Elon Musk’s space exploration company, SpaceX, is reportedly selling insider shares with a premium valuation pegged at $140 billion. As per Bloomberg, the shares are up for grabs at $77 a piece. The current valuation represents over a 10% increase from its July valuation of $127 billion, as per Pitchbook. It is not clear if the company will raise money through the primary funding round at this rate.
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SpaceX is Musk’s brainchild and was built with the mission to commercialize space travel. The company manufactures and launches advanced rockets and spacecraft.
Alternatively, SpaceX also owns Starlink, the low-latency, high-speed internet service provider. Earlier this year, Musk informed employees that Starlink could be spun off through an initial public offering (IPO) in 2025 or later.
Since July, SpaceX has launched several successful space missions. Among them is the National Aeronautics and Space Administration’s (NASA) sending of yet another crew of cosmonauts to the International Space Station. Additionally, its unit, Starlink, recently received approval from the Federal Communications Commission (FCC) to launch up to 7,500 Gen2 Starlink satellites.
Meanwhile, Gary Black, the Managing Partner of The Future Fund LLC and a strong Tesla (NASDAQ:TSLA), advocate tweeted the possibility that the insider share sale at SpaceX could mean that Musk is avoiding selling TSLA stock to fund his other failing baby, Twitter.
Is Buying Tesla Stock Risky?
The overhang on Tesla stock due to Musk’s Twitter escapades continues to linger. Analysts also have a Moderate Buy consensus rating on Tesla stock based on 19 Buys, eight Holds, and two Sell ratings. on TipRanks, the average Tesla price target of $305.50 implies 82% upside potential to current levels. Year to date, TSLA stock has lost 58%.
Interestingly, Black also lists the catalysts for TSLA stock, which include the Twitter overhang and Tesla’s planned stock buybacks. Nonetheless, based on his calculations, the price target for TSLA stands at $550, which implies an exorbitant 228% upside potential to current levels.
