SpaceX Stock is trading for $150 billion as it steadily gains momentum while the American economy continues to struggle under the apprehension of a potential recession.
The company, founded and managed by Elon Musk, is the most sought-after privately held stock in private markets like Forge and Equity Zen. However, the current economic environment demands proper due diligence before investing.
Founded in 2002, SpaceX specializes in space launches and is a dominant player in the American aerospace industry. To date, the company has launched almost 5,000 Starlink internet satellites.
Interest in SpaceX Stock was initially sparked because of its super-affluent founder, Elon Musk. In the past, SpaceX has raised funds from the United States Department of Defense and NASA. At a time when many big tech giants have pulled back, SpaceX has continued to spend big on its R&D activities.
SpaceX’s Ambitions Are as Big as Its Valuation
The business goals and ambitions of SpaceX are unlike any of its competitors. The company currently delivers communications satellites into orbit, takes people for joyrides in space, covers national defense assignments, and carries NASA astronauts to the International Space Station.
Musk’s ultimate goal with this venture is to transport people to Mars.
The primary product of SpaceX is a reusable rocket, popularly known as the Falcon 9. These rockets have gained momentum as a low-cost option for the launch of small satellites weighing up to 200 kilograms. In 2021, the company generated revenue of approximately $1.6 billion by launching satellites. Other SpaceX platforms include the Dragon spacecraft, the Falcon Heavy, and the Autonomous Spaceport Drone Ships (ASDS).
SpaceX is also in the process of developing its deep space transport system, Starship.
NASA’s Artemis project, designed to carry astronauts and cargo into deep space, enlisted SpaceX as the principal contractor. The vision of this project is to evolve into a fully reusable system capable of launching and landing trips to different destinations in space. A prototype of Starship is currently awaiting approval from the Federal Aviation Administration (FAA) for an orbital test.
Another highly ambitious venture from SpaceX garnering attention is the Starlink project. This global broadband service will be available worldwide via low-orbit satellites. SpaceX launched its first two prototype satellites in 2018. Since then, SpaceX has launched almost 5,000 Starlink satellites, and consumers are rapidly adopting the beta service.
Investor Interest Builds
There has been a growing interest in space travel in recent years, and SpaceX has certainly gained maximum attention. In 2020, SpaceX showcased the Falcon 9 rocket in a live event as it transported NASA astronauts. The presentation went on to become the highest-rated telecast for the Science Channel and the No. 1 non-prime telecast for the Discovery Channel.
Billionaire Elon Musk’s mastery in raising venture capital is beyond any doubt. Space Capital, a New York-based firm, reports that the first quarter of 2021 recorded an increase in private investment in space companies to $1.9 billion. SpaceX drew the lion’s share of this funding. The company raised a whopping $850 million during this period.
Another critical report on the global space propulsion system market was released recently by Emergen Research. According to this report, this market was worth $6.67 billion in 2020 and is growing 14% to reach $19.9 billion by 2028.
Investors around the world want to capitalize on the potential massive returns offered by one of the world’s most ambitious and innovative companies. The company has already achieved key milestones, such as the first-ever reusable rocket, and many more are certainly in the pipeline.
Investing in SpaceX is one of the best ways to participate in this revolution. Naturally, many savvy investors now consider SpaceX stocks an excellent play money investment opportunity. The potential applications of different SpaceX architecture across industries have created quite a stir amongst investors.
In 2015, the revenue of SpaceX was less than 1 billion. According to company owners, it is currently worth $150 billion, representing approximately 32% growth in annual revenue compared to 2022. The $150 billion valuation is due to a private purchase tender offering in July.
A copy of the purchase offer reveals SpaceX has agreements with its existing and new investors to put up to $750 million in insider stocks on sale at $81 per share. The company typically performs this type of secondary sale of existing shares twice a year to create an opportunity for shareholders to sell their stock.
A Morgan Stanley survey published in October 2022 reveals that many respondents expect SpaceX to overtake Tesla’s valuation. In 2021, Tesla soared to a $1 trillion market cap.
The rapid growth of SpaceX, along with its high cash-flow potential and buying back stock recently, make it a very attractive investment. If they continue to buy back stock and grow revenues with Starlink, SpaceX could easily outperform other companies shortly and grow into a 1 trillion valuation.
Though SpaceX has created quite a buzz amongst investors, acquiring its stocks is not easy because the company is still privately owned with no immediate plans of going public. SpaceX has no problem raising capital through private equity and venture funds.
Therefore, the only option for interested investors is to obtain private shares. Personal stock purchases, however, may be costly and challenging. To be legally eligible to purchase private shares, an investor must be accredited. Per the SEC, that means having a net worth higher than $1 million, a minimum annual income of $200,000, or a valid securities license.
Alternatively, one can buy SpaceX stock through the Baillie Gifford Trusts, VC funds, Alphabet stock, and the secondary market.
As it stands now, a much hoped-for SpaceX IPO will not happen anytime soon. Therefore, retail investors looking for their personal rags-to-riches stories should rely on shares sold by insiders, private equity funds, venture capital firms, angel investors, and other corporations.