The question of a possible initial public offering (IPO) for Starlink, SpaceX’s satellite internet service, has been occupying the financial world for some time. Despite intense speculation, as of today, there is no official date for a Starlink IPO.
However, the IPO window is seemingly open, and various newly listed companies such as eToro (ETOR), Circle (CRCL), and space tech firm Voyager have all seen impressive gains from their IPO price. Industry insiders and financial analysts believe that Starlink could go public as early as this year, although that would take some doing. SpaceX CEO Elon Musk has signaled that a Starlink IPO is likely, but only after the company has achieved more stable cash flow and greater operational maturity.
Interest in the space exploration & innovation sector can be tracked in the meantime using the ARKX ETF. This can provide one way of following the sector in the lead up to Starlink’s stock becoming public, with Alphabet, an investor in the firm another more diluted angle.
What is the Value of Starlink?
Starlink’s potential valuation is a key topic. Earlier estimates suggested Starlink could fetch a valuation of around $137 billion in an IPO, although this has could have been pushed somewhat higher judging by the latest private secondary market sale in parent SpaceX. This valued SpaceX at $350 billion towards the end of last year, with such a high valuation supported in part by the company’s impressive revenue growth.
In 2024, Starlink generated revenue of approximately $8.2 billion, nearly double the previous year. Forecasts for 2025 project revenue to reach $11.8 billion, driven by 15 million global subscribers and rapid expansion into maritime and roaming.
The reality is that a valuation is best carried out using technical and fundamental analysis methods, and will become clearer once the company moves to file for a listing. There is also the added element in Starlink of Elon Musk, with many likely to want a piece of another of the world’s wealthiest man’s company’s, when available. This can add some fuel to pricing, and has the potential to disrupt usual fundamental valuations, depending on his popularity at the time.
In recent weeks, Cathie Wood’s ARK Invest firm came out with a forecast on SpaceX in the next 5 years, with an astonishing $2.5trillion valuation by 2030. The company is known for some very lofty projections, but this perceived upside is beyond what most others have factored in at this stage.
Starlink Growth
Starlink’s growth drivers are diverse and have proved solid. These include increasing demand for global broadband, military contracts, and expansion into underserved regions.
Subscriber numbers continue to grow, with current numbers estimated at more than 5milion, with a projection to reach 7 million by the end of the year. It is said there are almost 10,000 new users daily at this time, with 1 million users per quarter being added through each period of 2024.
Despite the positive outlook, challenges and uncertainties also remain. In November 2023, Elon Musk denied reports that SpaceX was considering spinning off Starlink through an IPO as early as the end of 2024. He emphasized that an IPO would only be considered once Starlink’s revenue growth and cash flow were “smooth and predictable.”
Although Starlink has now reached cash flow breakeven, Musk’s denial suggests that an even greater degree of stability is desired before considering a public offering.
Which Exchange is Starlink Likely to List on?
The choice of listing is another crucial consideration. Starlink is expected to be listed on a major US stock exchange such as the NASDAQ or NYSE, given its size, technology focus, and SpaceX’s US headquarters. This would provide the liquidity and investor base appropriate for a company of this size and with this growth momentum.
Tesla, another of Elon Musk’s companies, is listed on the NASDAQ, and with it being a tech heavy exchange, it would make sense that there may be a preference here.
Analysts believe it’s possible that Musk could consider an IPO for Starlink in 2025 or 2026., with a listing, if it occurs, proving to be a powerful catalyst for the entire space industry.
In short, while Starlink has achieved notable financial milestones, including cash flow breakeven, and has been the subject of IPO speculation, Elon Musk’s statements suggest that a public offering is not imminent. Time will tell.
