later slashed after sidelining international banks.
This reflects a pattern: fees drop to this level only when the government is at the table (GM) or the deal is too large for any bank to walk away (SpaceX).
What does this mean for other mega-IPOs this year?
OpenAI and Anthropic are both laying groundwork for listings in coming months; Anthropic has reportedly filed a confidential draft prospectus.
Google parent Alphabet has also announced plans to raise $80 billion through a package of share offerings.
This means → SpaceX's ultra-low rate becomes a pricing anchor — companies lining up behind it will use it to negotiate down, potentially forcing analysts to lower full-year underwriting-revenue forecasts for Wall Street.
How big is the SpaceX IPO itself?
Target valuation of roughly $1.8 trillion; the $75 billion raise would easily break the all-time IPO record.
Monday's filing also reserves up to 5% of the offering for select employees and executives' friends and family.
In plain terms = this isn't just an IPO — it's a "super-financing event" large enough to test whether Wall Street can actually raise this much public capital in one go.
Content is for reference only, not financial advice.