SpaceX in talks to favor E*Trade over Robinhood and SoFi for retail IPO shares

AI Summary

Summary

The post reports that SpaceX is favoring Morgan Stanley's E*Trade over Robinhood (HOOD) and SoFi (SOFI) for distributing retail shares in its upcoming IPO.
The author's implied thesis is that this exclusion from a historic IPO is a negative development for HOOD and SOFI, potentially impacting their competitive standing and stock prices.
Quality assessment: Speculation. The post is a summary of a Reuters report; it presents news but offers no original financial analysis or data on the potential impact.

Score 137

Comments 73

Upvote % 89%

▶ Full Post Text

Source: [https://finance.yahoo.com/markets/stocks/articles/robinhood-reportedly-cut-blockbuster-spacex-200711229.html](https://finance.yahoo.com/markets/stocks/articles/robinhood-reportedly-cut-blockbuster-spacex-200711229.html)

As per the latest Reuters report, Elon Musk's rocket-making giant SpaceX is reportedly choosing Morgan Stanley's E\*Trade to go public later this year.

But this means two of Wall Street’s biggest brokerages, Robinhood Markets (Nasdaq: HOOD) and SoFi Technologies (Nasdaq: SOFI), will miss out on the biggest IPO of history, according to two people familiar with the matter.

SpaceX gears up for IPO

SpaceX is one of the world's top space technology companies. The rocket maker has held Bitcoin (BTC) since 2021 and currently holds 8,285 coins on its balance sheet.

The company is expected to launch its initial public offering (IPO) this year, and as per the latest Reuters report, E\*Trade could secure the majority of retail allocation for the IPO.

Morgan Stanley is a lead underwriter on the deal and is expected to route a significant ​portion of shares set aside for small U.S. retail investors through the brokerage platform E\*Trade, which it acquired in 2020, the report said.

Fidelity Investments is also in the race to distribute some of the SpaceX shares, the report added.

SpaceX is considering setting aside up to 30% of its shares for retail investors, and a significant portion of that allocation is expected to go to private wealth and high-net-worth clients.

Robinhood, SoFi reportedly out of race

Robinhood is a Menlo Park, California-based e-trading platform that is known for its stock, cryptocurrency, and tokenized stock offerings. Founded by Stanford graduates Vladimir Tenev and Baiju Bhatt in 2013, the company has emerged as a popular broker.

Founded in 2011, SoFi Technologies, Inc. (Nasdaq: SOFI) is an American fintech company that became the first nationally chartered bank in the U.S. to launch cryptocurrency trading for retail customers in November last year. Its brokerage platform is popular among investors.

Both companies are reportedly out of the SpaceX IPO race as per the Reuters report.

The HOOD stock was trading 2% lower at $64.88 at press time, and the SOFI stock was trading 1% lower at $150.07.

Trade Ideas

u/callsonreddit Reddit r/wallstreetbets

Reuters reports Robinhood (HOOD) will miss out on distributing shares for the SpaceX IPO, a major competitive event. This is a reputational and potential revenue blow, suggesting HOOD is not a priority for major underwriters, which could negatively impact user growth/engagement sentiment. Negative news catalyst providing a short-term reason to be bearish on HOOD stock. The IPO is not yet official; the financial impact on HOOD is likely minimal; stock may already be pricing this in.

u/callsonreddit Reddit r/wallstreetbets

SoFi (SOFI) is also reportedly excluded from distributing SpaceX IPO retail shares. Similar to HOOD, this exclusion harms SOFI's brand perception as a growing, full-service fintech/brokerage platform. Negative headline news that could pressure the stock in the near term alongside HOOD. Minimal direct financial impact; SOFI's business is diversified (lending, banking); news may be irrelevant to core thesis.

Summary

▶ Full Post Text

Trade Ideas

More from Reddit — r/wallstreetbets