Is Starlink preparing to go public in the coming year? An article from Bloomberg this morning discussed that question. According to anonymous sources “with knowledge of the matter,” Elon Musk’s SpaceX is considering spinning off Starlink, the satellite arm of the space exploration company, for an initial public offering (IPO). The sources claimed its trading debut could come in 2024, but the company’s CEO has issued a statement that directly contradicts those sources. Musk claims that the rumors are untrue, although he has offered no further context about whether or when a Starlink IPO is coming.
Does this mean the controversial CEO isn’t planning on ever taking SpaceX, Starlink or any other affiliates public? As of now, there isn’t much information available and Musk’s track record makes it hard to speculate. Let’s examine what we do know and assess what investors can expect in 2024 and beyond.
Will There Be a Starlink IPO?
With Tesla (NASDAQ:TSLA) stock struggling after reporting disappointing third-quarter earnings and its future looking increasingly questionable, investors are likely eyeing Musk’s other companies. At the same time, enthusiasm for space travel is building, leading to a new focus on space-related stocks. There’s no denying that the stage is set for either a SpaceX or Starlink IPO.
Nevertheless, Musk clearly doesn’t see it that way. When a Tesla-centric X (formerly Twitter) page shared the Bloomberg article, the CEO issued the following, brief statement:
In this case, it seems that either Bloomberg’s sources were not on the same page as Musk or that the CEO has changed his mind about going public. When discussing the possibility of a Starlink IPO in the past, Musk has been fairly vague. In July 2021, the CEO stated that an IPO would likely happen “at least a few years before Starlink revenue is reasonably predictable.” Musk added that he would try to give preference to long-term Tesla shareholders. Earlier this month, the CEO also claimed that Starlink had reached “breakeven cash flow.”
All the same, it would seem that Musk isn’t focused on a Starlink IPO right now. He may not want to relinquish the control of his company, which would be somewhat inevitable if it went public.
Starlink has helped provide valuable internet access to the people of Ukraine following Russia’s invasion in February 2022. But more recently, Musk has been accused of “enabling Russian aggression” when he denied Ukraine “satellite internet service in order to prevent a Ukrainian drone attack on a Russian naval fleet last year.”
What Comes Next?
Demand for the services that SpaceX and Starlink provide will likely only increase in the coming year. Additionally, Musk doesn’t seem motivated to pursue another IPO, although his nature is nothing if not unpredictable. If TSLA stock continues to struggle, Musk may need to pursue new ways of protecting his financial status. As of now, however, it does not seem as though investors should expect to see a Starlink IPO in the near future.
On the date of publication, Samuel O’Brient did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
