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The Tesla CEO has no immediate plans to push for a Starlink IPO as he believes the space satellite company is not ready for that yet.
Elon Musk says that SpaceX is not looking to take its Starlink business public for another 3 or 4 years. According to Musk last week, Starlink needs to be in top-notch operational shape before an initial public offering (IPO) is considered. However, Musk does not believe this will happen before 2025. In an audio recording made available to the media, Musk said to SpaceX employees:
“I’m not sure exactly when that [IPO] is, but maybe it will be like – I don’t know, just guessing – three or four years from now.”
In addition, Musk also used phrases like “in a smooth sailing situation” and “good predictability” to describe Starlink’s targeted position before an IPO. “I think spinning it off as a public company can make a lot of sense,” the Tesla Inc (NASDAQ: TSLA) CEO concluded.
Musk’s announcement of a delay on any potential Starlink IPO comes amid growing investor interest in owning a stake in SpaceX. However, the American spacecraft manufacturer, space launch provider, and satellite communications corporation remains a privately traded company.
In an old email obtained by CNBC, Musk initially suggested that Starlink would publicly list in 2022. An email sent to SpaceX employees in May 2019 said “it will probably make sense to take Starlink public in about three years or so”. However, the billionaire businessman stated in a tweet last year that the original IPO timeline was no longer feasible. At the time, Musk also suggested that taking Starlink public using the original schedule would have catastrophic effects.
Suspended Starlink IPO May Reflect Contentious History with Public Company Regulations
Musk has a documented difficult history with regulators. For instance, in 2018, he acquiesced to a multi-million-dollar settlement with the Securities and Exchange Commission (SEC) over fraud charges. According to the regulatory body, there was alleged financial foul play over Musk’s agenda to take his Tesla (NASDAQ: TSLA) company private. Furthermore, the serial billionaire investor is also at odds with Twitter (NYSE: TWTR) over a proposal to take the microblogging giant private.
In Musk’s opinion, “being public is definitely an invitation to pain, and the stock price is just distracting”. In addition, he also recently admonished his SpaceX staff not to assume taking a company public is a surefire way to riches. The Tesla CEO continued by suggesting that the public markets are ever-demanding and punish those who slip up.
SpaceX’s Starlink satellite network comes equipped with the functionality to deliver blazing internet speed anywhere in the world. The company can achieve this by positioning numerous satellites in low earth orbit. Late last month, Starlink revealed that it now has more than 400,000 subscribers across the globe and launched around 2,500 supporting satellites. However, this premium service does not come cheap. The base price for any Starlink product or service is $110 per month. Using the company’s recent subscriber numbers translates to annual service revenue of more than $500 million a year.