You invest in space exploration, and more specifically in SpaceX. SpaceX is a company founded by Elon Musk that has redefined the possibilities of what’s possible with rocket technology.
By pioneering reusable rockets and pushing the boundaries of space travel, SpaceX plans to revolutionize the cost of spaceflight, helping humankind push further into the cosmos.
If you’re interested in how to invest in SpaceX, keep reading for our guide on how to invest in this burgeoning industry!
Table of Contents
- What is Space Exploration Technologies Corporation (SpaceX)?
- How Can I Invest in SpaceX?
- Get Educated About SpaceX
- Understand the Stages of Development
- Where Can I Buy Shares of SpaceX?
- How to Invest in SpaceX Indirectly?
- Have a brokerage account
- Place a buy order
- Other Ways to Invest in Space
- Innovators in space technology
- Space funds
- How To Buy SpaceX With Private Shares
- How Does SpaceX Make Money?
What is Space Exploration Technologies Corporation (SpaceX)?
Space Exploration Technologies Corporation (SpaceX) is a rocket company at its core. It builds, launches, and operates rockets for space missions and has contracts with both NASA and various private companies to do so.
However, that’s not all there is to know about SpaceX. The company also develops and manufactures high-performance computing resources such as network-attached storage devices and multi-node rendering clusters.
So if you’re interested in an unusual business model, and aren’t fazed by some risk, then maybe investing in SpaceX could be worthwhile.
How Can I Invest in SpaceX?
Unfortunately, investing directly in SpaceX isn’t possible. While some investors are trying to buy shares of stock through secondary markets like SharesPost or other sites like Silicon Investor, they can only purchase fractions of shares at best.
And even then, those transactions come with a steep markup over actual value because of limited supply and demand.
If you want to know how to invest in SpaceX without paying inflated prices on third-party sites, try looking into microcap.
Get Educated About SpaceX
Elon Musk’s company has had some spectacular wins (think reusable rockets, a crewed Dragon capsule, and a contract with NASA). However, you should proceed with caution before investing.
Notably, SpaceX has yet to generate any meaningful revenue–in fact, it has lost money every year since its founding–and will likely continue losing money for several years.
Given that track record, potential investors have little tangible evidence on which to base their investment decisions on.
To understand how to, if at all, you should invest in SpaceX. First, educate yourself about what SpaceX does and why it thinks it can succeed where so many others have failed.
If you want to find out how to invest in SpaceX, learn more about how Musk wants his company to operate.
Then consider whether he has been successful thus far and whether his vision seems like something that could realistically become a reality over time.
Once you’ve done your research, you’ll be better prepared to decide whether or not investing in SpaceX makes sense for your portfolio.
If you’re interested in learning more about how space travel companies work, check out a primer on commercial spaceflight and the history of human spaceflight features.
And be sure to keep up with new developments via Spaceports Weekly News Update! A good idea would be to follow other people who share similar interests.
Understand the Stages of Development
When investing, it’s essential to understand how much risk you’re willing and able to take. To help simplify things, all startups fall into one of three development stages: idea, launch, or growth. Each stage has different financial requirements and implications for your investment.
In an idea stage, you provide funding that allows a business owner to develop their idea before the launch.
If your investment works out at launch, you’ll have capital gains—or if it doesn’t, you’ll have lost just a tiny amount of capital.
Growth-stage investments are riskier because they require heavy initial capital and don’t guarantee any return on investment. However, these investments can pay off if your startup hits it big (e.g., Facebook).
Understanding which stage you’re investing in is crucial to deciding how much money suits you. The first step is deciding whether (or not) to invest directly in a company or through an online platform like AngelList.
Both options have pros and cons, but ultimately, they offer similar opportunities with differing levels of flexibility.
Once you’ve decided how to invest, it’s time to decide what stage your investment will be at. You can determine your risk tolerance level (i.e., how much money you’re willing to lose).
Growth-stage investments might be suitable for you if you’re willing to take on more risk than average (and have more money). If not, stick with idea-stage investments—or go all out and go for growth-stage deals!
Once that’s settled, it’s time to start looking for companies that fit your investment strategy and risk tolerance. Then, you make sure their business model makes sense before investing!
Where Can I Buy Shares of SpaceX?
Buying shares of companies like SpaceX is usually done through a stockbroker. If you’re interested in how to invest in SpaceX, work with an experienced professional who knows how these things work.
However, there are other ways to go about investing without using a broker. For example, some people purchase individual stocks without a broker, and you can do that on websites like Sharebuilder or TradeKing.
Use the websites by putting money into your online account, then click ‘buy’ when you see something that looks appealing.
There are other sites out there for investors looking for different types of investments. Do your research if you don’t want a traditional broker.
How to Invest in SpaceX Indirectly?
All you need is $1,000. You can invest in SpaceX by purchasing shares of Tesla Motors, a publicly-traded company with CEO Elon Musk on its board of directors.
As one of just three U.S.-based automakers, Tesla isn’t a pure play on Elon Musk’s ambitions. It makes electric cars increasingly popular among environmentally conscious car owners who aren’t sold on Elon Musk’s ideas yet.
But since Musk is also CEO and CTO of SpaceX, buying Tesla stock means you’re betting on his success, and there’s no better way to do that than investing in his brainchild.
In addition to being an innovative car manufacturer with a growing market share, Tesla has two other things.
Tesla pays regular dividends, and it has been profitable every year since 2010. If you don’t want to buy shares directly from TSLA or another online brokerage account, consider investing through exchange-traded funds (ETFs) or mutual funds focused on alternative energy companies like First Solar (FSLR) invests in solar power companies around the world.
Have a brokerage account
You’ll need a brokerage account if you want to invest in privately held companies like SpaceX.
Some brokerages charge fees for accounts that hold less than a certain amount of money, and some don’t.
But regardless of whether or not your brokerage charges an account fee, you’ll still have other expenses.
Most brokers charge flat commissions on trades—typically $5 or less per trade but sometimes as high as $10.
And if your broker doesn’t offer free trades, you might also have to pay per-share trading fees when purchasing stock or ETFs with fractional shares.
Place a buy order
Buying stock in a company is about as easy as it gets. Companies that trade on major exchanges, like Facebook, are simple to buy—you go online and order from your broker. You’ll pay a commission, but if you don’t have thousands of dollars for an investment opportunity, that’s perfectly fine.
Buying stock is more tax-efficient than selling other investments at a profit. For diversity, look into exchange-traded funds (ETFs), which allow you to invest in dozens or hundreds of companies with one purchase.
Consider investing in Elon Musk’s private space exploration company, SpaceX, if space exploration excites you. Although you can only buy directly from them—their stock has been doing well since they began taking orders. And if Mars does turn out to be habitable? Maybe your $100 will be worth $1 million someday! (No guarantees.)
Other Ways to Invest in Space
Even if you can’t invest directly in SpaceX, there are still other ways to get involved. One option is via Space Angels Network, connecting space startups with angel investors looking for opportunities.
However, angel investors don’t have access to as much capital as institutional investors or private equity firms do.
But they don’t have nearly as many restrictions; angel investments are generally considered high risk/reward.
Space and space-adjacent companies abound—you could even be one of those angels looking for a high-reward venture.
Innovators in space technology
Investing in companies like Space Exploration Technologies Corporation (SpaceX) can be an incredible idea, and you will have to learn how to invest in SpaceX.
While other billionaires have been vocal proponents of commercial space flight, they’re not as integral to its success as Musk is.
Tesla Motors (TSLA) gives consumers a reason to rethink electric cars. But it doesn’t contribute much financially or operationally toward revolutionizing how we get into space.
That’s because Tesla and SpaceX are privately held companies whose finances aren’t available for public viewing.
Elon Musk has made his plans clear regarding Mars exploration and colonization. He founded SpaceX with $100 million of his own money (and has since invested at least $70 million more).
There’s no better time than now to invest in private space travel—especially if you’re looking for high returns on your investment.
SpaceX is a big player, and they’re worth investing in; you might want to start with some of their competitors. Orbital ATK (NYSE: O.A.) O.A. is a reliable space-based company that produces rocket components, satellites, and missile defense systems.
United Launch Alliance (ULA) provides launch services for NASA and other federal agencies.
Another way to get into space is through companies like Space Systems Loral (NYSE: LOR). This company builds satellite payloads, spacecraft, and earth stations.
More recently, Boeing (NYSE: B.A.) B.A.announced plans for a new rocket system called Phantom Express. This rocket system can deploy up to 100 small satellite launches by 2022
How To Buy SpaceX With Private Shares
On September 29, 2017, Musk announced that funding was secured for a $507M investment round at a $25B valuation.
This would indicate an opportunity for you to buy into private shares of SpaceX. These shares are expected to be traded over-the-counter (OTC), meaning they will not be listed on major exchanges such as NYSE or NASDAQ.
If they were listed on any stock exchange, their price would be much higher and your entry point significantly more expensive.
These shares won’t be listed on major exchanges, so the price won’t be too high making your entry point less expensive.
Instead, since you won’t be buying through an exchange like these other investors, your price will only ever increase once these shareholders need cash and choose to sell part of their stake off at a profit.
To do OTC trading, visit SharesPost. Once there, click Buy Shares In next to Space Exploration Technologies Corp.
Then enter 1 as the number of shares and select Private Placement. You will then see a page of shares with ranging prices. Click Buy Now next to whichever one(s) you want to place an order for.
SpaceX’s private shareholders may decide to liquidate some of their holdings so they can fund personal projects or pay bills. Then, those shares will become available for sale via OTC brokers like SharesPost.
How Does SpaceX Make Money?
How does SpaceX make money with a business model similar to other aerospace companies? Through government contracts and commercial launches.
For example, in April 2017 alone, SpaceX conducted its first national security launch for a Pentagon agency; launched ten Iridium NEXT satellites into low Earth orbit; and launched another Iridium satellite—the fourth set overall—into space (this time from California’s Vandenberg Air Force Base).
In June 2017 alone, Musk’s company became one of just nine U.S.U.S.mercial companies certified by NASA for crewed missions with its Dragon 2 capsule.
And it completed the world’s first successful drone ship landing of an orbital rocket stage during a January 2018 launch from Vandenberg.
This is part of SpaceX’s plan to reduce space travel and exploration costs dramatically. To do so, it needs to conduct many more successful launches than failures.
It means more revenue coming in than going out. It also means becoming profitable on its terms as quickly as possible—which is why Elon Musk has said he doesn’t want to rely on government funding forever.
Although investing is generally considered an activity reserved for adults, plenty of people have started investing while still minors.
Whether saving up birthday or holiday money or working part-time during high school, it’s essential to think about how you can invest wisely while young.
Even if you aren’t making much cash yet, that doesn’t mean you can’t start learning which investments work best.
And when it is an excellent time to put your money into stocks, bonds, mutual funds (and even more exotic things like options).
If you want to learn more about building your portfolio, using investment terminology, and getting advice from professionals rather than just reading articles online, look into investing clubs at your school.