Morgan Stanley’s E*Trade is emerging as the front-runner to handle the sale of SpaceX shares to everyday American investors in the company’s highly anticipated IPO. This move might push popular platforms like Robinhood and SoFi aside, changing how retail investors get access to one of the biggest IPOs ever.
E*Trade in Pole Position for SpaceX Retail Share Sale
Talks are underway between SpaceX and Morgan Stanley’s E*Trade unit to lead the distribution of shares to smaller, self-directed investors in the rocket maker’s planned IPO later this year. Sources familiar with the confidential discussions say E*Trade will probably secure a major chunk of the retail allocation, potentially leaving competitors like Robinhood Markets and SoFi sidelined or with reduced roles.
SpaceX’s IPO could raise as much as $75 billion and value the company near $1.75 trillion, making it one of the largest public offerings in history. The size and scope have fueled intense competition among brokerages eager for a slice of the retail investor market.
Robinhood and SoFi, both known for their popularity among smaller investors and their involvement in recent high-profile IPOs such as Arm Holdings and Instacart, have pitched for participation but may be cut out entirely or given a limited role. The sources caution that no decisions are final, and plans could evolve as SpaceX moves closer to going public.
Retail Allocation Could Be Unusually Large
What makes this battle especially significant is SpaceX’s reported intention to reserve up to 30% of its IPO shares for retail investors. That’s roughly three times the typical retail allocation seen in major U.S. IPOs. Elon Musk appears to want everyday investors to take part broadly, which might change how big IPOs are sold and marketed.
Still, a sizable portion of this retail allotment might go to wealthy private banking clients, meaning the smaller, self-directed investor segment remains a coveted prize for brokerages. E*Trade’s expected lead role would allow Morgan Stanley to funnel much of this demand through its own platform, solidifying its footprint among retail clients.
Strategic Win for Morgan Stanley and E*Trade
Morgan Stanley acquired E*Trade in 2020 for about $13 billion, aiming to boost its retail brokerage presence. This IPO offers a chance to leverage that investment by keeping more of the retail share sales within Morgan Stanley’s ecosystem, rather than distributing them widely among rival platforms.
In the past, big IPOs have spread retail demand across several brokerage firms to widen access. But Morgan Stanley’s strategy could change that pattern, concentrating retail flows through E*Trade. The firm’s status as a lead underwriter on the deal gives it a structural advantage in this effort.
Other players like Fidelity are also vying for a role in distributing SpaceX shares, adding another layer of competition. Fidelity’s involvement would bring a more traditional mutual fund and brokerage channel into the mix for retail investors.
Implications for Retail Investors and the IPO Market
If SpaceX sticks with its retail-friendly plan, it could change how big IPOs involve smaller investors. More self-directed traders and retail platforms have been pushing for easier access to big deals.
But if Morgan Stanley leans heavily on E*Trade to handle retail sales, it could limit the diversity of platforms available to small investors. Platforms like Robinhood and SoFi have built reputations for making IPO participation easier for less wealthy investors, and their exclusion or marginalization could alter that landscape.
Investors want to know if SpaceX shares will be easy to get for everyday traders or mostly go to wealthier private banking clients.
SpaceX hasn't publicly commented on the IPO plans or distribution strategy. Morgan Stanley, E*Trade, Robinhood, SoFi, and Fidelity declined to comment on the ongoing discussions.
SpaceX’s IPO remains one of the most closely watched events of 2026. How the company distributes shares to retail investors—and who gets to sell them—could set new precedents for future blockbuster public offerings.
