Two weeks ago, when the SpaceX IPO prospectus was released, we noted that "Goldman is lead left; and pretty much every other bank is on the cover."
Goldman is lead left; and pretty much every other bank is on the cover. They need that to sell it to retail https://t.co/9JogVIxo1ipic.twitter.com/nSnvx6tWqs
— zerohedge (@zerohedge) May 20, 2026
Yet one bank was missing: middle-market specialist (with a penchant for junk bonds and lack of due diligence on private credit deals), Jefferies.
Whether it was due to prior tensions between Elon and bank executives or something else occurred behind the scenes, we don’t know—but Jefferies bankers did not take it well. Now, SpaceX short sellers and some of Jefferies’ own leadership view the snub as a unique opportunity to unite against an IPO that some say could face a major reckoning once shares begin trading.
According to Bloomberg, hedge funds that aren’t convinced by Elon Musk’s rockets-to-tweets empire are reaching out to Jefferies to see if it can facilitate bets against SpaceX’s shares once they go public in one of the most highly anticipated initial public offerings ever.
Jefferies, the largest U.S. investment bank not named on the S-1 cover, is now uniquely positioned to arrange those trades. While Wall Street firms routinely assist clients in taking positions on all sides of a company’s shares, their lawyers can grow uneasy when one desk promotes a stock’s prospects to the public while another helps clients bet against it. And that’s not even considering how Musk would react if one of the 23 banks he hired for SpaceX’s debut helps facilitate large bearish trades.
Jefferies is not among them. And it is now seeking creative ways to make up for the loss in underwriter revenue.
Banks have eagerly sought a share of the IPO with a record valuation of at least $1.8 trillion. Bloomberg reported that Goldman Sachs CEO David Solomon reached out to Musk personally by sliding into his Twitter DMs. His bank and Morgan Stanley ended up listed first on the deal (although Morgan Stanley was positioned to the right of Goldman, a slight to Adam Jonas, who had covered TSLA for over a decade with nothing but praise), a placement large enough to generate approximately $500 million in fees for the underwriters.
And since they’re missing out on the SpaceX IPO—to the chagrin of some of the firm’s top rainmakers—Jefferies’ trading bosses see an opportunity to capture more business unencumbered, according to Bloomberg sources. In addition to shorting, the firm’s traders are preparing to assist any investors allocated shares in flipping them in the days following SpaceX’s debut, according to Bloomberg sources.
While short sellers have historically struggled to successfully bet against Musk and his famously loyal shareholder base, Bloomberg correctly notes that on Wall Street, building bridges to some of your competitors’ prized trading clients can be worth much more in the long run.