Key Points

SpaceX is set to be the biggest IPO in history, bringing in $75 billion.
Wall Street bankers like Jamie Dimon are making a big push to sell the stock, including to retail investors.
SpaceX is bending a number of rules as it goes public.

The SpaceX IPO is shaping up to be one of the biggest events on Wall Street.

Elon Musk's space exploration, satellite internet, and AI company is aiming to raise $75 billion in the offering at a valuation of $1.75 trillion, making it one of the 10 most valuable companies in the U.S., ahead of even Tesla.

The IPO is also shaping to be a bonanza for Wall Street as 23 banks are reportedly participating in the offering led by Goldman Sachs and Morgan Stanley that is expected to yield underwriting fees of around $500 million.

Now, JPMorgan Chase CEO Jamie Dimon is apparently joining the roadshow as Dimon will speak at a special event on Thursday night, which will include SpaceX's COO Gwynne Shotwell and CFO Bret Johnson, to pitch the offering to the bank's high-net-worth clients and retail investors. Dimon has been pushing to leverage the bank's branch network of roughly 5,000 locations to support the offering. Bank of America is hosting a similar event with Shotwell and Johnson to pitch the stock to its clients.

Still, it is unusual for someone of Dimon's stature to peddle an IPO itself, and it shows both the gravity around such a massive offering and the importance to Wall Street for the event to be a success, especially with market valuations looking frothy and concerns about an AI bubble remaining as offerings from Anthropic and OpenAI wait in the wings.

Why Dimon is getting his hands dirty

The SpaceX IPO differs from the usual routine in a number of ways. First, Elon Musk and his management team have already set the price of the IPO at $135 a share, more than a week ahead of the expected debut. Typically, Wall Street banks carry out a price-discovery process that leads to a price range, and then a final listing price is not decided until the day before it goes public.

The $135 share price, as well as the size of the offering, puts more pressure on Wall Street to find buyers for the IPO.

The scope of the offering also goes well beyond the typical pool of institutional IPO investors, so Wall Street bankers are trying to find new ones. No other IPO in history has raised more than $30 billion.

What it means for investors

SpaceX could have an exciting future, but if the company's current financials, which value the business at 100 times sales, were not enough of a red flag, the unconventional IPO process should sound a warning as well.

SpaceX has not had a direct funding round since January 2023, when it was worth $137 billion. Since then, tender offers, allowing insiders to sell some shares, and the implied valuation of $1.25 trillion in its merger with xAI in February have pushed the valuation up.

Too many rules are being broken for the SpaceX IPO, however. Buyers usually get a say in pricing, but that is not happening. Indexes and index funds are adding SpaceX stock at Musk's demand, even though SpaceX does not meet multiple requirements of the S&P 500, including generally accepted accounting principles (GAAP) profit.

Jamie Dimon seems to be compelled by more than a payday here. The size of the SpaceX IPO makes it a pivotal moment for Wall Street, and with offerings from Anthropic and OpenAI due up later this year, it is key that SpaceX find sufficient demand.

However, overselling SpaceX could be a mistake.

The market will render a verdict soon enough, and investors may want to remember that some of the biggest IPOs in the past like Meta Platforms (then Facebook) and Uber were down sharply shortly after their debuts.

If Jamie Dimon and other top bankers are giving SpaceX the hard sell, it may be because the opportunity is not good enough to sell itself.