A SpaceX Public Launch may not be a thing of the near future
In early May rumors started going around that SpaceX was finally going public. Imagine the public excitement over that one. Finally, investors could get their hands on one of Elon Musk’s growing companies. Elon Musk companies- you can call them that for now- have by far been some of the most successful firms to ever hit the public markets. PayPal didn’t hit the stock exchange, but Musk got a few million for it. Over the next few years, Musk debuted public trading with Tesla, earning millions in IPO proceeds for a company that is now worth an approximate $43 billion. And there was always the Solar City IPO to fall back on.
Going back to the matter at hand. The rumored SpaceX IPO. When the news hit the media everybody wanted to know if it was true. Then investors wanted to know when the IPO would take place. You could say that there was a lot of excitement on their end. And all that came to a stop when SpaceX CEO Gwynne Shotwell said that the news was “not true.” As it turns out Shotwell was right about the SpaceX IPO not taking place anytime soon. Here are some of the reasons why.
It’s a good time to do business
It’s not only oil companies that are benefiting from the current US administration’s pro-corporate stance. The fact that President Trump supports private space contractors means that SpaceX currently has some of the best market deals it will ever get. Why would the firm give it all that business up now for an uncertain chance on the public stock market?
There may be better deals in future
As you might know, SpaceX is largely gaining a reputation as one of the most innovative space tech companies that exist. One of the company’s goals is to be the best space transport provider globally. Already SpaceX has a Falcon 9 shuttle and recyclable space rocket base in late stages of development. Imagine what the completion of these projects could mean for SpaceX’s bottom line (and IPO proceeds) if the firm holds off the IPO for a while longer.
SpaceX is just not ready for shareholders
This point comes straight from Shotwell himself. One of the reasons he gave for not taking the company public is that in the long run what stakeholders might want, and SpaceX’s future will not mesh. You can look at it from this point of view. If you buy into a company, you want tangible results. You’re all about bottom lines and definite strategies. SpaceX does not have definite goals (just a vague one about enabling people to go to Mars). If the company sold out to the public, you could just say it would have a hard time being accountable.
There’s enough money in the bank
What’s the number one reason that firms go public? To get money. SpaceX currently does not need any help with its bottom lines. When it’s not pocketing government and NASA contracts, SpaceX is doing commercial satellite launches for firms like Facebook. And those operations brings in more cash than a SpaceX IPO ever could.