$MS - the dark horse winner of the SpaceX IPO?
Bloomberg reported Morgan Stanley's E-Trade might be Elon's platform of choice to dole out SpaceX's 30% retail allocation.
And they might cut $HOOD and $SOFI out entirely.
So why might $MS be a good long here?
On the financials, even winning the SpaceX IPO allocation barely moves the needle short term.
$MS did $70B in revenue last year. Wealth Management alone did $32B. The E-Trade self-directed book is *maybe* 10-15% of that and they don't break it out.
So this is not a Q2 earnings play. The real story is the halo effect.
If $MS E-Trade becomes THE platform to access the most anticipated IPO in history...
Backed by @elonmusk with the most loyal retail following on the planet, that is an earned media event worth hundreds of millions of dollars in equivalent ad spend.
New accounts get opened. Cash gets deposited. And those accounts don't close after IPO day. They stick around, sit in sweeps generating NII, and a percentage convert into higher value clients over time.
That is a long tail growth and LTV expansion story for the self-directed WM business.
And here's where it could get ever sweeter.
SpaceX won't be the last mega IPO to adopt this playbook.
Anduril, Anthropic, OpenAI are all on deck. These are companies with massive retail followings that will want the same kind of direct-to-retail distribution.
$MS's investment banking relationships position them to underwrite AND distribute through E-Trade. That's a vertically integrated flywheel that $HOOD and $SOFI simply cannot replicate.
Everyone wants to trade the retail revolution through high-vol names with pennies in assets compared to the biggest banks.
Meanwhile $MS is a $250 billion company trading at 15x earnings with a 2.5% dividend, and it might be quietly building a structural advantage in retail IPO distribution that the market hasn't priced in yet.
