Table of Сontents
- SpaceX Overview
- How To Buy SpaceX With Private Shares
- How To Indirectly Invest In SpaceX
- Bottom Line
There aren’t many businesses that compare to SpaceX. The project sends telecommunication satellites in orbit, transports NASA astronauts to the International Space Station, and offers space trips for tourists. Its creator hopes that it will one day take people to Mars. Find out how to buy shares in SpaceX.
SpaceX Overview
SpaceX, also known as Space Exploration Technologies Corp., is a distinctive business and one of the most intriguing corporate endeavors to emerge in recent memory. Elon Musk, a billionaire, launched the business in 2002. A recent private offering estimates its valuation to be over $100 billion and that it currently has over 9,000 workers.
The company operates in four primary business segments, which are as follows:
- manufacturing rockets and spacecraft
- transporting cargo and personnel into space for customers like NASA or for the sheer fun of it (plus a million dollars)
- creating a satellite network for global Internet services
- performing national defense work for the US government.
In its field, SpaceX has achieved a number of firsts. It is the first business anywhere to attain a valuation of $100 billion while it is still a private corporation. It is also the first to launch, orbit, recover, and reuse the same rocket.
How To Buy SpaceX With Private Shares
SpaceX has not yet made a decision about when it will go public and is currently a private firm. There is no way to predict when the venture and private equity backers will start looking for an exit and will likely push the business in that direction. The firm has so far raised a total of $6.7 billion, so it doesn’t seem to be having any trouble raising money through venture and private equity groups.
Until then, purchasing some of the private shares is the only way an investor may participate directly. Although it won’t be simple or inexpensive, it is not impossible.
To begin with, in order for an investor to be able to buy lawfully, they must first be accredited.
- Net worth of more than $1 million (excluding residence)
- Income of $200,000 per year (or $300,000 with a spouse)
- Valid securities license (FINRA Series 7, 65, or 82).
Finding shares to sell is the next job. Insiders, angel investors, venture capital firms, private equity funds, and other businesses will typically hold shares in private enterprises. The ideal option would be to buy shares from any insiders who were looking to sell, and there are now numerous companies that specialise in putting insiders of private companies in touch with potential investors.
EquityZen is one such company. A registered securities company called EquityZen focuses on bringing together accredited investors and shareholders of private companies wishing to sell shares. They will carry out the following steps:
- Sign up online with EquityZen
- Verify your accreditation and complete a suitability profile
- Browse companies that have shares available and reserve an investment
- Complete investment documents and funding
Considerations Regarding Private Investments
Although SpaceX is listed as a potential offering on the EquityZen website, it is unknown when it would happen, whether any shares are presently available, or what the asking price might be.
Advice: When confirming your certification status, some companies may demand documentation, while others may just rely on your word. In any case, you should be ready to offer documentation to avoid any issues with the legitimacy of the transaction in the future.
Forge Global and InvestX are two more businesses that provide access to private company shares, albeit neither presently makes it clear on their websites that SpaceX shares are available.
Even if you manage to purchase shares in SpaceX through a private transaction, you need to be aware of factors that differ from those of deals with public companies. These consist of:
- Verifying your accreditation status
- Potentially high minimum investments (sometimes over $100,000)
- Holding period requirements after an IPO
- Commission to the broker handling the transaction
- Little ability to negotiate the price of shares
Tip: Legal paperwork, such as a Private Placement Memorandum, will be required for transactions involving shares of private companies. Investors should be ready for their attorney to evaluate such paperwork.
How To Indirectly Invest In SpaceX
Investors might search for proxies or alternatives that are currently offered in the public markets that can serve as an indirect route to participate in the target business when neither public nor private shares of a target firm are available for direct investment. Each indirect investment must be evaluated on its own merits, regardless of whether it relates to your objective or is heavily impacted by other companies’ operations. Among indirect investments are
- Funds and ETFs
- Other public companies in the same sector
- Synergistic companies or suppliers
- Companies with significant investments in the target
1. ETFs or Mutual Funds That Invest In the Related Industry Sector
Companies involved in space technology are included in the following ETFs:
- Direxion Daily Aerospace & Defense Bull 3X Shares (DFEN)
- ARK Space Exploration & Innovation ETF (ARKX)
- iShares U.S. Aerospace & Defense ETF (ITA)
- SPDR S&P Aerospace & Defense ETF (XAR)
- SPDR S&P Kensho Final Frontiers ETF (ROKT)
- Procure Space ETF (UFO)
2. Other Publicly-Traded Companies In the Sector
The following stocks are the most popular space technology stocks at hedge funds, according to Insider Monkey:
- The Boeing Company (NYSE:BA)
- Lockheed Martin Corporation (NYSE:LMT)
- Raytheon Technologies Corporation (NYSE:RTX)
- Howmet Aerospace Inc. (NYSE:HWM)
- Northrop Grumman Corporation (NYSE:NOC)
- HEICO Corporation (NYSE:HEI)
- Aerojet Rocketdyne Holdings, Inc. (NYSE:AJRD)
- Astronics Corporation (NASDAQ:ATRO)
- Virgin Galactic Holdings, Inc. (NYSE:SPCE)
- AST SpaceMobile, Inc. (NASDAQ:ASTS)
- Maxar Technologies Inc. (NYSE:MAXR)
3. Synergistic Companies or Suppliers
The following businesses might be suppliers or partners of SpaceX:
- Garmin, Ltd. (GRMN)
- Iridium Communications (IRDM)
4. Companies With Significant Investments In the Target
You might be able to locate a few publicly traded businesses that are significant investors in your target and make a proxy investment in them. Given that the investing corporations are typically involved in several other investments and industries, this may be considerably away from a direct investment in your goal. However, occasionally you can also come upon a public corporation that will make a large investment in your target.
Fidelity and Bank of America are identified as investors in SpaceX, with private venture firms making up the majority of the rest. Dealroom.co is a reliable resource for this information.
Bottom Line
It can be thrilling and financially rewarding to invest in private firms like SpaceX, but there are also correspondingly higher dangers, significant minimums, and buy and selling limitations. Additionally, it will take more time and effort to acquire shares of a private corporation. Some circumstances will just not be possible. Fortunately, there are more accessible choices among funds, ETFs, and publicly traded corporations that might meet your needs.
Note from the editor: This article concerns one or more securities that are not traded on a significant American exchange. Please be mindful of the dangers connected to these stocks.
