Odds Increasing for SpaceX IPO
There is now considerable evidence—drawn from a motley collection of SpaceX news stories—that President Trump will embrace private space contractors.
In fact, the incoming administration may even fast-forward the timeline of a SpaceX IPO. Just take a look at the people Trump is appointing to his NASA transition team.
There’s Charles Miller, a NASA alumni that pushed for commercial space programs; Alan Stern, who is currently serving as Chairman of the Commercial Spaceflight Federation; and Alan Lindenmoyer, the former head of NASA’s commercial space taxi program. (Source: “Thiel Pushes to Add Commercial-Space Backers to Trump NASA Team,” The Wall Street Journal, December 21, 2016.)
It’s basically a Who’s Who of the private space exploration community.
But more to the point, Trump is being steered by Peter Thiel, a longtime friend of Elon Musk. In fact, the two went into business almost two decades ago when they merged Confinity and X.com to create one of the first online payments companies: PayPal Holdings Inc (NASDAQ:PYPL).
They sold PayPal to eBay Inc (NASDAQ:EBAY) soon after, but their friendship continued through the years. Thiel even invested significant amounts of money in SpaceX.
As a result, he stands to make a killing off a SpaceX IPO, the date of which is still a mystery. Musk has always maintained that the eventual SpaceX IPO was tied to his Mars ambitions.
But since most observers are doubtful that SpaceX can reach the red planet by 2018 (for an unmanned probe), those commitments hardly matter. Critics are quick to point out that SpaceX is not yet flying regular missions to the International Space Station.
However, they underestimate how much can change under a Trump Administration.
Thiel’s influence could help shift NASA’s resources away from legacy projects that benefit Boeing Co (NYSE:BA) and Lockheed Martin Corporation (NYSE:LMT). He could push policies that redirect funds towards NASA’s newer contractors, such as SpaceX or Blue Origin.
Fair or not, one of Elon Musk’s close friends and business associates is now in a position of extraordinary influence. The fact is that if SpaceX wins more contracts or gets favorable launch schedules, the company can afford to step up its Mars agenda.
Granted, there are limits to how much it can fast-forward. The rotations of Mars and Earth put them close together only once every two-odd years, meaning that 2018 is SpaceX’s earliest opportunity to fire a test probe. But that’s hardly the point.
For SpaceX to finance the Mars mission, it needs money. It is unlikely that enough money can be raised in private markets, at least on this scale, so it would likely opt for a SpaceX IPO.
That is the point.