SpaceX plans to raise $20 billion via bond market

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Days after the company’s IPO, SpaceX has decided to prepare to tap the bond market for $20 billion through its bankers. The company has raised a strong base of capital from which to fund its operations and capital expenditures. 

In the author’s view, the company has a strong history of cash burns and reflects Elon Musk’s aggressive stance when it comes to running companies. His highly futuristic investor profile has created a pattern of rapid cash burn. 

Based on available public reporting, Tesla appears to be the only Musk-led company to have established a consistent profitability track record, with xAI, The Boring Company, and X yet to demonstrate equivalent results."

While revenues for SpaceX are sizeable, the company still incurred a net loss of $4.28 billion on top of $4.69 billion in revenue.

Future revenue opportunities include a $30 billion deal with Alphabet and a $45 billion deal with Anthropic PBC, according to Bloomberg. 

Prior to the xAI acquisition, SpaceX was briefly in a profit-making position, disclosing $791 million in net profit in 2023 and a free cash flow of $105 million. Over the last twelve months, SpaceX has incurred $9.36 billion in net losses and –19.8 billion in free cash flow. Since the company’s founding in 2002, its financials have demonstrated a history of repeated cash burn. 

According to Bloomberg, SpaceX has indicated in its filing that it will be raising a substantial amount of money which it plans to use for capital expenditures. 

SpaceX is not the only company currently tapping bond and equity markets to raise cash. Tech heavy weights such as Microsoft and other large-cap firms part of the NASDAQ stock exchange are also looking to raise capital via share and bond sales to fuel their growth strategies when it comes to capturing the potential AI has to offer.

Summary

SpaceX’s capital demand is quite high relative to its peers on the NASDAQ. More data and earnings report are required to get a longer-term understanding of where the company is headed over the next 5 to 10 years. 

Research references

• SpaceX Bankers Prepare $20 Billion Bond Sale After Record IPO - Bloomberg
• TIKR data

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