Musk Denies Starlink IPO Plans — Tesla Shareholders Still Taking Preference?
Starlink won't go public, so does this mean Elon Musk is still focusing on Tesla stock?
Key Takeaways
- Speculation surrounding a potential Starlink initial public offering in 2024 took center stage recently.
- Elon Musk immediately denied the news on X.
- Does he still prefer to focus on Tesla stock only?
Elon Musk refuted reports suggesting that SpaceX, his rocket company, was in discussions about an initial public offering (IPO) for its Starlink satellite internet business by 2024. In response to an X post by Bloomberg News on the matter, Musk dismissed the claim as ‘false.’
This contradicts the report indicating that SpaceX had been transferring the assets of the Starlink unit to a wholly-owned subsidiary, with potential plans for a spin-off.
The billionaire entrepreneur has previously articulated his intention to take Starlink public once revenue growth and cash flow exhibit a more predictable trajectory. Just earlier this month, Musk stated that Starlink had achieved cash-flow breakeven.
Starlink IPO Rumors
On November 15, 2023, Bloomberg reported that SpaceX is actively exploring the possibility of an IPO for its rapidly expanding Starlink satellite business, aiming for a potential debut as early as late 2024. Citing individuals familiar with the matter, the move may be a strategic maneuver to capitalize on the strong demand for space-based communications.
As part of the preparation process, SpaceX has undertaken the transfer of the satellite unit’s assets to a wholly-owned subsidiary, laying the groundwork for a potential spin-off in the IPO, according to an anonymous source close to the matter.
“It’s important to note that final decisions have not been reached, and there remains a possibility that SpaceX may opt to retain ownership of the unit. Additionally, the IPO timeline could be subject to adjustment, with a potential delay to 2025, as indicated by the sources,” Bloomberg wrote.
Musk Denies News
Is Tesla Still Elon’s Favored Business?
It is not the first time that Starlink has ended up at the center of rumors regarding a possible IPO. The same happened in 2021, in the midst of the pandemic, and on that occasion, too, Elon Musk immediately denied any hypothesis of a listing on Wall Street for the satellite company controlled by SpaceX.
The question of Starlink going public has emerged several times given the growing interest in the space network, for example, even during the Ukraine war after Russia’s attack on its Eastern European neighbor.
Additionally, interest in space internet is rising as more companies evaluate its capabilities; the space division of defense contractor Lockheed Martin has joined forces with Omnispace to launch a similar service in direct competition with SpaceX.
But, all that said, Elon Musk made it clear that he’s focusing on giving long-term Tesla shareholders preference, focusing on just one of his companies on Wall Street.
Is Tesla To Buy?
Despite investing in a stock that needs a big amount of study – of balance sheets, news, fundamentals, etc. what’s clear is that most analysts think Tesla has not too much room to go ahead as its share value is quite close to the average target price. In fact, on November 16, 2023, the price of a Tesla share is at $242.95, just some dollars below the target price of $255.00.
The prevailing sentiment among 47 surveyed by CNN investment experts is to maintain their position in Tesla Inc., holding the stock. This rating has remained constant for a while, retaining its status as a ‘hold’ recommendation.
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