How to Invest in SpaceX

Many of entrepreneur Elon Musk’s companies have generated life-changing returns for early investors. The ascent of Tesla Inc.’s stock to a $1 trillion valuation in 2021 and approximately 600% return from the start of 2018 to the end of 2022 has investors hoping to get in early on Musk’s next company. SpaceX has been around for over 20 years, but investors using Tesla and PayPal’s historical performances as any indication will want to get in as soon as possible. Investing in SpaceX stock is a bit more convoluted than buying a publicly traded stock, but this article will share some ways to get portfolio exposure into the company.

Startup funding can yield generational returns if you buy equity in the right companies during their early stages. It took Alphabet Inc.’s Google and Apple Inc. decades to reach trillion-dollar market caps, and they needed early investors to continue running. Not every startup investment will turn into Google or Apple, and most of them may not even reach billion-dollar market caps. In fact, most startups fail, but investing in one startup like SpaceX can compensate for several blunders along the way.

If you want to buy SpaceX stock the conventional way, you’re out of luck for now. SpaceX does not trade on public exchanges, and buying Tesla shares does not give you exposure to SpaceX stock. You can’t buy a share of SpaceX that fluctuates based on the company’s performance and market conditions.

Although you can’t invest in SpaceX directly, it’s still possible to indirectly start a position in the space tech company. The methods shared below require more research. You will have to determine whether these solutions have exposure to SpaceX right now or could start a position in the future.

When you think of Bank of America and Google, do you think of SpaceX? It’s understandable why SpaceX wouldn’t come to mind, but both of these corporations have positions in SpaceX. Buying Bank of America and Google shares would provide an indirect position to SpaceX. 

The disadvantage of this approach is that you aren’t getting much of a position in SpaceX, relatively speaking. No one buys Bank of America or Google stock thinking about SpaceX. If these companies’ underlying businesses decline, their stock prices will go down. SpaceX can zoom higher during that same time, but you wouldn’t notice if Bank of America and Google report bad earnings. Bank of America and Google have great businesses on their own. Investing in SpaceX with this strategy is more of a bonus than the main reason you would invest.

Hedge funds have more investment choices, even assets off the market. Some of these hedge funds invest in early-stage startups like SpaceX and other alternative assets. These funds can invest side by side with institutional investors, and some hedge funds have made their portfolios more accessible to retail investors. You don’t have to be an accredited investor to start a position in a hedge fund that could own SpaceX shares or make that investment in the future. Hedge funds let you indirectly become a pre-initial public offering (IPO) investor.

SpaceX has generated attention because of its innovative technology and connection with Musk. The company is private, making it more difficult for retail investors to get exposure. But you can get indirect exposure through hedge funds and companies that own positions in the emerging space tech company.