SpaceX needs to achieve 2 of its moonshots to keep valuation: Steve Westly

Elon Musk will need to achieve at least two of three “lunar breakthroughs” to justify SpaceX’s massive valuation, a former Tesla board member told CNBC on Friday.

Musk’s reusable rocket company plans to raise $75 billion by selling 555.6 million shares for $135 each, according to a filing with the Securities and Exchange Commission. The deal values ​​SpaceX at $1.77 trillion, making it the seventh most valuable company in the United States. Tesla’s.

Venture capitalist and former Tesla board member Steve Westly told CNBC’s “Squawk Box Europe” on Friday that it would be difficult to predict the price of SpaceX’s upcoming IPO because its three parent companies are “completely different.”

In addition to its space business, Musk’s company also owns the Starlink satellite internet service, which accounts for the bulk of its revenue and is its only profitable unit. It also includes xAI, which Musk merged with SpaceX in February.

“SpaceX is doing three moonshots in one company, but I think at least two of those moonshots need to be successful to maintain a $2 trillion valuation,” said Westly, who is also the founder of venture fund The Westly Group.

SpaceX achieved its goal of becoming the largest IPO in history.

The number of underlying businesses could grow even larger as speculation grows that Musk may eventually merge Tesla with SpaceX. CNBC reported in May, citing people familiar with the matter, that Tesla and SpaceX already have a list of shared resources and that Musk had discussed the possibility of bringing the companies together with colleagues.

Westly told CNBC’s Arjun Kharpal that a move to bring Tesla into SpaceX is “definitely likely.”

“It’s going to be a difficult situation. There’s going to be a lot of governance issues, people are going to have complaints about it, but… I think there’s a good chance of it happening,” he added.