Prime Highlights
- Alphabet’s stake in SpaceX could be worth about $100–$122 billion if the company lists near a $2 trillion valuation.
- SpaceX’s IPO is expected to create massive wealth for early investors, employees, and senior executives.
Key Facts
- SpaceX is a private aerospace and rocket company founded in 2002 by Elon Musk.
- Alphabet Inc. first invested in SpaceX in 2015 through Google in a $1 billion funding round.
Background
The investment in SpaceX that Alphabet Inc. made early on might provide one of the highest returns in corporate venture since the rocket company is about to take a leap into the open market.
Recent regulatory filing indicated that Google LLC owned a 6.11 % stake in SpaceX as of the end of last year, with the value of that stake being approximately 122 billion in case SpaceX is valued at 2 trillion in its proposed initial public offering. After SpaceX merged with xAI earlier this year, the ownership of the company is projected to have dropped to about 5 % due to dilution, but the stake might still be valued at approximately $100 billion at the desired valuation.
The filing provided the most open public disclosure to date regarding Alphabet owning SpaceX. It also underscored the magnitude of wealth that would be generated in case the company goes on with what would perhaps become one of the biggest IPOs ever.
SpaceX is one of the most valuable privately-owned companies in the world, which was established in 2002 by Elon Musk. Musk is its biggest shareholder, and he has an estimated 40 % ownership in the company, which has the potential to make him the first trillionaire in the world in case the company goes public at the projected value.
Google was the first to invest in SpaceX when it became a Fidelity co-investor in a $1 billion round, funding the company at a valuation of 10 billion in 2015. The firms had a combined 10 % stake in that investment.
Analysts indicated that even those investors who have joined in as late as 2021 will record extraordinary returns from the IPO. The listing will also become a source of huge wealth to long-time employees, board members, and early institutional investors, and this could redefine the venture capital market at large as newly minted executives and investors inject capital into new ventures.