SpaceX owner and Tesla CEO Elon Musk.
SpaceX’s Starlink internet service will go public once its cash flow is predictable, Elon Musk said Tuesday.
SpaceX must endure “a deep chasm of negative cash flow” over the next year to make Starlink financially viable, Musk said.
Both Musk and Gwynne Shotwell, SpaceX’s COO, have previously said Starlink would IPO.
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SpaceX CEO Elon Musk on Tuesday repeated his prediction that the company’s satellite internet service, Starlink, would go public once its cash flow is predictable.
In a series of tweets, the billionaire said: “Once we can predict cash flow reasonably well, Starlink will IPO.” This would open Starlink to public investment.
Starlink is still in beta. It launched the “Better Than Nothing Beta” test in October, and it now has more than 10,000 users worldwide. Industry specialists told Insider’s Dave Mosher in December that SpaceX could need about three years and 3 million subscribers to get the project to begin paying for itself – but only if it lowers costs and improves its tech.
“SpaceX needs to pass through a deep chasm of negative cash flow over the next year or so to make Starlink financially viable,” Musk said.
Musk said that Starlink is “a staggeringly difficult technical & economic endeavor” but if it succeeds, the cost for users would improve each year. Starlink currently costs $600 upfront.
So far, SpaceX has launched more than 1,000 working satellites for Starlink via its reusable Falcon 9 rocket. The goal is to fly up to 42,000 satellites by mid-2027, creating a global high-speed internet service beaming down from orbit.
Eventually, Musk wants Starlink to generate between $30 billion and $50 billion in annual revenue.
This isn’t the first time Musk has mentioned an initial public offering for Starlink.
Gwynne Shotwell, SpaceX COO, also predicted a future Starlink IPO in February, saying: “Right now, we are a private company, but Starlink is the right kind of business that we can go ahead and take public,” per Bloomberg.
“That particular piece is an element of the business that we are likely to spin out and go public,” she added.
The beta is currently available in parts of the US, Europe and will be available in Australia and New Zealand in mid-2021. Despite SpaceX telling users to expect download speeds of between 50 and 150 megabits per second (Mbps), some users are hitting more than 210 Mbps.
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