SpaceX IPO, Not so Fast
Twitter Post, Elon Musk
“No near term plans to IPO @SpaceX. Only possible in very long term when Mars Colonial Transporter is flying regularly.”
Marc’s note: This is an interesting Tweet from Elon and a bit of an about face. Going public has been mentioned on and off for several years. Going public could bring in some serious cash to allow the company to expand, but why do it when you’re already profitable and you would have to deal with all the downsides of being public.
On the other hand, one reason why SpaceX was considering going public was the 500 rule. When a company has 500 or more investors you’re required to start releasing quarterly financial information to the Securities and Exchange Commission. Most companies go public before that happens. Elon has stated that all employees get stock options. In may they reported they had over 1800 employees. So how many have exercised their stock options? And will SpaceX start reporting, but not go public?
Mars’c update: A reader pointed out that the 500 rule was changed in the JOBS act of last year to 2000 persons.
Two points (both of which I ask for confirmation of from knowledgable professionals who may be reading this):
1) I believe that employees are not counted in the number of shareholders
2) The JOBS Act has increased the shareholder limit to 2000
If these two points are true, SpaceX has a lot more margin to maneuver
I believe you are correct.
Exercising a stock option in a private firm generally is not possible until the IPO, at least in the agreements I’ve seen. So my guess is that the employee count will not impact the reporting requirements.
Folks:
The known major private investors in SpaceX are inclined to give Elon Musk a lot more leeway than the average board of directors.
Profit is a byproduct of SpaceX, something that was necessary to survive, not necessarily desirable as it detracts from the primary goal, space colonization.
I have some ideas on how SpaceX could raise some capital and still stay private but I’ll do a little more research first before I say anything more.
Should SpaceX remain private? Yes! Going public allows folks to invest who don’t have the companie’s best interests at heart like those who shorted Tesla Motors stock (and paid dearly (literally) for that mistake).
tinker
You can have an ESOP in a privately held company, however those synthetic shares do have ERISA rights to be invested responsibly.
DOL has a public website where you can download form 5500 which both ULA and SpaceX have filed documents with.or shouls have filed documents with
member NCEO
Please forgive my ignorance, but isn’t this whole near term IPO gambit a potential disaster scenario for the launch industry?
What happens when Boeing, Lock-Mart, ATK and other old-space launch providers acquire enough SpaceX stock, seats on the board and an ability to impose their own choice of CEO/CTO?
A near term SpaceX IPO seems to be the cheapest, fastest and most certain way for competitors to derail or asset strip the Falcon F-9R which is threatening to annihilate old-space players. And the coup de grace would be the sacking of Mr Musk in a manner similar to that of Steve Jobs who was at one time fired by Apple.
As much as I’d love to own SpaceX shares, it’s a relief to hear that a near term IPO is being flagged away.
http://dealbook.nytimes.com…