Elon Musk's Record-Breaking $180 Billion SpaceX Valuation is Bright Spot in Otherwise Bleak Day for the Founder

SpaceX gets a huge $180 billion valuation but also receives expensive losses and delays.
Updated Dec. 15, 2023
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SpaceX, Elon Musk's interstellar venture, has recently achieved a stellar feat in the financial realm, soaring to a record-setting valuation of over $180 billion. However, this milestone is accompanied by a significant financial twist—the loss of a $900 million government subsidy on the same day. This also comes on the heels of a recently announced 2 million vehicle recall for Tesla. All-in-all, Elon Musk is having a week. 

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SpaceX's mostly good week

As SpaceX charts its course through its problems, its forward trajectory focuses strategically on Starlink, the satellite internet unit. Starlink has driven a record valuation of $180 billion. This valuation is coming from the ongoing secondary share sale of the company and values SpaceX above most defense contractors and telecommunications companies. 

Excitingly, SpaceX has also received FCC approval to conduct tests for Starlink's cellular capabilities on phones, marking a crucial step forward in the company's ambitious plans. This could be huge at driving additional revenue as the first truly global solution to cell service that could be delivered at affordable prices directly to consumers. 

However, the celestial trajectory of SpaceX is not without its financial turbulence. On the same day SpaceX celebrated this record-setting valuation, it faced the stark reality of losing a substantial $900 million subsidy from the U.S. Federal Communications Commission (FCC). This type of up and down would put anyone on notice of their financial fitness. The FCC reiterated its 2022 decision to deny SpaceX's satellite internet unit, Starlink, the $885.5 million in rural broadband subsidies, citing Starlink's failure to meet essential program requirements.

SpaceX and a $900 million loss

The FCC argued that Starlink couldn't demonstrate its ability to deliver the promised service, leading to the denial of the subsidy. Despite this setback, SpaceX received a glimmer of hope from the FCC as it granted an "experimental special temporary authorization" to test SpaceX's cellular Starlink system for beaming data to smartphones across the United States. This could really help the company bring in more money as they look to the future. 

Looking ahead, SpaceX is gearing up to make significant strides in satellite internet with Starlink. The FCC has granted approval for SpaceX to test Starlink's cellular capabilities on phones, heralding a new era for the satellite internet unit. This marks a pivotal development as SpaceX explores innovative ways to expand its technological footprint and provide enhanced services.

The FCC's "experimental special temporary authorization" allows SpaceX to conduct tests of the cellular Starlink system, beaming data to unmodified T-Mobile phones in over two dozen locations across the United States. This move is a testament to SpaceX's commitment to pushing the boundaries of technological innovation and connectivity. The 180-day testing period provides SpaceX with the runway to demonstrate the viability and effectiveness of Starlink's cellular capabilities.

Falcon Heavy launch delays

While SpaceX is scaling new financial peaks and navigating regulatory hurdles, its Falcon Heavy launch vehicle faced a temporary grounding. SpaceX stood down from the Falcon Heavy launch, citing the need for "systems checkouts" and weather concerns. The launch, intended to carry the Space Force's secretive mini-shuttle, the X-37B Orbital Test Vehicle, experienced delays due to weather conditions and ground-side issues.

The classified mission of USSF-52, the seventh trip of the X-37B Orbital Test Vehicle, will have to wait for a new launch opportunity. Despite the delays, SpaceX has been a dominant force in space launches, with the upcoming Falcon Heavy mission and additional Starlink missions poised to contribute to their tally, which has already reached 69 launches from the Space Coast in the current year.

Bottom line

SpaceX's record-setting valuation comes at a much-needed time. The loss of the government subsidy poses a financial challenge — especially on the heels of a recent two million-vehicle recall — but the company's strategic focus on Starlink's cellular capabilities demonstrates resilience and a forward-looking approach. As SpaceX continues to navigate the intricacies of finance and technology, the world awaits the next chapter in its journey — one that involves reaching new heights in satellite internet connectivity and unlocking the mysteries of space with each successful launch.

FinanceBuzz is not an investment advisor. This content is for informational purposes only, you should not construe any such information as legal, tax, investment, financial, or other advice.

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