Morgan Stanley's (MS  ) E*Trade is reportedly in discussions to lead the retail portion of the SpaceX initial public offering (IPO), potentially sidelining rivals Robinhood Markets Inc (HOOD  ) and SoFi Technologies Inc (SOFI  ). SpaceX may set aside up to 30% of its shares for retail investors, fueled by the massive following of founder Elon Musk, Reuters reported citing sources.

SpaceX did not immediately respond to Benzinga's request for comment.

Valuation and Market Impact

SpaceX is reportedly targeting a valuation of $1.75 trillion and aims to raise up to $75 billion.

Cathie Wood's ARK Venture Fund currently holds SpaceX as its largest position at 17.96%.

EchoStar Corp. (SATS  ) has effectively become a public proxy for SpaceX after spectrum-for-equity deals left it holding a stake recently valued at about $11.1 billion.

Alphabet Inc. (GOOGL  ) (GOOG  ) also maintains a position that could be worth $100 billion at the IPO's target valuation.

Analyst Warnings and Merger Buzz

The buzz around the IPO has sparked concerns from The Future Fund LLC managing director Gary Black. Black warned investors to remain skeptical of "overly positive" sell-side analysts.

He noted the IPO represents the "biggest payday for analysts in years." Additionally, speculation regarding a merger with Tesla Inc. (TSLA  ) persists.

Black cautioned that a merger could trigger a 20% to 25% reduction in Tesla's stock value due to a "conglomerate discount."

Price Actions: SoFi shares fell 1.08% to $15.06, while Robinhood dropped 1.97% to $64.72 on Monday, according to Benzinga Pro data. Morgan Stanley is slightly up 0.35% at $158.91 and Tesla is down 1.73% at $355.64.