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Starlink IPO
- Thread starter KarenRei
- Start date
Can we assume that SpaceX will retain some ownership stake in Starlink after IPO or will they fully divest? I would think if you wanted a piece of Starlink before IPO if SpaceX will hold some sort of stake, you can get into SpaceX.
SpaceX is of course privately held, but our good friend Ron Baron is offering 2 funds which have some exposure to SpaceX, however limited. I've bought into Baron Partners Fund (BPTRX) which holds around 5% SpaceX (in addition to around 14% TSLA) so I guess I'm good there if this is how things turn out.
SpaceX is of course privately held, but our good friend Ron Baron is offering 2 funds which have some exposure to SpaceX, however limited. I've bought into Baron Partners Fund (BPTRX) which holds around 5% SpaceX (in addition to around 14% TSLA) so I guess I'm good there if this is how things turn out.
M3BlueGeorgia
Active Member
They can, and in this case probably Elon will be the one keeping the stake, probably a controlling stake, probably through shares with superior voting rights.
In this situation, the reason for the IPO will be to raise a boatload of capital, so it likely isn't an option not to spin it off, otherwise Starlink's growth will be constrained by lack of capital.
People use azure instance to setup VPN to get around the firewall too. Did Microsoft got threatened?
JP Morgan Chase has discounted brokerage account. And if you have more than 250k asset you get private client privilege. I think many Tesla bulls clear that bar easily.
Nice to know. Still doesn't mean you'll get access to a hot IPO. Being a "good client" of a brokerage means paying them lots of commission and other fees. Which is why it's usually hedge funds and other institutional investors that only get access to hot IPOs.
Staking a claim here, in case someone is watching/keeping a list. This will be huge and would be a hit behind firewalled countries.
I think it'll play out a bit differently. Elon does not need the equity that Starlink represents, nor does he care much about Starlink itself. It isn't strategic to SpaceX other than as a source of revenue. Both SpaceX and Starlink need tons of investment capital (cash). This spin out is a way for both companies to raise lots of cash. I don't know the exact numbers, but let's say Starlink will be valued at $10B. I suspect in the IPO, pretty much all the equity will be sold off, none of it kept by anyone. The Starlink company will get some chunk of the IPO proceeds, say $5B, and SpaceX will get the other chunk, say the other $5B, and Starlink will end up being completely owned by the public market.
Elon will likely not be the CEO, they will have some block and tackling CEO running it. As far as control goes, that isn't Elon's style. I doubt there will be a special class of voting shares. It'll be the usual shareholders voting in a public board, just as it is for Tesla.
There is then ANOTHER possible spin out from SpaceX. Starlink will be an operating/service company that delivers broadband services. But SpaceX is developing expertise in designing and manufacturing satellites. That is also a potentially independent company. I suspect SpaceX will keep that expertise and revenue stream in house for a while yet, but I could see that being spun out at some point too.
BTW, for those thinking they would like to invest in Starlink, be aware that it will be a fairly boring company. It will initially be a growth company, but quickly transition into a cash cow, similar to other telecom companies like Verizon which have relatively stable stock prices and a high dividend.
That was my point earlier. If you get this order from the government, it is illegal to talk about it. My recollection about this was probably from those Snowden leaks, which you linked. Whether they are true or not, naturally I don’t know it.
ZachF
Active Member
From what we know, there won't be a Starlink IPO for 'several years', probably not until it's making tens of billion in profit (and therefor worth hundreds of billions).
What I imagine will happen is SpaceX will only sell off a 5-10% share during IPO to get a chunk of money, then Starlink will put all of it's profit into some combination of dividends and stock buybacks. Starlink will buy back the stock SpaceX sells, and SpaceX will also collect dividends on it's large chunk of shares. Perhaps over a decade SpaceX will also sell off another 5-10% share for more money/
The frequencies that Starlink uses do not allow for penetration of vegetation, roofs, walls, etc., as well as the signals being unidirectional. So Starlink isn't going to be competing against cell phone or sat phone providers and probably not the IoT providers.
If Musk wanted to compete against cell phone or sat phone providers, he would need to buy Iridium for its global frequency allocations and then do a Super Iridium constellation. But that's an expensive proposition at this point, given that Iridium has a market cap of $3.8 billion.
Agree with @ZachF on the likely timeline -- Techcrunch says "We've confirmed SpaceX doesn’t have any specific timelines for a spin-out, and that this is something in the early consideration stage, with any actual Starlink public debut still likely a few years out." SpaceX ‘likely to spin out’ and pursue an IPO for Starlink satellite internet business – TechCrunch
Hard to know how they will structure it but suspect that after the spinout/IPO all SpaceX shareholders (Elon, employees and outside investors) will have an interest in Starlink based on the number of shares they hold in SpaceX, and that SpaceX will also separately retain a significant interest so it can use dividends as a source of capital. Comparing Spin-Offs, Split-Offs, and Carve-Outs
A structure like this would allow employees and investors to have a path to cash out some of their interest if they want. It also would mean Elon would finally have a source of cash to fund his ventures and pay living expenses other than borrowing against his Tesla/SpaceX shares.
Hard to know how they will structure it but suspect that after the spinout/IPO all SpaceX shareholders (Elon, employees and outside investors) will have an interest in Starlink based on the number of shares they hold in SpaceX, and that SpaceX will also separately retain a significant interest so it can use dividends as a source of capital. Comparing Spin-Offs, Split-Offs, and Carve-Outs
A structure like this would allow employees and investors to have a path to cash out some of their interest if they want. It also would mean Elon would finally have a source of cash to fund his ventures and pay living expenses other than borrowing against his Tesla/SpaceX shares.
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SpaceX is a US rocket company, so the ground equipment won't be made in China any time soon. It would have to be well after Starlink IPOs and its major customer, the US military, gives its blessing. Rather, Shotwell has said that at least at the beginning, the ground equipment will be made in-house by SpaceX. The jobs posted on SpaceX's jobs board supports these plans.
To be clear, SpaceX is a private American aerospace manufacturer and space transportation services company and was founded in 2002 by Elon Musk with the goal of reducing space transportation costs to enable the colonization of Mars.
Everything Spacex does is to enable the colonization of Mars, including getting the StarLink Constellation built.
IPO will further strengthen its position to be able to colonize Mars.
With the security risks with China and its technology, I see the ground equipment being built in Taiwan etc.
Everything Spacex does is to enable the colonization of Mars, including getting the StarLink Constellation built.
IPO will further strengthen its position to be able to colonize Mars.
With the security risks with China and its technology, I see the ground equipment being built in Taiwan etc.
Totally unnecessary!
The satellites should not trust the ground station anyway because you have to prepare for someone else trying to emulate your signal and communicate with you maliciously. Hiding your ground station design is not gonna work.
Just like cell towers should not depend on cellphones being honest.
Regarding China, Russia, etc and users within them: The obvious solution (so that they can provide access legally, at all) is to route all traffic for terminals located within those zones through ground stations sanctioned by those countries, and thus still pass through whatever nonsense they dictate.
As for ground stations themselves being targets of espionage - you should be encrypting your traffic end to end anyways, so it shouldn't matter if the ground station is siphoning your traffic. Trust nothing.
As for ground stations themselves being targets of espionage - you should be encrypting your traffic end to end anyways, so it shouldn't matter if the ground station is siphoning your traffic. Trust nothing.
mblakele
FSD Beta (99)
I’ve been thinking about that too. Wasn’t the google IPO also set up to democratize the process a bit? Couldn’t anyone who met the “accredited investor” criteria apply to bid?
However I think there’s some controversy about how successful that IPO was. Some say they left money on the table vs a conventional IPO. Others say that open auction-based IPOs are prone to overbidding, creating bubbles.
Here’s a paper on the subject:
https://core.ac.uk/download/pdf/56354931.pdf
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