By Corrie Driebusch and Becky Peterson
Michael Grimes, the longtime Morgan Stanley rainmaker, spent years laying the groundwork for his bank to land a role leading the initial public offering of Elon Musk's rocket maker SpaceX.
But by the time Musk finally decided to take SpaceX public, Grimes was working in the Commerce Department, having followed the billionaire to Washington, D.C. Grimes found himself watching from afar as former colleagues pitched for roles on what could be the biggest IPO of all time.
This week, Grimes put himself back in the middle of the action -- and in line to reap millions of dollars of fees. Morgan Stanley said Monday he is rejoining the bank as chairman of investment banking, a promotion from his previous role as the head of global technology investment banking, according to an internal memo the Financial Times reported on earlier.
SpaceX has long been considered a golden goose by IPO bankers. It skyrocketed to a $1.25 trillion valuation last week when it merged with Musk's artificial-intelligence startup, xAI. The company is expected to raise tens of billions of dollars in an offering to finance plans to launch data centers in space and colonize the moon.
If SpaceX were to raise the $40 billion some close to the company envision, the dozen or so banks on the IPO could split fees of roughly $400 million, bankers estimate, assuming the fee structure is similar to previous mega-offerings. The largest cuts would go to the four lead banks -- expected to be Morgan Stanley, Bank of America, JPMorgan Chase and Goldman Sachs -- and the individual bankers such as Grimes who helped land the work.
Many on Wall Street had been wondering whether Grimes would be content remaining in government and forgoing the potential windfall.
Musk's ties to Morgan Stanley run deep -- both his money manager, Jared Birchall, and the chief financial officer of xAI, Anthony Armstrong, are bank alums. Grimes, for his part, spent years developing a relationship with Musk, becoming one of the few bankers the erratic entrepreneur "tolerates," according to a SpaceX investor who knows both men.
During a three-decade run at Morgan Stanley, Grimes helped Musk take Tesla public in 2010 and strike a deal to buy Twitter in 2022.
Musk demanded a quick turnaround while landing the deal for Twitter. Grimes instructed his team to work in "minutes and hours" instead of in days, keeping up with Musk's pace, according to a person involved.
Text messages released during the Twitter-acquisition legal battle revealed Grimes's rapport with Musk. In one, Grimes offered to help Musk get $5 billion in funding from then-cryptocurrency wunderkind Sam Bankman-Fried, whom he described as an "Ultra genius and doer builder like your formula." In another, Grimes shared a YouTube link to a performance of Lynyrd Skynyrd's "Free Bird."
Grimes has long been known to take client-wooing to extreme levels: To win a role on Facebook's 2012 IPO, Grimes played hours of FarmVille, a game on the social-media platform. He moonlighted as an Uber driver to land the lead role advising the ride-sharing company on its 2018 offering.
A Los Angeles native, Grimes studied engineering at the University of California, Berkeley, where he met his wife. He isn't slick like a stereotypical banker, say people who have worked with him. He is dorky and immersed in the latest technologies, but also prone to swearing.
Grimes left Morgan Stanley a year ago as Musk launched the Department of Government Efficiency, or DOGE. He took a role leading the Commerce Department's Investment Accelerator, commuting back and forth to his home outside San Francisco, a person familiar with the matter said. The career detour surprised fellow bankers, who said they didn't view him as particularly partisan.
He remained in his role , reporting to Commerce Secretary Howard Lutnick, even after Musk left Washington six months in. Among Grimes's duties: leading President Trump's "Invest in America" push, helping the government strike a deal to take a 10% stake in Intel and advising on potential plans to take Fannie Mae and Freddie Mac public.
The U.S. IPO market was in the relative doldrums for much of Grimes's government stint, with few sizable technology offerings on the horizon. But this year has the potential to be the best year for IPOs ever, with OpenAI and Anthropic also considering big debuts.
Write to Corrie Driebusch at corrie.driebusch@wsj.com and Becky Peterson at becky.peterson@wsj.com
(END) Dow Jones Newswires
February 09, 2026 21:05 ET (02:05 GMT)
Copyright (c) 2026 Dow Jones & Company, Inc.
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