Musk makes Starlink IPO guarantee to small investors

Billionaire tech investor Elon Musk teased in a Tweet that Starlink will "probably" list as a separate company – but not for "several years" yet.

By that time he hopes revenue growth from the Starlink satellite Internet business, which currently sits within SpaceX – investors include Alphabet and Fidelity Investments – will be "smooth and predictable."

Musk's punctuation-challenged and grammatically awkward Tweet [Ed note: No need to get petty] added that "Public market does *not* like erratic cash flow haha."

If a Starlink IPO does get off the ground, Tesla's CEO promised that small retail investors won't be elbowed out by the big guys and get a fair crack of the whip.

"I'm a huge fan of small retail investors," he claimed. "Will make sure they get top priority. You can hold me to it."

To cautiously go
There are good reasons why Musk is not rushing a Starlink IPO, besides his apparent fear of "erratic cash flow" spooking investors.

The business model has still got it all to prove, and there is a long way to go – 2026 – before all the potential 12,000 low-earth satellites are up in the sky (around 650 have been launched so far).

Starlink plans to increase its satellite fleet to 4,400 by 2024.

Lift off: Retail investors may be in luck when Starlink finally IPOs – but they'll have to wait.  (Source: SpaceX on Flickr CC 2.0)
Lift off: Retail investors may be in luck when Starlink finally IPOs – but they'll have to wait.
(Source: SpaceX on Flickr CC 2.0)

Financial analysts from Cowen recently noted that while Starlink has the ability to provide a "practical satellite-based broadband solution for the underserved, the capacity has limitations in most of the US especially considering the growing demand for bandwidth driven by in-home data-rich applications and devices."

It remains to be seen if Starlink can develop an attractive business model if its addressable market is limited to rural areas.

Starlink is expected to begin offering a US public beta service in November, then start expanding reach to the rest of the world next year.

SpaceX marks the investment spot
SpaceX raised over $1.9 billion in a new funding round in August. Seventy-five investors apparently participated.

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According to Bloomberg, the latest investment valued the company at $46 billion, propelling it upwards as one of most valuable venture-backed US companies.

Aside from Starlink, SpaceX has other irons in the fire, including space tourism and an ambitious project to carry people to Mars.

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— Ken Wieland, contributing editor, special to Light Reading

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