Internet access is no longer a luxury. It’s a necessity for everything from healthcare to education. In developed countries like the United States, Canada, and most of Europe, it’s easy to get online. The equipment and infrastructure required for reasonably fast, reliable internet is in place throughout populated areas. In some cases, it’s even possible to browse the web in remote locations.
The downside to standard internet service is that it relies on physical structures throughout the targeted service areas. That’s fine for developed countries with the expertise and resources to build, maintain, and secure the structures, but it’s a problem for undeveloped and emerging nations.
There is also the issue of sabotage and acts of war. Bad actors can go after internet infrastructure, potentially disrupting crucial connections for thousands or millions of people. For example, when Russia invaded Ukraine, one of the biggest worries was related to internet infrastructure. After physical safety and access to food and water, the population feared destruction of internet equipment that would leave them unable to communicate with each other and the world outside Ukraine.
Elon Musk came forward with a solution almost immediately, and it pushed one of his newest companies into the national spotlight. Musk was able to ensure relatively reliable internet connectivity for Ukraine through his unique approach to internet infrastructure.
What Is Elon Musk’s Internet Company Called?
Elon Musk named his internet company Starlink, which reflects the innovative method used to deliver internet service. Instead of connecting users through ground-based towers, Starlink offers service via satellites.
Right now, there are more than 4,500 Starlink satellites in orbit, and the company is authorized to increase that number to 12,000.
Starlink clearly has plans to grow exponentially, as it has already filed paperwork to add another 30,000 satellites to its fleet.
As the number of satellites goes up, Starlink connections are more reliable – and they offer access to the internet from anywhere in the world, no matter how impoverished, secluded, or unstable.
The impact may transform life for underserved populations, giving them health, education, and communication resources that have historically been out of reach.
What Company Owns Starlink?
Elon Musk is fascinated by the technologies of the future, and his electric car company, Tesla, has been key to taking EVs mainstream. Tesla is developing self-driving vehicles, and his goal is to build a new world in which the primary means of transportation is autonomous taxis.
Musk is also passionate about space exploration, and he wants to be the first to colonize Mars. He is moving towards that goal through another company, SpaceX, which has reignited interest in space exploration.
SpaceX is parent to Starlink, as satellite connectivity is a natural extension of the SpaceX mission to create “a next generation of fully reusable launch vehicles that will be the most powerful ever built, capable of carrying humans to Mars and other destinations in the solar system.”
SpaceX designs and manufactures Starlink satellites in addition to managing the logistics of putting Starlink satellites into orbit.
Is Starlink Publicly Traded?
Elon Musk might be a controversial figure, but there is no debate when it comes to his genius. Investors know that Musk isn’t afraid to try new things, and he has the intelligence, resources, and confidence to take on the impossible.
Those characteristics have pushed the price of Tesla stock up significantly, and investors are anxious to add Starlink to their portfolios. However, neither SpaceX nor Starlink stock is publicly traded.
At the end of 2022, Musk had a 42 percent ownership interest in SpaceX. The remaining 58 percent belongs to private equity companies, venture capital firms, a short list of publicly-traded companies, and a handful of angel investors. Those who follow Elon Musk believe that he doesn’t intend to take SpaceX public because he wants to retain control so that he can achieve the company’s mission.
Though it isn’t turning a profit quite yet, Starlink has far more profit potential than other SpaceX projects for the foreseeable future. After all, Starlink already has a marketable product bringing in revenue.
Originally, the plan was to use Starlink to generate capital to keep SpaceX going, but that doesn’t rule out an IPO. If Starlink is made a subsidiary of SpaceX, Musk can take Starlink public without changing the structure of SpaceX.
Musk has said on multiple occasions that a Starlink IPO is part of his long-term plan. He said that he would move forward with a Starlink IPO once revenue is “reasonably predictable,” and there are indications the company is close to achieving that objective.
In December 2022, Starlink announced its one-millionth subscriber – double the number just six months earlier. Access to Starlink is in high demand, and there is a long waiting list for those who are ready to sign on.
Is Starlink IPO a Good Investment?
If Starlink eventually goes public, there are many reasons to buy Starlink stock. It is one of Elon Musk’s passion projects, and he has demonstrated willingness to invest resources into the company’s development. Starlink is growing fast, and if the addition of 30,000 satellites is approved, Starlink will be able to sign on anyone who is still struggling with traditional internet service.
Deciding whether to buy Starlink stock once it becomes available boils down to individual investors’ level of risk aversion. Yes, Starlink looks like an amazing company that will contribute to the technologies of the future, but there are no guarantees. Like any growth company, Starlink is considered a relatively high-risk investment. Until it generates steady profits, no one can be sure how successful the company will be.
Investors willing to take on higher risk in exchange for higher potential rewards may find that Starlink is a good fit for their portfolios. Investors who are uncomfortable with high-risk investors may be better served with a more established company.
If Starlink does go through the IPO process, investors will be able to buy Starlink stock through any traditional or online brokerage firm – i.e., tastytrade (formerly known as tastyworks).
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.