Space Exploration Technologies Corp. (SpaceX) is now undergoing an insider stock sale. Bloomberg claims the corporation is valuing itself at about $140 billion, given that it is issuing shares at $77 each.
According to the people who disclosed the share sale to Bloomberg, SpaceX has had conversations on a variety of pricing options for the valuation, but in the end, they settled on the amount of $140 billion as the appropriate value for the company.
Considering the enormous federal contracts the firm has with NASA, a value of $140 billion is not out of the question; PitchBook put the company’s worth at $127 billion in July.
Given its size, one could conclude that SpaceX is now more likely than ever to split Starlink into a new firm. Back in June of that year, 2021, Musk proposed the concept, but he later clarified that Starlink would require a more stable source of revenue to go through with it.
However, neither the share price nor the business selling shares to workers were confirmed by SpaceX. Furthermore, they remained ambiguous on whether or not they would finish a primary financing round at this assessment.
A little intro to SpaceX
Space Exploration Technologies was established by Elon Musk in 2002 and develops, produces, and launches vehicles, rocket engines, spacecraft, and communications satellites. With its help, the Moon and Mars might be explored and colonized. The corporation wants to make space travel commercially viable.
In addition to NASA and other governmental organizations, SpaceX also launches rockets and spacecraft for commercial clients. To reduce operating costs, SpaceX is leading innovation in the utilization of reusable booster rockets. The company plans trips for people who want to pay to go to space and takes astronauts to and from the International Space Station for NASA.
More than 40 nations now have access to the Internet thanks to Starlink, a company owned by SpaceX that has launched hundreds of its satellites into space since January 2020.
Since the Russian invasion in February 2022, Starlink has made it possible for Ukraine to continue having Internet connectivity. According to SpaceX, 400,000 Starlink customers were on board as of June, up from 250,000 in March.
Will SpaceX go Public?
Although SpaceX is worth a lot of money, there are currently no signs that it will go public anytime soon.
CEO Gwynne Shotwell previously told CNBC that repeated Mars flights would be required before SpaceX would go public. Musk has also said that the long-term goals of the business are incompatible with the needs of the company’s public shareholders. If the business ever does an IPO, it will happen after Starlink’s initial public offering (IPO).
SpaceX is a private corporation; hence, it does not reveal its financials to the public. However, the firm may have made several billion dollars through launch sales and the Starlink Internet service. According to a PayloadSpace report published in October, the company’s income in 2022 might reach $3.25 billion, made up of $980 million from Starlink and $2.27 billion from mission launches.
To fund its expensive operations and growth, the firm may need to seek outside funding. By increasing the number of Starlink subscribers, the corporation will also be able to create greater free cash flow.
The rapid development of the space industry
SpaceX has led the way in a significant reduction in launch costs since the debut of the Falcon 9 in 2010, making space much more accessible. According to Citigroup’s forecast, the market could reach $1 trillion by 2040, growing at a compound annual growth rate of 5% from 2020:
“The bulk of the revenue increase in the satellite industry will come from manufacturing, launch services, and ground equipment.” However, new space applications and sectors are predicted to see the largest growth rate during the projection period, with revenues rising from $0 to $101 billion.
In the past, governments and the richest nations in the world dominated space investment. However, private equity has overtaken other investment options as the focus on SpaceX, Blue Origin, and Virgin Galactic (SPCE) has grown, as has knowledge and the rate of technological advancement. Citigroup also said:
Over the last ten years, there has been around $24 billion in commercial and private space investment, with private equity accounting for about 80% of that total.
The rising understanding of the potentially considerable influence on space accessibility from decreasing launch costs has contributed to this investment rise. The 2015 Falcon 9 launch by SpaceX served as a showcase for these low costs.
Private investors’ increased interest in investing in such a rapidly developing business, which was previously inaccessible to them, may increase SpaceX’s future value as it seeks further investment.
With inputs from Capital & DriveTeslaCanada