SpaceX Leaves Some Banks Peeved at Junior Roles in IPO Lineup
(Bloomberg) — Several small banks marketing shares in SpaceX’s landmark listing are working for relatively small wages and are relegated to roles that don’t come with any credit, according to people familiar with the matter.
Some of the banks listed at the bottom of the SpaceX filing have been informed in recent weeks that they have been appointed as co-managers, the lowest brokerage level in the IPO, said the people, who asked not to be named because the matter is private. Sources said Societe Generale and Mizuho Financial Group Inc. were among the informed banks.
This is another example of SpaceX using its leverage over banks ahead of its $75 billion IPO. It was already negotiating to pay investment banks pro rata IPO fees of less than 0.75 percent.
Small roles as co-managers don’t usually come with the same bragging rights for a blockbuster slate like this. Sources said some of these banks assumed they would take on the passive bookmaker role, which comes with more prestige.
The co-managers were involved in allocating the shares to retail and institutional investors in various countries around the world. They added that the bankers involved were disappointed but did not want to miss out on the high-profile listing or sacrifice their future relationship with SpaceX.
Some banks have a more prominent role in share sales in their local jurisdictions. Societe Generale is acting as joint book-running manager for retail shares offered for sale in Europe, according to a filing. Mizuho Securities Co., the Japanese bank’s brokerage arm, is the executive manager of the share sale in Japan.
A representative for SpaceX did not immediately respond to a request for comment. Representatives for Societe Generale and Mizuho declined to comment.
Leading salient banks are already positioned to capture a larger share of the fee pool than the other 21 brokers, leaving little cash available to banks that aren’t at the top of applications.
–With help from Bailey Lipschultz.
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