The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

By Stephen Gandel

NEW YORK, June 4 (Reuters Breakingviews) - Wall Street is strapped to Elon Musk’s $1.75 trillion rocket. As SpaceX prepares for the largest initial public offering in history, the mega-banks ostensibly stewarding it might instead seem mere passengers. The satellite-to-chatbot giant’s decision to fix a $135-per-share offering price on Wednesday skips the typical back-and-forth between financial consiglieri and investors. Rule tweaks attracting index-fund buyers, combined with Musk’s inimitable aura, will be as crucial as any trading desk. The risk is that others try to copy this launch sequence without enough hype to leave orbit.

Others have toyed with marginalizing Wall Street. In 2004, Google opted for a Dutch auction, which employs open bidding rather than banker-driven allocations. Shares entered the market well below an initially expected range. In 2018, Spotify SPOT.N used a direct listing, allowing existing shareholders to simply begin selling without any underwriter gatekeeping. It worked, but provided no new capital, a non-starter for SpaceX’s cash-incinerating AI ambitions.

If anything, Musk seems more interested in disintermediating markets than bankers. SpaceX conditioned its decision to list on the Nasdaq on rule changes speeding access to a key index, Reuters reported. Tweaks elsewhere may usher it at warp speed into similar benchmarks, despite plans to list only a small fraction of its shares. Consequent forced buying from funds tracking these indices could prove more effective than any banker glad-handing.

After all, that supply-demand mismatch could stymie short-sellers and stabilize post-IPO trading. The process seems tailored to minimize blowback over an out-of-this-world valuation.

Yet Goldman Sachs GS.N and Morgan Stanley MS.N, as is tradition, are leading the giant debut. Despite angling to hold fees at a slender percentage of its anticipated $75 billion fundraise, according to Bloomberg, SpaceX will still shell out perhaps $500 million to advisors. Musk is getting concierge service to boot. Goldman’s CEO David Solomon is personally signing off on allocations, Reuters reported. JPMorgan JPM.N boss Jamie Dimon is expected to help pitch the IPO to top clients.

It shows that, even though pricing might effectively be autonomous, rote details of execution still matter. That’s a relief for Wall Street. If successful, the strategy might also seem appealing for two public-market hopefuls matching SpaceX’s ambition and voracious appetite for capital: chatbot labs Anthropic and OpenAI.

Straightforwardly copying this blueprint will be tough. Musk bends financial reality like no other. Whenever his carmaker Tesla TSLA.O narrows in profitability, shareholders simply value it at a higher multiple of that dwindling figure. Brain implants, subterranean tunnels, robots: he cajoles investors into crediting all of it. Even ChatGPT might struggle to generate such powerful hallucinations.

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CONTEXT NEWS

SpaceX, in an updated prospectus filed on June 3, set its listing price at $135 per share.

Unusually, this preceded an investor road show, which launched the following day. The rocket, satellite ​and AI company is targeting a $1.75 trillion valuation.