How SpaceX Can Live Up To Its $ 100 Billion Valuation

Astronauts Thomas Pesquet, Megan McArthur, Shane Kimbrough and Akihiko Hoshide with Acting NASA Administrator Steve Jurczyk and SpaceX CEO Elon Musk on April 23.

Less than a month after sending four civilians on a historic three-day trip around Earth, Space Exploration Technologies Corp. has taken a new step: a valuation of more than 100 billion dollars.

The Hawthorne-based aerospace company is now worth $ 100.3 billion, CNBC reported on October 8. That valuation is up from $ 74 billion in February, making SpaceX the second most valuable private company in the world.

Anonymous sources close to the deal told CNBC SpaceX they have agreed with investors to sell up to $ 755 million in stock at $ 560 per share, up 33% from 419 $ 99 per share from its last valuation in February.

With its new valuation, SpaceX is right behind ByteDance Ltd., the Beijing-based parent company of popular video-sharing app TikTok, which has a valuation of $ 140 billion, according to business analytics platform CB Insights. TikTok’s US base of operations is located in Culver City. SpaceX’s astronomical valuation takes San Francisco-based financial technology giant Stripe Inc., which is worth $ 95 billion, to third.

SpaceX did not respond to requests for comment on the assessment.
“They had investors over time who saw where the business was at and heard the discussion about where the business was going,” said Rich Leshner, vice chairman of the board for the analytics firm BryceTech. “There is nothing to prove that they have not yet made a wise investment.”

The news follows a September 27 report from Forbes that found SpaceX founder Elon Musk to overtake Jeff Bezos, founder of aerospace company Blue Origin, as the richest person in the world with a personal net worth of 203 billion dollars. Musk earned $ 3.8 billion that day as the stock price of his electric vehicle company Tesla Inc. rose 2.2%.

As the company continues to expand into all facets of the aerospace industry, SpaceX and Musk have gained prestige with customers and investors, and not just for their high valuation.
“They have a lot of irons in the fire and they seem to have a knack for knowing how to turn things around,” Leshner said.

Profitable Money Generator
Much of SpaceX’s business comes from satellite launch services. The company claims to provide affordable launch services, with seats on its Falcon 9 ridesharing missions starting at $ 1 million for satellites weighing up to 200 kilograms, or 440 pounds. The company’s ride-sharing customers include terrestrial imagery company Planet Labs Inc., satellite company Loft Orbital Solutions Inc., and telecommunications company Kepler Communications Inc.

More recently, Torrance-based Varda Space Industries Inc. chose SpaceX to launch its manufacturing vehicle into space aboard the company’s Falcon 9 rocket for a carpool mission scheduled for 2023. This will be the first time. that Varda will send one of his spaceships into orbit. Financial details of the deal were not disclosed.

“I am delighted to use SpaceX as a launch provider because their reusable launchers have proven to be very reliable and cost effective,” Varda founder and CEO Will Bruey said in an Oct. 11 release announcing the launch.

While SpaceX has raked in revenue through its carpooling of satellites and spacecraft, the company has also won millions of dedicated launch contracts with large organizations such as NASA, Space Force, and the Department of Defense.

SpaceX started out in a “small corner” of the aerospace industry providing launch services when the company was in its infancy, Leshner said, but it has made a name for itself expanding into several aspects of the industry. aerospace and becoming a trusted entrepreneur for large government entities and businesses.
“They got there by having people who built things that work,” Leshner said.

The long shot
In addition to launching satellites into orbit for customers, SpaceX has also bet big on its own constellation of satellites, Starlink.
With its network of more than 1,700 orbiting satellites, Starlink provides the Internet to nearly 100,000 customers. SpaceX has a Starlink backlog of 600,000 customers and aims to deploy a total of more than 4,400 orbiting satellites for the program by 2024, which could cost up to $ 30 billion.

The company is working to reduce the cost of manufacturing Starlink terminals because it would waste money: each costs around $ 1,000 to manufacture but sells for $ 499.

Despite the high cost of setting up the program, the company expects to make up to $ 30 billion per year after the Starlink constellation is completed.

“If you can reduce the cost of this user terminal, it really is the holy grail for the consumer side of the business,” SpaceX CFO Bret Johnsen said during a panel at the Satellite conference. 2021 September 7.
And SpaceX is sending more than just satellites into orbit. The
The company strives to fulfill its core mission of advancing human spaceflight.

SpaceX made history in September by sending the first fully civilian crew into space on its Inspiration4 mission, a three-day trip around Earth.

The company has also won competitive and highly regarded contracts from NASA to work on the Artemis human lunar lander project, which aims to use the SpaceX spacecraft to land Americans on the moon for the first time in 50 years. However, a lawsuit filed against NASA by Blue Origin, which claims the contact was unfairly attributed, forced NASA to put the project on hold.

Hit the mark
Although SpaceX has made major strides in several of its businesses, the company must now deliver its massive valuation.
But with its recent history of contracts and launches, Leshner said, the company is unlikely to see its valuation drop.

“Succeeding is much more likely than failing if the question is, ‘Are they going to be up to it?'” He added.
However, predicting SpaceX’s next move is not easy, he said. With Musk moving the headquarters of electric vehicle maker Tesla to Austin, Texas, and SpaceX increasing its operations at its Starbase launch site in Boca Chica, Texas, it is possible that SpaceX will move its headquarters out of California, Leshner said. However, a decision is unlikely to curtail manufacturing operations at its current headquarters in Hawthorne, he added.

“They’ve got a pretty big capacity in Southern California to make SpaceX,” Leshner said. “I don’t think a move (of the head office) would mean some kind of drastic change.”

And even though SpaceX competitors like Rocket Lab USA Inc., Virgin Orbit, and Virgin Galactic have made or announced stock market debuts in recent years, Leshner said he didn’t expect SpaceX to follow in their footsteps. With $ 6.6 billion raised to date, the company has no difficulty raising capital, one of the main benefits of the IPO, he said.

“If you don’t face the need to raise capital, why would you introduce the downsides of being public into this equation when you seem to have all the benefits right now in being private?” Leshner asked.

While predicting the future of SpaceX is no easy task, Leshner said the company is far from finished dominating aerospace.
“Their investors are prepared to say they think the story of SpaceX’s growth is not over,” he said.

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Travis Durham

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