SmartAsset

How to Invest in Starlink

By Mark Henricks,

3 days ago

As a subsidiary of the privately owned SpaceX, an aerospace technology company founded by Elon Musk , Starlink is not available for public investment. No shares trade on public exchanges and the company has not announced any official plans for a public offering, though Musk has previously made online comments about a potential initial public offering (IPO) for the broadband internet service in the future.

Investors may be able to invest indirectly, however, by purchasing SpaceX shares via private placement in some cases, by purchasing ownership in publicly traded companies that are major SpaceX investors and by investing in funds that could get early access to Starlink shares. Below is background on Starlink and potential pathways to getting exposure in your portfolio.

Consider speaking with a financial advisor to navigate the rules and valuations surrounding private investments.

Starlink's Story

Starlink is a satellite communications company that in 2020 began offering high-speed internet service to terrestrial customers equipped with small, flat dishes. Employing a novel technology based on swarms of small, inexpensive satellites that orbited only a few hundred miles over the Earth, Starlink's offering quickly gained traction among subscribers. An advantage to the technology is that it does not require preexisting cable infrastructure, so it is relatively simple to connect rural or otherwise remote locations.

By 2024, the company has launched a fleet of more than 6,000 satellites . Propelled by performance that rivaled earth-bound internet service, Starlink enrolled around three million subscribers within five years.

Financially, the company was also off to a good start. Revenues for 2024 were forecast to reach $6.6 billion, though the company is private so details are unknown. It’s speculated that Starlink may reach profitability this year as well. The SpaceX subsidiary is said to represent the bulk of its parent company's approximate $180 billion valuation.

Ways to Invest in Starlink

Investors who want to participate in Starlink's financial future have to do so indirectly. As a subsidiary of a privately held company, Starlink does not offer the opportunity for direct investment. However, there are several ways investors may be able to indirectly invest in the satellite communications startup.

One way to own a slice of Starlink is to purchase ownership in SpaceX. Online private equity exchanges can pair investors with employees, venture investors and others who own shares of the privately held SpaceX. These exchanges can only be used by accredited investors , as defined by federal regulators, however, which requires investors to generally have either $1 million net worth or a reliable income over $200,000 per year.

Another way to acquire ownership in Starlink is to purchase shares of one of the publicly traded companies that are large investors in the satellite communications firm. These include Bank of America and Alphabet, the Google parent.

Publicly traded funds may offer another route. Ark Space Exploration ETF is a space-focused exchange-traded fund (ETF) that may eventually get access to Starlink shares when or even before it goes public.

Finally, an investment in Tesla, the electric car company that is Musk's largest venture, could also pave the way to an early opportunity to own Starlink. Musk has said that Tesla shareholders may get priority for purchasing shares in Starlink in any future Initial Public Offering (IPO.)

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Starlink Risks

Starlink could go public as soon as 2025, according to past statements from the company's leaders. However, it's possible that it could be many years before a Starlink public offering, and it may not happen at all. Many financial institutions may be willing to provide financing, so a public offering could be seen as unnecessary.

In addition to delay, competition is a concern. Several companies are starting or preparing alternative services using a similar technological approach. Rivals include potentially formidable competitors such as Verizon and AT&T, as well as smaller companies that could find some way to gain an edge on Starlink.

Bottom Line

Although Starlink has gotten off to an impressive start as a satellite communications provider, it isn't possible to buy shares on public exchanges. As long as it remains a subsidiary of another private company, investors are relegated to buying shares of other companies that have a stake in Starlink. These include its parent SpaceX, shares of which may be available to accredited investors through private equity transactions, as well as large investors Alphabet. Buying stock in Starlink founder Elon Musk's Tesla electric car manufacturer could potentially give investors priority to Starlink shares if and when they become available.

Tips

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