Only a "cabbage price" underwriting fee for a fundraising of 75 billion? SpaceX is rumored to be seeking to reduce IPO underwriting fees, 23 securities firms still expected to receive 5 billion in commissions.

According to reports, SpaceX, owned by Elon Musk, is negotiating with Wall Street underwriting investment banks to reduce its initial public offering (IPO) underwriting fees - but even so, the relevant investment banks are expected to collectively earn about $500 million in this record-breaking IPO. Sources familiar with the matter said that the aerospace and artificial intelligence (AI) giant plans to complete its IPO this month and raise $75 billion, with the negotiation goal to keep underwriting fees at 0.75% or less. Even at this low rate, this deal will still rank among the top IPO commission payments in Wall Street history. Lead underwriters - Goldman Sachs Group, Inc. and Morgan Stanley - will receive a larger share of the commission pool than the other 21 participating brokerages. Sources said that this figure represents the basic underwriting fee SpaceX will pay, not including other discretionary incentive rewards. Representatives from SpaceX, Goldman Sachs Group, Inc., and Morgan Stanley all declined to comment. It is understood that investment banks typically charge fees of 4% to 7% for IPOs, with average fundraising amounts of less than $1 billion. For large-scale IPOs where investment banks are raising tens of billions of dollars from investors, the percentage fee will decrease significantly. However, it is still usually higher than 1%. The meager fee provided by investment banks to Musk may have a potential impact on a series of high-profile IPOs scheduled to take place this year. With OpenAI and Anthropic PBC also paving the way for entering the stock market in the coming months, this may force investors and analysts to lower their expectations for Wall Street-related business income. A rare case of a low fee rate in the history of large IPOs in the US stock market occurred in 2010 with General Motors Company (GM.US): that year, the investment banks agreed with the US government to a commission rate of only 0.75%. At that time, Wall Street had just recovered from the financial crisis with the help of taxpayers and needed to repair its public image, while also fearing that high underwriting profits would attract public criticism. The US government held the majority stake in the automaker after its bailout. In 2014, Chinese internet giant Alibaba Group Holding Limited Sponsored ADR (BABA.US) raised $25 billion in its US IPO and paid a total of about $300 million in commissions to the underwriting syndicate, including performance bonuses; Saudi Aramco, which usually tightly controls underwriting expenses, initially agreed to a commission rate of over 1% when preparing for an overseas listing, but later reduced the participation of foreign investment banks and focused on domestic issuance, leading to a significant reduction in underwriting fees. According to previous reports, SpaceX is targeting a market valuation of around $1.8 trillion in its IPO, with a fundraising target of $750 billion set to break the global IPO fundraising record. According to documents disclosed on Monday, the company plans to allocate up to 5% of the shares issued in this offering specifically for some employees and close personal acquaintances of executives. Meanwhile, Anthropic has secretly filed IPO-related documents in an attempt to beat long-time rival OpenAI to market by the end of the year; in addition, Alphabet Inc. Class C (GOOGL.US) also announced plans to raise $80 billion through multiple rounds of equity sales. The cluster of billion-dollar equity financings will soon test the short-term practical ability of Wall Street investment banks to connect with the market and raise large amounts of capital.