TOPSHOT – The SpaceX Starship lifts off from Starbase near Boca Chica, Texas, on October 13, 2024, … [+] for the Starship Flight 5 test. SpaceX successfully “caught” the first-stage booster of its Starship megarocket Sunday as it returned to the launch pad after a test flight, a world first in the company’s quest for rapid reusability. (Photo by SERGIO FLORES / AFP) (Photo by SERGIO FLORES/AFP via Getty Images)
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The race to explore the cosmos has never been more competitive, and at the forefront of this new space age is SpaceX. With its revolutionary technology, cost-efficient launches, and global projects like Starlink, SpaceX isn’t just reaching for the stars—it’s already there, changing the way we think about space travel and the future of commercial space exploration. But what does this mean for investors? Can SpaceX’s skyrocketing potential translate into incredible return? Can retail investors even participate, or will you miss the liftoff?
When it comes to launching payloads into space, cost is a major factor. NASA, the long-established leader in space exploration, spends a staggering $54,000 for every kilogram of payload sent into orbit. In contrast, SpaceX has brought that price down to a jaw-dropping $150 per kilogram. This efficiency alone gives SpaceX a massive competitive edge, allowing them to offer affordable launch services to private companies, governments, and even non-profit organizations around the world.
But it gets better. While NASA’s average cost per launch hovers around a massive $2.2 billion, SpaceX achieves the same mission for just $10 million. This vast difference in cost isn’t just impressive—it’s revolutionary for the future of space exploration and commercial space endeavors.
Launch Frequency
The rate at which SpaceX launches rockets is another area where the company shines. SpaceX sends 135 rockets into space every year, compared to NASA’s 135 rockets over 30 years. This exponential difference in launch frequency is a testament to SpaceX’s robust capacity to serve the commercial and scientific space markets. This rapid pace also positions SpaceX as a dominant force in the space launch industry, enabling it to outpace competitors and meet increasing demand for space exploration.
The Power of Starlink
One of SpaceX’s most exciting initiatives is Starlink, the company’s satellite internet service. While most people associate SpaceX with launching rockets, Starlink has become a key player in its long-term growth strategy. The idea is simple yet ambitious: provide high-speed internet to remote and underserved areas around the world using a network of low Earth orbit satellites.
As of now, Starlink is already operational, offering internet to places that have long been left out of the digital revolution. This not only creates a new revenue stream for SpaceX but also positions the company as a global leader in the telecommunications space. With the potential to bring connectivity to billions of people, Starlink could significantly boost SpaceX’s profitability over the next decade, adding even more value to the company’s already impressive portfolio.
The Sky’s the Limit
SpaceX’s meteoric rise in the space industry has naturally led to speculation about its valuation. Two years ago, the company was valued at $100 billion, but with the continued success of its rocket launches, Starlink’s rapid expansion, and future projects like the Starship mission to Mars, that number is likely to be much higher today.
However, despite this explosive growth, SpaceX remains a private company, meaning retail investors don’t have a direct way to buy shares on the stock market. This creates a challenge for those who want to get in on the action. But not to worry—while you can’t buy SpaceX stock directly, new opportunities for retail investors are emerging.
One way investors can gain exposure to SpaceX is through closed-end funds that include SpaceX as part of their portfolio. However, there are a few downsides. First, investors are often paying a huge premium to net asset value (NAV)—sometimes as high as 12.5 times the underlying value. Additionally, these funds charge management fees in the range of 2.5% to 3%, which can erode long-term returns.
XOVR ETF: A Smarter Option
For those looking for a more accessible and cost-effective way to invest in SpaceX, the XOVR ETF offers a compelling alternative. This exchange-traded fund provides exposure to SpaceX (which holds the largest position in the fund), and it comes with several key advantages:
Daily liquidity, allowing investors to buy and sell shares like any other stock.
No minimum investment, making it an option for retail investors of all sizes.
A fee of just 75 basis points (0.75%), about a third of the cost of closed-end funds.
With the XOVR ETF, investors can gain exposure to SpaceX’s incredible growth potential without dealing with the inflated premiums or high fees that come with other investment options. Currently, SpaceX is the top holding in XOVR ETF.
Why SpaceX’s Growth Matters
The growing interest in SpaceX, both as a technology company and as an investment opportunity, is no accident. The company’s cutting-edge innovations are not only revolutionizing space travel but also setting the stage for future advancements in telecommunications, artificial intelligence, and global connectivity.
For investors, SpaceX represents a unique opportunity to support a company that is paving the way for the next frontier of human progress—whether that’s launching humans to Mars, providing internet access across the globe, or transforming the commercial space market. The sky’s the limit for SpaceX, and as the company continues to break new ground, its valuation is likely to soar even higher.
Conclusion:
As SpaceX continues to reach new heights, the question remains: are you ready to join the liftoff? Whether through closed-end funds or the more accessible XOVR ETF, there are opportunities for retail investors to participate in this exciting journey. But with the stock priced at a premium and fees to consider, it’s important to carefully weigh the risks and rewards before blasting off.
SpaceX is shaping the future of space exploration—and with it, the future of investment opportunities. Are you ready to get on board?
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