Will the Anthropic and OpenAI IPOs follow SpaceX in upending the underwriting market? — SkimNews
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- SpaceX negotiated a 0.666% gross spread on its $75-billion IPO, the lowest on record, reducing the average spread to 0.58% by eliminating commissions on overallotment shares
- Goldman Sachs and Morgan Stanley each underwrote 20% of the SpaceX IPO, positioning them to earn substantial net commission shares despite the ultra-low fee structure
- Hedge funds typically receive about 40% of IPO shares but were limited to around 10% in the SpaceX offering, with most shares instead going to buy-and-hold investors
- Underwriters profit not only from gross spreads but also indirectly through 'soft dollar' trading commissions from hedge funds competing for favorable IPO allocations
- Anthropic is expected to announce an IPO soon, potentially adopting SpaceX’s model by demanding a low gross spread and allocating most shares to non-hedge-fund, buy-and-hold investors
- OpenAI is expected to follow Anthropic with its own IPO, raising the possibility of a broader shift away from Wall Street’s entrenched IPO profit structure
Why it matters: If Anthropic and OpenAI replicate SpaceX’s IPO terms, major banks could lose billions in both direct fees and indirect soft-dollar revenue, as buy-and-hold investors don’t reciprocate with high trading commissions. This shifts power from underwriters to issuers and redefines IPO economics.
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