How a $900 million bet on SpaceX turned 100x into $94 billion for Alphabet
Alphabet's initial $900 million SpaceX investment is now worth approximately $94 billion. This significant return makes Alphabet the largest institutional shareholder in the rocket company. Other early backers like Fidelity Investments and Saudi Arabia's PIF also hold substantial stakes.
In 2015, Alphabet, the parent company of Google, made a $900 million investment in SpaceX, a rocket company founded by Elon Musk. This bet proved to be a resounding success, as the value of Alphabet's stake in SpaceX has skyrocketed to approximately $94 billion by the end of June, marking a 100-fold increase.
Following the IPO of SpaceX in June, Alphabet emerged as the largest single institutional shareholder in the company. Other notable investors who disclosed their holdings post-IPO include Fidelity Investments, Saudi Arabia's sovereign wealth fund, Public Investment Fund, Hancock Prospecting, the holding company controlled by mining magnate Gina Rinehart, and several others.
As per the 13F filings, the top five largest reported holders of SpaceX shares accounted for nearly three-quarters of the company's total shares. Alphabet alone held 551.2 million SpaceX shares, valued at about $94.2 billion at the end of the quarter, based on SpaceX's June 30 share price of $170.86.
Other significant shareholders include Fidelity Investments, which held 302.6 million SpaceX shares, and Gigafund Management, which owned 171.8 million shares. Saudi Arabia's PIF held 154.1 million shares, while Baillie Gifford had 51.4 million shares, and BlackRock owned 51 million shares. Hancock Prospecting held 8 million shares.
Elon Musk, the founder of SpaceX, owned a 48.4% stake in the company. SpaceX made its debut on June 12 at $135 per share, with the stock closing at $141.29 on Thursday, up 4.7% from its IPO price but down 17.3% from its June 30 close.
Currently, SpaceX remains one of the most actively traded stocks among Interactive Brokers customers. However, there was a brief dip in shares on Thursday, as the market anticipated the expiry of the first lockup period. Despite this, SpaceX shares have still seen a 30% increase since August 5. Retail investors turned net sellers for the first time since the IPO, selling a net $4.5 million worth of shares on Friday, according to Vanda Research.
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