SpaceX shares: what to know and can you invest?
Elon Musk’s side project SpaceX has been gaining investor interest in recent years. Discover what you need to know about this space exploration and satellite company, and whether SpaceX stock will be available to the public soon.
What you need to know about SpaceX
SpaceX was founded in 2002 by billionaire businessman and inventor Elon Musk. The company is focused on space exploration and space technology. The company is famous for its Starlink satellite constellation – which aims to provide free, fast-paced internet to the world’s population.
It’s also the first private company that has sent humans to the International Space Station (ISS), and the first to reuse a rocket capable of orbit.
What is SpaceX’s business model?
SpaceX’s business model is set around the human exploration of space. The company’s founder and chief executive officer (CEO) Elon Musk has been vocal in his support for the human colonisation of Mars, and his company is fully behind the research and development of spaceflight technology.
SpaceX is currently developing several cutting-edge spacecrafts, including the SpaceX Starship – a reusable spaceship that will be the largest rocket mankind has ever made.
Could SpaceX go public?
SpaceX has been a private company since it was founded. But, that’s not to say that it’ll remain so, as continued investment will likely be crucial if SpaceX is to continue leading the field in space exploration.
That said, with the backing of Elon Musk and his billions, it’s uncertain whether the founder and CEO would relinquish partial control of the company that he has put so much work into. At the time of writing, Musk owned about 54% of SpaceX stock.
Ways to get exposure to SpaceX and the space industry
Trading or investing in space ETFs or funds
Taking a position on a space ETF or fund gives you exposure to a group of companies already involved in the nascent space industry. In recent years, more and more space funds have popped up.
With us, you could take your position on Seraphim Space Investment Trust PLC. This investment trust became the world's first listed space tech fund in July 2021. At the time of writing, it was invested in 20 companies in the industry. We also offer the Procure Space UCITS ETF - GBp, an ETF that tracks the S-Network Procure Space Index. This includes 34 pure play space companies.
Trading or investing in publicly listed space companies
There’s currently only one pure play space stock that's publicly listed – Richard Branson’s Virgin Galactic (SPCE). But, there are others that could list in the future, most notably Jeff Bezos’s Blue Origin and, of course, Elon Musk’s SpaceX.
Virgin Galactic is focused on commercial spaceflight, with customers able to book places on spacecrafts to experience space travel. The company has some marked differences to SpaceX, most notably that it doesn’t launch rocket ships from the ground.
Instead, Virgin Galactic air-launches its spacecraft from a carrier aeroplane, which is less strenuous on the human body. This is essential for Virgin Galactic given the company’s focus on commercial human spaceflight, rather than sending trained astronauts into space or to the ISS.
Taking a position when SpaceX goes public
If SpaceX goes public, you can take a position on its stock in two main ways.
Firstly, you could invest in the company directly though share dealing, which will make you a shareholder. You’ll also receive voting rights and dividends if SpaceX chooses to grant them. In this scenario, you’ll profit if the SpaceX share price increases.
Secondly, you could speculate on the SpaceX share price with financial derivatives, such as spread bets and CFDs. With these products, you’ll be able to trade rising prices by going long, as well as falling prices by going short.
Pick and shovel investing
Pick and shovel investing is a way to get exposure to private space exploration companies by investing in the companies that supply them with parts, materials and other resources.
The idea comes from the American gold rush in the 1800s, where it was more stable to invest in suppliers of pick axes or other equipment that miners needed to find gold, rather than in the miners themselves. While the promise of gold was always tentative, miners were still going out to try and find it – meaning that demand for equipment was consistently high, even if the gold itself was in low supply.
Opening a position on SpaceX's investors
SpaceX boasts a lucrative roster of investors. This includes Founders Fund, Baillie Gifford and Valor Equity Partners, as well as Fidelity, Gigafund and Google. Talks for the latest series of funding – series N – started in July 2020, with the aim of raising $1 billion on a $44 billion valuation for SpaceX.
Use our stock screener tool to look at the companies listed here and whether you’d like to invest in them directly.
Investing in Elon Musk’s other companies
Elon Musk is known first and foremost as the CEO of Tesla – the electric car and battery manufacturer. He’s even facilitated collaboration between Tesla and SpaceX, with his own personal Tesla Roadster being launched into space on a SpaceX Falcon Heavy rocket. The car made a flyby of Mars on 9 October 2020, coming within 4.6 million miles of the Red Planet.
Tesla has been the apple of many investor’s eyes for the better part of 2020, which saw the Tesla share price rise by more than 500%. But the company has also been said to be overvalued, and its stock has entered multiple bearish trends in recent times – presenting opportunities for short sellers.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
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