SpaceX IPO Could Shut Out Robinhood as Morgan Stanley’s E*Trade Takes Control

The SpaceX IPO is expected to be one of the largest public listings to date. But early details suggest retail access may be more limited than anticipated. While the company is considering allocating a portion of shares to individual investors, how those shares are distributed is becoming a key point. Current discussions indicate that platforms like Robinhood may not play a central role in the process.

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E*Trade Could Capture the Largest Retail Slice of the Biggest IPO in History

According to recent reports, Morgan Stanley is in talks to route a significant portion of the SpaceX retail allocation through E*Trade. This is its own brokerage arm. The bank is leading the deal, and using its in-house platform would allow it to keep tighter control over how shares reach smaller investors.

SpaceX is considering setting aside about 30% of shares for retail investors. But allocations do not always translate to access. Nasdaq data shows individual investors typically account for about 5% to 10% of IPO demand. In most IPOs, institutional investors still dominate order books. Meanwhile, retail participation tends to be much smaller in practice.

A large share of that retail allocation is still likely to go through private banking and wealth management channels. This leaves a smaller portion for users placing orders through regular brokerage apps.

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How Did HOOD Stock React to This?

Robinhood and SoFi are still in discussions. But they are not currently positioned as primary distribution channels. Both platforms handled allocations in recent IPOs like Arm and Instacart, but this deal is structured differently.

Robinhood’s place around this deal matters more than it looks. The stock is currently trading around $65, and it is down over 17% over the past month. HOOD is trading around $65. It is notably off its recent highs near $80 earlier in March. On a year-to-date basis, it’s also seen a sharp pullback after a strong 2025 run. In addition, the stock also dipped by 1.30% over the past day.

The Robinhood and SpaceX IPO angle could have been the reason for its latest drop. A listing of this scale, tied to Elon Musk, drives account activity, trading volumes, and app engagement.

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