Prominent Silicon Valley investor Chamath Palihapitiya said in his podcast that a Starlink IPO could very much take place in 2023. In past, SpaceX president had said that the Starlink initiative may eventually break off from SpaceX to go public separately.
Elon Musk, world's most talked-about billionaire tech magnate, may take SpaceX's internet-from-space initiative Starlink on an Initial Public Offering (IPO) route in 2023 for the sake of a much-needed "financial flexibility", according to prominent Silicon valley investor Chamath Palihapitiya.
The Starlink IPO could make way in 2023, years earlier than planned, Palihapitiya said on his podcast 'All-In'.
The comments came on 'All-In' podcast during which Chamath Palihapitiya, famous for his "blank cheque" investments, as well as two co-hosts, investors Jason Calacanis and David Sacks, predicted trends and events across Silicon valley in 2023.
"He talked about this on our pod(cast), about the difficulties and the dangers of margin loans and all of that stuff," Palihapitiya said. "He’s going to create breathing room for himself. This is the simplest and most obvious way for him to do it. It’ll give him a ton of more dry powder."
According to a Bloomberg report, Palihapitiya isn't known to be particularly close to Elon Musk but his both co-hosts are. Both Jason Calacanis and David Sacks were involved in Elon Musk's takeover of Twitter last year.
Earlier in 2020, top SpaceX executives had opined that in the years to come, the Starlink initiative will eventually break off from SpaceX to go public.
SpaceX president Gwynne Shotwell in February 2022 had said that Starlink was "the right kind of business that we can go ahead and take public." Elon Musk, however, shortly after SpaceX president's comments had said that they "need to make the thing work" before taking it public.
The Starlink program of SpaceX consists of launching thousands of satellites into low orbits above Earth to provide broadband internet service. SpaceX has sent more than 3,300 satellites in orbit so far for its Starlink initiative.
Starlink is SpaceX’s plan to build an interconnected network of about 12,000 small satellites, to provide high-speed internet to anywhere in the world.
It’s a project for which SpaceX has been steadily raising capital, as Shotwell said two years ago “it will cost the company about $10 billion or more” to build the Starlink network. Last year, SpaceX raised over $1.3 billion in new funding, with recent investor Ontario Teachers noting the future growth potential of Starlink.
If SpaceX can overcome the technological challenges of building and distributing this service, the company is optimistic on its potential demand and revenue. SpaceX CEO Elon Musk in May told reporters that Starlink could bring in revenue of $30 billion a year – or about 10 times the highest annual revenue it expects from its core rocket business.
SpaceX as a whole to stay private until reaching Mars
Musk’s distaste for the public stock market has meant SpaceX has remained private for nearly two decades. SpaceX shareholders have told CNBC previously that they expect the company would eventually list its stock publicly, even if that meant waiting a long time. Shotwell in 2018 said that SpaceX as a whole “can’t go public until we’re flying regularly to Mars.”
But SpaceX has become one of the world’s valuable private companies, valued at over $33.3 billion, while its stock is one of the most sought after by private investors. Demand for SpaceX shares is so high that analysis group Equidate said the company has “an unlimited amount of funding” it could access from the private markets. SpaceX has steadily raised private funding as needed, while using the high demand as leverage to be “very pick about who invests,” Shotwell has said.
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