The Morgan Stanley team that delivered SpaceX’s IPO had a bad quarter
The SpaceX IPO was all anyone could talk about for a while. Understandably so – it was the biggest IPO in history, bigger than the next three combined – and the contest for which bank would lead it ended in a tie. You might imagine that the IPO’s leading teams would be having a stellar 2026. You would be wrong about one.
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Morgan Stanley published its Q2 results earlier today. It was a record quarter for the firm. CEO Ted Pick called the results "exceptional" for the "Integrated Firm". The ecstasy is reasonable, if a bit oversold.
When Morgan Stanley shared the leading role on the SpaceX IPO, it was primarily a victory for the firm’s equity capital markets (ECM) team. The Wall Street Journal estimated that both it and Goldman pocketed $100m each from the debut, around 20% of the total each.
But Morgan Stanley’s ECM team is not having a good year. It booked the second-lowest year-on-year growth in ECM revenue in Q2, a whisker ahead of BofA and some half of what Goldman’s ECM revenue grew by. In H1 of 2026, it had the outright lowest growth, just 52% up on H1 of 2025. Goldman and Citi grew by around 90% in the same period.
The figures are even worse without the SpaceX IPO’s $100m. Morgan Stanley would have had the worst Q2-on-Q2 growth of its peers by some margin without it, and barely half of Goldman’s H1-on-H1 growth.
Other parts of Morgan Stanley’s investment bank did better. For H1 of 2026, it had the best M&A growth on last year of its competitors, and its debt capital markets growth was middle of the pack.
Morgan Stanley’s sales & trading teams also did pretty well. Its fixed income, currencies, and commodities team had the best performance of its peers in the first half of the year, posting 22% gains on H1 of last year. Its equities trading team posted a 46% increase in H1, on par with the 42-50% that peers reported.
Importantly, we do not believe that the M&A, DCM, and sales & trading teams had to wear green shoes as Elon Musk's request, as the IPO team did. That was already after the SpaceX founder negotiated down the typical 4-7% IPO underwriter's fee down to 0.67%. A quarter to forget, really.
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