SpaceX's Starlink Satellite Internet Business 'Likely' To Go Public

Elon Musk's SpaceX is considering spinning off its Starlink broadband business, possibly as a public company, Bloomberg reported Thursday.

If Starlink launches as a separate publicly traded entity, it could boost investor interest across the entire space economy, one analyst said.

Bloomberg reported that SpaceX president and chief operating officer Gwynne Shotwell, raised the spinoff and IPO idea as "likely" at an investor event Thursday in Miami. 

“Right now, we are a private company, but Starlink is the right kind of business that we can go ahead and take public,” Shotwell said, according to Bloomberg. “That particular piece is an element of the business that we are likely to spin out and go public.”

Virgin Galactic Holdings SPCE went public last year. The stock's shares have more than doubled since the start of 2020.

The Satellite Broadband Network

SpaceX has launched more than 240 satellites for the broadband network, which is expected to begin satellite-based internet service this summer. The company is building about seven satellites a day.

Morgan Stanley Says Space Will Become $1-Trillion Industry 

If an IPO or spin-off were to occur, it "would significantly accelerate investor interest across the broader space economy we forecast to reach $1 trillion by 2040," Morgan Stanley analyst Adam Jonas said in a Friday note to investors. 

SpaceX has several different semi-related space businesses, with the satellite-broadband business being distinct, for example, from the company's Mars and deep space exploration side, the analyst said.

"Starlink requires many billions of capital … which may naturally drive increased relevance to a broader set of investors," he said.

Jonas cited a Washington Post report that SpaceX has said its Starlink network may cost more than $10 billion, although Musk has said it could bring in more than $30 billion a year once running. 

If, as planned, it deploys up to 30,000 additional satellites, the cost could be even higher - and the satellites would have to be replaced every five years, the analyst said.

Wide Risk-Reward Gap

Jonas said the risk-reward scenario remains wide, with a bear case of about $5 billion and a bull case close to $120 billion. 

Bloomberg reported that an IPO would likely be welcomed by employees and investors who have valuable stock that they now only can sell during certain limited private transactions. 

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Photo courtesy of SpaceX.