If SpaceX were to go public next week it would command a valuation of somewhere in the region of $175 billion, placing it in the ranks of tech veterans like Intel Corporation (INTC) and IBM (IBM).
Partially owned by Elon Musk, SpaceX has not set a definitive timeline for an IPO, but speculations and rumors surround the company, especially concerning the possibility of launching its satellite division, Starlink.
For investors interested in accessing SpaceX at present, publicly traded private equity (PE) firms holding shares provide a viable option.
One such firm is Stack Capital (STCK), based in Toronto and led by CEO Jeff Parks.
Parks emphasized the aim of democratizing access to growth in late-stage businesses through their portfolio, which includes companies like Locus Robotics, Hopper, Omio, and Bolt, along with SpaceX.
Parks stated, “We are striving to enable investors to participate in pre-IPO opportunities, providing exposure to promising companies before they hit the public market.”
He further highlighted the attractiveness of companies like Reddit Inc (RDDT) and Astera Labs Inc (ALAB) in the public market, underscoring the avenue provided by entities like Stack Capital for gaining early access to potential IPO candidates.
Sufficient Capital for SpaceX
Parks noted the abundant availability of private capital for established companies like SpaceX and Stripe, citing the strong demand for such businesses from investors.
He pointed out, “These companies have been able to sustain their private status for extended periods by tapping into the private funding ecosystem, although there comes a point where transitioning to a public offering becomes a logical step.”
Parks anticipated a wave of companies opting to go public in the future, projecting a resurgence in IPO activities.
Current State of the IPO Market
However, the IPO market is currently experiencing a slowdown following the exceptional performance in 2021, attributed to disruptions caused by the Covid-19 pandemic.
Parks discussed recent IPOs like Birkenstock Holding Ltd (BIRK), Klayvio Inc (KVYO), and Instacart (CART), highlighting the tepid response compared to the success seen with ALAB and RDDT listings.
He emphasized the significance of ALAB and RDDT as indicators for the potential resurgence of the IPO market, creating optimism among investors for upcoming public offerings.
Parks envisioned a flurry of new listings reinvigorating Wall Street’s momentum, driven by the enthusiasm among investors to engage with long-private entities making their debut on the stock exchange.
Valuations in the Private Market
Beyond mega-cap valuations in the public arena, blue-chip companies in the private domain are also witnessing significant valuation growth, fueled by the influx of private capital.
Parks highlighted the availability of attractive investment opportunities in the private market, especially following recent IPO events that have rekindled interest in pre-IPO stages.
He concluded by underscoring the robust demand for deals involving blue-chip entities, with substantial capital flows moving through the secondary market.
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