CNBC reports on two stock sales by Elon Musk’s SpaceX that would send the company’s valuation to $127 billion:
The space venture is looking to bring in up to $1.725 billion in new capital, at a price of $70 per share, according to a company-wide email on Friday obtained by CNBC. Notably, SpaceX split its stock price 10-for-1 in February, which reduced the common stock to $56 a share – with the new valuation representing a 25% increase.
SpaceX is also conducting a secondary sale to company insiders and existing shareholders for up to $750 million in common stock. The company conducts these secondary offerings regularly, as a way for long-time stockholders to sell equity, given that SpaceX remains private more than 20 years since its founding.
The New York Post quoted a source as saying there was “very tepid demand” to SpaceX’s latest effort to raise capital, which would help to fund the company’s Starlink broadband satellite constellation and Starship/Super Heavy booster. The company raised $1.9 billion in 2020.
“No one is paying up for anything in this market,” the second source said, with public and private valuations of tech companies collapsing.
Part of Musk’s problem could be that many of his investors who typically participate in his fund-raisings committed several billion earlier this month to co-invest with him in Twitter. Now that position does not look great considering that Musk has questioned the social media giant’s financials.
Those loyal Musk investors for the moment might be somewhat tapped out, the first source said.
The value of Tesla stock has plunged since Musk announced plans to spend $44 billion to acquire Twitter. The decline in the stock has come amidst a general decline in tech stocks.
Musk has put the purchase on hold, saying that a lower price might be warranted if the number of automated bot accounts on Twitter are more than the company has previously stated. Twitter’s board, which approached the acquisition, said it will seek to enforce the sale.
Meanwhile, Musk has faced charges that he exposed himself to a SpaceX flight attendant and propositioned her for sex during a private jet trip to Europe. SpaceX is reported to have paid a $250,000 severance to the woman with a non-disclosure agreement that she not discuss the matter or disparate Musk or SpaceX.