If you're eager to explore opportunities in the burgeoning space industry, understanding how to invest in Starlink can be a pivotal step towards engaging with this innovative venture.
Elyse WoodsJan 08, 2024707 Shares37187 Views
If you're eager to explore opportunities in the burgeoning space industry, understanding how to invest in Starlinkcan be a pivotal step towards engaging with this innovative venture.
Through the use of specialized satellite equipment, Starlink—a subsidiary of SpaceX—aims to provide affordable internet on a global scale. Starlink is a privately held subsidiary of privately held SpaceX, which is not yet listed on any public exchanges.
Since its launch in September 2023, Starlink's satelliteshave provided high-speed broadband internet to over 2 million users. The man behind SpaceX and Starlink, Elon Musk, has dropped hints about an IPO date not too far off.
Meanwhile, there are a number of ways to invest in Starlink. The company is not yet listed on any public exchanges, but an IPO could take place as early as 2025.
The monthly growth rate of Starlink's user base is 150,000 as of September 2023. There may be an initial public offering (IPO) in the works for Starlink in 2025, but there are ways to purchase shares before the IPO.
Established in 2015 as a competitor to cable internet services, Starlink is a spinoff of SpaceX. Launched in 2019, its first satellites provide lightning-fast internet access to any location on the globe with the purchase of a Starlink receiver.
One of Starlink's primary selling points is that it allows developing nations to have easier access to the internet, while rich economies may save money on maintenance by minimizing the need for cable routing and cell tower infrastructure.
Starlink was used to reestablish internet connectivity in Ukraine after the destruction of cell towers and fiber optic cables by the Russian forces during the Russia-Ukraine conflict in 2022. Because of their potential military uses, the Chinese government has threatened to take the Starlink satellites out of low orbit.
After Starlink satellites came dangerously close to hitting the Chinese Space Station in low orbit, the Chinese government took the matter to the UN, arguing that the space station was already congested in that area.
Despite high-profile disagreements, Starlink is launching new satellites into low orbit to extend internet service to much of the Earth's surface. Providing people all across the globe with affordable, high-speed internet access is Starlink's primary goal. There will be 4807 Starlink satellites in orbit by the end of 2023.
Starlink is not yet a public business, thus investing in it is not possible at this time. While you wait for its initial public offering, you may put your money into other space equities. Investing in the space industry might be a good move for three reasons:
More satellites are needed to facilitate navigation due to the fast expansion of location-based services applications, such as those for food delivery and ridesharing.
New horizons are being opened by falling costs: Space tourism, satellites, and communications are just a few of the new space-based economic prospects made possible by the declining launch costs.
Governments and the military sector are expected to expand space expenditure in the future years due to the creation of the U.S. Space Force.
Space stock sales and profitability could surge thanks to these triggers. Companies involved in space exploration may find the growth they need to provide investors with skyrocketing profits in the years to come.
While a spin-off and initial public offering (IPO) are potential goals for Starlink, the company is now a wholly owned subsidiary of SpaceX. Starlink cannot be purchased via a brokerage account and does not have a stock symbol.
Starlink is well-funded and anticipates turning a profit this year. Turning to the public markets is unnecessary at this stage.
While regular people can't purchase Starlink shares before the initial public offering (IPO), accredited investors could be able to join the private equity companies in purchasing shares ahead of the curve.
Rest assured, there are many roundabout methods for regular investors to profit from Starlink's potential.
Accredited investors may use Equitybee to get into private corporations and high-growth startups backed by venture capital, such as Waymo, OpenAI, and Stripe:
An authorized investor may get exposure to private businesses at historical prices by sponsoring employee stock options. This means that they can buy in at the same valuation that private equity firms paid at the last fundraising round.
You will get a cut of the future profits from any successful liquidity occurrences as compensation for your investment in the options.
At the moment, Starlink/SpaceX isn't listed on Equitybee. However, if an employee chooses to sell their stock options, you may be able to get some shares.
Make sure you don't pass on this chance by signing up to be alerted when Starlink stock becomes available.
Starlink and SpaceX have received funding from Bank of America and Alphabet (GOOGL). Alphabet's investment came in 2015 at a value of $12 billion and again in 2021 at a valuation of $100 billion. The combined value of these investments is $10.5 billion, which is equivalent to around 7% of SpaceX and Starlink.
If you're looking to get exposure to Starlink, you may want to consider buying Alphabet shares instead. Their investment in SpaceX is only 0.6% of their whole company. At a $30 billion value in November 2018, Bank of America put $250 million in, which is probably worth roughly $1.15 billion.
Buying Bank of America stock only to have exposure to Starlink is a bad idea since its investment in SpaceX and Starlink accounts for less than 0.5 percent of its market value.
Musk runs SpaceX, which produces the majority of its components in-house. On the other hand, SpaceX has formed partnerships with businesses that stand to gain from the company's future achievements, such as Velo3D, Tesla, Garmin, and Iridium Communications.
In 2021, Shift4 Payments established a 5-year relationship with Starlink to handle consumer payments, marking the most direct cooperation with Starlink to that point. About 2% of Shift4's overall payment volume comes from Starlink's 2 million subscribers, who bring in $200 million each month, or $2.4 billion per year.
Many companies compete with Starlink, the first and biggest satellite-based internet provider in the world. These include Telesat, Kuiper Systems (Amazon), OneWeb, HughesNet, Viasat, and Telesat. Since Starlink's introduction, EchoStar's HughesNet has seen a decline in subscriber numbers and stock price.
The stock price of Viasat, the country's number two broadband satellite internet provider, has been falling with its subscriber base of 590,000 users. Starlink faces stiff competition in the low-Earth orbit market from the private firm OneWeb, which offers superior latency.
Among Starlink's potential rivals in the years to come is Amazon's Kuiper Systems initiative, which aims to place 3,236 satellites into a low Earth orbit. Even while Telesat brings in around $745 million annually, it may not be able to hold its own against Starlink.
Cathie Wood's Ark Space Exploration ETF (ARKX) is expected to be the first exchange-traded fund (ETF) to invest in Starlink or SpaceX when shares become available, even though it does not currently own either of those companies. It would be wise for you to be informed if any such investment is announced.
In several investment rounds, the venture capital company Andreessen Horowitz (a16z) has been one of SpaceX's principal investors. Ark Venture Fund, which is run by Cathie Wood, acquired a portion of a16z's shares when the company invested in X (formerly Twitter) (TWTR).
When it comes to purchasing Starlink, the process involves using Coinbase Walletrather than the centralized exchange. While Starlink isn't currently available on Coinbase's main exchange, you can seamlessly acquire it through Coinbase Wallet, providing you with a gateway to the crypto world. Here's a step-by-step guide on how to purchase Starlink using Coinbase Wallet:
Download Coinbase Wallet - Obtain a self-custody wallet, such as Coinbase Wallet, which is accessible as a mobile app or browser extension. Download the wallet to initiate the process.
Choose a Coinbase Wallet username - During the setup of your Coinbase Wallet, you'll need to select a username, facilitating easy crypto transactions with other Coinbase Wallet users. While you can keep your username private, having one is essential for account access.
Securely store your recovery phrase - Upon creating a new self-custody wallet, you'll receive a recovery phrase comprising 12 random words. Safeguard this recovery phrase as it acts as the key to your crypto assets. It's crucial not to share it with anyone. Consider storing it on paper securely or utilizing Coinbase Wallet's cloud backup feature.
Understand and plan for Ethereum network fees - Ethereum network fees vary based on factors such as network congestion and transaction complexity. Allocate funds for fees accordingly. Familiarize yourself with Ethereum fees [here](link to Ethereum fees page).
Buy and transfer ETH to Coinbase Wallet - If you don't have a Coinbase account, create one to purchase Ethereum (ETH). Learn more about creating a Coinbase account and acquiring Ethereum [here](link to relevant guide). The process of transferring ETH to your Coinbase Wallet varies based on whether you're using the mobile app or Chrome extension.
Use your ETH to buy Starlink in the trade tab - After adding ETH to Coinbase Wallet, proceed to swap your ETH for Starlink within the mobile app or browser extension. Access the "Swap" icon in the Assets tab, choose Starlink as the asset, input the desired ETH amount for the exchange, ensuring to leave sufficient funds for transaction fees. Confirm the purchase and follow on-screen instructions to finalize the transaction.
This streamlined process empowers users to navigate the complexities of crypto transactions and acquire Starlink with ease through Coinbase Wallet.
Like any investment, there are risks involved. Factors such as regulatory challenges, technological hurdles, and market competition can impact the success of Starlink. Conduct thorough research before considering investment.
In conclusion, exploring how to invest in Starlink presents an intriguing avenue for those captivated by the potential of space technology and its impact on our interconnected future.
Starlink has achieved cash flow break-even and is rapidly expanding as a provider of satellite internet services. Despite the interest from investors, the company is still privately held under SpaceX and has no plans to go public.
At this time, Starlink stock cannot be purchased by the general public. Nevertheless, there are alternative investment opportunities in the satellite technology, aerospace, and related industries, or through the parent company, SpaceX.
Those interested in investing in Starlink can do so through SpaceX, another privately held company. Google isn't the only company with SpaceX stock; the Scottish Mortgage Investment and US Growth trusts are also Baillie Gifford entities.
Public investors will be able to acquire direct exposure to SpaceX in 2025, as the company has announced a Starlink IPO date. Investors will have a better chance to invest in Starlink after SpaceX announced an IPO date in 2025, even though current methods of gaining exposure to the company are not ideal.