Elon Musk on Monday hinted at his plans to take SpaceX’s space internet venture, Starlink, public in several years when revenue growth is “smooth and predictable” as the firm, which eventually aims to provide broadband around the world, is servicing towns in Washington ravaged by wildfires along the U.S. West Coast.
KEY FACTS
The Tesla CEO revealed his plans on Twitter, saying small retail investors will “get top priority” when the company is listed: “You can hold me to it.”
Investors may be waiting a while — Musk said he will only take the company public in several years when revenue growth is smooth and predictable, adding: “Public market does *not* like erratic cash flow.”.
Last year, Musk said he believed Starlink would be an important revenue stream for SpaceX, with ambitions to provide high-speed internet around the world.
It comes as the company is assisting the Washington Military Department’s Emergency Management Division as it responds to towns devastated by wildfires, providing internet access to emergency responders and the public.
In February, SpaceX President Gwynne Shotwell told investors of the company’s plans to spin out Starlink into a separate business and take the company public.
KEY BACKGROUND
Starlink is SpaceX’s ambitious internet-from-space project, involving a constellation of thousands of satellites that will deliver high speed internet access across the globe. SpaceX is optimistic about Starlink’s future. The company says it is already seeing an “extraordinary demand” from potential customers for its satellite broadband service, CNBC reported, with nearly 700,000 individuals in the US alone. Starlink’s website says it is targeting the US and Canada in 2020 and rapidly expanding “to near global coverage” by 2021.
CRUCIAL QUOTE
Elon Musk tweeted: “We will probably IPO Starlink, but only several years in the future when revenue growth is smooth & predictable. Public market does *not* like erratic cash flow haha. I’m a huge fan of small retail investors. Will make sure they get top priority. You can hold me to it.”
TANGENT
Starlink’s enormous constellation of satellites have proven controversial since the first set was launched last year. Some complain they obstruct the night sky and the European Space Agency said it had to alter the trajectory of one of its observation satellites to avoid a collision with a Starlink satellite.
WHAT TO WATCH FOR
The race for space has only just begun and Musk isn’t the only billionaire with his eyes set skyward. Jeff Bezos will be overseeing Amazon’s own constellation of internet-providing satellites, Project Kuiper, which received FCC approval this summer. Bezos’ Blue Origin is also involved in the space race, currently developing reusable launch vehicles.
FURTHER READING
Musk’s SpaceX Plans a Spinoff, IPO for Starlink Business (Bloomberg)
–-BY Robert Hart, Forbes Staff