Elon Musk has confirmed that Starlink—a satellite broadband internet provider developed by his company SpaceX—will eventually go public. The exact details of the IPO have not been announced. Here's how investors in Canada can prepare for the big event.
SpaceX (which owns Starlink) has started accepting preorders for its satellite internet service, Starlink. In a tweet on February 8, CEO Elon Musk said that the company will go public once it can "predict cashflow reasonably well."
But it can take a while for businesses with new products to start seeing regular, predictable cashflow. So an IPO could still be a ways out.
On October 8, 2021, it was revealed that SpaceX has a market valuation of over $100 billion. An agreement was reached allowing existing investors to sell private stock in SpaceX for $560 each. Up to $755 million in stocks can be sold. Back in February, private stocks were worth 33% less at $419.99 each.
We'll update this page as soon as we know more.
In September 2021, rumours resurfaced that Starlink's parent company, SpaceX, might go public. This came after Elon Musk responded to a tweet that revealed an email he had sent to SpaceX employees back in 2013.
In the email, Musk explained why it would not be in the company's best interest to go public. His reasons included the volatility of the tech industry, his belief that the company's valuation had not yet peaked and the risk of lawsuits prompted by stock price drops.
Musk's short, cryptic response to the tweet—"A lot has happened in 8 years"—aroused speculation that his attitude towards taking SpaceX public had changed. An IPO could bring some much-needed capital into the company, which has recently suffered significant financial setbacks due to production problems and a turnover in senior management.
The rumours that SpaceX may go public have yet to be confirmed, but the event may not be ruled out.
Note: all dollar amounts on this page are in US dollars unless otherwise stated.
Once Starlink goes public, you'll need a brokerage account to invest. Consider opening a brokerage account today so you're ready as soon as the stock hits the market.
You won't be able to buy Starlink stocks on a Canadian stock exchange like the TSX. Instead, you need a Canadian broker that provides access to international stock exchanges.
You can access US exchanges like the NYSE and the NASDAQ using Canadian trading platforms like Qtrade, Wealthsimple, Scotia iTRADE and CIBC Investor's Edge.
Interactive Brokers provides access to many stock exchanges outside North America like the Hong Kong Stock Exchange (SEHK), Korea Stock Exchange (KSE), National Stock Exchange of India (NSE), Frankfurt Stock Exchange (FWB) and London Stock Exchange (LSE).
It's impossible to predict how any stock will perform — and IPOs can be particularly volatile. Looking at the performance of similar companies can help you decide if now is a good time to buy Starlink stock.
See how the following stocks are performing, and view details like market capitalization, the price-to-earnings (P/E) ratio, price/earnings-to-growth (PEG) ratio and dividend yield.Canadians who earn dividends from US stock investments must pay the US Internal Revenue Service (IRS) a 15% withholding tax on their earnings. The rate goes down to 10% for bonds and other interest-yielding US investments.
An exception is made for stock investments held in trusts designed to provide retirement income. This includes RRIFs, LIRAs, LIFs, LRIFs and Prescribed RRIFs. RRSPs that hold US stocks, bonds or ETFs are also exempt from US withholding tax. RESPs, TFSAs and RDSPs are not exempt.
Canadian and international investment income must be declared on your Canadian tax return. Unless your US earnings are exempt from withholding tax, this means you'll be taxed by both the IRS and the CRA. The CRA may allow you to claim foreign tax credits for any taxes you've already paid to the IRS.
Speak with a tax professional to find out what rules and exceptions apply in your circumstances.
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