HOOD Bleeds: Robinhood Looks Poised to Miss the SpaceX IPO Party as Musk Flexes His Own Rocket's Landing Legs

SpaceX is reportedly set to leave Robinhood and SoFi watching from the launchpad while Morgan Stanley's E*Trade takes the pole position in the race to sell the SpaceX IPO to retail investors. Because nothing says "disruption" like watching someone else eat your lunch from the bleachers.

According to Reuters, ETrade is currently in advanced talks to lead the retail share sales for what could become the largest IPO in history. Morgan Stanley, the lead underwriter for the offering, bought ETrade for roughly $13 billion back in 2020 and is expected to keep the bulk of retail distribution within its own ecosystem. Family office vibes, but make it IPO.

Fidelity is also throwing its hat in the ring, but E*Trade's Morgan Stanley connection gives it a leg up. Sometimes it's not about having the best product—it's about having the right daddy.

For Robinhood, the news stings. The meme-stock broker had positioned itself as a contender for the role, but looks increasingly likely to get benched or handed a minimal slice. SoFi appears to be in a similar boat. Nothing like getting rugged by your own hype cycle.

HOOD stock reacted accordingly, dropping nearly 2% to around $65. Over the past five days, the stock has shed over 8%, compounding existing pressure from crypto market turbulence and uncertainty around the CLARITY Act. When it rains, it pours—and apparently someone's been holding an umbrella made of stablecoins.

The snub is notable because SpaceX is planning an unusually generous retail allocation. Musk is considering reserving up to 30% of IPO shares for everyday investors—roughly triple the typical level for major US offerings. But apparently, Musk's definition of "retail" doesn't automatically include Robinhood's userbase. Bold strategy, Cotton. Let's see if that pays off.

SpaceX is targeting a June listing, with an IPO filing potentially coming by April. The company is looking to raise up to $75 billion at a $1.75 trillion valuation, which would blow past Saudi Aramco's 2019 record and officially crown this the biggest IPO ever. Oil money, meet rocket money.

Whether Robinhood gets any last-minute seat at the table remains to be seen, but for now, the degen favorite appears to be watching this launch from the sidelines. Maybe they'll finally get that spot on the waitlist for Mars colonization instead.