News & Analysis

Investors seemed to have never lost faith in rocket launch and satellite internet provider SpaceX amid an otherwise tumultuous 2022 for Elon Musk and his other major assets.  

Musk's Tesla lost 65% of market capitalization last year, and his ability to extract economic value from his acquisition of Twitter was doubted by many observers. 

SpaceX is raising a new $750 million funding round from VCs, including Andreessen Horowitz potentially as lead, at a valuation of $137 billion, CNBC reported. If completed, the financing would be a notable valuation step up for SpaceX, last valued at $127 billion when it closed on a $1.72 billion fundraise in June, per PitchBook data.

"SpaceX has consistently traded at a premium [in the secondary market] to last preferred round valuation for basically as long as we've traded it," said Glen Anderson, a managing director at Rainmaker Securities, an investment bank that specializes in shares of pre-IPO companies. "That was also true for 2022 when nearly everything else was down."

The company continues to trade at a range from $140 billion to $145 billion, according to Rainmaker Securities.  

Last year, SpaceX's core business set a record with the number of launches of its reusable Falcon rocket. But Anderson said the company's premium valuation on the secondary market is primarily driven by Starlink, the company's satellite internet service that has the potential to disrupt the global telecom business.

Musk previously said that Starlink would be eventually spun off and taken public as a standalone company. The unit has been in the spotlight for providing internet connectivity in parts of Ukraine that lost power after its infrastructure was destroyed as a result of Russia's invasion.

Last month, SpaceX allowed employees and other insiders to sell shares in the company for $77 apiece, roughly $140 billion for the whole business, according to reports. 

While it is not known whether Musk sold any of his shares during the tender offer, Anderson said he would not be surprised if Musk did. Last year, the billionaire sold Tesla stock to finance and possibly reduce the debt associated with his acquisition of Twitter.  

Related read: Secondary trading picks up as market settles into discount mentality