E*Trade in Talks to Lead SpaceX IPO Share Sale to Small US Investors

• SpaceX plans to allocate up to 30% of IPO shares to retail investors, significantly higher than the typical 5-10% retail allocation in major offerings
• E*Trade would route retail orders through Morgan Stanley, a lead underwriter on the deal, while Robinhood and SoFi risk being cut out despite their roles in recent major IPOs like Arm's $55 billion listing
• A leading role would mark a major win for E*Trade in its market share battle with competitors, following Morgan Stanley's $13 billion acquisition of the platform in 2020

Summary

Key Development:

Morgan Stanley's E*Trade is in advanced talks to lead retail sales for SpaceX's highly anticipated IPO later in 2026, potentially edging out competitors Robinhood Markets and SoFi. Morgan Stanley serves as a lead underwriter on the deal.

Main Players:

• **E*Trade (Morgan Stanley)**: Likely to secure the majority of retail allocation
• Fidelity: Also in discussions for retail distribution
• Robinhood and SoFi: Still competing for roles but may be excluded entirely despite being fixtures in major IPOs like Saudi Aramco's $55 billion listing in 2023

Key Figures:

• SpaceX is considering allocating up to 30% of its IPO to individual investors, an unusually high percentage
• Morgan Stanley acquired E*Trade for $13 billion in 2020
• Retail investors typically represent only 5-10% of IPO orders

Market Implications:

A leading role would mark a major victory for E*Trade in the competitive retail brokerage market. Morgan Stanley's strategy reflects its broader push to tap retail markets and reduce reliance on wealth management and investment banking. The approach follows Morgan Stanley's playbook of capturing larger retail shares through its own channels rather than partnering with standalone platforms.

The SpaceX IPO is expected to be one of the year's most significant offerings. A substantial portion of the retail allocation will likely go to private wealth and high-net-worth clients served by underwriting banks, with smaller self-directed retail orders being the primary battleground for E*Trade, Robinhood, and SoFi.

Important Note: Plans remain fluid and could change as SpaceX approaches its IPO in coming months.