Jefferies Financial Group Inc. was omitted from the list of roughly two dozen banks chosen to manage SpaceX's initial public offering. Following that exclusion, people familiar with the matter told Bloomberg News that hedge funds seeking to take bearish stances on the company have reached out to Jefferies to organize short positions once the stock becomes tradable.
Those sources, speaking on the condition of anonymity because the discussions are private, said interest has focused on arranging short trades after the IPO concludes. The SpaceX offering under consideration carries a valuation of at least $1.8 trillion, according to the reporting.
On Wall Street, it is common for firms to provide clients with opportunities to take positions on both sides of a security. However, when an investment bank plays a role in underwriting or promoting an IPO, tensions can arise if another division simultaneously helps clients place bets against that same issuance. Such dynamics can produce legal and compliance concerns for institutions involved in both activities.
A spokesperson for Jefferies responded to the reports by saying the firm "is not promoting any shorting activity regarding SpaceX or any IPO." The spokesperson added that once shares begin to trade, Jefferies will facilitate "balanced, two-sided market activity for our clients as an independent platform."
The developments leave Jefferies in a distinct position: absent from the underwriting group, yet potentially active in arranging aftermarket short exposure for clients. The parties who described the discussions did not provide additional specifics about the structure or timing of any trades, and Jefferies’ public comment emphasized its neutral role in supporting market access after trading starts.