If SpaceX were to go public next week it would command a valuation of around $175 billion, aligning it with tech giants like Intel Corporation and IBM. The speculation around a SpaceX initial public offering has been a rollercoaster ride, with tantalizing prospects such as the potential public listing of Starlink, SpaceX’s satellite division.
For investors seeking exposure to SpaceX before any public listing, there are avenues through publicly traded private equity (PE) firms that hold shares. One such PE firm is Stack Capital, a company listed in Toronto, led by CEO Jeff Parks.
Parks expressed the company’s goal in an interview with Benzinga: “We want to democratize access into growth in late-stage businesses.” Stack Capital’s investment portfolio includes SpaceX, alongside other companies such as Locus Robotics, Hopper, Omio, and Bolt.
Parks emphasized the significance of gaining access to high-growth companies pre-IPO, highlighting the challenges of securing allocations in public markets. By investing in Stack Capital, investors can indirectly benefit from opportunities in these companies.
No Shortage Of Capital For SpaceX
Parks emphasized the abundance of private capital available for companies like SpaceX and Stripe, indicating that such companies prefer to stay private for extended periods due to the ample funding opportunities in private markets. However, Parks believes that eventually, large firms find it advantageous to go public.
He elaborated, “They can continue with tender offers for some time, but eventually, going public becomes a logical step. Hence, we might witness a wave of companies planning to go public in the future.”
Where is the IPO market?
The IPO market has experienced a downturn recently following the record-setting year in 2021. Factors like rising inflation due to the pandemic-induced consumer demand surge have led to increased interest rates and market volatility.
Parks highlighted recent IPOs like Astera Labs Inc. (ALAB) and Reddit Inc. (RDDT) that performed well, indicating a positive change in market sentiment. He suggested that these listings could pave the way for a revitalized IPO market, offering hope for both companies and investors.
According to Parks, the success of ALAB and RDDT listings should act as a catalyst for more companies to consider going public. The enthusiasm surrounding these recent IPOs may encourage companies that have been private for a significant duration to make the leap to the public markets.
Valuations In The Private Market
Private valuations, especially for prominent companies like SpaceX, are soaring, mirroring the trend seen in the public market. Parks mentioned a surge in deals as companies seek capital to position themselves for potential IPOs, utilizing the private market’s liquidity.
He concluded by emphasizing the increasing demand for deals involving blue-chip companies, with billions of dollars flowing in the secondary market. Such trends indicate a robust appetite for investment in established, high-growth firms.
Investors and companies navigating the IPO landscape are witnessing significant shifts, with opportunities arising in both the private and public markets. As the market dynamics evolve, stakeholders are adapting to seize the potential growth prospects presented by companies like SpaceX.