SpaceX's Satellite Internet Service Starlink
Plans for Spin-off and IPO Within a Few Years
[Asia Economy Reporter Kwon Jae-hee] Elon Musk, CEO of Tesla and SpaceX, who was harshly criticized at Battery Day for having "no innovative technology," has now announced plans to spin off Starlink, SpaceX's internet division, within a few years and pursue an initial public offering (IPO). He also stated that he aims to increase electric vehicle production to 20 million units by 2030. Despite investors' disappointment, he continued on his own path.
On the 28th (local time), Musk announced on his Twitter that "Starlink will go public within a few years." Although he did not mention specific plans related to this, it drew attention as it was the first confirmation of the possibility of a spin-off that SpaceX executives had occasionally hinted at. Starlink is SpaceX's satellite internet service, started with Musk's ambition to provide ultra-high-speed internet at 1Gbps worldwide. 1Gbps is a speed capable of transmitting 1 billion bits of data per second, which is 5 to 6 times faster than LTE (Long-Term Evolution). This allows ultra-high-speed internet access anywhere in the world. Regarding the timing of the Starlink IPO, Musk said, "The stock market does not like irregular cash flows, so an IPO will be possible once revenue growth becomes predictable."
The interest in the Starlink IPO stems from expectations that it could accelerate the goal of building ultra-high-speed internet worldwide. So far, SpaceX has launched about 700 communication satellites, falling far short of the initial target of around 12,000 satellites this year. Starlink was originally planned to be commercialized by the end of this year, but considering the number of satellites launched, the prevailing view is that it will be difficult to achieve within the year. It is said that raising funds through an IPO would help realize such plans.
Musk expects Starlink to generate annual revenue of $30 billion. This is ten times the maximum annual revenue SpaceX earns from its rocket business. Musk also mentioned, "I am a fan of retail investors and will prioritize them above all."
On the same day, Musk also tweeted, "Tesla will reach an annual production volume of 20 million units before 2030," adding, "This will be possible only under the premise that excellent production capacity is established." This is 40 times the production target of 500,000 units Musk set this year. If Tesla sells 20 million electric vehicles annually as Musk announced, revenue is expected to reach about $800 billion (approximately 936 trillion KRW).
Recently, seemingly aware of investors' criticism, Musk appeared on a New York Times (NYT) podcast and expressed confidence by saying, "If asked whether Tesla stock is worth holding for more than five years, the answer is 'yes'." Although there are voices questioning whether Tesla's stock price is already highly overvalued, even after Musk himself evaluated Tesla's stock price as too high last May, the stock price has risen nearly 200%.
As of the close on this day, Tesla's stock price was $421.20, up 3.4% from the previous day. Tesla's stock price has risen 400% just this year.
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