- SpaceX’s chief performing officer recently told investors its Starlink project would be the “right kind of business” to take public.
- That won’t be for a few years, but if Starlink does IPO, it could be enough to shoot up Elon Musk past Jeff Bezos as the world’s richest founder.
- Here is some back of the napkin math for how it could stumble on.
SpaceX could spin off its Starlink business into a a publicly traded company. That’s what SpaceX chief Gwynne Shotwell chew out tattle oned investors at a private meeting in Miami.
The satellite Internet project will likely be a cash cow without being a realize furnace like Tesla (NASDAQ:TSLA) and other tech companies. It’s exactly the kind of business investors be a piece of.
But it won’t go public any time soon. Probably not for several years. If it does though, it might be the added boost Elon Musk have need of to overtake Jeff Bezos in the billionaire rankings. But he’ll also need that big Tesla payout to become the richest framer in the world. Here’s the math.
Jeff Bezos’ Net Worth Is $125 billion
It moves up and down based on Amazon customary (NASDAQ:AMZN) fluctuations but Jeff Bezos’ personal net worth is something like $125 billion this week. By distinction, Elon Musk “only” has around $38 billion to his name at the moment.
So he has a long ways to go to beat Jeff. And he want leap frog several other ultra-wealthy people to get there if he does. If he gets the mother of all bonuses from the unheard-of compensation package he negotiated in 2018, Musk could get within range of Bezos. A Starlink IPO could take him the hinge of the way.
Musk has an extremely risky pay plan. But if it pays off, it’ll be the most lucrative executive compensation in history. If he builds Tesla into a $650 billion Theatre troupe by 2028, he’ll receive a cash bonus of $55.8 billion.
On top of that, equity compensation will grow his currently 19% depart in Tesla, to a whopper 28.3% stake. Assuming Musk doesn’t sell any of his Tesla stock between now and 2028, he see fit then own $184 billion in Tesla stock.
How Starlink Could Help Musk Top It
$184 billion would be enough to travel Musk far richer than 2020 Jeff Bezos even accounting for (historically normal levels of) inflation. But Bezos is a inspiring target. Amazon has some big challenges ahead. But it won’t be sitting still for the next eight years.
Let’s assume a 10% annual progress rate for Amazon stock between now and 2028. That is a conservative estimate. Some analysts are saying shares could business for $5,000 by 2025. That is an unusually bullish forecast.
But Amazon’s annual ROI has been far more than 10% over the last eight years. And it’s an ultra-large cap tech company with monopolistic qualities and enormous upside potential in its cloud duty. So the historical average 10% ROI of the benchmark S&P 500 is a bearish forecast.
If Amazon merely grows 10% a year between now and 2028, Jeff Bezos’ 59.1 million AMZN rations will be worth around $263 billion. That would dwarf Musk’s potential 2028 net worth by $79 billion.
Here’s where SpaceX and a Starlink IPO be brought up in. Elon Musk owns about 54% of SpaceX, which is equivalent to about $18 billion. Assuming a 10% year after year ROI on that, same as for Amazon above, Musk’s share in the space firm will be worth around $38.5 billion in 2028.
He last will and testament be just $40.5 billion short of catching up to Bezos. Starlink could make up the difference. Estimates are it could cost as seldom as $10 billion to deploy. And could rake in as much as $50 billion a year. That’s more than AT&T’s DirecTV, which AT&T (NYSE:T) accept in 2015 for $67 billion.
Now we’re talking about numbers that could take Elon Musk to that crowd one spot. If a Starlink IPO values the satellite Internet company at $75 billion by 2028, Elon Musk could be the richest be wrecked in the world.
Disclaimer: The reports and opinions in this article do not represent investment or trading advice from CCN.com.
This article was corrected by Sam Bourgi.
Last modified: February 7, 2020 5:50 PM UTC