The SpaceX IPO marked a watershed event in the equity capital markets. The $75bn float represented by far the largest ever initial public offering, easily eclipsing the previous records set by Aramco in 2019 of $29bn and the $24bn Alibaba raised in 2014. The stock market debut transfixed the financial community and media for months on end, with endless speculation, leaks and commentary.
But what’s it like working on this kind of high-profile deal? I’ve never worked on anything quite like SpaceX but several marquee transactions crossed our desk during my tenure. And so my team and I had to deal with the day-to-day challenges of managing jumbo deals that dominated global headlines and commanded attention from a wide range of stakeholders.
It’s a different, weird, even unsettling experience. If it goes well, of course it’s rewarding. But working in a fishbowl produces its own odd effects. The stakes are higher, the scrutiny is great, and the politics are more fraught than ever.
Here are a few aspects that I suspect the deal teams on SpaceX had to manage along the way:
1. Senior management suddenly discovers your deal
On most transactions, you and your deal team are left to your own devices. Senior management may check in for the occasional update, especially if the expected fee is high enough, but otherwise you won’t hear much from them. In fact, more often you will be proactively appealing to leadership because you want them to appreciate the work you’re doing.
On a mega-IPO, all this inverts. The global head of banking (or, sometimes, as in the case of SpaceX, even the CEO) will take an active interest in progress. Senior leaders will want to meet the client, whether or not they have much to say beyond the commitment speech.
If they’ve struck up a relationship with the client, you can expect to be forwarded late-night emails — sometimes panicky, sometimes pushy — from the client and you’ll be expected to deliver immediate and reassuring answers.
Deals often experience bumps in the road, and experienced practitioners take them in their stride on normal deals. But your senior leadership may not know that there’s never smooth sailing the whole way. It’s understandable that they will be breathing down your neck, because any misstep will reflect badly on them and on the institution. If we’re being honest, you will probably be doing the same to the people below you.
2. The press becomes an obstacle course
One of the strangest things I found as a banker is that the communications team would introduce us to reporters and give them our business cards. The reason I found this strange is that our cards all had our mobile phone numbers, thus enabling the reporters to bypass the gatekeepers in the comms team and call us directly, even though we were not supposed to speak with the press without authorisation.
Normally, this isn’t too much of an issue. Most reporters don’t care about your deals, and in any case they call the syndicate desks to get the latest news.
But when you have a very high profile deal — a massive flotation, a jumbo privatisation, a blockbuster M&A deal — the calls come pouring in from journalists looking for an angle or (preferably for them, not for you) a scoop. At the same time, the clients and everyone around the deal are much more focused on press stories and communication management. Some reporters respect protocol but others can really be pests, calling repeatedly even when you tell them you’re busy.
3. Every word counts
Remember, you’re operating under a microscope, and that inevitably creates the risk of ex post facto scrutiny in the event that the deal turns out badly. The risk of a lawsuit or a government investigation is fairly low, but you can’t ever exclude it and so you have to remain vigilant. You’re more cautious about what you say, where you say it, especially (but not exclusively) in emails and presentations.
For the SpaceX bankers, they probably would have had to operate under the assumption that everything they produced could be leaked, subpoenaed, or subjected to strict, retroactive scrutiny if things had gone pear-shaped. That’s never a pleasant feeling even if (as is always the case in my experience) you have nothing untoward to hide.
4. Accountability without control
The Stoics tell us to focus only on what we can control and not to worry about things that will be determined or decided by outside forces. Good luck with that if you’re working on a high profile deal.
I often found the toughest part of working on a marquee transaction was the gap between responsibility and control. Things go right and wrong, regardless of your effort. Every capital markets banker learns at some point there’s often little correlation between the quality of your contribution and the outcome. So much can hinge on market sentiment, macroeconomic developments, political decisions, client behaviour and luck.
If the price pops or drops, you’ll be praised or panned, even though you probably had little to do with the aftermarket performance
Yet as the banker you’re considered accountable for what happens. If the price pops or drops, you’ll be praised or panned, even though you probably had little to do with the aftermarket performance. Life’s tough.
The upshot
If you’re going to work on a high profile deal, you have to maintain a sense of perspective and avoid internalising what happens along the way. You’re never ever as great or as bad represented.
That said, it is a singular experience to work under such public scrutiny for so long, with so much at stake. It’s exhilarating, exhausting, and exciting.
What if it doesn’t go to plan? Just remember — and I’ve said this in this column on many occasions — memories are incredibly short. That rule applies equally whether the IPO is a roaring success or a public disaster. Victories and defeats are entirely transient, just like our time on this planet.