Two weeks ago, when the SpaceX IPO prospectus landed, we observed, that "Goldman is lead left; and pretty much every other bank is on the cover."

Yet one bank was missing: middle-market specialist (with a penchant for junk bonds and lack of due diligence on private credit deals), Jefferies.

Whether it was shunned due to prior bad blood between Elon and bank execs, or something else happened behind the scenes, we don't know but Jefferies bankers did not take it well. And now, SpaceX bears and some of Jefferies’ own bosses see the snub that as a unique opportunity to gang up against an IPO that some say could be in for a major reckoning once the stock prices.

According to Bloomberg, hedge funds that aren’t sold on Elon Musk’s rockets-to-tweets empire are hitting up Jefferies to see if it can arrange bets against SpaceX’s shares once they go public in one of the most highly anticipated initial public offerings ever.

Jefferies, which is the biggest US investment bank not named on the S-1 cover, is now uniquely situated to arrange those trades. While Wall Street firms routinely help clients take positions on all sides of a company’s shares, their lawyers can get nervous when one desk pitches a stock’s prospects to the masses while another helps clients bet against it. And that’s not to mention how Musk would react if one of the 23 banks he hired for his SpaceX’s debut helps set up big bearish trades.

Jefferies is not among them. And it is now seeking creative ways to make up for the loss in underwriter revenue. 

Banks have clamored for a piece of the IPO with a record valuation of at least $1.8 trillion. Bloomberg reported that Goldman CEO David Solomon reached out to Musk personally by sliding into his DMs on Twitter. His bank and Morgan Stanley ended up listed first on the deal (although MS was to the right of Goldman, a slap in the face of Adam Jonas who had covered TSLA for over a decade with nothing but praise), which is big enough to generate about $500 million of fees for underwriters.

And since they’re missing out on the SpaceX IPO - to the chagrin of some of the firm’s top rainmakers - Jefferies’ trading bosses are seeing a chance to mop up more business unencumbered, the Bloomberg sources said. In addition to shorting, the firm’s traders are preparing to help any investors that are allocated shares flip them in the days after SpaceX’s debut, BBG sources said.

While short sellers have struggled historically to successfully bet against Musk and his famously loyal shareholder base in the past, Bloomberg correctly notes that on Wall Street, building bridges to some of your competitors’ prized trading clients can be worth much more in the long run.