SpaceX is considering an IPO in fast-growing Starlink satellite services. Starlink is a subsidiary of SpaceX, which belongs to the richest man on the planet, Elon Musk. According to the news agency Bloomberg, which brought this information, the company could enter the stock exchange at the end of next year.
With this move, SpaceX is supposed to try to take advantage of the high interest in communication through space. To prepare for the planned transaction, SpaceX is moving the assets of its satellite unit to a subsidiary, according to Bloomberg.
The subsidiary could eventually be spun off in an initial public offering (IPO). However, according to Bloomberg, the final decision has not yet been made and there is a possibility that SpaceX will keep its satellite unit. The IPO could also be delayed until 2025.
Musk has been talking about the planned entry of Starlink on the stock market for several years, but he has not yet specified the exact date. In 2021, the American visionary said that the space Internet service will go public only after revenue growth and cash flow are smooth and more predictable. Last year, he told his employees that the premiere on the publicly traded market could take place in a few years.
Musk denied the report
- The American billionaire on the social network X (formerly Twitter) denied the speculation about the planned entry of Starlink on the stock exchange. On the other hand, Musk is known for his inconsistent and controversial statements on social media, which often do not correspond to reality.
- For example, in 2018 he “tweeted” that he had secured financing to buy back shares of his company Tesla, which turned out to be a lie. He was fined $20 million by the Securities and Exchange Commission (SEC) for fraud and misrepresentation that harmed investors and stock market traders.
- In 2020, he then “tweeted” that Tesla’s stock price was too high, causing it to crash. We wrote here about how Musk changed his opinions and decisions several times when he bought the social network Twitter.
- So Musk’s recent statement that Starlink will not go public next year may or may not be true.
“Elon Musk announced the project in 2015 and five years later made it clear that an IPO would be a must. The amount of investment in Starlink exceeded ten billion dollars. Musk watches the financial indicators because the date of the company’s IPO depends on them,” said Maxim Manturov, Director of the Freedom Finance Europe group for investment analysis.
Recently, Musk’s space business has taken off at a solid pace. SpaceX expects that the total revenue of Starlink will reach ten billion dollars in the next year, which translates to about 255 billion crowns. That’s more than the rest of its rocket business and will account for two-thirds of SpaceX’s total revenue, Bloomberg reports.
Since its founding in 2002, SpaceX has launched a huge number of satellites that provide high-speed Internet in more than 60 countries. The firm has committed billions of dollars to build this constellation of satellites, and the investment positions Starlink as a key player in the competitive field of space communications, where it competes with rivals such as Amazon’s Kuiper project.
Starlink is a service consisting of a large number of satellites and ground stations that provide broadband Internet connection. The satellites are currently in orbit at an altitude of approximately 550 km. Satellites move at different heights around this value. A total of 12,000 satellites are to be placed in orbit by 2027. Launching began in 2019. Although there are now significantly fewer satellites than the final number, the service is already operational.
Jeff Bezos, as the founder of Amazon, wants to get a total of 3236 satellites into orbit under the banner of his company Blue Origin. However, the current prototypes are only used for system tuning, the first Internet signal should not be broadcast by the satellites until the beginning of next year.
Musk announced in early November that Starlink had achieved positive cash flow, a significant improvement over the previous year. Musk indicated at the time that his biggest goal for the company was to not go bankrupt.
For 2022, Starlink reported revenues of 1.4 billion dollars (roughly 30 billion crowns), which is about 222 million dollars more year-on-year. However, the company’s ideas from previous years spoke of the fact that this year Starlink will generate annual revenues of at least 12 billion dollars and reach an operating profit of 7 billion US dollars.
Even SpaceX itself could be publicly traded in the future, but Musk said in his earlier statements that this will definitely not happen before the company succeeds in getting the first people to Mars. Now the space company is one of the most valuable private companies in the United States, its value is estimated at 150 billion dollars, which is over 3.8 trillion crowns.