SpaceX’s Starlink subsidiary could soon be more profitable than SpaceX itself.
Tesla (NASDAQ: TSLA) CEO Elon Musk may never IPO SpaceX — but he’s not averse to IPO’ing one of SpaceX’s most profitable subsidiaries. This is the upshot of a report today from Bloomberg.
Quoting SpaceX COO Gwynne Shotwell speaking at a private investor event hosted by JPMorgan Chase & Co. in Miami: “Right now, we are a private company, but Starlink is the right kind of business that we can go ahead and take public. That particular piece is an element of the business that we are likely to spin out and go public.”
Starlink, of course, is the new business that SpaceX is building, and for which it’s already conducted a total of four Falcon 9 missions, launching a total of 240 internet broadband satellites into low Earth orbit. As SpaceX has described its plans, once Starlink has 800 satellites in orbit, it should be able to begin providing internet service to customers on Earth — and at the rate these launches are going up, this could happen as early as five or six months from now.
Ultimately, Musk says he intends to put 12,000, or perhaps 42,000 satellites in orbit (this is Elon Musk, after all. The numbers move around a lot). And by 2025, SpaceX hopes to be earning as much as $22 billion annually from its satellite broadband internet business — even more money than SpaceX earns from launching other people’s satellites into orbit!
Looked at that way, maybe it’s a good thing that Elon Musk doesn’t want to IPO SpaceX. Maybe the company you really want to IPO … is Starlink.
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