Musk's "exclusive" investment banker "in position," preparing for the world's largest IPO

Musk's "exclusive" investment banker "in position," preparing for the world's largest IPO

According to a Wall Street Journal report on Monday, Morgan Stanley’s veteran investment banker Michael Grimes announced this week his return to Wall Street, where he will lead SpaceX’s initial public offering as Chairman of Investment Banking—a deal that may become the largest IPO in history. Grimes, who helped Elon Musk take Tesla public, left Morgan Stanley last year to join the U.S. Department of Commerce, but is now returning as the window for SpaceX’s listing opens.

Morgan Stanley announced in an internal memo on Monday that Grimes will return to the company, with a promotion from Global Head of Technology Investment Banking to Chairman of Investment Banking. The timing is pivotal—last week, after SpaceX merged with Musk’s AI startup xAI, its valuation soared to $1.25 trillion.

SpaceX is expected to raise tens of billions of dollars through its IPO to fund the construction of data centers in space and its lunar colonization plans. According to people close to the company, if the fundraising reaches $40 billion, the more than ten banks involved in underwriting are expected to share about $400 million in underwriting fees, with Morgan Stanley, Bank of America, JPMorgan, and Goldman Sachs serving as the four lead underwriters and receiving the largest shares.

Grimes’s return means he will have the opportunity to share in this potentially enormous windfall, rather than stay in government and watch from the sidelines.

Grimes has worked at Morgan Stanley for nearly thirty years, building a deep relationship with Musk. According to a SpaceX investor who knows both men, Grimes is one of the few bankers “tolerated” by the unpredictable entrepreneur.

Musk’s ties to Morgan Stanley run deep. His wealth manager Jared Birchall and xAI CFO Anthony Armstrong both hail from the bank. Grimes himself helped Musk take Tesla public in 2010 and assisted in the acquisition of Twitter in 2022.

During the Twitter acquisition, Musk demanded a rapid process. According to sources, Grimes directed his team to work in terms of “minutes and hours” rather than days to keep pace with Musk. Messages disclosed in the Twitter lawsuit reveal their close rapport. In one message, Grimes offered to help Musk secure $5 billion in financing from crypto wunderkind Sam Bankman-Fried, calling him “a super genius and doer just like you.”

Grimes is known on Wall Street for his extreme client development methods. To win the lead underwriter role in Facebook’s 2012 IPO, he spent hours playing the platform’s game FarmVille. To secure the lead role in Uber’s 2018 listing, he worked part-time as an Uber driver.

A Washington Episode and His Return

Grimes left Morgan Stanley a year ago, when Musk was launching the Department of Government Efficiency (DOGE). He became Head of the Commerce Department’s Investment Accelerator, shuttling between Washington and his suburban San Francisco home. The career shift surprised fellow bankers, who said he didn’t seem especially partisan.

Even after Musk left Washington six months later, Grimes remained in his position, reporting to Commerce Secretary Howard Lutnick. His duties included leading President Trump’s “Invest in America” initiative, helping the government buy a 10% stake in Intel, and offering advice on potential IPO plans for Fannie Mae and Freddie Mac.

During Grimes’s government stint, the U.S. IPO market was relatively subdued, with few major technology listings. But this year is expected to be the best on record for IPOs, as OpenAI and Anthropic are also considering large-scale listings.

According to the Wall Street Journal, many in the financial world have been speculating whether Grimes would settle for staying in government and forgo the massive potential payout. Now the answer is clear.

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