SpaceX's Internet Service, Starlink, Could Make the Company Worth $120 Billion

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Elon Musk's space exploration and rocket company, SpaceX, is working towards providing Internet connectivity for the world by sending a large number of satellites as part of its Starlink mission.

In May, Musk made a prediction that if the Starlink mission is successful it would bring between $30 billion to $50 billion net annual revenue to SpaceX's coffers.

Since then, however, Morgan Stanley has researched the matter further and estimates the amount to be $52 billion.

However, the report by Morgan Stanley points out that the estimate is dependent on whether SpaceX market shares rise or fall. If they rise, SpaceX could be worth $120 billion, but if they fall, they could be worth as 'low' as $5 billion.

What is Starlink?

First things first, Starlink is a mission that will send a large number of Internet satellites that would be hovering above Earth between 100 to 1,000 miles (160.9 to 1,609 km) away. Starlink would be in direct competition with older and larger current internet satellites, which stand at 22,236 miles (35,785.373 km) from Earth. A massive difference between Starlink and the other providers.

SpaceX's Internet Service, Starlink, Could Make the Company Worth $120 Billion — Starlink mission. *Source: SpaceX/Flickr*

If successful, Starlink's estimated 12,000 satellites would provide faster and wider-reaching Internet services. This would make Starlink the biggest and strongest Internet operator, with more than six times the number of satellites operating in orbit.

How would the satellites be launched into orbit? They would be launched through SpaceX's rockets, the Falcon 9 rockets. The rockets would thrust 60 table-sized satellites at a time into orbit.

Originally, the plan for SpaceX's launch of Internet satellites was due for 2027, but that date has been moved forward to 2020 or 2021.

SpaceX Files to Accelerate Starlink Commercialization Readiness to November 2020 https://t.co/PuulfckREw pic.twitter.com/K3fYQAN3CD
— mirajish (@mirajish1) September 13, 2019

Starlink in financial numbers

According to Morgan Stanley's report, if the 12,000-satellite-strong Starlink mission is successful, it could create quite a ruckus within the Internet industry.

The statement, named "SpaceX, Starlink, and Tesla: Moving into Orbit?" was sent to Business Insider on Tuesday, and predicted the base valuation of the company at $52 billion — roughly 50% more than the previous predictions.

Analysts from the report wrote, "This assumes that expanding access to the internet drives broadband penetration from 50% to 75% of the global population, with SpaceX able to capture ~10% of the incremental broadband subscribers."

However, as Business Insider reports, if all goes wrong and SpaceX struggles to lock in Internet customers, the company would only be worth $5 billion ("bear case" net worth). If all goes according to plan, it would have a ("bull case") net worth of $120 billion.

It would place SpaceX's in the game alongside General Electric, Verizon, JPMorgan Chase, and Fannie Mae.

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