Elon Musk’s SpaceX is reportedly in discussions to sell $500 million to $750 million of its stock, potentially valuing the company at over $175 billion. This valuation exceeds the record set by Alibaba’s IPO in 2014 and marks a significant rise from SpaceX’s $150 billion valuation in July.
SpaceX’s new valuation would position it above major corporations like Disney and Comcast in terms of market cap. However, the details of SpaceX’s tender offer could still change, and the company has not yet responded to inquiries about its latest valuation.
The company is projected to generate $9 billion in revenue in 2023 and is aiming for approximately $15 billion next year. SpaceX has achieved a dominant role in the space transportation market, accounting for over 64% of commercial rocket launches in the first half of this year.
Musk has attracted top talent to SpaceX, including former NASA engineers and Apple product designers. The company’s satellite business, Starlink, which aims to provide internet access in remote areas, has seen its revenue increase from $222 million in 2021 to $1.4 billion in 2022.
Despite speculation about a potential Starlink IPO as early as late 2024, both Musk and investor Ron Baron have dismissed these rumors. Baron, a significant investor in SpaceX, anticipates a Starlink IPO around 2027, with SpaceX’s valuation potentially reaching $250 to $300 billion.
Musk has previously indicated that he doesn’t foresee Starlink going public until at least 2025. The company is currently focusing on its ambitious goal of launching a “megaconstellation” of 42,000 satellites by next year.
Musk has mentioned on X (formerly Twitter) that Starlink’s IPO would depend on the company becoming financially viable and being able to predict cash flow effectively. Currently, Starlink has achieved breakeven cash flow, as per Musk’s recent posts.
SpaceX reported a profit of $55 million on $1.5 billion in revenue for the first quarter of 2023. The company has also raised significant capital through stock issuance, maintaining a strong cash position. However, it has yet to reach its projected target of 20 million subscribers, currently having about 1.5 million.
SpaceX continues to attract investment and interest despite the uncertainty around its cash flow predictions. It has recently secured a contract with the US Space Force and investments from entities like Intesa Sanpaolo.
Ron Baron, a billionaire investor, sees potential in SpaceX’s Starlink, expecting it to go public around 2027 with a valuation between $250 billion and $300 billion. He views SpaceX and Tesla as key investments in his portfolio.
Musk and SpaceX’s leadership have contemplated a Starlink IPO once the business stabilizes. Musk has confirmed that Starlink has achieved breakeven cash flow, though details remain unspecified. The company has launched over 5,000 satellites and boasts more than two million subscribers.
SpaceX’s surging valuation, now around $150 billion, is significantly driven by Starlink. Musk’s decision to possibly take the company public reflects the desire of long-term investors to realize their investments.
SpaceX’s stock sale, if it proceeds as reported, will be a notable event in the financial markets, offering a rare opportunity for investors to buy into one of Musk’s most successful enterprises.
The potential SpaceX stock sale is a testament to the company’s growth and Musk’s ability to attract investment and drive innovation in the space industry.
The decision to go public with Starlink or any part of SpaceX will be closely watched, as it could offer insights into Musk’s strategic plans for his space venture and its role in the expanding space industry.