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Alphabet Could Net $120B from SpaceX IPO
30 May
Summary
- SpaceX IPO expected in June with $2 trillion valuation.
- Alphabet's 6% stake could be worth $120 billion.
- Alphabet plans significant capital expenditure increases in 2027.
SpaceX is reportedly preparing for its initial public offering (IPO) in June, aiming for a staggering valuation of $1.75 trillion to $2 trillion. This event is poised to be a landmark moment for the stock market.
Alphabet, holding approximately 6% of SpaceX since 2015, stands to gain significantly. If SpaceX achieves its highest valuation targets, Alphabet's stake could be worth around $120 billion. This would represent a highly profitable return on its initial $900 million investment.
Following the IPO, SpaceX will implement a rolling share-release schedule for pre-IPO investors over 180 days. Alphabet will not be able to fully liquidate its holdings until December at the earliest.
Meanwhile, Alphabet is undertaking a massive AI infrastructure build-out. The company has projected capital expenditures between $180 billion and $190 billion for 2026, with expectations of a significant increase in 2027. This spending largely consumes its current cash flow from operations.
To finance these ambitious plans for 2027, Alphabet may explore several avenues, including increasing cash flow, utilizing its existing cash reserves, reducing dividends or share buybacks, issuing debt, or potentially selling its SpaceX shares.
