How to Invest in Starlink

The internet has changed how we do everything. From communication to work to travel, the internet has become an integral part of life in the modern world. As it’s become so crucial to human existence, there is a constant push for people to develop better and faster versions of the internet.

Just like computers, internet connections have become much faster, more compact, and able to process much more data than they could even five years ago. And when it comes to the future of the internet, no company represents the current trend toward space-oriented connectivity better than Elon Musk’s Starlink. Like the Metaverse, Starlink is at the forefront of ever-changing technology — in this case, satellite internet constellation services.

Starlink is a division of Elon Musk’s rocket company, SpaceX. It was created with the goal of offering satellite internet to be beamed down from low-orbiting satellite constellations. Not only does Musk see this as fundamental to the progression of internet technology, but the company could also prove to be an incredibly profitable endeavor as well. In fact, the president and COO of SpaceX, Gwynne Shotwell, has said that she feels the valuation could one day reach $1 trillion.

As SpaceX is a privately held company, it’s not easy to invest directly to obtain shares in Starlink. That being said, the satellite internet industry is just getting warmed up, with major players like China launching scores of satellites into the night sky. This means that investing in tangential partners of Starlink — or in the industry as a whole — is a great way to invest in Starlink before its IPO.

SpaceX is a private company founded by Elon Musk in 2002 with the goal of transforming the commercial space industry. The main focus of SpaceX is building and launching rockets for the purpose of space exploration.

SpaceX was initially conceived as a company that would refit existing rockets and make them useable for modern space travel, with the specific goal of one day traveling to Mars. However, after failing to find affordable rockets in Russia, Musk changed direction and the company started creating rockets from scratch. Since that time, SpaceX has found massive success with its Falcon rockets.

Although SpaceX did briefly invest in a satellite company in 2005, Starlink’s first proper incarnation emerged in 2014, when Musk and inventor Greg Wyler discussed plans for a constellation of 700 satellites called WorldVu. Those plans eventually fell through, and in 2015, Starlink was announced.

In 2019, SpaceX successfully launched its first fleet of Starlink satellites. The satellites’ purpose was to offer fast internet connectivity beamed directly from space. This would allow people living in remote areas, who previously could not get internet, to have it beamed directly to them via the satellite system. It also would completely untie the link between physical infrastructure and internet connectivity. This point would later prove to be of the utmost importance during Russia’s invasion and occupation of Ukraine.

The Russian invasion of Ukraine in early 2022 has actually increased the perceived value of Starlink. The Russian army destroyed several cell towers and fiber-optic cable installations throughout Ukraine in an attempt to cut off communications — the city of Irpin, for example, was taken offline completely when Russia destroyed all its towers. However, Starlink was able to provide satellite internet access directly to Ukraine, restoring connectivity to the country.

The potential military applications of Starlink have been met with concern from the Chinese government. In fact, China’s military researchers recently released a whitepaper calling for the destruction of Starlink satellites, as they claim Starlink could pose a threat to national security.

China is also working on a competitor to Starlink called Xing Wang, or Starnet. They claim that Starlink is taking up valuable limited space in low orbit that would hinder the launch of their global network.

How all this will affect Starlink’s investment potential remains unknown as of yet, but it’s clear this battle between China and Elon Musk over low-orbit real estate is only just beginning.

As of this writing, Starlink is not yet a publicly-traded company. The Starlink IPO date is not yet known, but Musk insists that it will be tied to a successful landing on Mars. This means that without an IPO on the stock exchange, there are not many options for investing in Starlink before the IPO date. However, there are some ways you can invest before the Starlink IPO date.

Looking for ways to invest in Starlink and the space industry? Here are some investment advisors that will be well versed in the satellite internet space.

If you have the money and the connections, the only way to directly invest in Starlink is to invest during one of SpaceX’s equity-raising rounds. Typically, these are reserved for large funds, such as hedge funds and private equity, and are not offered to retail investors. Between 2019 and 2021, the company has raised $5.2 billion of private placement of their privately held equity. If you can get a slice of a fundraising round, then you can invest directly in Starlink.

Pre-IPO and grey markets offer investment options for retail investors, who otherwise cannot directly buy stock in Starlink before the IPO date. In many cases, you will be purchasing a security that is linked to the estimated value of the company once it goes public. Some investments can even be made through an IPO investing app. If the IPO turns out to be much higher than your initial estimated investment, you can make a substantial profit.

Another way to invest in Starlink’s growth is by investing in the company’s partners — as the former grows, so will the latter. One example of this phenomenon is the rise of Foxconn on the coattails of Apple. Foxconn is a Taiwanese company that manufactures the iPhone; thanks to Apple’s success in the smartphone market, Foxconn has seen a meteoric rise and become a behemoth in the smartphone manufacturing space.

Shift4 is a good example of a tangential partner that stands to benefit from Starlink’s growth. Shift4 is a payment processing company that recently announced a five-year deal with Starlink. Should the satellite company take off, Shift4 will likely be to Starlink what Foxconn is to Apple.

With the promise of Starlink service, there have been several other companies jumping into the satellite internet industry in recent years. To give one example, Maxar Technologies is an older space-oriented company that is currently investing in communication technology. Likewise, Loral Space & Communications (LORL), a Canadian space and communications company, has merged with Canada’s leading satellite company, Telesat. Investing in these companies will contribute to the growth of an internet heavily reliant on satellite constellation services.

An IPO is the initial public offering of a previously private company’s stock on the stock market. Elon Musk claims that SpaceX’s IPO will be tied to successful missions to Mars. Whether this holds true or not remains to be seen, but it’s safe to assume that a Starlink IPO isn’t forthcoming in the next year.

That being said, if you are preparing for the Starlink initial public offering, you would do well to keep track of the company’s valuation. As of October 2021, the valuation for all of SpaceX is around $100 billion. Morgan Stanley estimates that Starlink makes up about $50 billion, or 50%, of that valuation.

Starlink is currently not publicly traded as it is part of SpaceX, which is privately held. Musk says SpaceX’s IPO will be tied to a successful exploration mission to Mars.

Starlink stock is not directly available to retail investors. You would need to invest in a private funding round or trade on the pre-IPO or grey markets.

You can indirectly invest in the Starlink IPO by buying shares on the grey or pre-IPO trading markets. Instead of investing directly in Starlink shares, you will be buying securities tied to the valuation of SpaceX when it goes public.

Currently, you cannot buy stock in SpaceX as a retail investor.