Liftoff for the initial public offering (IPO) of Space Exploration Technologies (SPCX +1.40%)-- better known as SpaceX -- is nearly here, with the largest IPO in history set for today (Friday, June 12). With Elon Musk's company expected to raise $75 billion at a $1.75 billion valuation, the hoopla is considerable.
Obviously, that dollar amount is eye-catching, but so is another figure: the portion of the offering -- up to 30% -- that SpaceX is reserving for retail investors. That's well above the 5% to 10% typically set aside for non-professional market participants in standard IPOs. Undoubtedly, SpaceX will be highly accessible compared to past IPOs. Still, prospective investors should set aside a few minutes for pre-IPO homework to avoid disappointment.
Clients of these five brokerage firms can access the SpaceX IPO, but the details matter. Image source: Getty Images.
Said another way, market participants who want to buy in immediately need to know whether their brokerage of choice is one of the five offering first-day access to this space stock. Without further ado, let's unveil the five brokers offering rapid access to SpaceX shares.
Eyes on E*TRADE from Morgan Stanley
Morgan Stanley (MS +3.07%) is one of the investment banks participating in SpaceX, and its E*TRADE unit is mentioned in the prospectus as one of the five trading houses that will get a slice of the stock's retail pie.
E*TRADE reportedly won't require a minimum account balance to join the SpaceX craze, but there are some small hoops to jump through. You have to go to the broker's New Issue hub, complete an investor profile that confirms eligibility, and acknowledge that you've read the IPO's prospectus.
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Key Data Points
After that, you must submit a conditional offer to buy, and ensure your account is appropriately funded. So if you're an E*TRADE customer and want to buy $5,000 worth of SpaceX on Friday, make sure you've got at least $5,000 in cash in your account before the IPO.
Speaking of account minimums...
A pair of well-known trading shops is requiring clients to maintain certain cash balances before buying SpaceX stock, but the gap between the two is as wide as the Pacific Ocean. Fidelity originally required retail clients to have $500,000 in their accounts to attend the SpaceX party, but the company has since lowered the minimum to a more palatable $2,000.
Charles Schwab (SCHW +1.91%) is still in the six-figure requirement club, mandating that its clients have at least $100,000 in their accounts. Schwab customers who meet that mark have a potential advantage, because the broker doesn't curtail clients from rapidly moving out of IPOs on the first day or soon after the offering.
Some brokers, including Fidelity, do punish clients for "flipping" IPOs. Fidelity clients who don't hold SpaceX for at least 15 days may lose access to future IPOs on the platform.
Two for younger traders
The other two brokerages mentioned in the SpaceX prospectus as participants in the retail tranche of the IPO are Robinhood Markets (HOOD +12.60%) and SoFi Technologies (SOFI +5.47%).
Musk's company doesn't come right out and say as much, but involving Robinhood and SoFi in the IPO may well be an effort to cater to younger investors, many of whom are enthusiastic about space stocks. If that is in fact part of the SpaceX plan, it's supported by data. As of December 2024, 75% of Robinhood customers were 43 years old or younger, with 25% being 27 or younger. SoFi's client base also skews younger, with many clients concentrated in the 28 to 43 age range.
Good news for users of both platforms: Neither is imposing an account minimum to participate in the SpaceX IPO.
