Author: Lindsey Boycott
Estimated read time: 4 minutes
Publication date: 18th Feb 2020 12:58 GMT+1
Internet for everyone. That is Elon Musk's ambitious mission driving the launch of a satellite-based broadband network that will span the globe. Investors might be able to own their little slice of the project if plans to go public move forward. While parent company SpaceX is one of a small handful of agencies developing technology for space – it's a fiercely competitive business with the likes of Jeff Bezos's Blue Origin, fuelling the race to space. Except for some like Richard Branson's Virgin Galactic (NYSE: SPCE), which IPOd in October 2019, most tech firms are keeping their space-bound startups private. An opportunity to buy into Musk's vision of the future would be an attractive option for just about any tech-oriented investor.
Called Starlink, the satellite company was founded in 2017 and successfully launched its first two test satellites in 2018. They will be sending-off 4,425 satellites into space over the next three to four years to ensure complete coverage. But that is going to take a lot of rockets, a lot of fuel, and a lot of money. SpaceX is worth approximately $33 billion on the market right now, but Musk opposes making it public due to the unwelcome financial scrutiny that comes with such a decision. A Starlink IPO could provide those with valuable stock options with an avenue to cash in yet keep SpaceX out of the public eye.
“Right now, we are a private company, but Starlink is the right kind of business that we can go ahead and take public,” said president and COO Gwynne Shotwell. “That particular piece is an element of the business that we are likely to spin out and go public.”
If all goes according to plan, people will be able to access lightning-fast internet anywhere from the sandy dunes of the Sahara Desert to the bustling streets of Beijing as soon as 2024. It could change the face of how business works and create a welcome stream of revenue – Musk anticipates it could bring in in about $30 billion a year. This revenue potential certainly gives investors something they can reflect upon, as Shotwell predicts it will cost another $10 billion to get the program up and running.
"This is going to turn SpaceX into a company that is providing service to consumers, which we are excited about," Shotwell said. SpaceX is releasing an estimated 60 satellites into orbit at a time, and another four rockets with satellite payloads will soon launch. Shotwell states that the service will be more affordable than what people pay now but 5 to 10 times faster
Not everyone is welcoming the addition of Starlink’s satellites to the night sky, however. Astronomers have condemned the additional technology being launched into orbit, stating the satellites are obstructing views and make scientific research more challenging. Many star-gazers have come forward to voice their concerns about what they perceive as the “foreground” that exists between themselves and the larger universe.
While there are no immediate legal issues in existence for companies like Starlink to launch satellites into the deep blue, space is not proprietary. The night sky is a commons, explains Imperial College London astrophysicist Dave Clements said in a BBC interview, and what is happening here is a "tragedy of the commons."
“So, they get in the way of everything,” Clements said. “And you’ll miss whatever is behind them, whether that’s a nearby potentially hazardous asteroid or the most distant quasar in the universe.
Whether these concerns culminate into star wars of sorts and presents challenges for what flies in the night sky, investors should keep an eye on SpaceX headlines for more news of a Starlink IPO.
Cover Photo by NASA by Unsplash
Disclaimer: The writer is an experienced financial consultant who writes for Finscreener.org. The observations he makes are his own and are not intended as investment or trading advice.
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