Described as the most popular pre-IPO tech company across the globe, there aren’t many organizations quite like SpaceX.
From carrying NASA astronauts to the International Space Station, taking people on expeditions through space, to distributing communications satellites into orbits, these are what make SpaceX into what it is today.
Eventually, they even want to send people to Mars. The sky definitely isn’t the limit with SpaceX!
Therefore, if you’ve been thinking about investing in SpaceX stock, you are not the only one.
Many investors are interested in their stock: whether you are an individual, private equity firm, or sovereign wealth fund, SpaceX makes for an attractive investment. However, you may be wondering where to begin.
Luckily for you, we have created a detailed guide on how to invest in SpaceX. Read on to learn more about investing in SpaceX.
What Is SpaceX?
SpaceX, also known as Space Exploration Technologies Corp., is a space exploration company based in America and developed by the Tesla CEO, Elon Musk.
Based in Hawthorne, California, the company started out in 2002 with the aim to reduce space travel expenses in order to enable a smooth transition of settlement on Mars.
This is a goal and aspiration very dear to the owner, Elon Musk. Therefore, SpaceX is only willing to accept investors’ funding which has a long-term goal in mind.
SpaceX is a company that is focused on launching and developing futuristic and state-of-the-art spacecraft and rockets.
They boast many achievements and historic milestones; for example, they are the only private organization to successfully return a spacecraft within the low orbit of Earth.
Additionally, SpaceX’s Dragon spacecraft is the only commercial spacecraft in the world to transfer cargo to the International Space station and back again.
The company aims to be the first privately-owned spacecraft to deliver humans into space.
Their competitor, Amazon, owned by Jeff Bezos, is also working on delivering a similar program using his organization Blue Origin, this makes the two, Musk and Bezos, rivals.
How To Invest In SpaceX Stock?
If you were to open the Webull or Robinhood app and then search SpaceX stock or even SpaceX stock price, you won’t be able to find anything.
The reason for this is that SpaceX is a private company, meaning that you won’t be able to buy your stock through a regular broker.
The process of buying shares within a private company is not as forthright as when you are investing in publicly traded companies.
With publicly traded stocks, you can start with as little as $1.0 with commission-free online brokers such as Sofi Invest, Cash App Investing, and Robinhood. However, it’s a completely different story when it comes to investing in privately-owned companies.
In order to invest in private companies, you have to be an accredited investor. If your fortune is less than $1.0 million or you don’t earn more than $200,000 annually, you won’t be able to directly invest in SpaceX.
Likewise, you need to be highly sophisticated, with experience and professional knowledge, to become a certified accredited investor (see also ‘How To Become An Investor‘).
However, there are opportunities for individuals to invest in SpaceX, albeit; they are limited. With this in mind, the most viable option is through a fund or publicly-traded company that owns SpaceX shares; to get exposure to SpaceX investments.
Two noteworthy entities that have invested in SpaceX are financial services providers Google parent Alphabet and Fidelity Investments.
Investing Through Fidelity
Fidelity has made various investments in SpaceX. Their earliest recorded investment of Fidelity investing in SpaceX came in 2015 when they collaborated with Alphabet to inject approximately $1.0 billion into the company.
The joint venture resulted in Fidelity and Alphabet receiving a combined stake of roughly 10 percent in SpaceX stock.
Likewise, Fidelity also engaged in the 2020 SpaceX investment round that resulted in a total of $2.0 billion raised for the space company.
With a portfolio of various investments in public and private stocks, investors looking to shop for SpaceX stock are able to gain exposure to the organization through Fidelity’s mutual funds.
To do this, you can simply purchase funds through investment apps that provide them with additional other securities.
Although, when investing in mutual funds, you should keep in mind the costs associated with mutual funds, as typically the expense ratios apply to fund investments. While likewise, some funds may charge a load fee whether you buy or sell their shares.
Does Alphabet Possess SpaceX Stock?
In 2015, following a joint venture with Fidelity, Alphabet retained an approximation of 7.5 percent of SpaceX stock. However, it’s unclear whether or not successive funding rounds have dissolved Alphabet’s SpaceX holding.
After the 2020 funding round, SpaceX’s valuation soared from $10 billion, from their first joint investment into the company, to $46 billion. This means that Alphabet’s holding has appreciated.
If you’re looking to invest in SpaceX, investors can gain exposure and experience through directly investing through Alphabet stock.
Besides the entities previously mentioned, aspiring investors can also invest in other SpaceX contributors such as Valor Equity Partners, Baillie Gifford, and Peter Thiel’s Founders Fund.
While it was still a private company, Theil and Fidelity also invested in Facebook.
Moreover, Forge Global and EquityZen are just some platforms that enable investors to buy pre-IPO stocks from insiders. These are great platforms for individual investors who are interested in purchasing stocks in SpaceX.
Final Thoughts
Investing in private companies such as SpaceX can be a potentially lucrative and exciting investment opportunity. However, it may require some extra research if you’re an individual looking to invest.
Fortunately, there are many options available that may help you to achieve this, these are generally through publicly-traded companies that already own SpaceX shares.
For now, it seems that Musk is opposed to making SpaceX public. Hopefully, this guide has informed you on how to invest in SpaceX.
If you enjoyed this article, you might enjoy our post on ‘How To Invest In Miso Robotics‘.
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