The rapid ascent of Elon Musk’s SpaceX seems to be slowing down, as the company plans to sell shares next month at a valuation similar to that of the summer, according to sources familiar with the matter.
Despite the explosive growth of its satellite-launching Starlink unit, which has reportedly struggled to meet profit targets, SpaceX is set to initiate a tender offer in December, valuing the company at approximately $150 billion. This mirrors the valuation assigned in a July tender offer that raised $750 million in cash.
SpaceX’s valuation has exhibited a steady increase, starting at $125 billion in May 2022 and reaching $137 billion in January with a $750 million funding round. The upcoming tender offer in December suggests that Elon Musk is not currently considering an initial public offering (IPO) for the Starlink satellite division in the near future. Contrary to recent reports, Musk stated on his X platform on Nov. 15 that consideration of a Starlink IPO were “false.”
There may be several reasons why Musk is not seeking an increased valuation for SpaceX. According to sources familiar with the tender, investors remain uncertain about the trajectory of Starlink, which constitutes a significant portion of SpaceX’s overall value. In 2022, Starlink reported $1.4 billion in revenue but incurred a loss for the year, falling short of investor expectations. Originally forecasting 20 million customers in 2015, Starlink had just over one million customers in 2022.
Elon Musk presented a more positive outlook on Starlink’s financials in a Nov. 2 post on his X platform, announcing breakeven cash flow and highlighting Starlink’s majority share in active satellites. However, despite these developments, SpaceX does not plan to raise its valuation in the upcoming December tender. Insiders suggest that maintaining a conservative approach allows SpaceX to attract investors while avoiding uncomfortable questions.
“Investors are still unsure about the direction of Starlink,” one source commented, emphasizing the pivotal role of Starlink in SpaceX’s overall value. The decision to refrain from increasing the valuation in the upcoming tender appears to be a deliberate choice to manage expectations and maintain clarity amid perceived confusion.
