How to Invest in SpaceX🚀? Exploring Opportunities Beyond IPO

SpaceX, Elon Musk's pioneering aerospace company, is the leader in space exploration and one of the most sought-after investment opportunities. Despite its dominance and appeal, SpaceX remains privately held, leaving retail investors unable to buy its shares directly. However, there are several indirect ways to gain exposure to SpaceX and participate in its growth potential. 

Here's an in-depth look at various investment options:

EntrepreneurShares ETF (Ticker: XOVR)

XOVR ETF offers a simple and cost-efficient way for retail investors to gain indirect exposure to SpaceX. Unlike private funds limited to accredited investors, XOVR is accessible to all and invests heavily in entrepreneurial companies, including SpaceX.

SpaceX Allocation: 10.41% of market value

Expense Ratio: 0.75%

Liquidity: High, widely available on platforms like Schwab, Fidelity, Robinhood, and IBKR

Key Features: Invests 85% of its assets in the ER30TR Index, focused on U.S. entrepreneurial companies. Low fees and strong liquidity make it an excellent option for retail investors.

XOVR is a growth-focused fund offering meaningful SpaceX exposure, suitable for investors seeking accessible and cost-effective options.

ARKK Ventures Interval Fund (Ticker: ARKVX)

Known for its emphasis on disruptive innovation, ARKK Ventures provides another pathway to SpaceX ownership by investing in both public and private companies.

SpaceX Allocation: 9.74% of market value

Expense Ratio: 5.76%

Liquidity: Quarterly redemptions capped at 5% of fund assets

Key Features: Focuses on innovation and disruptive industries. Includes a mix of small-cap and micro-cap stocks, adding growth potential but also higher risk.

Conclusion: While ARKVX provides exposure to SpaceX, its high fees and limited liquidity may deter some investors.

Destiny Tech 100 Closed-End Fund (Ticker: DXYZ)

Destiny Tech 100 invests in high-growth tech companies, including private equity stakes in SpaceX.

SpaceX Allocation: 3.16% of market value

Expense Ratio: 5.33%

Liquidity: Daily

Key Concerns: SpaceX exposure is overstated, with actual allocation closer to 3%. The fund trades at a 10x premium to net asset value, implying an inflated SpaceX valuation of $3.5 trillion (versus its estimated $350 billion). Past portfolio adjustments reveal significant markdowns.

Conclusion: High fees and questionable valuation practices make DXYZ a less attractive choice for most retail investors.

Baron Partners Fund (Ticker: BPTRX)

Baron Partners Fund is a traditional mutual fund and an early investor in SpaceX.

SpaceX Allocation: 9.8% of market value

Expense Ratio: 2.44%

Liquidity: Daily

Key Concerns: Overexposure to Tesla, accounting for 52.5% of its portfolio, introduces significant volatility.

Conclusion: While it offers substantial SpaceX exposure, the fund's Tesla dependence increases its risk profile.

Alternative Pathways to SpaceX Exposure

Join SpaceX as an Employee: SpaceX offers stock options and equity grants to employees, making it the most direct way to gain ownership. This option, however, is limited to those who qualify for employment at the company.

Invest in Alphabet (Ticker: GOOGL): Alphabet holds a minor stake in SpaceX, acquired through a $900 million investment in 2015. However, this stake is negligible, representing less than 0.04% of Alphabet's market cap. While holding Alphabet provides indirect exposure, it is not a meaningful strategy for SpaceX investment.

Private Equity Secondary Markets: Platforms like Forge Global and EquityZen facilitate private trades of SpaceX stock. However, these platforms cater to accredited investors and involve high fees (2-10%) and complex legal requirements. Secondary markets are viable for high-net-worth individuals but remain impractical for retail investors due to costs and liquidity constraints.

Wait for a SpaceX IPO: SpaceX's long-awaited IPO would provide the most direct access to its shares. However, the timing remains uncertain, and much of the company's value might already be realized before it goes public. Patience could pay off, but potential gains may be limited depending on the IPO valuation.

Final Thoughts

For investors seeking exposure to SpaceX's growth, XOVR and BPTRX offer the most practical and liquid options. However, each investment avenue comes with its unique set of risks and rewards. Whether through ETFs, mutual funds, or private equity platforms, aligning investment choices with risk tolerance and financial goals is essential. As the world anticipates SpaceX's continued innovation, indirect investment opportunities provide an exciting way to be part of this groundbreaking journey.