The privately-held space technology company SpaceX has become one of the world’s most hotly anticipated initial public offerings (IPOs).
Interest in SpaceX is high because one of the world’s richest men, Elon Musk, owns the company. Forbes listed Musk as the world’s richest man in December 2020 and January 2021. However, Musk’s fortune shrank because Tesla’s stock price fell 70% in 2022/23.
Note: This is an unbiased research report. The author or Liberated Stock Trader is not affiliated, paid by, or owns stock in any of the companies mentioned in this report.
SpaceX stock is not available to buy on any listed stock exchange because it is a privately held company, and the majority stakeholder is Elon Musk. Musk has raised $10.5 billion in private equity capital from 10 companies.
As an independent investor, you cannot buy SpaceX stock on the open market.
SpaceX Stock Price
SpaceX does not have a publicly listed stock price because it is not floated on any stock exchange. But shares in the company do have a value estimated to be $60 billion. SpaceX investors include Sequoia Capital, Founders Fund, Andreessen Horowitz, Gigafund, Alpha Dhabi, and Kinetic Partners.
Reuters estimates SpaceX’s private share price to be between $325-$350 in January 2021. This stock price is derived from SpaceX’s value of $46 billion. However, other analysts gave SpaceX a $60 billion to $92 billion valuation in January 2021, up from $45 billion in August 2020, Reuters claims.
SpaceX Stock Symbol
There is no SpaceX stock symbol because SpaceX is a private company that has not undergone an initial public offering (IPO). There will be a SpaceX stock symbol only after an IPO.
Elon Musk finances with his own money and venture capital. SpaceX has other income sources today, including satellite launches, US government contracts, and space research.
Investors are interested in SpaceX because of Musk’s proposed Starlink satellite high-speed internet program. Starlink’s goal is to offer high-speed internet anywhere on Earth using a network of thousands of satellites. The Starlink website claims the internet could be available in 2021.
Musk hopes Starlink will generate enough money to finance his well-publicized scheme to colonize Mars.
Musk’s ultimate goal at SpaceX is to create a colony on Mars.
SpaceX’s Starship heavy rocket aims to haul people and supplies to Mars. The National Aeronautics and Space Administration (NASA) plans to use the Starship to transport astronauts and equipment to the Moon.
SpaceX has experience hauling people and cargo to the International Space Station (ISS) on its Dragon space capsule. The Dragon has carried astronauts to the ISS on two missions. There are plans to use the Dragon to haul wealthy private individuals into space.
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SpaceX and the NASDAQ
The consensus is that SpaceX will list on the NASDAQ because Musk listed Tesla (TSLA) there. Being listed on the Nasdaq has advantages, such as being included in the fastest-growing stock market index, the Nasdaq 100, which provides stock price boosts no other index can match.
Tech stock investors are interested in SpaceX because it has built some successful spacecraft. In addition to the Dragon, the Falcon 9 is an innovative reusable two-stage rocket.
SpaceX advertises the Falcon 9 as the world’s first reusable rocket. After launching cargo to orbit, the Falcon 9 lands in the water where SpaceX can recover it. The hope is that Falcon 9 can reduce launch costs because it reuses the most expensive part of the vehicle – the rocket.
How SpaceX Makes Money
The Falcon 9 has made 105 total launches and 66 landings, SpaceX reports. They have reflown 48 Falcon 9 rockets.
The primary use of the Falcon 9 is the launch of communications satellites, a proven technology. The latest Falcon 9 mission was the Transporter 1 on January 24, 2021, which put 133 commercial and government spacecraft and 10 Starlink satellites in orbit.
SpaceX uses the Falcon 9 to commercialize space travel with initiatives such as the Smallsat Rideshare Program. The Smallsat Rideshare Program claims to offer space missions for as low as $1 million.
Musk hopes this program will make money by discounting space travel. Discounters hope to make more money by selling more items at a low price. One goal of discounting efforts such as the Smallsat Rideshare Program is to increase space travel and demand for SpaceX’s rockets.
The Falcon Heavy is a more powerful version of the Falcon 9 that carries the Dragon space capsules into orbit. The Falcon Heavy is known for launching a Tesla roadster into orbit.
Another way SpaceX makes money is through government contracts to launch satellites. For example, the US Space Development Agency awarded SpaceX a $150.4 million contract to launch 28 satellites for the US Defense Department, Space News reports.
SpaceX is the world’s largest launcher of Satellites, and Starlink’s excellent performance in Ukraine has launched a new space race in 2023.
Will there be a SpaceX Ticker?
I think there will be no SpaceX stock ticker anytime soon because Musk wants to keep the company private. I suspect Musk will keep SpaceX private because he does not want anybody interfering with his plans to go to Mars. Musk views the Mars colony as his life’s work and his gift to humanity. My view is that Musk will not let anybody stand in the way of his life’s work.
If Musk were to take SpaceX public, he could lose control of the company and have to report to a board or stockholders. Similarly, Musk will have to follow more regulations if SpaceX goes public.
SpaceX could be incapable of spending many billions of dollars building the Starship or a Mars spaceship if it were public. In my opinion, the only way SpaceX can be free to launch a Mars mission is to remain private.
Instead of taking SpaceX private, I predict Musk will spin Starlink off and hold an IPO. Musk will use the money he makes from Starlink stock to finance SpaceX and his Mars colony. There will be a Starlink ticker on the NASDAQ long before there is a SpaceX ticker. Musk will take Starlink public before SpaceX because Starlink could generate enormous amounts of money by selling internet services.
Starlink could make money because there could be a huge demand for internet services in developing countries. Statista estimates only 44.4% of the people in developing countries and 19.5% in the least developed countries have internet access.
There could also be a demand for Starlink’s services in developed countries such as the United States. The Pew Research Center estimates that 27% of American households do not have a broadband internet connection. Similarly, 63% of rural households in the United States have no broadband access, Pew estimates.
The Starlink business plan is to sell internet services to anybody worldwide, including developing countries. Demand for Starlink could be high because Statista estimates 4.66 billion active internet users, and 59% of the world’s population uses the internet.
Starlink could be Musk’s most lucrative public offering because it will sell a product 59% of the population uses – the internet. By increasing internet access, Starlink could become the next super stock from Silicon Valley. Unfortunately, nobody knows when they could take could Starlink public.
Investing in SpaceX: Alternative Options
There is no SpaceX stock, but there are some publicly-traded space technologies companies you can buy now. Some alternatives to SpaceX include:
1. Maxar Technologies Inc. (NYSE: MAXR)
Satellite maker Maxar (MAXR) is an excellent SpaceX alternative because it is cheap and has a proven business. Maxar manufactures products for which there is a proven demand: communications and surveillance satellites. Importantly, Maxar does not take the risk of building rockets or launching satellites.
Other companies, including SpaceX, launch Maxar’s satellites into orbit. Thus Maxar keeps things simple by building one product. Plus, Maxar is an established that has been in business since 1969.
Maxar built over 90 communications satellites in orbit in January 2021, Maxar claims. Maxar claims over 300,000 US government users use its satellites each day.
Maxar is cheap; Mr. Market paid $41.92 for its shares on January 29, 2021. Maxar Makes money; it reported a quarterly gross profit of $106 million and a quarterly operating income of $7 million on September 30, 2020.
The company reported quarterly revenues of $436 million on September 30, 2020. Maxar had some value in the form of $4.565 billion in assets on September 30, 2020.
Maxar even paid a 1¢ dividend on December 31, 2020. I think Maxar is a value investment in space technology because of the dividend.
2. Northrup Grumman (NYSE: NOC)
Northrup Grumman (NOC) is one of Blue Origin’s partners in the National Team building the Human Landing System.
Northrup Grumman is one of the world’s largest weapons manufacturers and a global aerospace company. Northrup Grumman has a long history in space exploration. It built the Lunar Module using the Apollo 13 moon mission.
Today, Northrup Grumman participates in several of NASA’s space exploration programs. Those programs include the James Webb Space Telescope, the Chandra Space Telescope, and the Dawn Asteroid Explorer.
Northrup Grumman is building the Cygnus spacecraft, which will haul cargo to the International Space Station. Northrup Grumman is one of two companies with a contract to haul cargo to the ISS; the other is Elon Musk’s SpaceX.
Northrup Grumman could design and build the Habitation and Logistics Outpost, or HALO, component of NASA’s proposed Lunar Gateway. The Lunar Gateway is NASA’s proposal for a new moon mission.
Subsidiary SpaceLogistics LLC is developing vehicles that can service and repair satellites in orbit.
Northrup Grumman makes enormous amounts of money, with a profit margin of 19% with a profit of $7 billion in 2022.
Northrup Grumman (NOC) currently has a dividend payout ratio of 18% and a 1.4% yield in 2023. I consider Northrup Grumman an excellent income stock because of the dividend and the cash.
Northrup Grumman shows Blue Origin could be a good stock someday. I think that day could be many years away, however.
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3. Lockheed Martin Corporation (NYSE: LMT)
Lockheed Martin is one of Blue Origin’s partners in the National Team building the Human Landing System (HLS) lunar module for NASA.
Lockheed Martin (LMT) participates in many space missions, including the OSIRIS-Rex asteroid tagging mission. In that mission, the OSIRIS-Rex spacecraft touched the surface of asteroid Bennu, gathered samples, and flew off. The mission depends on Lockheed Martin’s TAGSAM technology.
Lockheed Martin and Boeing (BA) partner in the United Launch Alliance (ULA). The United Launch Alliance builds and launches the Delta and Atlas rockets that carry satellites into orbit. A ULA rocket will carry Boeing’s Starliner space capsule into orbit.
Lockheed Martin will build its rocket factory in Titusville on Florida’s Space Coast to service NASA. Lockheed Martin is a major builder of aircraft ranging from fighter planes to helicopters to airships, drones to cargo planes. Lockheed Martin could profit from the growth of Amazon (AMZN) and e-commerce because it builds cargo planes.
Lockheed Martin pays a dividend of 2.61% based on $90 billion in revenues and $4 billion in income for 2022.
Lockheed Martin is a growing space-technologies company that makes money and dividend. Investors must understand that much of Lockheed Martin’s money comes from weapons.
4. Boeing (NYSE: BA)
Boeing (BA) builds the Starliner, a 21st Century Space Capsule NASA plans to use on missions to the International Space Station (ISS).
The Starliner will carry Boeing and NASA astronauts to the ISS. Unlike the SpaceX Dragon, the Starliner has not carried astronauts into space. NASA had a manned Starliner mission in 2021.
The Starliner test has been delayed several times because of the coronavirus and various problems. During the first test flight in December 2019, an unmanned Starliner went off course and burned up in orbit. Boeing is rebuilding the Starliner to prevent another catastrophe.
Boeing faces many problems, including the collapse of air travel and airliners and its 787 Dream Liner aircraft crashes.
The air travel collapse forced Boeing to end production of its iconic 747-8 jumbo jet in 2022. The company will focus on more fuel-efficient next-generation airliners instead.
Boeing loses money, unlike Lockheed Martin and Northrop Grumman. Boeing (BA) reported a Q3 2022 loss of -$3.2 billion compared to a quarterly gross profit of $1.044 billion on September 30, 2020.
Boeing burns enormous amounts of cash to stay in operation. Boeing reported a negative quarterly operating cash flow for 2022.
Boeing stock is less valuable because it no longer pays a dividend. Boeing last paid a quarterly dividend of $2.05 on February 13, 2020.
Many people will think Boeing has some attributes of a traditional Warren Buffett value investment. Boeing is a good company with some profitable businesses going through a rough stretch. Boeing’s defense and space businesses still make money even as its airliner business collapses.
Boeing is the only company with a space capsule capable of competing with SpaceX’s Crew Dragon. Boeing’s Starliner is unproven and untested, but space capsules are a proven technology.
The Russians have been flying space capsules without any fatalities for almost 50 years. The Starliner pictures on Boeing’s website resemble America’s historic Mercury capsules that took John Glenn and Alan Shepard into orbit.
Boeing has a long history of building complex vehicles, including airliners, rockets, missiles, and satellites. They founded Boeing in 1916, so it has a long history compared to SpaceX.
Contrarian investors could buy Boeing because they think the airline industry will recover in 2023. Such a recovery could take several years or longer because people could be afraid to travel.
- Related Article: Investing in Space with Blue Origin
Should you Invest in Space Technology?
It is an exciting time for space technology. Visionary entrepreneurs, including Musk and Blue Origin’s Jeff Bezos, are developing new companies and capabilities. The first private space capsule has reached the International Space Station, with plans for more. NASA has plans to return to the Moon and explore Mars.
Musk famously has plans for a Mars colony, including a city, Space.com reports. Bezos wants a future where millions of people will live and work in space. Bezos’ plans include giant orbiting space colonies that thousands of people call home and factories in space.
Space technology is exciting and glamorous and possibly vital to humanity’s future. However, in today’s world, space technology is a speculative investment.
Only people can afford to lose money, and those who can stomach investment in weapons makers should consider investing in space technology. Ordinary investors must avoid investing in companies like SpaceX until somebody proves they can make money in space.
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