middleportal.com – SpaceX, the space exploration company founded by Elon Musk, has captured the world’s attention with its groundbreaking achievements and ambitious plans. As the most valuable private company in the US, valued at $150 billion as of July 2023, many investors are eager to get a piece of the action. However, investing in SpaceX is not as straightforward as buying shares on the stock market.
Elon Musk, who owns a significant stake in the company, has made it clear that SpaceX has no immediate plans to go public. His focus is on the long-term goals of reducing space transportation costs, colonizing Mars, and providing global satellite internet service. So, how can investors gain exposure to SpaceX? Let’s explore three possible options:
1. Invest through a pre-IPO secondary market
A pre-IPO secondary market is a platform where existing shareholders can sell their private shares to accredited investors. This option allows insiders to cash out some of their equity and provides an opportunity for outsiders to buy in. However, there are a few considerations to keep in mind:
- Accredited investor requirements: To participate in the pre-IPO secondary market, investors need to meet certain income or net worth requirements to qualify as accredited investors.
- Supply and demand dynamics: The availability and price of SpaceX shares on the secondary market depend on the supply and demand of the sellers and buyers. This can affect the accessibility and pricing of the shares.
- Liquidity and restrictions: Shares bought through the secondary market can be illiquid and may have restrictions on when they can be sold. It’s important to understand the terms and conditions before investing.
- Information limitations: The information available on the company’s financials and operations may be limited or outdated, which can make it challenging to make informed investment decisions.
Examples of pre-IPO secondary market platforms include EquityZen, SharesPost, and Forge Global.
2. Wait for the IPO
An IPO, or initial public offering, is when a private company goes public and sells its shares to the general public for the first time. While Elon Musk has expressed the possibility of taking SpaceX’s Starlink satellite internet business public in the future, it is not expected to happen before 2025 or later. Musk has also indicated that priority would be given to long-term SpaceX employees and customers when allocating shares. If you choose to wait for the IPO, keep the following in mind:
- Timing and competition: The IPO may not happen for several years, and when it does, there may be a limited number of shares available. Investors may need to be patient and compete for the opportunity to invest.
- Transparency and accessibility: Investing in the IPO is the most direct and transparent way to become a shareholder of SpaceX. However, it may still require meeting certain criteria and going through the IPO process.
3. Invest after the IPO
Once SpaceX goes public, investors will have the option to buy shares through the stock market or invest in an exchange-traded fund (ETF) that includes SpaceX in its holdings. This option offers more accessibility and liquidity compared to the previous two options. However, there are a few factors to consider:
- Potential price inflation: The share price of SpaceX may be influenced by the hype and demand surrounding the IPO, potentially making it more expensive to buy.
- Market volatility: Like any publicly traded company, SpaceX’s share price may be volatile and influenced by market conditions and investor sentiment.
- Regulatory scrutiny and competition: Going public may subject SpaceX to increased regulatory scrutiny and expose the company to more competition in the market.
Some ETFs that may include SpaceX in their holdings after the IPO are ARK Space Exploration ETF and Procure Space ETF.
Investing in SpaceX offers the potential for exciting returns, but it’s important to carefully consider the available options and understand the risks involved. Whether you choose to explore the pre-IPO secondary market, wait for the IPO, or invest after the IPO, conducting thorough research and consulting with a financial advisor can help you make informed investment decisions.
