Both Musk and Tesla investors could benefit from a Starlink IPO. However, Musk recently stated that it would not be legal for him to speculate on a Starlink IPO.
• Musk regains first place among richest people
• Starlink IPO was first announced in 2021
• Both Musk and Tesla investors can benefit from Starlink IPO
Musk is the richest person in the world again
Only recently has Elon Musk regained first place among the richest people in the world. His fortune is currently around $219 billion, according to the Bloomberg Billionaires Index. As Fortune explains, that’s largely because Tesla stock has surged significantly over the course of this year. Tesla shares have already gained around 103.13 percent since this year and are currently trading at $250.21 (closing price: June 27, 2023). And yet there’s something that could make the billionaire even richer – the IPO of Starlink, the satellite broadband unit of his private space company SpaceX.
Starlink IPO announced long ago
But how likely is a Starlink IPO in the near future? Musk announced for the first time in 2021 that the company would go public. At the time, Musk said via Twitter that Starlink could be taken public if sales could be better estimated. Finally, in January this year, venture capitalist Chamath Palihapitiy predicted that a Starlink IPO would happen later this year, calling it the biggest deal of 2023, according to Fortune. Palihapitiy said Starlink’s valuation should be “at least half of SpaceX’s current private value.” In June, reports emerged that SpaceX was trying to increase its valuation to $150 billion. This is to be achieved by allowing employees to sell their shares. As recently as January, the space company raised $750 million at a valuation of $137 billion. When asked about this in a Twitter Space Talk by Bloomberg’s Ashlee Vance, Musk said, according to Fortune, “It would not be legal for me to speculate on a Starlink IPO.” Immediately after that, however, he started laughing. When asked why Musk couldn’t talk about it, he replied, “We’re private, but you can’t — I think it’s against the rules to go into any detail about a future IPO.”
Tesla shareholders could benefit from Starlink IPO
Tesla is currently the only company associated with Musk to be listed on the stock exchange. That means Musk’s only option is to sell Tesla stock when he needs to raise money, such as to buy Twitter. In order to relieve the US company a bit, another stock market listing is needed. At least that’s the view of Al Root, senior editor at Barron’s. According to Root, if Starlink actually goes public, a market value of $70 billion is possible. Musk, who is said to currently own around 42 percent of the company, would have access to around $30 billion and could sell shares in the space division from then on to raise additional capital if it is needed. A circumstance that could make Tesla investors happy. Because so far, investors have had to struggle more and more often in the past few months under Musk’s sales and the associated price slumps. As the market research company CCS Insight explained last fall, a Starlink IPO is only realistic after 2025. It remains to be seen when another company around jack-of-all-trades Musk will actually go public.
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