SpaceX Stock: When Will the IPO Blast Off?
SpaceX recently raised funding at a $419.99 share price (somewhere, Elon Musk giggles). With the company now valued at $74 billion and possessing interplanetary ambitions, is an IPO on the horizon? Below, we have everything you need to know about SpaceX stock. That includes some backdoor ways to invest in the company’s success and other space stocks to consider as well.
What is SPACEX?
SpaceX has three primary business lines: launching payloads into space for NASA, selling satellite Internet, and space tourism. The company has pioneered a number of technologies and hopes to one day become the first interplanetary company!
Expected IPO Date:
2022 or later
- As of February 2021, SpaceX is valued at $419.99 per share at a valuation of $74 billion.
- SpaceX is not currently publicly traded. Shares may be available on secondary markets. In addition, public companies whose shares are widely available for purchase have invested in SpaceX.
- SpaceX has a widely-acknowledged lead in front of competitors such as Blue Origin.
- Beyond delivering payloads into space, the company has opportunities in satellite Internet and space tourism.
- Building a space business currently comes with tremendous customer concentration. SpaceX relies on NASA for a significant portion of its revenue.
- While SpaceX has a lead over many rivals, Jeff Bezos recently announced he’s stepping down as CEO of Amazon and plans to spend more time at his space startup Blue Origin. In short: the competition is rising!
SpaceX News & Analysis
- March 11: Starlink launches 60 satellites & reveals next growth market
- February 17: SpaceX Raises Fresh Cash at $74 billion valuation
- February 1: SpaceX Announces All-Civilian Space Mission for Q4
- January 25: SpaceX Just Broke a World Record
- January 24: Will SpaceX’s Starlink Kill the Cable Industry?
The Big Picture: Why Do Investors Want SpaceX to IPO in 2021?
Wall Street is eagerly anticipating a SpaceX IPO after seeing competitor Virgin Galactic explode 145% in the last year while witnessing Elon Musk’s other company — Tesla Motors — climb a mind-boggling 422% in the same period. Needless to say, a SpaceX IPO is likely to be the hottest ticket on Wall Street.
However, the biggest challenge to retail investors making gains in SpaceX stock might just be Elon Musk himself. He has made statements that the company’s long-term goals aren’t compatible with the short-term demands that come with being a public company.
Here’s what investors should consider before buying shares once SpaceX stock is available to the public.
Will Starlink IPO Before SpaceX?
Before we get into the full details on SpaceX’s future IPO potential, we need to note that Elon Musk and SpaceX employees have started on repeated occasions they intend to IPO Starlink before a SpaceX IPO.
Why would a Starlink IPO be potentially lucrative for investors?
- Leaked SpaceX projections from 2016 had Starlink contributing 83% of company revenue by 2025.
- Some market forecasts believe satellite Internet could reach a total addressable market (TAM) of $100 billion in the coming decade. Compare that to satellite launches, which were just $4.5 billion in 2017.
- Starlink is already shipping its product. As of February 2021, it had left beta and was delivering to customers across several markets.
Want more details on Starlink? We have a full hub that can get you up to speed on when Starlink stock could IPO.
Bull Case: Why Would You Want to Buy SpaceX Stock?
Founder and CEO Elon Musk has plans for SpaceX to be the first interplanetary company. SpaceX’s mission to colonize Mars for the benefit of mankind might seem audacious, but so did the plans of explorers like Christopher Columbus that discovered “the New World.”
Skeptical? Understand this is a long-term goal and SpaceX doesn’t have to create a new civilization of space-faring humans to be a successful company. In fact, SpaceX is well on its way to establishing its viability from easier-to-accomplish tasks like government-contracted and civilian space travel.
SpaceX has three potential revenue streams. Currently, the bulk of SpaceX’s revenue comes through its contract with NASA. SpaceX became the first civilian company to design, manufacture, and launch an orbital rocket into space and parlayed that into a series of contracts with NASA.
SpaceX has long-term deals worth hundreds of millions to develop and manufacture delivery vehicles and deliver cargo to the International Space Station via its commercial resupply services contract win. The company has continued to lead successful missions for governmental agencies and will be top-of-mind for future contracts.
Second, SpaceX is launching a series of Starlink satellites that will provide high-speed Internet access. After announcing the service, SpaceX quickly revealed that more than 700,000 individuals were interested in Starlink.
The main opportunity for Starlink is that millions of users live in rural areas that are best served by satellite internet. To date, these services have been slow and expensive, making Starlink potentially very disruptive in the space.
But it’s the next leg of SpaceX’s monetization that has been the highest profile: space tourism. In February 2021, Musk finally announced the event the world and private SpaceX investors have been eagerly anticipating: in the fourth quarter of 2021 SpaceX will launch its first all-civilian mission to space.
The company’s Falcon 9 rocket first carried astronauts to space in a Dragon spacecraft in March 2020, so SpaceX has a lead on many other commercial spaceflight companies targeting this potentially lucrative market.
Bear Case: Why Pass on SpaceX Stock at IPO?
The biggest risk for SpaceX investors is execution and headline risk. Elon Musk is a legendary entrepreneur, but that doesn’t guarantee success in an industry chock full of complexity. Earlier in SpaceX’s history, the company experienced its fair share of setbacks, including launch failures and explosions.
While these appear in the rear mirror, the consequences of failure have exponentially increased. Going forward, if a negative event like an explosion occurs it could lead to decreased demand for commercial travel and an end to the critical government contracts.
Relatedly, customer concentration risk is an issue for SpaceX both in the public and private sectors. Although SpaceX saves government money on space travel, the benefits seem misaligned in a world where covid rages and unemployment remains stubbornly high. The government’s priorities can quickly change in the event of a push for fiscal restraint or even a change in party control.
This isn’t new for Musk. The Tesla and SpaceX CEO has faced a litany of criticism for both companies’ dependence on government investment, contracts, and subsidies. However, as the only source of significant revenue any changes in governmental priorities would force SpaceX to revisit its value proposition.
While exciting, success in the commercial space is not guaranteed. Musk wants to bring the cost of space tourism down, but it will never be an option for most consumers. Consumers with the financial ability to fly into space will likely treat the experience as a novelty event, something that’s fun to do once.
For example, the recently announced first all-commercial space flight is being sponsored by a billionaire, which is paying the costs for three “everyday” people as part of a charity event.
Finally, Musk faces competition from two billionaire investors. Sir Richard Branson founded Virgin Galactic in 2004 to build upon his success running an airline, and Blue Origin, founded by Amazon’s Jeff Bezos in 2000.
Virgin Galactic went public via SPAC in 2019 and has used the public markets to raise cash and fund future operations. It’s been a fruitful endeavor for long-term investors as the stock, symbol SPCE, had been on a tear in the last year.
When Can I Buy SpaceX Stock?
SpaceX stock is not currently publicly traded and, provided you are a non-accredited investor, you’ll have to wait until SpaceX has its initial public offering or follows Virgin Galactic’s lead and does a reverse merger with a SPAC (special purpose acquisition company).
Don’t look for that to happen soon, though. Elon Musk has been clear that he does not intend to take the company public in the immediate timeframe…or at all. SpaceX has noted the short-term demands of shareholders conflict with Musk’s long-term ambitions.
(However, there is a backdoor way you can own SpaceX stock…see below)
Despite Musk’s intentions, SpaceX’s debut might come sooner than he expects. Manufacturing spacecraft is a capital-intensive industry that requires tons of money to keep things running.
To date, private investors have gladly stepped in to provide SpaceX an abundant stream of funding, but eventually, they’ll expect a return on investment. The easiest way to do so is to tap the public markets.
Additionally, Virgin Galactic is now public and can quickly source new investment capital, which could force SpaceX to IPO to keep up.
SpaceX Stock: Who Owns It Now?
SpaceX is private so non-accredited investors outside of employees are not allowed to directly buy stock. Additionally, SpaceX is under no obligation to disclose its investors, which prevents the public from knowing all its backers.
Here’s what we do know. SpaceX was founded by Musk in 2002 and he remains the company’s CEO. According to Forbes, Musk is the second-richest person in the world (trailing Amazon and Blue Origin founder Jeff Bezos) with a net worth approaching $200 billion. Before the most recent round of funding, Musk owned 54% of SpaceX as of September 2020.
SpaceX stock has a large list of venture capital backers, including Founders Fund, the VC firm started by fellow PayPal Mafia brethren Peter Thiel, along with high-profile VC firms G Squared and Draper Associates.
Finally, even the federal government invested in SpaceX early in their partnership, putting more than $3.1 billion into the company to fund its Dragon spacecraft.
Also, if you own stock in Alphabet you have a small amount of ownership in SpaceX as Google Ventures, its investment arm, invested $1 billion in the company in 2015.
With a list of backers like this, it’s understandable that many retail investors are itching to buy the stock once the IPO occurs.
SpaceX Stock Price: How Much Is It Now?
SpaceX has gone through more than a dozen rounds of funding. We know the valuation will change each time the company undergoes a new investment round, and if the company does go public the stock price will be higher than the current price.
If you look at the chart below that includes cumulative money raised by round and the valuation per round and you can see the significant market capitalization growth. Prior to February, SpaceX had taken nearly $5.1 billion on outside funding and was valued at $46 billion as of its last funding round.
However, it has been reported the company’s newest round of funding raises the company’s value to $74 billion and provides $850 million in fresh capital.
The price per share in this new round? $419.99 per share. A penny away from Elon Musk’s favorite number.
What is SpaceX’s Stock Symbol?
A stock symbol is for public companies, as the price changes often and it allows investors to quickly see their investment performance amid a sea of blinking tickers. As a private company, SpaceX has no reason to have a stock symbol and does not have one. However, when SpaceX comes to the public markets it will likely join Musk’s Tesla and list on the NASDAQ exchange.
Historically, the New York stock exchange has been preferred by large equipment manufacturers like Boeing, Raytheon, and Caterpillar all being listed on the “Big Board.” However, Musk has history with the tech-focused NASDAQ exchange and likes to think of himself as more of a tech founder than a manufacturer.
Wherever it’s listed, when the company comes to the public markets, it will likely be a traditional IPO, unlike competitor Virgin Galactic, which chose to go public via a reverse merger with a SPAC.
At its reported $74 billion valuation, SpaceX is significantly higher valued than Virgin Galactic’s $2.2 billion valuation. At that valuation, it would be difficult to find a “blank check company” with the capital to bring it to market. Second, Musk has a relationship with investment banks through Tesla and many would jump at the chance to take this company public.
The method — SPAC or traditional IPO — doesn’t affect the stock symbol but the choice of exchange might. Traditionally, companies on the New York Stock exchange have used symbols three letters or fewer – BA for Boeing and RTN for Raytheon – while stocks on the NASDAQ tend to have four letters (TSLA).
A stock symbol sets you apart from other companies in this crowded space and forces investors – with short-term memories – to remember your company. Assuming a NASDAQ listing, SpaceX has a choice of symbols like SPEX and SPAX to choose from once it goes public. The stock symbol SPCX would seem like a natural fit for SpaceX’s stock ticker but has been claimed by an ETF that ironically tracks SPACs.
Space Stocks: Publicly Traded SpaceX Competitors
While a SpaceX IPO might be a long way off the horizon, there are plenty of other competitors and space exploration alternatives that are publicly traded. With 2021 seeing a wave of special purpose acquisition company (SPAC) mergers, no shortage of space companies are raising to go public. Just a word of caution, make sure to do your due diligence, as many may be of significantly lower potential than SpaceX.
- Blacksky: Is a satellite imagery company that is merging with a SPAC named Osprey Technology that trades under the ticker symbol SFTW. Once the merger is completed, the company will trade under the ticker symbol BKSY. The merger values BlackSky at $1.5 billion. The company plans to use the proceeds to launch a fleet of 30 imaging satellites.
- Spire Global: Is joining Blacksky in going public through a SPAC. The company is merging with NavSight and will trade under the ticker SPIR once the merger completes. The company bills itself as a “high growth SaaS company” whose satellites serve the maritime and aviation industries while providing weather forecasting as well.
- Virgin Galactic (Nasdaq: SPCE): The company that kicked off the round of space companies going public through SPACs. Virgin Galactic is building a model based primarily around space tourism but has seen its stock struggle in early 2021 as it had to abort test flights in December and February. The company hopes to have its electromechanical interface issues fixed for a May flight.
SpaceX Timeline: When Will it Send People to Mars?
SpaceX has the ambitious goal of making humanity an interplanetary species by sending spacecraft to Mars. Here’s a look ahead at some of SpaceX’s planned timelines.
- 2021: Starlink moves out of Beta and toward impactful revenue generation. This is an important step for SpaceX because Starlink is projected to generate the bulk of the company’s cash flow in the coming years.
- Late 2021: SpaceX intends to send three tourists to the International Space Station for 10 days. The flight will use a Falcon 9 rocket and Crew Dragon spacecraft.
- 2022: SpaceX plans manned missions to the moon onboard its Starship vehicle.
- 2023: Planned date for tourist missions around the moon.
- 2024: First uncrewed mission to Mars.
- 2026: The year when Elon Musk says he’s “highly confident” SpaceX will land humans on Mars.
SpaceX Stock: Should You Buy the IPO?
It’s a fool’s errand attempting to answer this question without seeing the company’s financial position or understanding what the IPO price would be…if it even happens. One thing that’s guaranteed is SpaceX will have nosebleed valuations.
Additionally, in the intermediate future the company’s largest source of revenue will come from the federal government, so growth will be largely based on appropriations and not the quality of the product. Musk knows this and it’s one reason why he doesn’t care to take the company public.
The next blockbuster IPO?
2021 could be one of the biggest years for IPOs in stock market history. Yet, with just a small fraction of IPOs historically driving nearly all the profits, who will you trust to uncover the most innovative and high-upside IPOs in the coming months?
There’s a company that “called” these businesses long before they hit it big. They first recommended Netflix in 2004 at $1.85 per share, Amazon in 2002 at $15.31 per share, and Apple back in the iPod Shuffle era at $4.97 per share. Take a look where they are now.
That company: The Motley Fool.
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At this point, a bet on SpaceX is a bet on Elon Musk, which has paid off handsomely for Tesla shareholders. However, Musk hasn’t always been a flawless executive. Many forget he was heavily involved with and the largest shareholder of SolarCity, which floundered on the public markets until the company was acquired by Tesla in a move heavily scrutinized by Wall Street analysts.
If SpaceX debuted this year it would have an expensive price to sales ratio when investors are in a mania about space travel stocks, willing to pay nearly any price for them on the basis others will pay more – the greater fool theory – so it’s a folly to take fundamentals into account for owning SpaceX stock.
Investors should also understand that IPOs tend to underperform established stocks in the long run, so SpaceX must ensure it is (pun unintended) firing on all cylinders and there’s no guarantee investor sentiment and valuation corrections won’t drag the stock down anyway.
At this point, it’s all speculation as it appears SpaceX will not file for its IPO in 2021. Even if it did it would be a high-risk proposition. However, if there’s any entrepreneur that can succeed at putting mankind on Mars, it would be Elon Musk. There’s no wonder why investors are excited to see the company debut on the public markets.
Markets such as Sharespost do try facilitating secondary markets where investors can purchase SpaceX stock. However, it should be noted that the minimums on these sites often reach $100,000 or more. In addition, you must be accredited (have a net worth of at least a million minus your primary residence or reach certain income thresholds) to purchase SpaceX stock through these marketplaces.
Frequently Asked Questions
How do you buy SpaceX stock?
SpaceX is currently private and its stock trades at a reported $419.99 per share as of February 2021. If you want to own a piece of SpaceX you can buy publicly traded companies that have invested in it already — such as Alphabet — or if you’re an accredited investor you can look for shares on secondary marketplaces.
What is SpaceX’s share price?
SpaceX closed its most recent round at $419.99 per share. (Well played, Musk). Remember, these shares are private and you cannot find SpaceX shares on major exchanges such as the NYSE or Nasdaq.
What is SpaceX’s stock symbol?
SpaceX is not currently listed and has no public ticker. If the company decides to go public tickers such as SPEX or SPAX will be available.
How much is SpaceX worth?
As of February 2021, SpaceX is in the process of closing a new round of funding at a minimum valuation of $74 billion. Pre-close, SpaceX has raised more than $5 billion in total funding. Before its latest funding round SpaceX was valued at $46 billion.
Is SpaceX a buy or sell?
On the bear side, SpaceX’s ultimate aims to colonize Mars and commercialize space travel will require a lot of technological breakthroughs and capital. The bull case for SpaceX is Elon Musk’s track record of success and the potential long-term value creation if his audacious plan comes to fruition.