Last year, we discussed the alternatives about how to invest in SpaceX stock in 2023, in both direct and indirect ways. Today, we are back with the same question for 2024, as several investors are vying for a pie of the rapidly growing space exploration company. SpaceX is a privately held company, which means we cannot invest/buy shares of SpaceX directly on any of the stock exchanges. However, it is difficult (not impossible) to invest in SpaceX via the indirect methods of investing in private companies, discussed later.
Moreover, we will look at how SpaceX’s valuation and financials have changed in the past year.
First, a Little About SpaceX & Who Owns it
Billionaire investor and entrepreneur Elon Musk founded Space Exploration Technologies Corp., also known as SpaceX, in 2002 with the mission of transporting people to Mars and colonizing the red planet. To date, SpaceX is the most valuable private space exploration company in both the private and public domains. SpaceX is jointly owned by Musk, private equity companies, venture capital firms, a few public companies, and angel investors.
SpaceX handles several parallel operations that include:
- Manufacturing rockets and space vehicles
- Flying astronauts and people to space
- Sending satellites into orbit to provide global internet services (named Starlink)
- Providing defense services to the U.S. government
As of date, SpaceX has launched 335 space flights, successfully conducted 299 landings, and undertaken 269 re-flights with its first-of-its-kind reusable rockets. A majority of these remarkable feats were achieved for one of its prime customers, The National Aeronautics and Space Administration (NASA).
SpaceX Current Valuation and Financial Performance
SpaceX’s valuation has increased by roughly 20% since its last funding round in July 2023 to $180 billion. The company announced a planned secondary share sale in December 2023, which valued each SpaceX share at $97 per piece.
As per multiple reports, SpaceX was on track to reach a record revenue of $9 billion in 2023. Furthermore, the company is targeting revenue of $15 billion in 2024 with $3 billion in earnings. Musk’s space venture has steadfastly grown from a loss-making company in 2018 to generating an estimated profit of more than $2 billion in 2023.
Starlink, its high-speed satellite network, reportedly contributed more than half of the revenues. In fact, speculation is abuzz that Musk is planning to separate the Starlink unit and undertake an initial public offering (IPO), as it has been profitable and proven to be a well-established business over the years.
How Can We Invest in SpaceX Directly?
SpaceX is not yet a publicly traded company, which implies that its shares are not listed on any stock exchange. Hence, investors cannot invest/buy shares of SpaceX directly. For now, investors can only buy shares in the tender offer or buy shares from existing investors and employees who have received the stock compensation.
You can connect with reputable brokers that specialize in private company share sale to check if and when SpaceX’s shares will be available for sale from the private equity company insiders. Should you decide to go ahead with the private placement of shares, you will have to undergo a stringent accreditation process, have sufficient capital, and adhere to minimum investment requirements.
How Do We Invest Indirectly in SpaceX?
Another way to invest in SpaceX stock is indirect investments in companies that have exposure to SpaceX. For instance, you can buy shares of public companies that have investments in SpaceX. As of date, there are only two public companies with investments in SpaceX. These are:
- Alphabet (NASDAQ:GOOGL) (NASDAQ:GOOG) – The trillion-dollar tech giant, along with Fidelity Investments, invested $1 billion in SpaceX in 2015 at a valuation of roughly $12 billion.
- Bank of America (NYSE:BAC) – The American banking conglomerate invested $250 million in SpaceX in November 2018. SpaceX was valued at $30 billion at the time.
Investors must be aware that the primary business of these companies is other than space exploration. Plus, their investment in SpaceX is quite small compared to their own hefty valuations and business model, which means their share prices could be affected by reasons other than SpaceX’s performance.
Investors can also gain exposure to SpaceX’s business by buying shares in companies that are its suppliers or partners, such as these:
- Garmin Ltd. (NYSE:GRM)
- Iridium Communications (NASDAQ:IRDM)
Furthermore, an investor may choose to invest in the space technology sector by investing in Exchange-Traded Funds (ETFs) and Mutual Funds (MFs) that hold stocks in the space sector.
- Direxion Daily Aerospace & Defense Bull 3X Shares (DFEN)
- ARK Space Exploration & Innovation ETF (ARKX)
- iShares U.S. Aerospace & Defense ETF (ITA)
- SPDR S&P Aerospace & Defense ETF (XAR)
- SPDR S&P Kensho Final Frontiers ETF (ROKT)
- Procure Space ETF (UFO)
Finally, investors willing to gain exposure to the aerospace and defense sector may buy stocks of other listed companies in the sector.
- The Boeing Company (NYSE:BA)
- Lockheed Martin Corporation (NYSE:LMT)
- Raytheon Technologies Corporation (NYSE:RTX)
- Northrop Grumman Corporation (NYSE:NOC)
- Aerojet Rocketdyne Holdings (NYSE:AJRD)
- Virgin Galactic Holdings (NYSE:SPCE)
- Rocket Lab USA (NASDAQ:RKLB)
- AST SpaceMobile (NASDAQ:ASTS)
- Maxar Technologies (NYSE:MAXR)
How Do I Buy the SpaceX IPO?
Private equity players typically exit an investment through an IPO. Once the private investors are fully assured that the company has reached its best valuation, they exit their stakes via a public equity offering at sky-high valuations.
For now, Musk has no plans of taking SpaceX public, as the company is easily able to raise capital from private investors, and Mu wants to strengthen the company’s performance to a certain level before exploring the public markets. However, if and when SpaceX decides to go public, an investor must be ready.
Following are steps to buy listed shares of SpaceX when they become public:
- Log in to or create a brokerage account (if you do not already have one)
- Search for SpaceX shares via company name or Ticker/Stock symbol
- Select the number of shares you wish to buy
- Place your order with quantity and price
- Once your trade is completed, you become a SpaceX shareholder
Key Takeaways
Investors can invest/buy private company shares such as SpaceX’s through either direct or indirect methods discussed above. However, if you are keen to directly buy shares of SpaceX in an IPO or thereafter, you may have to wait for a long period.
Meanwhile, there are numerous options for investors to gain exposure to the attractive space technology and exploration sector via other listed companies and ETFs. At the same time, investors seeking exposure to other Musk-led public companies could consider buying Tesla (NASDAQ:TSLA) stock, a pioneer in electric vehicle (EV) manufacturing.
