You can become an investor of SpaceX's Starlink in the near future. The satellite broadband service is planned to be spun off from SpaceX, allowing for an initial public offering. But a Starlink IPO will only be possible when cash flow is more predictable.
Starlink Satellite Internet Service
Starlink, engineered by SpaceX, is a string of satellites launched into space to provide high-speed, low latency broadband internet. Starlink also claims to deliver high-speed broadband to rural and remote communities.
According to their website, it's currently delivering initial beta service domestically and internationally to 11 countries including the US, Australia, New Zealand, and parts of Europe. There are currently 1,800 Starlink satellites in orbit, and they will likely achieve global coverage by September.
Their goal is to launch a "constellation" of 42,000 satellites into lower-earth orbit by mid-2027 to provide Internet access all over the world, especially in underserved communities and remote areas normally not serviced by broadband providers.
Users could expect internet speeds of up to 209.17 megabits per second, one of the fastest speeds recorded by a beta-test subscriber.
A monthly subscription to Starlink currently costs $99. But if you want to purchase the kit, which includes a tripod, Wi-Fi router, and terminal to connect to the satellites, that would cost $499.
Starlink IPO in the Future
Last year, SpaceX President Gwynne Shotwell said that the satellite broadband service could be spun off from SpaceX for an initial public offering, CNBC says.
Elon Musk said he will only publicly list Starlink when its cash flow can be predicted "reasonably well." This was in response to a question one user asked: "Will Starlink IPO soon? Would love to invest! Any thoughts on first dibs for Tesla retail investors?"
He cites how going public sooner than that would be "very painful." He also wants to give preference to long-term Tesla shareholders.
Earlier in the year, Musk told users on Twitter how "staggeringly difficult" Starlink was as a technical and economic endeavor. But he believed if it doesn't fail, the cost to end-users will improve every year, Bloomberg reports.
In another tweet, he writes that to make Starlink financially viable, SpaceX needs to pass through "a deep chasm of negative cash flow" in the next year or so. He states that every new satellite constellation in history has gone bankrupt and the company hopes that they would be the first that does not.
Tesla soars as @elonmusk tweets about a potential Starlink 🌌 IPO in the future. Giving preference to long-term $TSLA holders.— Delta Investment Tracker (@get_delta) June 24, 2021
Starlink is SpaceX's most valuable part, representing 84% of #SpaceX's value according to a $MS analyst. The valuation put it at $42 billion! 🚀 pic.twitter.com/IDKS5Fle0d
According to IG, it may take a few years before Starlink will be listed.
Starlink's IPO value will depend on the market conditions at the time of the listing. The performance of SpaceX, its parent company, will also be considered. As of 2021, CNBC reports that the space exploration company is worth $74 billion.
In March last year, Musk mentions how SpaceX could make up to $30 billion a year by providing broadband. He states the disadvantage of 5G is the need for range, which isn't great for the countryside. Starlink's services will be helpful to telcos because the satellite broadband service company will serve the "hardest to serve customers."
Earlier in May, Musk also said that Starlink will be a crucial source of funding for some of his other plans. This includes sending paying customers to Mars and possibly colonizing the Red Planet.