How to Invest in SpaceX in 2025 ?

In the aerospace industry, SpaceX is a company that has attracted much attention. In 2002, entrepreneur Elon Musk founded Space Exploration Technologies Corporation (SpaceX) with the vision of reducing the cost of space transportation and advancing humanity's goal of reaching Mars. As of now, SpaceX has become one of the most valuable private startups in the world in its own right, with a valuation of $350 billion.

SpaceX has made many groundbreaking achievements. It has successfully developed a liquid propellant rocket that can enter orbit, is the first private company to send astronauts to the International Space Station, and has achieved vertical propulsion and landing technology. Its business scope continues to expand, covering spacecraft research and development and manufacturing, providing launch services, and operating Starlink satellite Internet services. As the business develops, the company's revenue and profits continue to rise, and its value is becoming increasingly prominent. Many investors are interested in investing in SpaceX. The following are many factors to consider before investing.

Is SpaceX a public company?

SpaceX is not publicly traded on a major stock exchange, such as the New York Stock Exchange (NYSE) or the Nasdaq, making it impossible for average investors to buy its shares through regular brokerage accounts.

Musk holds a dominant position in the company, with a large stake reportedly exceeding 40%. The rest of the outstanding shares are held by employees and venture capital investors.

Will SpaceX IPO?

As of now , SpaceX has not yet made clear plans and arrangements for an IPO. Musk said in April 2023 that SpaceX has sufficient funds and does not need to rely on an IPO to raise funds from external investors to support investment plans and business growth.

However, SpaceX has an active internal trading mechanism that allows employees and existing investors to sell shares. For example, in mid-2024, the company reached an agreement with investors to determine that insiders can sell shares at a specific price, which provides stock liquidity for employees and eliminates the need for the company to meet internal stock sales needs through an IPO.

Previously, there was market speculation that SpaceX might spin off its Starlink satellite internet business and list it on the stock market. In November 2023, Bloomberg reported that SpaceX was preparing to spin off its Starlink business and that an IPO could take place as early as the end of 2024, but Musk quickly denied this, emphasizing that Starlink would only consider listing after achieving stable and predictable revenue growth and cash flow.

How to invest in SpaceX ?

Since SpaceX isn’t publicly traded yet, investors can’t buy its shares through a traditional brokerage account. But some investors can get access to shares using platforms that offer secondary market trading in pre-IPO companies.

Take Rainmaker Securities as an example. It is a platform that enables private securities trading, allowing institutions and qualified investors (such as high net worth individuals or high-income people) to buy and sell shares of privately held companies.

According to relevant reports, there have been a large number of SpaceX stock transactions on the Rainmaker platform. In mid-2024, the company's website showed that it held a certain value of SpaceX stock, and each share had a corresponding value.

Since most investors don’t qualify, they can’t buy SpaceX shares directly before it goes public. But there are other options for investors.

Public venture capital funds: such as Ark Venture Fund (NASDAQMUTFUND:ARKV.X), which holds shares in SpaceX and some other private companies, can be of interest to investors who are interested in participating in bottom-level investments in top pre-IPO companies.

Investing in other space companies:

L3Harris Technologies: In 2023, L3Harris Technologies (LHX) acquired Aerojet Rocketdyne, a major company in the aerospace, defense and rocket propulsion fields. Aerojet Rocketdyne has many key innovations in space exploration and discovery, and this acquisition enhances L3Harris Technologies' ability to provide innovative technologies in space, air, land, sea and cyber.

RocketLabUSA: RocketLabUSA (RKLB) was founded in 2006 and is a comprehensive space company. It provides launch services, spacecraft manufacturing, satellite components and on-orbit management solutions for government and commercial customers. The company initially focused on small launch capabilities, and the Electron launch vehicle it developed is the second most frequently launched rocket in the United States. The company is currently developing a larger next-generation launch vehicle, Neutron, and investing in other space-related businesses to achieve diversified development.

Virgin Galactic Holdings: Founded by entrepreneur Richard Branson, Virgin Galactic Holdings (SPCE) is an aerospace and space travel company. It pioneered manned spaceflight for private individuals and researchers. It went public in 2019 after merging with a special purpose acquisition company (SPAC). After several delays, it completed its first space test flight in 2021 and launched commercial services for scientific research in 2023. It plans to launch a new spacecraft for commercial space tourism services by 2026.

SpaceX-related ETFs : Investors interested in SpaceX stock may also consider exchange-traded funds (ETFs) focused on the space sector. As of mid-2024, there are several relevant ETFs:

ARK Space Exploration & Innovation ETF (ARKX): Actively managed by Cathie Wood, it focuses on companies in the space exploration and innovation sectors, with a target of 35 to 55 stocks and a certain level of ETF expense ratio. Its asset management scale (AUM) reaches a certain scale by mid- 2024 . L3Harris Technologies is one of its important holdings (ranked sixth in mid-2024 and accounting for a certain percentage of its net assets).

ProcureSpace ETF (UFO): This ETF holds stocks of companies in the space industry. As of mid-2024, its AUM is about a certain amount, its expense ratio is a certain percentage, and it holds a certain number of stocks, with RocketLabUSA being its fourth-largest holding (a certain percentage of its assets).

SPDRS & P Kensho Final Frontiers ETF (ROKT): This is a passively managed fund that focuses on companies that produce products or provide services for space travel and exploration. As of mid-2024, its AUM is approximately a certain amount, its total expense ratio is a certain percentage, and it holds a certain number of stocks, with L3Harris Technologies being its fifth largest holding (a certain percentage of its assets).

Should I invest in SpaceX?

Although most investors cannot currently purchase SpaceX stock, interested investors need to focus on two key factors before investing, assuming the company eventually goes public.

1. Profitability of SpaceX

Since SpaceX is not a listed company, it is not obliged to disclose its financial performance. However, due to its high attention, it has also made some financial data public.

US$9 billion in 2023 . That's a significant improvement from 2019, when it had a net loss of $501 million on revenue of $1.5 billion.

SpaceX profits are expected to grow further in 2024. Relevant data estimates that its revenue will exceed US$13 billion in 2024, and profits are expected to increase by 50% to approximately US$4.5 billion.

These data indicate that SpaceX is highly profitable. If it can maintain rapid growth in revenue and profits, it will effectively drive its stock price up.

(2) Valuation status of SpaceX

Valuation is an important factor for investors to consider before buying a stock. Even if profits grow, losses may still result if the buying price is too high.

As of mid-2024, after secondary market stock trading, SpaceX's private market valuation reached $210 billion (at a specific price per share), a certain percentage increase from the previous valuation (at a specific price per share, approximately $180 billion), and its value has exceeded that of some of the leading US defense contractors, such as Boeing (BA specific percentage), Lockheed Martin (LMT specific percentage) and Northrop Grumman (NOC specific percentage).

Although SpaceX is profitable, its current valuation is high. With an expected net income of $4.5 billion in 2024, the expected price-to-earnings ratio is over 45 times. However, compared with some other high-priced stocks, the price is not too high.

If SpaceX's revenue and profits continue to grow in the next few years, its valuation may rise further, and its valuation may be more reasonable when it goes public.

Conclusion

SpaceX is not currently listed, so most investors cannot invest directly. However, it is possible that the company or its Starlink business will go public in the future. At that time, investors will need to carefully consider the company's profitability and valuation, as these two are key drivers of the stock price. If both perform well, the stock price is expected to rise.

However, investment decisions must be based on sufficient research and accurate judgment of one's own risk tolerance. Space investment is high risk and has great uncertainty. Investors should remain cautious and pay close attention to market trends and company developments so as to adjust investment strategies in a timely manner.