Starlink: To IPO or Not to IPO?

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The universe, as anyone who has casually glanced at it will confirm, is a profoundly odd place. And yet, among all its strangeness – quantum entanglement, the persistent search for intelligent life that actually *wants* to converse, the fact that socks disappear in washing machines – the human obsession with investing in things it doesn’t quite understand remains remarkably consistent. Especially when those things involve rockets.

Currently, the object of much investor fascination is SpaceX, the company run by Elon Musk. As of today (a date which, as far as we know, is still valid), it’s valued at a rather startling $350 billion, making it the most valuable privately held technology company in existence. (Which is, of course, only valuable if someone else agrees it is, a rather shaky philosophical foundation if you think about it.)

Now, SpaceX doesn’t just fling metal tubes into the void (though it does that with considerable enthusiasm). It also beams internet down to us through Starlink, a constellation of satellites that, should you gather enough of them together, probably looks quite impressive from a sufficiently distant planet. And that, naturally, has led to whispers. Whispers of an IPO. (An Initial Public Offering, for those unfamiliar, is when a company decides to invite the general public to participate in its ongoing exercise in controlled financial chaos.)

But how does one even begin to untangle the potential mechanics of a Starlink IPO when it’s inextricably linked to the larger SpaceX operation? Let’s have a look, if you insist. It’s bound to be… interesting.

SpaceX, Starlink, and the Peculiar Habits of Retail Investors

It’s a fundamental truth of investment that when you purchase shares in a company, you are, in essence, acquiring a tiny, fractional ownership of *everything* that company does. (This is not necessarily a comforting thought if that ‘everything’ includes, say, advanced weapons systems, or a fondness for particularly irritating jingles.) This is something retail investors – the vast, often enthusiastic, and occasionally bewildered horde of individuals trading stocks – sometimes miss.

Take Alphabet, the parent company of Google. If you wish to invest in the somewhat unsettlingly pervasive artificial intelligence being developed by Waymo, Google’s autonomous vehicle project, you don’t get to just buy ‘Waymo stock.’ You buy Alphabet stock. You come along for the entire ride, including YouTube cat videos and the ongoing struggle to index the internet. (It’s a lot to take in, really.)

So, hypothetically, if SpaceX were to go public, you’d get exposure to everything – the rockets, the lunar ambitions, the vaguely unsettling pronouncements about colonizing Mars – *and* Starlink. But what if Starlink decided it wanted to strike out on its own? The possibilities, as they often do in situations involving significant sums of money and overconfident engineers, are numerous.

SpaceX could partially spin off Starlink, creating a legally separate entity and offering a slice of it to the public. Or, and this is where things get delightfully convoluted, they could create a ‘tracking stock.’ (Imagine a stock that’s perpetually attached to a small, rather anxious satellite, desperately trying not to drift off course.) This would allow investors to buy shares specifically tied to Starlink’s performance, without having to worry about the inherent unpredictability of launching things into the upper atmosphere.

The point is, a Starlink IPO is entirely feasible…provided someone can explain it in a way that doesn’t induce existential dread. But why would SpaceX even *want* to do this?

A Starlink IPO: Sensible or Simply Spectacularly Complicated?

One rather obvious benefit of separating Starlink is giving investors choices. Do you want to invest in a business that occasionally explodes (SpaceX), or one that provides relatively reliable internet access (Starlink)? (Though, admittedly, ‘relatively reliable’ is a low bar in the satellite internet business.) It allows capital to flow where investors believe it will yield the best, or least terrifying, returns.

SpaceX, being a private entity, isn’t obligated to reveal its financial secrets to the world. (Which is fortunate, as the truth about rocket science is probably best left shrouded in mystery.) Building and launching rockets is, shall we say, not cheap. It’s a venture that requires enormous upfront investment and doesn’t necessarily produce predictable revenues. (Hence the frequent reliance on government contracts and the occasional flamboyant billionaire.)

However, according to a report from Payload Space, Starlink appears to be SpaceX’s primary source of revenue. Moreover, that revenue is largely derived from recurring subscription fees. A remarkably reliable income stream, one might think, in the generally volatile world of space exploration. (Though one should always be cautious of anything described as ‘reliable’ within a five-mile radius of a launchpad.)

Starlink’s profitability, however, remains a bit of a question mark. Bloomberg has reported that the costs of building and launching satellites are substantial. On the other hand, some argue that the revenue from internet subscriptions helps offset those costs. (It’s a delicate balance, like trying to maintain equilibrium while juggling black holes.)

I, for one, remain cautiously optimistic about a Starlink IPO. It could provide SpaceX with much-needed capital while allowing the company to retain control of its valuable satellite business. A rather clever arrangement, if I do say so myself.

The freshly acquired capital could then be reinvested in the core space exploration business, enabling more audacious and expensive projects. This, in turn, would allow SpaceX to further compete with rivals like Blue Origin and Rocket Lab, resulting in more rockets, more satellites, and a general increase in the likelihood of someone accidentally launching a toaster into orbit.

Given Starlink’s reported growth and SpaceX’s apparent desire to maintain control, Mr. Musk would be well advised to give this some serious consideration. After all, in the grand scheme of things, what’s one more IPO in a universe brimming with improbable events? 🚀

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2025-07-28 08:52