SpaceX is a spacecraft company founded in 2002 to revolutionize space technology. The company has constantly made headlines, especially since putting a payload in Earth orbit in 2008. As the company’s value continues to rise, so does the interest and buzz surrounding it.
If you’re curious about this company, you’ve come to the right place. Keep reading to learn if SpaceX is a private company and if you can and should consider investing in it.
Is SpaceX a Private Company?
SpaceX, also known as Space Exploration Technologies Corp, was founded by Elon Musk in 2002. Musk sought to change the state of space technology, reduce space transportation costs, and make space exploration possible for people who aren’t trained astronauts. His ultimate goal is a crewed mission to Mars.
According to its founder, the company is based in Hawthorne, California, and currently has roughly 12,000 employees, according to its founder.
Since its inception, SpaceX has remained a private company.
Thanks to its considerable achievements, staggering value, and Musk’s bold goals, the company has attracted significant attention, with many investors interested in buying SpaceX stocks.
With that in mind, let’s discuss the benefits and downsides of investing in SpaceX and whether this investment is possible.
Why Are People Interested in Investing in SpaceX?
Federal spending on space exploration peaked during the Space Race, with over 4% of the overall budget going to NASA in preparation for the Moon landing. However, since the Cold War ended, the investment has waned, resulting in NASA’s annual budget making up only 0.5% of the U.S. federal budget in 2022.
This drop was one of the reasons Musk launched a privately funded company that ultimately managed to revive the enthusiasm for space travel. In fact, the live special that chronicled the launch of SpaceX’s Crew Dragon from NASA’s Kennedy Space Center in Florida hit record ratings in 2020. The special took viewers inside the launch, becoming the most-watched non-prime telecast in the history of the Discovery Channel.
The number of eyes on SpaceX’s projects isn’t the only impressive number tied to SpaceX. Elon Musk has proven skillful at raising capital for his ventures, and SpaceX is no different.
2021 saw record-setting figures of private investment in space infrastructure companies, with SpaceX being one of the companies drawing in the lion’s share of funding. The company’s regulatory filing from June 2022 revealed that SpaceX had raised $1.68 billion in its latest funding round.
These numbers aren’t surprising considering that SpaceX is eying two significant projects in the coming years, calling for a more aggressive approach to raising capital.
The projects in question are Starship and Starlink.
Starship is a class of reusable launch vehicles designed to carry crew and cargo to the Moon, Mars, the Earth’s orbit, and beyond. These rockets are poised to be the world’s most powerful launch vehicles, surpassing the Saturn V rockets responsible for carrying U.S. astronauts to the Moon.
As for Starlink, the project aims to provide high-speed internet to people worldwide via a satellite internet constellation consisting of thousands of units. This project is especially suitable for rural and remote communities with unreliable or unavailable internet access. At the moment, Starlink has launched around 2,500 satellites to support the system and accumulated over 400,000 subscribers.
Thanks to the company’s appealing projects and the potentially monumental applications of its reusable launch architecture, Space X has attracted a lot of willing investors. Some even expect SpaceX to become more profitable than Tesla, which had the world’s sixth most valuable company market cap as of July 2022.
Should You Invest in SpaceX?
Since SpaceX is privately held, it’s hard to say how profitable the company is. However, judging by the figures thrown around, it’s safe to say the company is already making big money. So far, the bulk of the company’s revenue has probably come from:
- Lucrative contracts with NASA
- A historic contract for a military satellite launch
- Many contracts for private satellite launches
Moreover, the company’s main selling point is the ability to launch satellites at significantly lower prices than traditional companies, making additional room for profit.
With all this in mind, there are several reasons why you should invest in SpaceX stocks, including the following:
- Massive growth potential in the communications and aerospace sectors
- The early success of the Starlink and Starship projects
- Triumphant background drawing in capital
As a result, many investors are hoping Musk will decide to go public with SpaceX.
Major excitement at these projects’ potential has almost overshadowed the downsides of investing in a company like SpaceX.
Even with the high capital investments, the commercial space travel market is still relatively small, putting a ceiling on the company’s revenue potential.
In addition, this market is pretty volatile, and tightening monetary policies could significantly stump the progress of SpaceX and similar cutting-edge companies.
So, the main downsides to buying SpaceX stocks are the following:
- No guarantee that the company will be a moneymaker in the long run
- Overly ambitious short and long-term goals
- Limited profitability relative to valuation in the early 2020s
Will SpaceX Ever Go Public?
Unlike most publicly listed companies, private companies like SpaceX are free from the continued pressure to deliver a quick return on investment. Since they don’t have to worry about quarterly results, privately owned companies are more prone to embarking on long-term and high-risk ventures.
Considering his somewhat eccentric behavior, it’s no wonder Elon Musk has expressed a desire to keep SpaceX private. This way, he can take risks that would hardly be possible if he had to answer to shareholders and their attorneys.
However, a tweet from September 2021 suggesting that Musk might’ve changed his outlook on going public has sent potential investors into a frenzy. Musk stated, “A lot has happened in 8 years,” when replying to an email to employees explaining why going public isn’t the right route.
While the tweet leaves plenty of room for interpretation, the founder of SpaceX hasn’t shared any plans of going public. Like the tweet, Musk has always been cryptic when the subject of an initial public offering (IPO) comes up. For this reason, investors can only speculate whether the company will ever go public.
In contrast, Musk has been vocal about going public with SpaceX’s Starlink satellite internet business. Although no precise date was given, Musk has suggested that Starlink won’t go public until 2025. According to him, spinning Starlink as a public company will only make sense if the business is “in a smooth sailing situation” with “good predictability.”
Why SpaceX Might Not Go Public Soon
Despite the mounting pressure of investors hoping to get a piece of SpaceX soon, going public might not make sense for the company.
Elon Musk’s biggest target has always been sending people to Mars. Moreover, he’s confident he’ll be able to fly human passengers to Mars for as little as $500,000 per seat.
If the company were to go public, it would change its fundamental mission from going to Mars to generating profit. That is why SpaceX President and COO Gwynne Shotwell suggested the company would remain private until it started regular flights to Mars.
Unless the funding from institutional investors like Google or federal institutions like NASA suddenly drops, there’s no need for Musk to consider going public.
Speaking of NASA, SpaceX has received several lucrative contracts from this government agency.
- $278 million in 2006 under the Commercial Orbital Transportation Services demonstration program to stimulate the development of commercial systems for transporting cargo to the International Space Station
- $1.6 billion in 2008 for 12 flights for resupply services for the same program
- $2.6 billion in 2014 to transport U.S. astronauts into the space
Going off the numbers alone, it’s more than likely the SpaceX CEO wants to keep these contracts whose security could be deterred by a public offering
Although, to be fair, Boeing is a publicly traded company, which hasn’t prevented the U.S. government from employing the company’s services and technologies. Therefore, NASA’s need to outsource work might override its decision to turn away from a publicly traded company.
How to Buy SpaceX Stocks
Elon Musk’s SpaceX is showing no signs of slowing down. In fact, it might soon become the most valuable U.S. startup. So, it’s no wonder investors can’t wait for a chance to snag some shares of this promising startup.
However, as of 2022, Space Exploration Technologies Corp. doesn’t have a stock symbol, as the company isn’t publicly traded. Unfortunately, this also means that the investing public can’t get a hold of the shares of SpaceX.
So, unless you’re incredibly wealthy, your best bet is to hope the company will go public in the future.
If you aren’t keen on waiting, consider looking into pre-IPO marketplaces or alternatives in the space industry.
Pre-IPO Marketplaces
Pre-IPO marketplaces organize private sales of a company’s shares before they list their stock on a public exchange. In the past, only hedge funds, accredited investors, and private equity firms could participate in these sales. However, this changed in 2012 with the Jumpstart Our Business Startups (JOBS) Act, allowing unaccredited investors to join.
EquityZen is one of the top platforms for pre-IPO offerings. This online marketplace enables the trading of employee shares from private companies. As a prospective investor, you can use it to contact SpaceX employees.
Forge Global is another leading contender among the online pre-IPO marketplaces. They offer a similar service and a transactional technology streamlining the investment process.
Alternatives to Buying SpaceX Stocks Directly
While there’s currently no way to buy SpaceX stocks directly, you can invest in companies that will give you exposure to this burgeoning company. Basically, this means you’re investing in SpaceX indirectly.
For instance, Google invested an astounding $1 billion in SpaceX in 2015. So, by investing in Alphabet Inc., Google’s parent company, you’re getting exposure to SpaceX. The company’s stock symbols are GOOG and GOOGL.
Alternatively, you can invest in other top players in the space industry. Here are some alternatives you should consider.
Astra
Astra is a publicly traded launch vehicle company based in Alameda, California. In 2021, their LV0007 rocket reached orbit, joining SpaceX as one of the only four companies to achieve this feat. Astra’s mission is to improve life on Earth from space and create a healthier and more connected planet.
Boeing
Boeing is one of the top SpaceX competitors with a long history and tradition in the aerospace, telecommunications, and defense sectors. This publicly traded company is based in Arlington, Virginia.
Lockheed Martin
Lockheed Martin Corp. is a publicly traded corporation focusing on aerospace, defense, information security, arms, and technology. They’re based in North Bethesda, Maryland. This company is another long-time key player in the aerospace sector.
Maxar Technologies
Maxar Technologies Inc. is a publicly-traded space technology company based in Westminster, Colorado. The company delivers space infrastructure solutions and earth intelligence to a global client base. During its 60 years of existence, the company has partnered with more than 50 governments to deliver broadband communications and monitor global change.
Momentus
Momentus is a publicly traded commercial space company based in California. This company might be the best way to indirectly invest in SpaceX, as the two companies have signed a service agreement. In addition, Momentus will participate in several upcoming SpaceX launches into orbit, using the opportunity to test its developmental technologies.
A Future Worth Waiting For
Elon Musk’s SpaceX remains privately held, despite the longing of many investors to own a piece of this future-oriented company. Moreover, as of July 2022, there’s no indication when its CEO might decide to pursue a public listing.
Although the lack of information and a precise timeline might deter the more impatient investors, they should still keep an eye on this profitable company. The remarkable success of the company’s ambitious projects promises to make the wait well worth it.
In the meantime, eager investors can purchase stocks of other promising companies from the same sector and hopefully strike gold.