Morgan Stanley's Top Banker Returns for SpaceX's Monumental IPO
In a major development for Wall Street and the space industry, Michael Grimes—the longtime Morgan Stanley rainmaker—is returning to the investment bank after a stint in government. His mission: to lead what could become the largest initial public offering in history for Elon Musk's SpaceX.
From Government Service to Wall Street Windfall
Grimes spent years meticulously positioning Morgan Stanley to secure a leading role in SpaceX's eventual public offering. However, when Musk finally decided to take the rocket company public, Grimes was serving in the Commerce Department, having followed the billionaire to Washington, D.C. This week, Morgan Stanley announced that Grimes is rejoining the firm as chairman of investment banking, a promotion from his previous role as head of global technology investment banking.
The move positions Grimes to potentially reap millions in fees from the SpaceX IPO. According to an internal memo reported by the Financial Times, his return comes at a critical juncture. SpaceX recently skyrocketed to a staggering $1.25 trillion valuation following its merger with Musk's artificial intelligence startup, xAI.
The Stakes of the SpaceX Public Offering
The anticipated IPO is expected to raise tens of billions of dollars to finance ambitious projects, including launching data centers in space and establishing lunar colonies. Bankers estimate that if SpaceX raises around $40 billion—as some close to the company envision—the dozen or so banks involved could split fees of approximately $400 million.
The largest portions would go to the four lead banks, which are expected to be Morgan Stanley, Bank of America, JPMorgan Chase, and Goldman Sachs. Individual bankers like Grimes, who played a pivotal role in securing the mandate, would also receive significant compensation.
A Deep-Rooted Relationship with Elon Musk
Grimes' return resolves a lingering question on Wall Street: whether he would remain in government and forgo this monumental financial opportunity. His ties to Musk and Morgan Stanley are profound. Both Musk's money manager, Jared Birchall, and xAI's CFO, Anthony Armstrong, are alumni of the bank.
Over a three-decade career at Morgan Stanley, Grimes cultivated a unique rapport with Musk, becoming one of the few bankers the entrepreneur genuinely tolerates, according to a SpaceX investor familiar with both men. His track record includes:
- Leading Tesla's IPO in 2010
- Facilitating Musk's acquisition of Twitter in 2022, where he instructed his team to work in "minutes and hours" to match Musk's frenetic pace
Text messages revealed during the Twitter acquisition legal battle highlighted their unconventional relationship. In one exchange, Grimes offered to help Musk secure $5 billion from then-cryptocurrency figure Sam Bankman-Fried, whom he described as an "Ultra genius." In another, he shared a YouTube link to Lynyrd Skynyrd's "Free Bird."
Grimes' Unorthodox Approach to Client Relations
Grimes has long been known for his extreme dedication to winning business. To secure a role in Facebook's 2012 IPO, he spent hours playing FarmVille on the platform. He even moonlighted as an Uber driver to land the lead advisory role for the ride-sharing company's 2018 offering.
Colleagues describe the Los Angeles native—an engineering graduate from UC Berkeley—as dorky, deeply immersed in technology, and prone to swearing, rather than fitting the stereotypical slick banker image.
Government Interlude and the Resurgent IPO Market
Grimes left Morgan Stanley a year ago to join Musk's Department of Government Efficiency (DOGE), leading the Commerce Department's Investment Accelerator. He commuted between Washington and his home near San Francisco, surprising peers who didn't view him as particularly partisan.
During his government tenure, he reported to Commerce Secretary Howard Lutnick and led initiatives such as President Trump's "Invest in America" push, helped secure a government stake in Intel, and advised on potential public offerings for Fannie Mae and Freddie Mac.
The U.S. IPO market was relatively quiet for much of Grimes' government service, but 2026 is poised to be a landmark year. Beyond SpaceX, companies like OpenAI and Anthropic are also considering major public debuts, setting the stage for what could be the most active IPO period ever.
Grimes' return to Morgan Stanley not only underscores his pivotal role in high-stakes finance but also signals the intense competition and colossal rewards associated with SpaceX's journey to the public markets.
