Business

SpaceX lowballed its bankers on fees. Goldman Sachs has another way to win big

The real money comes after the opening bell.

Ritter recounts the scenario the only other time a U.S. IPO got done at a spread this small. In late 2010, the U.S. government—after bailing General Motors from bankruptcy following the great Financial Crisis—took the auto giant public. “Goldman was competing with W.R. Hambrecht & Co., a firm that proposed auctioning GM’s shares instead of using an underwriting. Its founder Bill Hambrecht told me he offered the Treasury a super-low fee of 0.75%.” As it turned out Goldman Sachs agreed to match that fee to win the deal.
Now, Goldman as leader on SpaceX is orchestrating a trophy offering at the same record-thin percentage that’s a good deal for Wall Street simply because the deal’s so immense. Though SpaceX will generate a never-before-seen fount of fees, they’ll still likely furnish a small portion of the most sumptuous total prize Wall Street’s ever seen. And Goldman’s looking to collect the lion’s share.
Let’s start with the reward that will be explicitly stated on the prospectus, and gets most of the media attention, that gross spread. SpaceX has already announced in its latest, amended S-1 that it’s selling 555.6 million shares at $135 in the underwriting, for $75 billion—and is aiming for a $1.75 trillion valuation, biggest on record. The banks are also getting an extra allocation called an “over-allotment” of 15% in case their investors want more once SpaceX starts trading. Since that additional demand is a virtual certainty, the full raise should come to 639 million shares and just over $86 billion. That’s over triple the $25 billion Alibaba amassed in the 2014 IPO that until now ranked as the largest ever mounted on a U.S. exchange. Hence, the firms distributing the shares will split approximately $646 million in fees. That’s more than twice the roughly $300 million for Alibaba, and dwarfs the less than $100 million Uber paid and the around $200 million cost to Meta.
The roster of underwriters ranges from such marquee names as Goldman Sachs and Morgan Stanley to boutique investment banks such as Allen & Co. and William Blair to giant foreign universal banks Societe Generale, Santander and Mizuho. All of these participants get shares to distribute. Ritter reckons that many of the smaller banks will get batches only for their retail clients. They’ll still do well. The fees get split according to the percentage of the shares each bank gets to distribute; if your allocation is 5%, you’d receive 5% of the roughly $646 million. Hence, membership in the SpaceX IPO club will bring a nice share of the fees even to the banks that distribute a few points of the total.
The King’s Ransom will flow from not from fees but “soft dollars,” and Goldman looks to be the big winner
Though the gross spread’s rich, the really big money goes to the player who determines which ultra-hungry funds and brokers get the shares. The banks will send a far bigger part of their portions to the retail side than in most IPOs, an estimated 30% versus the usual 5% or less. Among the recipients are Charles Schwab, Morgan Stanley’s E*Trade, and Robinhood. But while all the 23 firms do the distributing, only one bank decides to what clients the vast bulk of the offering will go. And that’s what’s known as the “lead left underwriter.” SpaceX displays Goldman Sachs in that position, at the top left on the front page of the IPO prospectus. Just after Goldman on the same top row come the four other “joint book-running managers,” Morgan Stanley, B ofA Securities, Citigroup, and J.P. Morgan.
Ritter explains that the joint book-runners will get more than the average percentage of shares to distribute since they dominate the institutional part of the offering, and hence they’ll receive an outsized part of the fees. But they’ll have little say on which hedge and mutual funds, insurers and endowments those shares go to. That’s mainly Goldman’s purview. “Goldman Sachs will allocate the vast majority of the shares on its own authority as lead-left underwriter,” he says.
The big question is how much the stock will jump on Day 1. For SpaceX, a good “pop,” though by no means assured, is likely. As Ritter points out, Wall Street makes a practice of underpricing IPOs. Result: Around three-quarters of the offerings end day one above the underwriting price, and the average increase is 19%. The second amended S-1 disclosed that SpaceX has reserved 5% of the shares to be purchased at the offer price of $135 by employees, friends and family of the executives, and people SpaceX does business with. “That suggests Elon Musk would want a ‘pop,’” says Ritter. “If employees immediately lose money in an IPO, they’re not happy campers.” By the way, that privileged group can sell their stock any time, including hours soon after the opening bell rings on the Nasdaq, since they’re exempted from the lock-up provisions that apply to pre-IPO shareholders including Musk and others in the C-suite.
In exchange for getting underpriced shares, and immediate risk-free gains for their portfolios, the hedge funds and other money managers return part of the bounty to the lead underwriter in what’s called “soft dollars.” That’s officially the amount that the “commissions” exceed the actual cost of executing the trades. “The soft dollar amount paid can be multiple the pennies spent on execution,” observes Ritter. Typically, he says, about 30% of the first day profits boomerang back to the bankers in soft dollars, most of the bounty going to the lead left underwriter.
Let’s say that SpaceX shares finish their first day $27 or 20% higher, at $162. In a single session, the owners anointed by the underwriters, and chiefly by Goldman, would book profits of $17.3 billion. That would set a record for money “left on the table.” (The previous record was the $8 billion from Alibaba’s 2014 offering.) If the nearly one-third of the first day bump that’s the norm flows back to the underwriters in soft dollars, the 20% pop in SpaceX could hand Wall Street a windfall of over $5 billion (30% of the $17.3 billion pop). “And the biggest beneficiary by far would be Goldman as the lead left underwriter that decided who got the shares,” says Ritter. Big as the fees are, even at that low-sounding percentage, the soft dollar fount is around eight-times larger. “I’m expecting two tremendous quarters in sales and trading for Goldman and maybe Morgan Stanley and others helped by SpaceX, plus the profits from the coming OpenAI and Anthropic IPOs,” says Ritter.
AI is disruptive and transformative. But the IPO process doesn’t change, and Wall Street wouldn’t want it any other way.

Business

Elon Musk becomes the world’s first trillionaire with SpaceX’s IPO

Elon Musk has become the first person to cross the trillionaire threshold, at least on paper, after SpaceX priced its blockbuster initial public offering at $135 a share and its stock soared in its stock market debut.
Before the IPO, Musk was worth an estimated $813 billion, a fortune more than twice as large as the planet’s second-richest person, Google co-founder Larry Page, who is worth an estimated $288 billion, according to Forbes.
SpaceX formally setting its stock price at $135 boosted Musk’s fortune to just over $1 trillion. The shares, which will trade under the ticker symbol SPCX, jumped after they began trading shortly before noon ET. At its intraday high of $168.75 on Friday, Musk’s net worth reached roughly $1.18 trillion, although future declines could push him back below the trillionaire mark.
While billionaire wealth alone may be hard enough to comprehend, a trillionaire represents a level of wealth that rivals the economic output of the world’s biggest nations. Only 19 countries have GDPs that surpass $1 trillion, ranging from the U.S. to the Netherlands, according to World Bank data.
Musk’s surging fortune represents a “new Gilded Age” of wealth inequality, Oxfam America senior director of economic justice Nabil Ahmed said in a statement.
“Elon Musk’s rise to trillionaire status marks a new pinnacle of oligarchy,” Ahmed said.
To be sure, plenty of other SpaceX employees and investors are likely to mint new fortunes with the IPO. About 4,400 SpaceX workers could become millionaires when the stock begins trading, according to the New York Times. But Musk is likely to be the biggest beneficiary, given his large stake in the business.
Trillionaire math
Musk owns 4.8 billion shares of SpaceX, or about 42% of the company, as well as 350 million stock options exercisable at $8.39 per share, according to the company’s IPO filing. At $135 a share, Musk’s stake is worth $648 billion. His options add another $44.3 billion to his net worth.
Because Forbes valued Musk’s pre-IPO stake in SpaceX at $500 billion, the IPO sale boosts the value of his SpaceX shares by an additional $192.3 billion, bringing his total net worth to $1.005 trillion.
SpaceX shares touched as high as $168.75 in Friday afternoon trading. At that price, Musk’s stake in SpaceX is worth an additional $366.1 billion, placing his total wealth at roughly $1.18 billion.
That wealth makes Musk richer than the bottom 46% of the world’s population, or a combined 3.8 billion people, Oxfam said.

Business

Company’s Stock Opens Up 11% in Biggest-Ever Public Offering

Elon Musk is officially the world’s first trillionaire after his SpaceX tech company debuted Friday at $150/share, 11% higher than the company’s IPO pricing.
SpaceX — rocket manufacturer, satellite internet service provider, AI firm and owner of X (aka Twitter) all rolled into one — had already officially set a record for the biggest IPO in history with its initial stock pricing. On Thursday it confirmed the pricing of its IPO of 555.6 million shares of its Class A common stock, at a public offering price of $135.00/share. That gave it a valuation of around $1.77 trillion and the company raised about $75 billion from the IPO.
Shares of the company, which is officially “Space Exploration Technologies Corp.,” began trading Friday at around 11:50 a.m. ET on the Nasdaq Global Select Market and Nasdaq Texas exchanges under the symbol “SPCX.” The stock shot up over $160/share, pushing its market cap over $2 trillion. As of 1 p.m. ET, shares had hit $174.00/share, up nearly 29% from the IPO price.
With the SpaceX IPO, Musk — already the world’s wealthiest individual — has captured trillionaire status. As of Thursday afternoon, Musk’s net worth stood at about $795 billion, accounting for his holdings in Tesla, SpaceX and other companies, according to Forbes. As of midday Friday, Musk’s net worth had popped to an estimated $1.1 trillion, per the New York Times.
Musk is founder, chairman, CEO and chief technical officer of SpaceX. Post-IPO, Musk’s voting control of SpaceX will be “north of 82%” but he is not permitted to sell shares in the company for one year, per CNBC.
Prior to SpaceX’s shares public debut, Musk in Texas helped “ring” Nasdaq’s opening bell Friday. “It is certainly hard to believe that a little company that started in a warehouse in El Segundo is now going public with the largest IPO ever,” Musk commented.
SpaceX’s debut in the public market comes ahead IPOs expected later this year for two AI heavyweights: Anthropic and OpenAI, both of which recently filed confidential paperwork with the SEC for initial public offerings of their own with dates for those IPOs yet to be announced.
The early surge for SpaceX’s IPO shows strong demand among investors to own a piece of the AI-fueled company. Still, some analysts have identified concerns with the tech conglomerate’s lofty valuation given its current financials.
In a June 8 report, research firm Morningstar put a fair-value estimate of $63/share on SpaceX (with a valuation in the neighborhood of $830 billion). Even that assumes favorable outcomes of two unproven technologies: a rapidly reusable Starship upper stage and commercially scalable and competitive orbital AI data centers. “We expect neither of these technological questions to be answered before 2028, even in the most optimistic scenario,” Morningstar analysts led by Nicholas Owens wrote.
Meanwhile, whereas SpaceX claimed Starlink’s global addressable market was a whopping $1.6 trillion, Morningstar estimates it at less than 10% of that: $129 billion globally. The analysts project 7.5x revenue growth for Starlink to $85 billion by 2035, supported by “niche broadband, enterprise use cases, and carrier partnerships.”
SpaceX’s IPO valuation was substantially higher than previous high-profile tech IPOs — roughly 94 times revenue, the Morningstar analysts pointed out (compared with, for example, Meta at 22x and Amazon at 18x). The IPO valuation implied that the company’s 2035 earnings before interest and taxes would have to grow 75-fold from 2025 levels.
In 2025, the company’s xAI segment — which includes X — posted a $6.36 billion operating loss (vs. a $1.56 billion loss a year earlier) on $3.2 billion in revenue (up 22%). For the first three months of 2026, capital expenditures for the AI business came in at $7.7 billion. That represents a significant acceleration from $12.7 billion in capex for full-year 2025.

Business

Lawsuit: ChatGPT validated suicidal woman’s distrust of crisis lines

Last year, a 24-year-old Canadian woman was in a mental health crisis and turned to ChatGPT for help. Hours later, that woman, Alice Carrier, took her own life.
According to a new lawsuit filed Thursday in San Francisco Superior Court and brought by Carrier’s surviving family, her ChatGPT session “encouraged Alice to kill herself.”
This lawsuit, like numerous other similar cases that have come before it, alleges a design defect with ChatGPT itself and blames OpenAI for knowingly deploying a dangerous product.
However, this case has a slight twist: At one point, the chatbot did encourage Carrier to seek professional mental help. But when she rebuffed that advice—saying that “all crisis lines do is call the cops on you or hang up on you”—the chatbot “immediately abandoned” any attempt to steer her toward such care, the lawsuit says.
“This is because GPT-4o was programmed to prioritize Alice’s preferences and engagement over her safety and wellbeing. GPT-4o mirrored Alice’s own language and became critical of the crisis lines, too, stating that calling a crisis line can ‘feel downright dangerous,’” the lawsuit alleges.
Tiffany Brown, one of the attorneys at the Tech Justice Law Project representing the Carrier family, told Ars that the chatbot in this instance, when it immediately agreed with Carrier’s dismissal of professional help, was extremely troubling.
“That was one of the most egregious things that we saw in her chat,” she said. “Even when we saw things about getting support, the sycophancy kicked in.”
OpenAI has previously said it has “deep responsibility to help those who need it most.” The company did not immediately respond to Ars’ request for comment on the new case.
“Our goal is for our tools to be as helpful as possible to people—and as a part of this, we’re continuing to improve how our models recognize and respond to signs of mental and emotional distress and connect people with care, guided by expert input,” the company wrote in August 2025, less than two months after Carrier’s death.
Earlier this year, OpenAI said the ChatGPT-4o model specifically would be retired (after already having ended it once before, then bringing it back).
Brown told Ars that she’s not totally convinced that the problem of potentially lethal sycophancy has been solved.
“I think we believe that the company has taken steps in the right direction,” she said.
“We are distrustful of how safety mechanisms are being implemented and how safety teams are being implemented and heard,” Brown said. “We have heard of course that OpenAI has done a lot of things and put out a lot of blog posts and made statements involving rolling things back and putting in safeguards. But ultimately it should have been done sooner. These products generally have been rushed to market way too soon.”
If someone you know feels suicidal or is in distress, please call the Suicide Prevention Lifeline at 1-800-273-TALK (8255), which will put you in touch with a local crisis center.

Business

Meta outage affecting Facebook, Instagram and Messenger, according to user reports

Users in several countries reported problems accessing Meta-owned platforms Friday morning, including Facebook, Instagram and Messenger, according to posts on social media and third-party outage trackers.
The reports began with users describing login failures, automatic logouts, error messages and pages that would not fully load. Some users said they were unable to access Facebook, Instagram or Messenger through mobile apps and web browsers.
TOP STORIES: Heat Advisory issued for Grand Strand, Pee Dee areas Friday 11 a.m. to 8 p.m.
According to outage-tracking site IsDown, user reports of problems with Meta services had climbed by 9:42 a.m., with the site listing Meta’s status as “users are reporting an outage.”
Meta had not publicly confirmed a widespread outage as of that time, and third-party outage trackers rely on user-submitted reports that may not reflect the full scope or cause of a service disruption.
Reports included users in the United States, the Philippines, the United Kingdom, Canada and Australia. Several users reported being logged out of their accounts and receiving error messages when trying to log back in.
Meta owns Facebook, Instagram, Messenger, WhatsApp and Threads. It was not immediately clear whether all Meta services were affected equally.

Business

SpaceX IPO: Everything you need to know

SpaceX has captured the attention of media, investors, and the public for years now — interest propelled by the company’s reusable rocket launches, the rise of its Starlink satellite network, and of course, for its founder and CEO Elon Musk.
But in its 24-year history, nothing quite compares to this initial public offering. Everyone seems to be interested, and perhaps it’s because of the sheer size of this IPO. The company priced its 555.6 million shares at $135 each to raise $75 billion, making it the largest IPO in history. At this price, the deal also looks set to make Musk the world’s first trillionaire.
TechCrunch has followed SpaceX’s start, struggles, and successes from the early days. And we’re here for what happens next too. This article will be continually updated with all of the latest SpaceX IPO news.
How to track the SpaceX IPO
With an offering this large, there is a lot of financial machinery operating behind the scenes — so the first question is just when the stock makes it to the market to start trading. SpaceX is debuting on Nasdaq and you can see the official Nasdaq listing here, which will have the price of record as soon as there is one. Nasdaq also has video of the SpaceX crew ringing the bell, if that’s your thing.
But the price is just part of the picture. For the most up-to-the-minute information, your best bet is still financial press outlets like Bloomberg and CNBC, both of which have liveblogs running and will have close coverage of any hiccups that happen in getting the stock to market.
By the numbers
Here we look at some of the bigger numbers, the consequential figures, and the eyewatering amounts that make up the company’s S-1 form.
For instance, SpaceX lost $4.9 billion on revenues of over $18 billion in 2025. That’s only a fraction of the more than $37 billion lost since SpaceX’s inception.
As CEO, Elon Musk holds about 85.1% of the company’s voting power. You can read more about that in the next section “Who wins and who doesn’t” — and we’ll continue to drop interesting numbers in here.
Here is another figure that caught our attention… 4,400. That’s the number of SpaceX employees who could become millionaires, according to the NYT.
Elon Musk can’t hear you over the sound of his $1.75 trillion IPO: The Equity podcast weighs in on the IPO.
Who wins and who doesn’t
SpaceX is the world’s largest IPO in history and means a big payday for some investors, employees, and of course, Elon Musk.
How Elon Musk will increase his power through the SpaceX IPO: Musk, who will have more than 50% of the voting power, will have a monarchical grip over the publicly traded version of SpaceX — control that goes far beyond what other tech founders enjoy.
Who will benefit most from SpaceX IPO? Mostly Elon — and a few from his inner circle: Elon Musk has the largest stake in SpaceX by billions of shares, but others also stand to win. Here’s the rundown of who owns what.
SpaceX SPV investors won’t know their true holdings until post-IPO lock-ups lift: After SpaceX makes its public debut, lower-tier SPV investors face hidden fees, lengthy payout delays, and the risk of outright fraud.
What’s in the S-1
The S-1 registration document gave the world an unprecedented look inside SpaceX, including its financials and its various businesses. The S-1 continued to be amended as the IPO date approached, and we were on it. Here is what we found.
The SpaceX IPO filing is filled with AI bets, Starship dreams, and Elon Musk at the center: The contents of the SpaceX IPO details a business dominated by its Starlink satellite internet offering, more than $37 billion in losses, and future business prospects through its xAI division.
Starship’s path to reusability looks murky after SpaceX’s S-1: SpaceX’s IPO and Starship rocket test flight delivered two big data points that offer a realistic vision for the coming years — and one that may disappoint both the company’s boosters and its critics.
SpaceX warns investors of future dilution, adding fuel to Tesla merger rumors: The company added new language to its S-1, a warning to prospective investors that a major dilution could be in the cards after it goes public.
Pre-IPO deals and events
Leading up to the IPO, SpaceX locked in a string of deals, mostly selling off compute to improve its balance sheet.
Anthropic will pay xAI $1.25B per month for compute: Initial coverage of the Anthropic deal on May 20.
How long is Anthropic’s lease with SpaceX? Opinions vary: Elon Musk keeps downplaying the duration of SpaceX’s contract with Anthropic.