Why SpaceX investors aren’t concerned about Musk taking Tesla private

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Musk’s vision for SpaceX is to push humanity to become a species living on multiple planets. That vision is “big, bold and long-term,” a second investor said.

SpaceX, a space transportation services company founded by Musk in 2002, has become one of the most valuable private companies in the world, worth an estimated $28 billion. The expectation has been that at some point, it will list shares on the stock market, allowing private investors a chance to cash out and others a chance to buy in. But any initial public offering is likely well in the future.

“He needs to stay private with SpaceX so he can achieve this,” the second investor said. “I think everybody who’s put money in it understands that there’s not a chance of an IPO until they make it to Mars.”

SpaceX President and COO Gwynne Shotwell told CNBC in May that the company “can’t go public until we’re flying regularly to Mars.”

“One way or another, it’s not until then, at a minimum,” she said.

But Musk’s frustration with public markets bubbled over this week. He told Tesla employees and the world on Tuesday that he wants to take his electric car maker private, citing the volatility of the quarterly earnings cycle and being the target of traders who have bet against the company.

Even as Musk’s take-private plan for Tesla raises questions about the possibility of a SpaceX public offering, investors who talked to CNBC said they remain confident that an IPO will happen – even if it’s a long way off. The thought that SpaceX might never do an IPO “never even crossed my mind,” the second investor said.

“I am confident that if Elon decides to go for an IPO for SpaceX, bankers will line up to syndicate the deal and the IPO will be oversubscribed,” the third investor said.

The need for money from an IPO isn’t immediate. SpaceX has steadily raised private funding “as we need it,” Shotwell said.

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