In today’s increasingly digital world, internet connectivity is becoming less of a luxury and more of a necessity. However, many parts of the country and of the world remain unconnected or under-connected. Now, a new business venture called Starlink — a division of aerospace manufacturer SpaceX — looks to change that.
SpaceX is launching dozens of satellites into space every month as it deploys its Starlink satellite internet constellation. This new service promises to connect nearly every corner of the globe to the internet — a promise that is catching the eye of investors.
If you are one of those investors, you may be wondering how you can buy Starlink stock. You can’t invest directly in Starlink just yet, but you may be able to invest indirectly in other ways. We’ll take a peek at how Starlink is doing so far and whether you might consider investing money in the SpaceX division if it eventually goes public.
|Number of employees||~9,500 (SpaceX, 2021)|
|Ticker symbol||Doesn’t exist yet|
|Expected Starlink IPO date||TBD|
Aerospace manufacturer SpaceX has grown significantly since its founding in 2002. It has about 9,500 employees as of 2021. Since 2014, a division of SpaceX has been working on a so-called satellite “constellation” that will provide internet access nearly anywhere in the world.
SpaceX’s Starlink satellites form this constellation; the company uses satellites in low Earth orbit to enable online gaming, video calls, streaming, and other aspects of internet connectivity. As a division of SpaceX, the company’s founder is Elon Musk.
SpaceX uses its Falcon 9 rockets to launch Starlink satellites into space, having launched 49 Starlink satellites in January 2021. Starlink is based in Redmond, Washington.
Why do people want to invest in Starlink?
There are many reasons people may want to invest in Starlink, but it being one of CEO Elon Musk’s numerous companies is a likely factor. Although Musk can be a polarizing figure, he inevitably draws a lot of attention with any of his business endeavors.
Also consider SpaceX, the company that operates Starlink. As a well-known force in the developing space industry, SpaceX has received a lot of attention with its eye-catching launches. That includes the Crew-3 Mission launch from the Kennedy Space Center in November 2021.
The company’s potential is also raising eyebrows among investors. Starlink estimated its addressable market was $6 billion at launch. What this means is Starlink could bring in as much as $6 billion in its first year if it can turn every potential sales lead into a customer. However, Gwynne Shotwell, president and CEO of SpaceX said in a 2021 interview that Starlink’s total addressable market could be as high as $1 trillion.
People also just want to invest in Starlink because it’s different. Although traditional internet companies provide internet through a series of cables and towers on the ground, Starlink uses satellites hundreds of miles above the earth.
Simply put, the idea of having satellites beaming down internet signals is a novelty and makes people excited. (It’s a pie-in-the-sky kind of promise — and, incidentally, the Starlink terminal is shaped like a pizza pie.) Starlink is new, it’s different, and it’s exciting – and that gets the attention of both institutional and retail investors.
Starlink is launching new satellites all the time. As of January 2022, It has launched 2,091 satellites including 1,915 currently in orbit. Unfortunately, SpaceX says 40 of the 49 satellites it launched at the end of 2021 were wiped out by a geomagnetic storm.
Starlink has also launched a premium service, which it simply calls Starlink Premium. The company claims the service will double Starlink antenna capability for higher internet speeds and throughput. Those who sign up are required to make a $500 deposit and pay $2,500 for the antenna and router. The service also costs $500 per month. Starlink says Premium delivers speeds of between 150 megabits per second and 500 megabits per second.
Starlink is still a private company and not yet publicly traded, so we can’t yet value it based on its market cap on a stock exchange. Currently, the best information we have is based on projections and estimates. We do know that SpaceX has secured some funding specific to broadband access, such as $885 million in broadband subsidies from the Federal Communications Commission.
Elon Musk has also raised equity funding in several rounds, including an announcement of $337.4 million raised in December 2021. SpaceX’s value was $100 billion in October 2021 after a secondary share sale, and it had raised $1.16 billion in equity financing in April. Notable investors include Alphabet Inc. and Fidelity Investments.
Keep in mind that because Starlink is a division of SpaceX, that $100 billion valuation includes Starlink. For Starlink’s valuation specifically, estimates include a $50 billion forecast by Morgan Stanley analyst Adam Jonas in 2020. Others have put the valuation higher, but these projections seem to agree that Starlink could be more valuable than SpaceX in the long run.
Reasons to invest in Starlink
You can’t invest in Starlink just yet, but there are a few reasons the broadband provider might be an investment to consider in the future. The addressable market and valuation figures for Starlink are only projections at this point, but there are some things we do know that bode well for the company.
First, satellite internet by its nature is easier to expand than cable and fiber internet infrastructure. People can theoretically use Starlink as long as they have the necessary equipment and a clear view of the sky as its satellites orbit the globe.
Hence, Starlink could be a boon to rural areas and other places where internet service is sparse. It also may be more resilient during severe weather and natural disasters because there are no towers or physical lines that can be wiped out on the ground.
That being said, Starlink also needs a license to offer internet services before new customers can sign up. So far, 25 countries are a part of the public beta.
Another reason to like Starlink is its pairing with SpaceX. Having its own rockets has allowed the company to launch about 2,000 satellites since May 2019, or more than 600 per year. Having more satellites in the sky may enable consistently faster speeds and fewer interruptions.
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Pros of buying Starlink stock
- Easier to expand coverage than traditional internet networks
- Pairing with SpaceX simplifies the deployment of satellites
- SpaceX has been awarded government subsidies
Reasons to avoid Starlink
As mentioned, Starlink isn’t publicly traded yet, and some of these issues could improve before it goes public. Still, there are things you should keep in mind.
At the moment, it’s not for certain that Starlink will be sustainable from a financial standpoint. Musk says the company needs up to $30 billion in annual funding to survive. He said in 2021 that the company was spending $1,000 to produce Starlink terminals, which it sells for $500. Thus, while Starlink has secured some funding, it will need more to survive — and ultimately bring its manufacturing costs down.
Also problematic for Starlink is that its service is reported to be unreliable in many cases. Many beta testers experienced issues with the service. Even the slightest obstruction of the view of the sky may cause slowdowns and interruptions. Trees and buildings could cause problems for Starlink service.
There are also concerns about light pollution and even Starlink’s satellites potentially interfering with the work of astronomers. Another problem is that some users reported “non-existent” customer service — something that will need to be addressed going forward.
Cons of buying Starlink stock
- Needs $30 billion in funding per year
- Service is not reliable yet
- Concerns over space debris and light pollution
- Customer service has been poor for some subscribers
When to expect a Starlink IPO
At the moment, we do not quite know when Starlink will go public. The best we have is a comment from Elon Musk saying the company would go public when its cash flow predictability improves. But because Starlink isn't a publicly traded company, information about cash flow is limited. Musk said Starlink could bring in $30 billion annually by 2025. In addition, Gwynne Shotwell said Starlink’s business model “could make sense as a public company.”
Information about a Starlink initial public offering (IPO) stock price is also limited, but we do have some clues about SpaceX shares. For instance, SpaceX has raised private equity funding in multiple rounds including $560 per share with a $100 billion valuation and $419.99 per share with a $74 billion valuation.
Although nothing is for certain at this point, some predict Starlink will be more valuable than SpaceX itself. Hence, its share price could be even higher.
How to buy Starlink stock
It isn’t currently possible to buy Starlink shares on the stock market. That won’t be possible until when (and if) the company ultimately goes public. For now, there are some options you may consider if you want to know how to invest in SpaceX or in Starlink.
Invest in Starlink partners
One way to invest now is to watch for Starlink partner companies. For instance, Shift4 Payments (NYSE: FOUR) announced a five-year partnership with Starlink. Watch for partnerships like these to invest indirectly.
Of course, if you want to invest in related companies, you will first need a brokerage account. Check out our lists of the best investment apps and best brokerage accounts to see some great options, a number of which are commission-free.
Invest in Tesla
Even though you can’t invest directly in SpaceX or Starlink quite yet, you can invest in the one Elon Musk company that is currently public. Tesla vehicles are fully internet-capable, so it’s not far-fetched to think Teslas may one day be able to use a Starlink connection. Find out how to invest in Tesla stock if you want to go this route.
Look for Starlink on pre-IPO trading platforms
There are now pre-IPO investing platforms that may allow you to trade Starlink or SpaceX shares before they go public. Examples include IG and EquityZen. For more details, check out our EquityZen review.
What is Starlink’s stock symbol?
Starlink is not yet publicly traded. Hence, it doesn’t have a stock symbol as of today.
Does Starlink have an IPO date?
There is no IPO date set for Starlink at the moment. Elon Musk says the company will go public when cash flow is more predictable.
How profitable is Starlink?
Starlink does not appear to be profitable yet. For instance, it reports that it spends $1,000 to manufacture each of its terminals but sells them for just $500. It does charge a $99 monthly subscription fee for its basic service and $500 for Starlink Premium, but Musk says the company will need an additional $30 billion in annual funding “to survive.”
Starlink is a promising company with seemingly limitless potential. It promises to expand internet services to the far reaches of the globe without requiring Wi-Fi devices, which can bring millions of people online.
However, as with all of Elon Musk’s companies (except Tesla), Starlink is not publicly traded for now. That may not be a bad thing, though, because its service has been unreliable for many of those who have tried it. In addition, the company doesn’t appear to be profitable yet — though we will need to see its earnings reports to know for sure. Those won’t come unless Starlink goes public.
Hopefully, Starlink will go public sometime in the next few years, but nothing is for certain yet. For now, you may consider investing in a related company or exploring pre-IPO offerings.
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