SpaceX investor and former ‘SPAC King’ Chamath Palihapitiya believes that a Starlink IPO is the “simplest, most obvious way” for Elon Musk to achieve “complete financial flexibility” in 2023.
Starlink is SpaceX’s satellite internet service that has over 1,000,000 active subscribers across the world’s seven continents.
The service, which is run through a constellation of Low Earth Orbit (LEO) satellites, is able to provide high-speed internet to rural and remote areas, or areas difficult to connect to a broadband service.
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Palihapitiya’s forecast comes as Musk continues to cut jobs at Twitter following his $44 billion acquisition, while Tesla’s stock has lost nearly 70% of its value in 2022. The billionaire investor made this forecast on his podcast All-In, on the episode where he and co-hosts Jason Calacanis and David Sacks discussed their take on trends for the tech industry this year.
“He’s going to create breathing room for himself,” he said. “This is the simplest and most obvious way for him to do it. It’ll give him a ton of more dry powder.” He also predicted that Starlink’s valuation would be at least $75 billion or half of SpaceX’s current private mark.
Tech entrepreneurs Calacanis and Sacks, who are both in Musk’s inner circle and were both involved in some way with the Twitter acquisition, did not comment on Palihapitiya’s prediction beyond validating some details.
Palihapitiya knows a thing or two about taking companies public, he was once the loudest and most prolific special purpose acquisition company (SPAC) investor. Many believe that he ushered in the short-lived SPAC boom of 2021.
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READ: The End Of An Era: Chamath Palihapitiya Winds Down Two SPACs
But Musk, who seems to prefer taking companies private, said in June last year that an IPO of SpaceX’s satellite internet business is still three or four years away. At the time, the SpaceX CEO said that before it can go public, the business must be “in a smooth sailing situation” with “good predictability.”
These comments come after Starlink provided internet service to Ukraine’s military when its internet infrastructure was attacked in the early stages of Russia’s invasion, but before the company announced in September that it has added Antarctica to its service areas, becoming active in all of the planet’s seven continents.
At the time of that announcement, they had just added 54 satellites to join the 3,076 already in low-Earth orbit. In December, the company received US Federal Communications Commission authorization to launch 7,500 more into orbit. But the company still has a lot of scaling to do to meet its mid-2027 goal of having a constellation the size of 42,000 satellites.
Like many of his deadlines, the 2025-2027 IPO timeline was already an adjusted estimate. CNBC reported that according to a May 2019 email to SpaceX employees, Musk said that “it will probably make sense to take Starlink public in about three years or so.”
He adjusted that target and said in a 2021 tweet that it would be “at least a few years before Starlink revenue is reasonably predictable,” as “going public sooner than that would be very painful,” and that he will do his “best to give long-term Tesla shareholders preference.”
But at this point post-Twitter acquisition and as Tesla’s stock struggles to recover, Palihapitiya might be right in Musk needing that breathing room to do what he needs to do, and Musk might just expedite the Starlink IPO timeline and make some shortcuts along the way.
Information for this story was found via Twitter, CNBC, and the sources and companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
