Musk has completely shaken up Wall Street.
According to the latest news, billionaire Bill Ackman has proposed listing SpaceX through his newly created Special Purpose Acquisition Rights Vehicle (SPARC). This innovative structure would bypass the traditional IPO process and give Tesla a competitive advantage. Shareholders' preferred investment rights.
Another source revealed that Morgan Stanley Morgan Stanley is emerging as a leading contender for a key role in SpaceX's IPO due to its close ties to Elon Musk, which gives it an advantage in Musk's decision-making process. Currently, Morgan Stanley and Goldman Sachs are among the companies involved. and JPMorgan Chase A few investment banks, including [names of banks], are vying for the relevant underwriting roles.
SpaceX is reportedly preparing for a potential IPO with a valuation that could reach $1.5 trillion, potentially making it the largest IPO in history.
New plan revealed
On December 20 local time, Ackerman posted on social media that SPARC will allocate special purpose acquisition rights (SPARs) to Tesla shareholders, enabling them to directly invest in SpaceX or monetize their rights.
According to Ackerman's proposal, approximately 0.5 SPARs will be issued for each Tesla share, totaling 1.723 billion SPARs (including the 61.1 million already outstanding). Each SPAR is redeemable for two SpaceX shares, implying a total of 3.446 billion shares. This structure eliminates underwriting fees, founder stock, and shareholder warrants, while maintaining a 100% common stock capital structure.
This proposal echoes previous statements by SpaceX CEO Elon Musk—who previously worked at Tesla. At the November shareholders' meeting, it was stated that Tesla supporters hoped to have the opportunity to invest in SpaceX.
When promoting the company to Musk on social media, Ackman wrote: "This will give loyal Tesla shareholders the opportunity to invest in SpaceX (or exchange their SPAR shares for cash) while completely democratizing the IPO process."
Ackman also offered another lure: holders of SPAR options would receive Pershing Square SPARC Holdings II SPARs, which could potentially be used to power Musk's artificial intelligence in the future. The company xAI went public.
The plan maintains a 100% common stock capital structure, avoiding the complex equity arrangements common in traditional IPOs. Ackman stated that he plans to complete due diligence and finalize the agreement within 45 days, with the goal of announcing the deal in mid-February.
This plan offers significant flexibility in terms of funding scale. If the SPAR option exercise price is set at $11.03 per share, SpaceX will raise approximately $42 billion, with about $38 billion coming from SPAR option exercise and another $4 billion from the Pershing Square Fund.
If the exercise price rises to $42, SpaceX's fundraising will surge to approximately $148.7 billion. This fundraising size is in line with market expectations for SpaceX.
According to reports, SpaceX is preparing for a potential IPO with a valuation that could reach $1.5 trillion, potentially making it the largest IPO in history.
Sources familiar with the matter say that although Musk has long preferred to keep SpaceX private, the company's valuation has continued to rise, along with the development of Starlink satellite internet. The success of the business has led to a shift in its strategic thinking.
Ackerman concluded, "The world's most innovative and efficient rocket company deserves to go public in the most innovative, efficient, and fairest way for Tesla shareholders. Heading to Mars, exploring farther and farther!"
Competition among Wall Street giants
According to Reuters, citing sources, Morgan Stanley is expected to be the lead underwriter for SpaceX's IPO. The bank has a close relationship with SpaceX CEO Elon Musk, which gives it an advantage.
Sources familiar with the matter said the IPO selection process is still underway, with a few investment banks, including Morgan Stanley, Goldman Sachs and JPMorgan Chase , vying for the underwriting roles.
However, sources say that although Morgan Stanley is the frontrunner, it is not yet certain that it will ultimately be awarded the lead underwriter position.
Musk's relationship with Morgan Stanley reportedly dates back at least 15 years, making the bank widely considered the strongest contender to lead the underwriting syndicate. However, SpaceX has not yet formally selected any bank. The related discussions are still evolving.
The sources requested anonymity because the discussion was confidential. Morgan Stanley, Goldman Sachs , and JPMorgan Chase declined to comment, and SpaceX did not respond to requests for comment.
SpaceX is one of the world's largest privately held companies, and its potential IPO will be extremely complex. Sources familiar with the matter added that while Musk has not yet selected a lead underwriter , a decision could be made before the end of the year, with the full underwriting syndicate likely to be finalized subsequently.
Furthermore, although preparations are underway, the IPO still depends on market conditions, and SpaceX may choose to postpone or even abandon its listing plans altogether.
Morgan Stanley has reportedly advised Musk for many years and was involved in Tesla's 2010 IPO, in which the underwriting syndicate also included Goldman Sachs, JPMorgan Chase, and Deutsche Bank, who served as lead underwriters. Subsequently, Morgan Stanley also served as an advisor and led the financing in Musk's 2022 acquisition of Twitter (now known as X).
Musk also recently appointed Morgan Stanley banker Anthony Armstrong. Anthony Armstrong serves as the CFO of his AI startup, xAI.
Dongcai Illustrated Guide: Some Useful Tips
(Source: Securities Times) (Times.com)
