SpaceX IPO: Everything you need to know about SpaceX

Elon Musk has no plans to take his space exploration company public, but that hasn’t stopped investors’ excitement about a potential SpaceX IPO. Find out everything we know about the company and a potential listing.

What do we know about the SpaceX IPO?

Previous comments from management and Musk have made it clear that the company doesn’t need to raise any capital to bolster Starship, Starlink or any of its other initiatives. But that hasn’t stopped investors hoping that they’ll get the chance to buy shares via a public listing.

Most recently, in June 2023, founder Elon Musk joked on a live Twitter (or should we say X?) interview with Bloomberg that it wouldn’t be legal for him to comment on potential IPO plans. But Musk has always been reasonably vocal about not wanting to take SpaceX public, given the demands of shareholders will conflict with his ambitions.

In fact, Chief Operating Officer Gwynne Shotwell has said that the SpaceX IPO won’t happen until the company is regularly sending crafts to Mars – a goal that isn’t in sight just yet.

The reason SpaceX IPO talk has started up again is that the company just held another secondary sale and rumours continue to swirl that Musk needs to monetise some of his holdings to fuel his Twitter (X) expansion plans.

How much is SpaceX worth?

SpaceX is worth around $150 billion, according to estimates of its value after an insider sale of stock – which is a 9% increase in valuation from last year. This came after an agreement to sell up to $750 million shares from insiders at $81 per share, according to documents obtained by CNBC.

The previous secondary sale was $77 per share, giving the firm a valuation of $140 billion.

These valuations secure SpaceX’s position as one of the most valuable private companies in the world – it’s technically classed as a ‘centicorn’, a unicorn company 100 times over.

As of yet, SpaceX hasn’t announced intentions to raise new capital, but it does typically perform secondary funding rounds about twice a year, giving employees and existing shareholders the opportunity to cash in on stock.

The rise in value comes from a steep increase in funding, and the growing expected market capitalisation of SpaceX’s Starlink segment. It’s expected that Starlink itself will go public by 2025, in a spin-off from the main SpaceX business. The valuation of Starlink is said to be half of SpaceX’s current market capitalisation.

A word to the wise, like many of the ventures Musk is involved in, SpaceX and Starlink’s future share prices will be closely tied to the man himself – not just the business’ core fundamentals. No one should be surprised to see the valuations change dramatically with any headlines about Musk once market sentiment drives the share price.

What does SpaceX do?

SpaceX is primarily a privately funded rocket manufacturer and transportation services company. It’s known for its reusable rocket and launch system.

The first model, named Dragon, was unveiled in 2006. But it was the Falcon 1 that catapulted SpaceX into the public eye. The Falcon was the first privately built, liquid-fuelled booster to make it into orbit – although it took four tries to get the rocket to fly successfully. The Falcon made two successful flights in September 2008 and July 2009.

In May 2012, the Dragon spacecraft – attached to a Falcon 9 rocket – completed its first cargo delivery to the ISS. In 2015, SpaceX’s next model the Falcon 9 successfully completed its first landing. This was the first model that reused boosters, reducing its landing costs.

The Falcon Heavy debuted in 2018, which is the model that flew a Tesla Roadster and space-suited mannequin.

In 2019, the original Dragon spacecraft that was intended to bring NASA astronauts to space malfunctioned while on the ground. The incident set the company back a long way, but SpaceX finally reached the milestone of a crewed mission to the International Space Station in 2020. 

The company’s core goal is to make space technology and exploration available to people who aren’t trained astronauts. Musk and his team have been developing the Starship system that they hope will enable lunar landings and crew a mission to Mars. The testing program began in 2019, and achieved a soft landing in 2021.

Starship attempted its first orbital test earlier this year, but it was unsuccessful.

Although the rocket business is what makes regular headlines, it’s the other core element of SpaceX that makes the money. The Starlink satellite business has a near-monopoly over the US satellite launch market, both due to its own operational success and the struggles of its rivals to compete.

Starlink now has more than 4,000 estimated operational satellites and more than 1.5 million subscribers to its satellite-based broadband internet system. SpaceX has said that Starlink will start to make money this year, having achieved a positive cash flow last year.

Starlink now boasts 250 successful satellite launches thus far in 2023 and is expected to exceed 300 by the end of the year.

However, the business has faced criticism from NASA and astronomers alike who state that the constellation of satellites has caused problems with observations of the night sky.

How does SpaceX make money?

SpaceX makes most of its money through government and commercial contracts – mostly for its Starlink business, but alsofor transporting goods into space.

In 2006, SpaceX received its first $278 million from NASA under the agency's Commercial Orbital Transportation Services (COTS) demonstration program, which was created to fund the development of transportation for cargo commercially to the ISS.

It’s since won a number of contracts for both its rocket and satellite businesses. For example, Starlink won a Pentagon contract earlier this year to provide services in Ukraine – the amount they were paid was not disclosed.

This is another reason an IPO could be ruled out, as becoming a public company with reporting responsibilities could deter the security of future government contracts. As a private company, SpaceX is free from shareholder claims and transparency burdens.

However, Boeing is a publicly traded business and still wins a lot of government contracts.

Is SpaceX profitable?

SpaceX turned its first profit during the first quarter of 2023, according to documents obtained by the Wall Street Journal. The report showed profits of $55 million on revenues of $1.5 billion.

However, for the full year of 2022, SpaceX still posted a loss of $559 million on revenues of $4.6 billion – though that’s half of the loss from 2021.

Who owns SpaceX?

Elon Musk’s trust currently owns 47.4% of the outstanding stock of SpaceX and has voting control of 78.3% of the outstanding stock of SpaceX, according to documents filed in 2020.

SpaceX’s primary capital came from Musk, who used the funds from the sale of PayPal as the initial stake. He spent a third of his reported fortune, $100 million, to get SpaceX going.

There are plenty of other investors in SpaceX, although a lot of the funding remains under wraps. We know that in January 2015, Google and Fidelity Investments acquired a 10% stake in SpaceX for $1 billion.