SpaceX is exploring creative execution approaches for what could become the largest initial public offering in US history, including a possible Dutch auction structure akin to the one used by Google, according to sources familiar with the matter.

The Elon Musk-controlled aerospace and satellite group is targeting a valuation of around USD 1.5tn, a level that would rival the record USD 1.7tn valuation achieved in Saudi Aramco’s 2019 IPO. The listing will test the market’s capacity to absorb one of the largest equity offerings ever attempted.

While no decision has been taken, the possibility of a Dutch auction — or open IPO — has emerged as a real option as the company weighs how best to balance price maximization, liquidity needs, and aftermarket performance.

Under a Dutch auction, investors submit limit orders specifying the maximum price they are willing to pay. The clearing price is set at the highest level at which all offered shares can be sold. The structure is designed to reduce underpricing and shift price discovery away from underwriters.

“The Dutch auction structure makes sense, and I actually have heard this in the past few weeks among the options that are apparently on the table,” said a cross-border ECM banker pitching for a role. “It prevents underpricing, and frankly, the sell-side is generally too cautious when they price IPOs.”

In a traditional US IPO, banks conduct roadshows and build an order book, often setting a conservative range, normally anchored around a key group of desirable shareholders. The price can then be raised should demand warrant it, but critics argue that this approach can result in significant first-day pops that leave money on the table for issuers.

“In a Dutch auction, that doesn’t apply because it’s a limit-order structure,” the banker said. “If I really want to own the shares, I’m incentivized to put in a high limit. It becomes a game theory question.”

However, he cautioned that while such a structure may minimize dilution, it could dampen aftermarket performance. “If everybody centers around fair value, there might not be a lot left on the table. It’s attractive for the company, but maybe not as attractive for performance.”

Google’s 2004 Dutch auction IPO delivered solid, though not spectacular, early trading. The shares closed 18% above the offer price on the first day, were up nearly 25% after one week, 38% after one month, 97% after three months, and almost 133% after six months, according to Dealogic.

“I wouldn’t be surprised if SpaceX tries to do an auction too,” said a second ECM banker pitching for a role. “It wouldn’t be surprising.”

Recent performance from 2025 IPOs shows far higher volatility among newly listed stocks than at any point in recent years. Several US companies that enjoyed strong early trading pops have since fallen sharply, and those declines may have been even steeper had the deals been conducted using a Dutch auction structure.

A venture capitalist familiar with the company added: “Dutch auctions tend to work best with high-profile retail names. SpaceX and Elon Musk certainly fit that category. Given Elon’s loyal fan base, there could be strong demand. It might be a way to clear the market successfully.”

One portfolio manager said the auction format could introduce a high degree of uncertainty for an offering of this scale, arguing that banks generally prefer structures that allow them to shape demand and manage outcomes.

“Banks want control,” the investor said. “They’re already building books and gathering early indications of interest from large institutions so they can show Elon that they have USD 40bn to USD 60bn of demand lined up.”

Bankers noted that retail participation is now structurally higher than in the mid-2000s, potentially improving the viability of an auction format, particularly if online brokerages are involved. Still, one source described the structure as “confusing” for retail investors and warned that Google’s experience “was not great.”

“If Elon wants to do something, he’ll probably add his own tweaks,” the cross-border banker said. “That feels more on brand. I do not see him saying: ‘Let’s do it the conventional way.’”

Global syndicate push

Even as structural debates continue, SpaceX has begun widening its net in search for banks.

The company reportedly met with non-US banks in mid-January at its California facilities to discuss potential underwriting roles. One contingent represented European institutions while another comprised banks from other regions. Junior underwriting slots are being contested partly on the basis of geographic reach and influence.

“They want non-US banks in the syndicate because their biggest future counterparties will be Europe, Asia, and the Middle East,” said the cross-border ECM banker. “If you want Starlink to expand in those geographies, you should take money from people who can help you get it into those markets.”

Market participants broadly expect Morgan Stanley, Goldman Sachs, and JPMorgan to occupy senior roles, though a final lineup has not been announced.

“There aren’t enough brokerage firms to put on the cover of a USD 50bn IPO,” one ECM banker said, referencing the potential primary raise. “You might see 30 different banks on the cover of the deal.”

SpaceX and Morgan Stanley did not return messages. Goldman Sachs and JPM declined to comment.

In parallel, Musk’s advisers are reportedly seeking early inclusion in major stock indexes ahead of the planned IPO later this year, in a bid to boost liquidity and support the share price.

Companies typically must wait months after listing before joining major benchmarks, a period intended to ensure trading stability and sufficient liquidity. SpaceX is understood to be exploring ways to accelerate that timeline.

“If you’re in the S&P 100, they’re going to be buying the stock and just putting it away,” one banker said, referring to passive index and ETF flows. “It seems like that’s a strategy to soak up a deal of this size.”

The portfolio manager said early index inclusion could materially reshape demand dynamics, irrespective of valuation debates. “Index inclusion changes investor behavior,” he said. “If it becomes a large index weight, even investors who dislike the valuation may need to participate to avoid being structurally underweight. That alone can pull demand forward.”

He added that beyond pricing mechanics, the lockup structure is also under scrutiny, with the traditional 180-day cliff creating predictable technical pressure for jumbo listings.

“For something like SpaceX, the private cap table is enormous. The stock will trade off when the lockup expires. Hedge funds front-run it,” the investor said, adding that there is discussion around moving toward more graduated release mechanisms, in which small percentages of shares unlock over time, potentially linked to performance thresholds.

Such moves would be consistent with a broader strategy to pre-position demand, particularly if the company opts for a structure that limits traditional bookbuilding discretion.

Marquee assets in demand

At a mooted USD 1.5tn valuation, the IPO would force investors to grapple with a complex mix of assets: the high-margin Starlink satellite business; launch services; and, following its recent merger with xAI, an artificial intelligence and social media business that is bleeding capital.

“I have a hard time understanding the strategy,” said one banker. “Starlink is a huge moneymaker. Why merge a very profitable asset with something burning cash?”

He added that traditional valuation frameworks may struggle to capture the full scope of the enterprise. “If you asked a research analyst how to value it, they’d probably say, ‘Can we change the subject?’ Fund managers are going to struggle with this.”

Still, appetite for marquee assets remains strong. “There’s plenty of money out there for this kind of deal,” the banker said. “The question is: at what price?”

Market participants expect the IPO to dominate issuance windows.

“The deal will definitely take all the air out of the room,” said an ECM banker tracking the situation. “All eyes will be on them for a week or so.”

Rival issuers are already recalibrating their timelines. “If I were running a company that wanted to be public this year, I’d try to go first,” the banker added. “I don’t love letting the behemoths set the tone.”

Whether SpaceX ultimately opts for a Dutch auction or a traditional bookbuild, bankers agree the listing will be anything but ordinary.

For a company seeking to rewrite the rules of space and satellite connectivity, rewriting the IPO playbook may be part of the appeal.