Could SpaceX Or Starlink Be Nearing An IPO? A Recently Passed Milestone Could Be A Clue

Zinger Key Points
  • New comments from SpaceX suggest the company could be improving its financial shape.
  • Elon Musk has suggested SpaceX or Starlink could go public when certain items were hit.

SpaceX is one of three companies that count Elon Musk as their current CEO. Two of the companies are private with Tesla as the only Musk-led company that is public.

That could be changing soon.

What Happened: Musk-led space company SpaceX is one of the most valuable private companies in the world, recently valued at $137 billion.

For years, fans of the space sector and overall fans of Musk and what he accomplished at Tesla, had been begging for SpaceX to go public with an IPO. Musk had been hesitant to lay out a timeline for an IPO, but one item he said needed to be considered might be coming more of a reality.

SpaceX President and COO Gwynne Shotwell said Starlink, a unit of SpaceX had a cash-flow positive quarter in 2022 and shared an update for 2023.

“This year Starlink will make money,” Shotwell said at the FAA annual Commercial Space Transportation Conference.

The update from Shotwell could show the progress Starlink made after comments from Musk indicated the unit could be a success if it avoided bankruptcy, as Teslarati reported.

Other satellite constellations failed or went bankrupt in the space that SpaceX was trying to use to provide internet to anyone globally, including rural and hard-to-reach areas.

Starlink started in the mid-2010s and launched its first operation in November 2019. The company has now launched more than 3,500 working satellites.

Starlink passed the one million subscriber mark for the business in December 2022 and was available to people on all seven continents.

Teslarati said the cash-flow positive quarter likely happened in the fourth quarter when the one million subscriber milestone was hit. The company saw subscribers for Starlink quadruple between March and December.

One question mark was whether the comments on positive cash flow were counting any money raised in recent funding rounds for SpaceX.

“If Shotwell means that Starlink had a positive cash flow quarter without accounting for fundraising, the achievement would be highly impressive and indicate that Starlink’s financial health is surprisingly good,” Teslarati wrote.

The other question mark was if Shotwell’s comments about positive cash flow centered only on the Starlink business or SpaceX as a whole. Speaking at the same conference, Shotwell said SpaceX’s operations for the Falcon rocket and Dragon spacecraft made money and helped pay for Starlink and Starship development.

Teslarati noted the introduction of SpaceX’s next-gen Starship rocket and upgraded satellites could help “turn Starlink into a money printer.”

Related Link: Here's How You Can Invest In Elon Musk's SpaceX Before The Company Goes Public

Why It’s Important: The comments from Shotwell could be good news for investors who want a piece of SpaceX and Starlink in the future.

SpaceX recently raised a reported $750 million with Andreessen Horowitz leading the round. Other investors in the company included Alphabet Inc GOOGGOOGL, Fidelity and Ballie Gifford.

One of the key items that had kept SpaceX from going public over the years was its lack of profitability. Musk previously said the IPO would happen “several years in the future” and cited the public market not liking “erratic cash flow” as one of the reasons.

In November 2021, Musk got investors excited when he responded to a tweet about reasons why SpaceX should remain private. Musk’s response of “a lot has happened in 8 years” sparked rumors that he could be more in favor of an IPO of the company.

Over the years, Musk stated existing Tesla investors and retail traders would get first access to SpaceX or Starlink IPO shares.

“I’m a huge fan of small retail investors. Will make sure they get top priority. You can hold me to it,” Musk said.

In June 2022, Musk said it was not likely SpaceX or Starlink would go public until 2025. The CEO cited the need to have Starlink “in a smooth sailing situation with good predictability.”

With positive cash flow expected in 2023 and more predictable cash flow in the future, several of the milestones Musk wanted SpaceX and Starlink to hit before any IPOs or spinoffs could be here sooner than the 2025 date. This could also move up the potential for IPOs.

Read Next: Elon Musk Could Spin Off Starlink From SpaceX And Take Public By 2025, Says Analyst 

Photo: Shutterstock
 

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Posted In: NewsSPACETop StoriesGeneralAndreessen HorowitzBallie GiffordElon MuskFidelityGwynne ShotwellSpaceXStarLinkTesla
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