E*Trade in talks to lead SpaceX IPO retail share sales

Morgan Stanley's E*Trade is reportedly in discussions with SpaceX to spearhead the distribution of shares to individual investors in the United States during the rocket manufacturer's upcoming initial public offering (IPO). This strategic move could provide E*Trade with a significant advantage over competitors such as Robinhood Markets, Inc. and SoFi Technologies, Inc., which have also expressed interest in participating in the landmark listing. The SpaceX IPO is anticipated to be one of the largest in history. While Robinhood and SoFi have reportedly pitched for roles in the deal, sources familiar with the matter indicate that SpaceX is considering excluding them in favor of a more consolidated retail strategy. Morgan Stanley, acting as a lead underwriter, is expected to channel a substantial portion of the retail allocation through its ETrade platform, potentially limiting the availability of shares for other brokerage firms. Despite the current lean toward ETrade, discussions remain ongoing, and other platforms like Fidelity are also seeking opportunities to distribute shares. The final structure of the retail offering has not been finalized and could evolve as the company approaches its market debut later this year. Securing a primary role in the SpaceX listing would represent a major milestone for E*Trade. The brokerage has been engaged in an intense competition for market share against industry giants including The Charles Schwab Corporation and Interactive Brokers Group, Inc.. Since its $13 billion acquisition by Morgan Stanley in 2020, E*Trade has been a cornerstone of the bank's strategy to expand its reach into the retail market and diversify its revenue streams. SpaceX is reportedly considering an allocation of up to 30% of its IPO shares for retail investors, aiming to capitalize on the significant public interest surrounding founder Elon Musk. While a large portion of this set-aside is intended for high-net-worth clients and private wealth management segments, the remaining portion for self-directed retail traders remains the primary point of contention among the competing brokerages.