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Elon Musk’s Starlink is one of the most highly anticipated IPOs in recent years, but it’s coming slower than many investors had hoped.
Read on to find out everything we know about the IPO so far, starting with an explanation of what Starlink is, some background on Starlink’s IPO prospects, and the latest IPO news from Musk.
If you’re impatient and can’t wait to get your hands on some satellite internet stocks, we’re also sharing some alternatives to add to your portfolio meanwhile.
- Starlink is a satellite internet provider and the division of Elon Musk’s SpaceX spacecraft company.
- Musk first hinted at a Starlink IPO in 2019 when he suggested it could come in 2022, but more recent updates suggest otherwise.
- In 2022, Musk announced to his employees that Starlink’s IPO was unlikely to happen for at least three or four years, pushing its release to 2025 at the earliest.
- While you can’t currently invest in Starlink, there are many other satellite technology stocks and ETFs on the market.
What is Starlink?
Before we dive into Starlink’s share issue, let’s take a few steps back and talk about the company itself. This satellite internet company is a division of space company SpaceX. Starlink was founded by Elon Musk honestly CEO of Tesla.
Musk founded SpaceX in 2002 and created Starlink in 2014. Starlink provides high-speed internet services and particularly benefits customers in underserved rural areas.
Starlink has grown significantly over the years in business. Although expansion is slow and there are many customers on long waiting lists, the service already has more than 400,000 subscribers worldwide. And the company recently announced a partnership with T-Mobile to provide mobile services to its customers in remote areas.
Starlink IPO: Background
Speculation surrounding Starlink initial public offering (IPO).) is not exactly new. In fact, Musk stated in 2019 that he was considering releasing shares of his satellite internet company. At the time, he suggested it might be about three years before we see an IPO.
Three years later and still no IPO date announced.
But Musk began dropping his rumored 2022 IPO date more than a year ago.
V Tweet February 2021Musk said, “SpaceX needs to solve the negative cash flow problem in the next year or so to make Starlink financially viable. Every new constellation of satellites in history has gone bankrupt. We hope to be the first not to do that.”
He said we will see Starlink IPO “When we can predict the cash flow relatively well.”
This delay has disappointed many potential investors, but they are hopeful that the IPO will happen. And it’s easy to see why people are eager to invest in this company. The latest figures from the May 2022 funding round value the company at approx 127 billion dollars. Based on the company’s pricing and number of customers, Starlink probably has an annual service revenue of more than 500 million dollars.
Latest Starlink IPO News
It’s been three years since Musk first floated the idea of releasing stock for Starlink, and about a year and a half since he shared his update via Twitter. So where does that leave us today?
The latest update was published by Musk in June 2022. In an audio clip obtained by CNBC meetings with company employees, Musk stated, “I’m not sure when exactly [IPO] it is, but maybe it will be like—I don’t know, I’m just guessing—in three or four years.”
In other words, it looks like Starlink won’t issue a public stock until at least 2025 — maybe later.
Also in the same audio clip, Musk warned his employees that an IPO would not necessarily be a surefire path to riches. He called the public markets “volatile” and stated that they could “really beat you with a gun if you don’t meet expectations.”
Read more about the IPO >>> IPOs to watch in 2022
Other ways to invest in satellite internet besides Starlink shares
Satellite technology is not exactly new. In fact, the first satellite, Sputnik 1, was launched into space in 1957. And in the years since then, this technology has only expanded.
Satellite technology has become increasingly important as an important source of Internet, especially for those who do not have easy access to cable or fiber Internet. Companies such as Starlink and other satellite internet companies have played an important role in spreading high-speed internet access to rural and remote areas.
Given the importance of satellite internet, it’s easy to see why so many people want to invest in it. The good news is that just because you can’t invest directly in Starlink doesn’t mean you can invest in satellite internet or technology.
First, you can invest in satellite technology by investing directly in these companies in the industry. Some of the best satellite stocks in 2022 include Iridium Communications, ViaSat, Gilat Satellite Networks and others. Additionally, Amazon has also dabbled in the satellite industry, so investing in them could gain some exposure.
One of the best ways to invest in satellite internet technology is to invest in exchange traded funds (ETFs) instead of individual shares. ETFs still give you industry exposure, but they also reduce risk by diversifying your assets and diversifying your portfolio. In other words, you’re not trying to pick industry winners and losers and put all your eggs in one basket.
According to Nasdaq, they are the two most popular satellite ETFs Get the Space ETF UFO and SPDR Kensho Final Frontiers ETF ARM. These funds have been around since 2019 and 2018, respectively, and focus on different parts of the satellite industry.
The bottom line
Many investors have been patiently waiting for news of Starlink’s IPO. But according to the latest news from company founder Elon Musk, it doesn’t seem like that’s going to happen anytime soon. If you want more immediate exposure to the industry, there are other stocks and ETFs you can invest in while you wait for Starlink to go public.
Read more about investing in future-oriented technology: