That’s what Elon Musk intends to do with the SpaceX money

Status: 02/18/2021 2:41 p.m.

A new round of funding has catapulted the valuation of space company SpaceX to $ 74 billion. But what exactly does Elon Musk need all the money for?

By Angela Göpfert,

Tesla CEO Elon Musk has closed a new round of financing for his space and telecommunications company SpaceX. A total of $ 850 million was raised reports CNBC citing people familiar with the matter. That pushes SpaceX’s valuation up to $ 74 billion.

In the last round of funding in August 2020, the valuation was still $ 46 billion. After the new injection of capital, SpaceX is, according to a current list from the American research company “CBInsights” the most valuable venture capital company in the United States. Worldwide, SpaceX ranks second after the Chinese technology group ByteDance (140 billion dollars).

A SpaceX rocket taking off at night.

Notorious $ 420 mark

The individual SpaceX shares were valued at $ 419.99 in the new funding round, according to CNBC. That’s just a penny below the infamous $ 420 mark. In 2018, Musk published the legendary tweet: “Consider taking Tesla off the stock market for $ 420. Funding secured.”

The tweet had an unpleasant aftermath for Musk with the US Securities and Exchange Commission, which also suspected an allusion to marijuana. “Four twenty” is a popular code from the cannabis community.

200 billion or five billion?

However, according to experts, SpaceX could be worth far more than $ 420 per share, or a total of $ 74 billion. It wasn’t until November that Adam Jonas, an analyst at US investment bank Morgan Stanley, raised its long-term valuation to $ 101 billion. In July it was $ 52 billion.

This is what is known as the basic scenario. Should SpaceX exceed expectations, the valuation would rise to $ 203 billion. In the worst case, the so-called bear scenario, Morgan Stanley only trusts the space company with a valuation of 5.4 billion US dollars.

Destiny Starlink

The further fate of the Starlink space internet project is likely to have a decisive impact on the future evaluation of SpaceX. In the bear scenario, Morgan Stanley assumes that SpaceX’s existing rocket business will become the sole part of the business and that there will be no added value from Starlink.

Elon Musk has high hopes for the Starlink satellite project.

In other words, the success or failure of Starlink will determine the future fate of SpaceX. Musk hopes that one day Starlink will have $ 30 billion a year in revenue – ten times what it did with rocket launch. However, this is an extremely ambitious calculation, as Motley Fool analyst Rich Smith details.

High-speed internet for everyone?

The project, which should enable access to a global high-speed Internet, is currently still in the beta phase. The plan is to shoot numerous satellites into space in order to make comprehensive high-speed Internet available all over the world.

Musk once put the cost of Starlink at ten billion dollars. Morgan Stanley, on the other hand, estimates that SpaceX will have to spend around $ 50 billion on Starlink by 2032.

Starlink launch in Germany delayed

SpaceX has yet to overcome a “deep abyss of negative cash flows” to make Starlink profitable, Musk tweeted on February 9th. Every new satellite project in history has gone bankrupt. “We hope to be the first to not do that.”

In order to generate sales as quickly as possible, Musk had announced the launch of Starlink in some test regions. Germany is one of them. But the start is delayed in this country, as SpaceX announced a week ago. The start of the test network in Germany is now announced for mid to late 2021.

With Starship to the moon and Mars?

Starlink is by no means the only capital-intensive project that SpaceX is running. Another ambitious project by Musk is Starship: a spaceship with a cargo capacity similar to that of the Saturn V – the rocket that brought Apollo 11 to the moon.

With the help of the Starship rocket, Musk wants to transport cargo and people to the moon and Mars one day. Up to 100 people will one day find space in a Starship rocket.

A Starship missile prototype explodes on landing on February 2.

The next rocket is already ready

However, the most recent test flight ended just like a test flight in December: with the explosion of the Starship prototype. Or to paraphrase SpaceX engineer John Insprucker: “We still have some work to do on the landing.”

A new test could soon be pending – subject to approval by the US supervisory authority FAA: The next shiny silver rocket is already on the launch pad in Boca Chica, Texas, a launch could take place as early as the end of February, according to SpaceX.

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That’s what Elon Musk intends to do with the SpaceX money