How has SpaceX yet to give us an initial public offering, despite the company’s strides in space travel? Elon Musk’s company has made many headlines with new space technology, including Starlink and the company’s priced Falcon line of space crafts.
However, after 20 years of the company’s exploits, it seems painfully clear that SpaceX may never IPO. So what are the drawbacks to the IPO? Let us find out.
SpaceX and its Development
In its early stages, investors considered the company one for the future, given its immense capabilities for growth. Then, companies like Alphabet handed the company its first $10 billion at a more than $100 billion valuation. After that, the company’s valuation hit an all-time high of $150 billion before plummeting to $140 billion in December last year.
This drop may be because investors cooled down their interest in the company or due to the many geopolitical and post-pandemic factors. Either way, it is not looking good for the company, and the IPO not happen.
The Reducing Popularity of Musk
Since Musk’s takeover of Twitter, his popularity rankings among investors could be more promising, with investors needing more convincing about his leadership and running of Twitter. In addition, the 140-billion-dollar valuation could look better because it suggests that the company has to sell more shares to do any given project than it would if the valuation were higher.
Finally, this valuation shows that the popular CEO is losing control of SpaceX quickly, and investors need to be convinced about the company’s assets. According to a Wall Street Journal article, SpaceX has raised capital by selling additional shares of its stock.
When a company sells additional shares of its stock, it dilutes its existing shareholders’ ownership stake. That means that the percentage ownership stake of each shareholder drops. For example, in the case of SpaceX, the company has sold enough additional shares that Elon Musk’s ownership stake has gone from a majority interest (53%) to a minority interest (41%). These numbers mean that Musk owns less than 50% of the company.
Profit Ahead of Vision
According to many analysts, SpaceX has moved toward selling shares compared to a unified vision. Mark Stamp, an enthusiast on Quora, says that the stock market does not fit a person like Elon because of his rush decisions that impact the company’s overall success.
Many investors view Elon’s decisions as self-driven rather than geared toward investor assets. Mark thinks Musk’s actions paint the picture of cluelessness, which might break the company far before profits come.
What Musk has to Say about SpaceX IPO
According to CNBC, Musk has told some employees that the company could make an initial public offering by 2025. However, the reports need to be more specific, and their current economic standing offers no hope.