Elon Musk’s friends in Silicon Valley are predicting that he will laugh after a year of destroying his record fortune
Tesla CEO Elon Musk recently break the world record Because of the largest loss of personal wealth in history, an estimated $182 billion has been lost since November 2021 (another estimate puts the figure closer to $200 billion). But he could enjoy a big break this year, according to Silicon Valley insiders, and that will be thanks to one of his other companies, space.
These insiders are two prominent Bay Area venture capitalists, Jason Calacanis and Chamath Palihapitiya, who were once nicknamed the “SPAC King” for their numerous investments in special purpose acquisitions. Both longtime Musk associates, they are talk about the All in podcast about prospects for 2023. Calacanis’ closeness to Musk was revealed in court, when he private text messages arrive Twitter The CEO was revealed as part of the Twitter acquisition lawsuit, including his oath of allegiance: “Board member, advisor, whatever… you have the sword of I. Take me into the game coach! Twitter CEO is my dream job.” So they may be biased towards Musk, but they see a clear way the world’s second-richest man could recover his swagger in 2023.
When asked what the biggest business deal of the year would be, Palihapitiya said on the podcast, “It’s very easy. Starlink will be made public.”
star link pricing
Starlink is the satellite broadband unit of SpaceX, which dominates the commercial space launch market. It gained attention last year due to the war in Ukraine, where user terminals proved important to against Russian aggression, helping the military stay in touch with each other and leaders in Kyiv despite attacks on infrastructure.
Starlink’s valuation “will be at least half of SpaceX’s current private value,” Palihapitiya predicts.
That would put it at about $75 billion, the Calacanis host noted. Between November, Bloomberg reports that SpaceX is in funding talks that will value it at more than 150 billion USD.
musk itself said in early 2021 that Starlink will go public once its cash flow can be “reasonably” predictable.
“I think it will go public and I think that will be the best chance we have to open up capital markets in 2023,” Palihapitiya said on the podcast.
Like AssetNewsletter Terms of Use of Note this week“US IPO market basically died last year.”
Matt Kennedy, senior IPO strategist at Renaissance Capital, a provider of pre-IPO research, told Asset in December that the equity market environment is “the worst since the Great Recession.”
Musk appeared on All in his podcast a number of times. Besides, the name of Calacanis is emerging as a Potential new CEO for Twitterwhich Musk bought for $44 billion at the end of October, the same goes for one of the other four “buddies” on the podcast: David Sacks, who along with Musk is a member of “”PayPal Mafia” as a founding member of that company.
Palihapitiya noted that he himself is a Starlink customer, as is Calacanis, who said:
“People are underestimating the HEART [total addressable market] of this product. TAMs are not existing broadband connections, but secondary connections, which are connections where connections do not exist. It was on the RV, the bus, in the village.”
Palihapitiya notes that, for private jet users, Starlink can provide broadband at a fraction of the cost of other services.
But he also gave another reason for Starlink to IPO in 2023.
‘Breathing room’ for Musk
“I think the reason is for Elon to have full financial flexibility and do what he needs to do and—he talked about this in our group, about the difficulties and dangers of the margin loans and all that—he’s going to create breathing space for himself. This is the simplest and most obvious way for him to do it. It will give him a lot of dry powder.”
Early December, Bloomberg report that Musk’s bankers are considering offering him new margin loans backed by Tesla stock to replace some of the high-interest debt in his Twitter deal.
That follows Musk personally spending billions of dollars buying Twitter and sell Tesla shares to help make it happen.
Last month, during a podcast appearance, Musk reiterated his view that the economy is long overdue for a recession and said: “I strongly advise people not to have margin debt in a market. Stocks are volatile and you know, from a cash standpoint, keep the dough dry. You can get some pretty extreme things happening in a bear market.”
This story was originally featured on Fortune.com
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