This is the first time SpaceX has performed a stock split. The value of its common stock will be split 10-for-1 as the total value of SpaceX goes beyond $100 billion.
1. Attracting investors
Elon Musk’s SpaceX is trying to make the company’s share price more accessible and thus attract a greater number of investors. In doing so, the company also hopes to improve the liquidity of its shares.
According to a company-wide email obtained by CNBC, the split means that for each share of SpaceX stock owned as of February 17, a holder now has 10 shares after the conversion. With SpaceX valued at $560 a share during its most recent sale, the split reduces SpaceX’s common stock to $56 a share.
The split has no impact on the overall valuation of the company or on the overall value of your SpaceX holdings.SpaceX
In recent years, the American aerospace manufacturer has seen its value soar with each fundraising. Musk’s SpaceX carries great ambitions which need large financial means particularly for two crucial projects: the next generation rocket Starship and its global satellite internet network Starlink.
2. Splitting stocks
Stock splits are typically performed by companies wanting to make their shares more accessible or more manageable. That has been the case for high-growth tech companies such as Apple or Alphabet – Google’s parent company. In August 2020, Tesla announced a 5-for-1 split, offering every Tesla shareholder five shares of the company for each share of Tesla they owned.
After the surprising announcement from SpaceX, it is rumoured that the e-commerce giant Amazon could follow suit. The action of the company founded by Jeff Bezos is currently trading at $3,052, with a market value of $1.55 trillion.
SpaceX has launched nearly 2,000 satellites under the Starlink name and has applied for licences to fly more than 40,000. Amazon’s Project Kuiper will comprise more than 3,000 satellites.