SpaceX CEO Elon Musk said on Tuesday that the company wanted to buy back more than $500 million in common stock in its recent liquidity event but was held back by the need to allow some new investors into the company.
What Happened: Last week, it was reported that SpaceX’s valuation hit $350 billion after the company and its investors agreed to purchase $1.25 billion of insider shares.
The company and its investors agreed to buy insider shares at $185 a share with SpaceX alone offering to buy as much as $500 million in common stock.
“We would have bought back more stock, but wanted to allow some new investors to join,” Musk said on Tuesday.
The recent so-called tender or secondary offering was aimed at giving employees and early shareholders the choice of selling shares they hold in the company and generating liquidity.
Musk has previously said that no investors wanted to sell shares despite the good value offered.
"What’s really crazy about this is that almost no investors wanted to sell shares even at a $350B valuation!,” Musk said last week.
Why It Matters: SpaceX is a privately held company, making its financials harder to access than publicly listed companies.
SpaceX COO Gwynne Shotwell said at a conference hosted by Baron Capital last month that the company will make "some money" on Starlink this year. Starlink is the satellite internet segment of SpaceX. It achieved a breakeven cash flow in November 2023.
"We are going to make some money on Starlink this year. But ultimately I think Starship (the company’s new rocket under development) will be the thing that takes us over the top as one of the most valuable companies," she said. Shotwell refused to divulge more of the private company's financials.
However, the company buying back shares implies it has additional capital besides what it invests back into the company. But again, $500 million accounts for only a meager portion of the most valuable private startup in the world.
While SpaceX is private, investors can leverage Destiny Tech100 Inc. DXYZ and Cathie Wood‘s Ark Venture Fund ARKVX to participate in the Musk-led space company's growth.
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