SpaceX will sell insider shares at US$97 apiece in a tender offer, a price increase that boosts the value of Elon Musk’s space and satellite company close to $180-billion, according to people familiar with the matter.
The world’s second most valuable closely held start-up has been discussing a tender offer that could range from $500-million to $750-million.
The share price increased from the roughly $95 discussed last week, said the people, who asked not to be identified because the information is confidential. The rising valuation illustrates strong investor demand for a stake in the dominant space transportation company and its fast-growing Starlink internet-from-space service.
Terms and the size of the tender offer could change, the people said.
Representatives for SpaceX, formally known as Space Exploration Technologies, didn’t immediately respond to a request for comment.
Closely held companies use tender offers like this one to give employees a chance to unlock the value of their holdings in the period before an initial public offering. It also gives investors the chance to snap up more equity.
The company has become a juggernaut in the commercial space industry, notching more than 90 successful launches of its Falcon 9 and Falcon Heavy rockets this year — a record number for a US commercial launch company. Analysts have argued that SpaceX currently holds a de facto monopoly on the commercial launch market with its Falcon 9.
Starlink
SpaceX also continues to flesh out its internet-from-space initiative called Starlink, which currently has more than 5 000 satellites in low-Earth orbit providing broadband internet to customers. Starlink surpassed 2 million active users this year, according to SpaceX.
SpaceX has also become a valuable launch provider for the US government and Nasa. The company holds a multibillion-dollar contract with Nasa to develop its massive Starship rocket into a lunar lander capable of delivering astronauts to the surface of the moon.
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SpaceX is on track to book revenues of about $9-billion this year across its rocket launch and Starlink businesses, with sales projected to rise to around $15-billion in 2024. The company is also discussing an initial public offering for Starlink as soon as late 2024 — a bid to capitalise on robust demand for communications via space. — Katie Roof, Ed Ludlow and Loren Grush, (c) 2023 Bloomberg LP