According to a Bloomberg report, Elon Musk’s company SpaceX is planning to launch its IPO next year. The company recently approved an insider share sale, fueling speculation that an IPO is on the way next year. It is being told that due to this insider share trading, the valuation of the company has increased to $800 billion. The company’s Chief Financial Officer (CFO), Brett Johnson told this to shareholders in a memo.
What else did Brett Johnson say in the letter?
According to the report, the company is offering shares to insiders at $421 per share in the latest secondary offering as it plans to potentially launch an IPO in 2026. The letter sent by CFO Brett Johnson said the company plans to buy back $2.56 billion worth of shares from shareholders at $421 per share, the New York Times reported. “Whether or not this will actually happen, when, and at what valuation is still very uncertain, but the plan is that if we get it right and the market cooperates, we can raise a lot of capital through a public offering,” Johnson said in the letter, according to the NYT.
What is a secondary offering?
This is a process by which companies usually allow employees or early investors to sell their shares before the IPO. SpaceX has recently done the same. SpaceX conducts buybacks twice a year to raise capital from shareholders, giving shareholders the opportunity to cash out their holdings. This process prepares the company for IPO, which enables it to raise large amounts of funds. SpaceX can use the funds raised from the IPO to finance its Starship and Starlink projects. After this secondary offering, SpaceX’s valuation has increased to $800 billion, and if the IPO is launched, the valuation could exceed $1 trillion.
Will Indians get a chance to invest?
the answer is yes. Indian residents can invest in this US IPO under the RBI’s Liberalized Remittance Scheme (LRS), which allows them to remit up to $250,000 every year abroad for investment purposes.
To do this, you first need to choose a broker. Open a global trading account with an Indian platform that offers US investing or directly with a US broker that offers access to IPOs. Not all brokers allow IPO applications, so you need to check this beforehand.
Now complete your KYC. Submit basic documents like your PAN card and passport. This process is online and usually completes quickly.
After that, transfer the money from your bank to US dollars via the LRS route and apply for the IPO through the broker’s platform. However, there is no guarantee of allotment.
If you are allotted shares, they will be automatically credited to your demat account. If not, most investors buy shares after they are listed on the stock exchange.
