Wall Street’s SpaceX and Merger Fee Boom Comes With a Catch

Wall Street banks split roughly $500 million in fees for taking SpaceX public at $135 a share, and weeks later the same underwriters started telling clients the stock is worth far more than they charged Elon Musk’s company to sell it. That single payday sits inside the strongest run for investment banking fees in years: global investment banking revenue hit $61.4 billion in the first half of 2026, up 24% from a year earlier, according to Dealogic data reported by Reuters.

SpaceX’s initial public offering, the largest in history, priced at one of the thinnest fee rates ever charged on a mega-listing. Now, once the mandatory quiet period for underwriters expired, the banks that took SpaceX public have initiated coverage with price targets averaging far above the IPO price, a sequence that shows exactly how a modern Wall Street fee machine compounds.

How SpaceX Turned a Discount Into a Record Fee Pool

Elon Musk’s SpaceX negotiated to pay less than 0.75% in underwriting fees for its initial public offering, according to Bloomberg, a rate that would ordinarily squeeze bank profits on a deal this size. SpaceX priced 555.6 million shares at $135 each, raising $75 billion and valuing the rocket and satellite company near $1.77 trillion. That made it the largest initial public offering on record, according to CBS News, eclipsing prior benchmarks including Saudi Aramco’s 2019 sale. Banks were still likely to rake in about $500 million from the record-setting debut, Bloomberg reported before pricing, and Reuters later confirmed banks on the SpaceX IPO raked in around $500 million in fees.

The rate undercut the roughly 1.2% Alibaba’s underwriters earned when that company went public in 2014, a deal that until SpaceX’s listing held the record for the largest offering mounted on a U.S. exchange, according to Fortune. Alibaba’s underwriters split about $300 million from that sale. SpaceX’s bankers more than doubled that dollar total despite charging a fraction of the percentage, because scale does the work a fee rate cannot: even a wafer-thin spread produces a historic sum when the underlying raise runs into the tens of billions.

Including the roughly $11 billion over-allotment option underwriters can exercise if investor demand holds, the total raise climbed toward $86 billion. Jay Ritter, the University of Florida finance professor known as “Mr. IPO” for his decades running the school’s the University of Florida professor’s IPO research database, told CNBC just before pricing that SpaceX was “almost certainly going to blow them away,” referring to the pop between the IPO price and the opening trade.

The Underwriters Who Got the Biggest Seats

Goldman Sachs held the lead-left position on the SpaceX prospectus, the top spot that put it in charge of allocating the vast bulk of the offering, according to Fortune. Right behind Goldman on the cover, in alphabetical order, sat the other four joint book-running managers. All told, 23 investment banks worked the SpaceX syndicate, from marquee names to boutique shops.

• Goldman Sachs: lead-left underwriter, the top position on the cover of the prospectus
• Morgan Stanley: joint book-running manager and stabilization agent overseeing early trading
• BofA Securities, Citigroup and JPMorgan: the remaining joint book-running managers
• Allen & Co., William Blair and foreign universal banks including Societe Generale, Santander and Mizuho: distributed shares to retail and institutional clients

Morgan Stanley took a special role as stabilization agent, overseeing the stock’s early trading under securities rules meant to keep the price steady, and it ran SpaceX’s directed share program for retail investors. Banks funneled far more of their allocation than usual toward individual buyers, an estimated 30% of shares, compared with 5% or less in most offerings, according to Fortune. Distribution ran through brokerages including Charles Schwab, Morgan Stanley’s E*Trade platform and Robinhood. Fees were split according to each bank’s share of the underwriting, so even firms distributing a handful of percentage points of the deal still walked away with a meaningful cut.

The Same Banks Now Say the Stock Is Worth More

Wall Street’s biggest banks priced SpaceX shares at $135 each during the IPO. Just weeks later, once the mandatory quiet period for underwriters expired, sell-side analysts from many of those same banks told clients the shares should be worth $236 each on average, according to Bloomberg. More than a dozen brokers, including Morgan Stanley, JPMorgan Chase and Goldman Sachs, started coverage on July 7, 2026 with buy-equivalent ratings, Bloomberg reported, the same day SpaceX joined the Nasdaq-100 index.

Individual targets varied widely across the syndicate. Morgan Stanley set the high mark with an Overweight rating, while Goldman Sachs opened coverage with a Buy rating of its own. RBC Capital Markets and Mizuho joined with Outperform ratings, framing SpaceX as an infrastructure platform spanning launch, connectivity and artificial intelligence compute.

Not every voice on the Street agreed. Nicholas Owens of Morningstar issued a sell rating with a price target of just $62, calling the shares overvalued even after the run of buy ratings from the underwriting banks. His target sat close to an estimate that had circulated before the IPO: analysts not affiliated with the underwriting banks had valued SpaceX at roughly $780 billion, or around $63 a share on an equivalent basis. The gap between that independent estimate and the underwriters’ post-IPO targets is stark: $63 versus a range running from $200 to $300.

Retail Investors and the Trillionaire Question

The IPO’s outsized retail tranche made SpaceX one of the most accessible mega-deals in Wall Street history, and the listing made Musk, at least on paper, the world’s first trillionaire. Not everyone welcomed the moment. Senator Elizabeth Warren formally asked the SEC to delay the offering, and pressed the agency and stock indexes over whether SpaceX, OpenAI and Anthropic had pushed them to change listing rules, according to CNBC.

The world will get its first trillionaire while Americans across the country are scraping together every dollar to save for retirement. Rather than changing the rules to rush SpaceX into Americans’ retirement portfolios, index providers should ensure they do their part to protect American families’ investments.

Warren wrote in a statement covered by CNBC around the time of the June 12, 2026 debut.

Retail investors who bought at the IPO price or shortly after now hold a stock far removed from those bullish targets. As of July 13, 2026, SpaceX shares traded at $145.30, with a 52-week range spanning from the $135 IPO price to a high of $225.64, according to Investing.com market data. Ritter’s own research offers a caution for anyone chasing the rally: across more than 9,200 IPOs since 1980, the average three-year, market-adjusted return for investors who bought at a company’s first-day closing price came to -21%, he told CBS News.

Gwynne Shotwell, SpaceX’s president and chief operating officer, gave interviews from the Nasdaq MarketSite on the morning of the debut, CNBC reported. Brad Gerstner, an early investor through Altimeter who also took part in the offering, told the network that in a few years SpaceX would be the largest AI hyperscaler in the United States.

Goldman’s Record Half for Merger Advice

SpaceX’s IPO was only one line item in a broader run for Wall Street’s advisory business. Goldman Sachs has advised on more than $1 trillion worth of announced mergers and acquisitions so far in 2026, a record pace for any investment bank within a half-year period, the firm said in a LinkedIn post citing Dealogic data on June 16. That figure represented a 71% increase from the comparable period in 2025, according to Dealogic data. Global M&A activity reached $2.73 trillion so far this year, up 38% year over year, with Goldman advising on deals representing more than 40% of that total announced transaction value. JPMorgan ranked second, advising on $687.5 billion of transactions, while Morgan Stanley followed with $575.9 billion.

The turn had been building since the start of the year. Goldman Sachs chief executive David Solomon told analysts in January that dealmaking conditions had shifted decisively.

The world is set up at the moment to be incredibly constructive in 2026 for M&A and capital markets.

Solomon said on a call with analysts, according to Reuters. Morgan Stanley Chief Financial Officer Sharon Yeshaya echoed that view, telling Reuters the bank was seeing an accelerating pipeline in M&A and IPOs and expected more activity in the healthcare and industrial sectors.

The Fee Numbers Behind the Boom

Beyond SpaceX and Goldman’s advisory tally, broader industry data show just how strong the first half of 2026 was for bank fees. Global banking fees for the first six months of the year came to $79.9 billion, up 17% from the same period in 2025, according to LSEG data. All of the major categories, equity issuance, debt underwriting and merger advisory, rose over the same stretch, and second-quarter fees outpaced the first quarter by 6%, the data provider said.

Individual banks’ first-quarter filings show where some of that growth landed. Goldman Sachs’ investment banking fees came to $2.84 billion in the first quarter of 2026, 48% higher than a year earlier, primarily reflecting a significant increase in completed mergers and acquisitions volumes, according to Goldman Sachs’ first-quarter filing detailing its banking fee jump. JPMorgan Chase’s investment banking fees rose 28% to $2.88 billion over the same quarter, while Citigroup’s investment banking revenue climbed to $1,238 million, up from $1,036 million a year earlier, according to Citigroup’s quarterly filing on its investment banking revenue.

Two Earnings Days Will Test the Fee Story

The next real test of this fee boom lands this week. Five of the six largest U.S. lenders, JPMorgan Chase, Bank of America, Citigroup, Wells Fargo and Goldman Sachs, report second-quarter results on July 14, with Morgan Stanley following on July 15, according to Reuters.

Angad Chhatwal, head of fixed income, currencies and commodities at Coalition Greenwich, said market revenue is expected to be up at least 15% year over year for the largest global banks. Morningstar analyst Sean Dunlop said Goldman Sachs and Morgan Stanley, given their big roles in the nearly $86 billion SpaceX IPO, will likely outperform in equities, though he cautioned that second-quarter trading revenue, while still strong, may slow compared with the first quarter, when unusually high volatility tied to the initial Iran war shock and related inflation and interest-rate repricing drove elevated activity. The $500 million SpaceX fee pool and this year’s merger-advisory windfall are already booked, regardless of where SPCX trades next.

Frequently Asked Questions

How much did Wall Street banks earn from SpaceX’s IPO?

Banks split roughly $500 million in underwriting fees for taking SpaceX public, a figure confirmed separately by Bloomberg and Reuters even though SpaceX negotiated a fee rate below the industry norm for offerings of that size.

Why did SpaceX pay such a low fee rate?

SpaceX negotiated to pay less than 0.75% in underwriting fees, according to Bloomberg, a rate banks accepted because the sheer size of the $75 billion raise still produced one of the largest dollar paydays ever recorded on a single stock listing.

What price targets did Wall Street set for SpaceX stock after the IPO?

Once the quiet period ended on July 7, 2026, brokers including Morgan Stanley, Goldman Sachs, RBC Capital Markets and Mizuho issued targets ranging from $200 to $300 a share, averaging $236 across more than a dozen firms, while Morningstar’s Nicholas Owens set a $62 sell target.

When do Wall Street banks report the earnings tied to this fee boom?

JPMorgan Chase, Bank of America, Citigroup, Wells Fargo and Goldman Sachs report second-quarter results on July 14, 2026, with Morgan Stanley following on July 15, according to Reuters.

Disclaimer: This article is for informational purposes only and does not constitute investment advice. Stock prices, analyst price targets and fee figures cited are accurate as of publication and are subject to change; consult a licensed financial advisor before making investment decisions.