Report: SpaceX discusses equity sale, latest valuation close to $175 billion.

On December 7th, according to informed sources, Elon Musk's space exploration company SpaceX has begun discussions on another round of internal stock sales, with an estimated valuation of $175 billion.

The sources said that SpaceX is considering selling internal stocks at a price of about $95 per share, with the transaction size ranging from $500 million to $750 million. However, the specific size of the acquisition offer may vary depending on the willingness of both buyers and sellers.

Media analysis points out that if SpaceX's final valuation can reach $175 billion, it will rank among the top 75 companies in the world by market capitalization, on par with US telecommunications giant T-Mobile USA ($179 billion), Nike ($177 billion), and China Mobile ($176 billion), and will refresh the valuation record of US startups.

Previously, according to informed sources, SpaceX plans to split its satellite business, Starlink, and conduct its initial public offering (IPO) as early as the end of 2024. The sources said that in preparation for this, SpaceX has been transferring Starlink's assets to a wholly-owned subsidiary, which will eventually be spun off from SpaceX and independently conduct the IPO. Although Musk has denied the above news, analysts believe that it will happen either next year or in 2025 or 2026.

In July of this year, according to a copy of the acquisition offer issued by SpaceX CFO Bret Johnsen, the company has reached agreements with new and existing investors to sell up to $750 million worth of stocks from insiders at a price of around $81 per share, with a valuation close to $150 billion at the time. The valuation was $137 billion during the financing in January of this year.

It can be seen that within 5 months, SpaceX's valuation has increased by 16.6%. What changes and breakthroughs has SpaceX made during this period?

Musk: SpaceX's Starlink has achieved financial balance

Currently, there is still limited information about SpaceX's financial details. According to multiple media reports, SpaceX's revenue doubled to $4.6 billion in 2022, with overall costs increasing by 56% to $5.2 billion. In the first quarter, the company made a profit of $55 million on revenue of $1.5 billion.

Media reports suggest that SpaceX's rocket launches and Starlink business revenue are expected to reach around $9 billion this year, and it is projected to increase to around $15 billion by 2024. Starlink, in particular, generated $1.4 billion in revenue in 2022.

Achieving financial balance for the previously loss-making Starlink business is important for SpaceX's development. Musk announced on the X platform (formerly known as Twitter): "I'm happy to announce that Starlink has achieved cash flow breakeven!" Analysts believe that this news is a milestone progress for SpaceX. In November of this year, media reports claimed that Elon Musk had previously stated that he would split off the Starlink satellite business and conduct an IPO when Starlink's revenue growth and cash flow became stable and predictable. Therefore, the media speculated that SpaceX could split off the Starlink satellite business and conduct an IPO as early as the end of 2024.

Although Musk quickly denied this on Twitter, Justus Parmar, the founder and CEO of venture capital firm Fortuna Investments, said:

"I believe he (Musk) will split off Starlink, either next year or in 2025 or 2026. He is waiting for a certain level of stability or predictability in revenue."

Has SpaceX monopolized global rocket launches?

Musk founded SpaceX in 2002 with the goal of eventually transporting humans to other planets. Since then, SpaceX has gradually established a monopoly position in the rocket launch business through active testing and improvement of its launch vehicles.

SpaceX is also the only company that transports NASA astronauts to the International Space Station. A few years ago, SpaceX began handling national security space flights for the United States, ending the previous monopoly held by ULA in this field.

According to launch data compiled by astrophysicist Jonathan McDowell, who tracks space activities, in 2022, 66% of customer flights from US launch sites were powered by SpaceX rockets. This proportion for the first six months of this year was 88%.

This reflects that SpaceX has a de facto "monopoly position" in the rocket launch field, including transporting astronauts and launching satellites. Their flight speed is unmatched by competitors, and their prices are lower.

According to media reports, former Air Force Space Command officer John Holst said, "Competitors are currently unable to launch any products, making SpaceX the de facto monopolist."