How to Buy Starlink Shares
Experts predict Elon Musk’s ground-breaking internet company, Starlink, to go public in 2022.
With the ability to leverage engineering and technology from Musk’s aerospace manufacturer, SpaceX, Starlink targets a gap in the global telecommunications market, aiming to provide high-speed internet services to remote locations via low-orbiting satellite technology.
So, how can you be an early investor in Starlink’s future?
In this article, we look at:
- what is Starlink
- Starlink’s IPO outlook and target market
- what is an IPO
- and how you can buy Starlink shares at their initial IPO price when they become available
What is Starlink?
Starlink is an internet broadband provider utilising unique satellite technology to provide faster internet connections to more remote locations across the globe.
Many share the need for high-speed, reliable internet in remote locations, from large businesses and government organisations operating in remote areas to personal customers requiring internet for remote working, video calls and gaming.
Currently, no other internet providers can provide services at the speeds Starlink can offer in remote locations, due to their low-orbit satellite technology.
From the satellites that Starlink has already launched, customers can expect to get download speeds between 100 Mb/s and 200 Mb/s and latency as low as 20ms in most locations.
The company aims to launch 100% of its satellites into orbit by 2027, and Elon Musk expects the total amount invested into the project to be between $20-$30bn.
Floating the company on an American stock exchange will likely raise a large amount of deployable cash for the company to achieve its goals.
As private investors and shareholders still hold Starlink at the moment, it is difficult to know exactly how much has been invested in the company and get an accurate valuation of its shares; however, in February 2021, Starlink was valued at $72bn.
What is an IPO?
IPO stands for Initial Public Offering, and it is the process of a company offering its shares to the general public for purchase via a stock exchange.
A private or unlisted company not trading on a stock exchange can only raise funds from private investors – their shares aren’t available to everybody and aren’t easily tradable.
This is why when a company lists their shares on a stock exchange, it typically leads to large investment volumes.
To reflect this increased investment activity, a company will try to gauge its shares’ fair and accurate valuation before making them public to ensure they remain as stable as possible after launch.
However, companies often over or underestimate the value of their shares compared to demand on the market, and IPO share prices can be volatile in the short term after launching.
This can be compounded by traders attempting to make short term profits from this volatility as there is often a lot of publicity and interest surrounding IPOs, particularly for companies already in the public eye like Starlink.
Starlink IPO Outlook and Target Market
According to Elon Musk, high-speed satellite internet access cannot be free, so the project must cost money.
All the equipment for the company is expected to cost between $10 billion and $15 billion.
According to the business plans, by 2025, the company should earn $30B per year and is expected to have 40M customers.
When is Starlink’s IPO, and what are the details?
At the time of writing, Starlink’s IPO is predicted to launch in 2022, although there is no confirmation of this and no guaranteed date as of yet.
We look to updating this page as soon as the dates are confirmed.
However, to guarantee instant updates on Starlink’s IPO, an IPO platform Freedom24 that we work closely with offers a subscription service providing updates on Starlink and other company IPOs via email or SMS, so you can ensure you’re among the first to hear about any announcements.
How do I invest in Starlink’s IPO?
You need to open an investment account in which to purchase new stocks at their initial (IPO) price.
Freedom Finance is a leading EU stockbroker, and their investment accounts, available through their trading platform Freedom 24, grant you exclusive access to hundreds of IPO opportunities, including Starlink’s potential IPO listing.
Freedom Finance provides access to over one million trading instruments, including stocks, ETFs, bonds, futures, and options on major American, Asian and European exchanges. It offers the lowest price for US options in Europe – just $0.65 per contract, and you can also benefit from a USD savings account with an interest rate of 3%.
How can I buy IPO shares?
Due to the popularity of IPO investments, the total number of applications for IPO shares usually far exceeds the available amount from the company.
This means that most investors aren’t allocated all of the shares they try to purchase and instead are only granted a percentage of what they try to buy.
For Freedom24 customers, your allocation of shares is based on your Freedom24 customer rating.
So, the higher the customer rating you have, the more shares you will be eligible for when an IPO like Starlink launches.
How to boost your Freedom24 customer rating
If you’re looking to maximise the number of new stocks you can secure at the IPO price for a stock like Starlink, you’ll need to create an account in advance and build up your customer rating by trading and investing through your account.
The more you use your account for buying and selling stocks and shares, the higher your rating will be, and the greater number of stocks at the IPO price you will be eligible for.
How do I open a Freedom24 IPO account?
- Firstly, open an account on the Freedom24 platform – You can do this in a matter of minutes, and you’ll just need to provide some basic personal information like your email address and contact number, and some proof of ID documents which can be uploaded electronically
- Add money to your investment account – you can use a debit card and start buying and selling shares
- Take a look at other IPOs on offer – you will be alerted when Starlink’s IPO launches
- When you’ve chosen an IPO to invest in, apply to purchase stock at the original price and confirm the amount you want to invest
- The day before the company’s IPO, your applied amount will be locked in your account for trading. Any unused funds will be refunded to your account the next day
- After the IPO date, there is a lock-up period of 93 days, during which your IPO shares cannot be sold to avoid the impact of volatile market fluctuations
- On the first trading day after the lock-up period, receive your new shares at the IPO price – From here, you can either sell them immediately or keep them as a long term investment.
Does it cost money to invest in IPOs?
Freedom24 offers a 0% trading commission deal for your account for the first 30 days after registering (excluding IPO stocks).
Making use of this 30 day grace period is the easiest way to build up your customer rating and make you eligible for more IPO stocks.
After this period, along with paying for the shares you purchase; you will likely incur some of the following charges for using an investment account and purchasing shares:
· Share Dealing Fees: Freedom Finance offers multiple different tariffs so you can choose one to fit your trading style and goals, and keep your fees to a minimum. If you trade regularly, for example, you’ll likely want to select a different tariff compared to somebody who plans to hold investments for the long term.
· Withdrawal Fees: Freedom Finance charge a transparent, flat rate fee of €7 for withdrawals from your account.
· IPO Price Share Dealing Fees: Opportunites to buy new stocks at IPO price are treated differently to regular share trading, and the commission for the purchase and sale of IPO stocks is always applied, even in the first 30 days of your account.
The commission you pay for buying new stocks at their IPO price depends on the value of available assets in your investment account on the day before the IPO.
The amount of the assets you have is comprised of your cash holdings plus the value of your existing investments:
- If your total assets are less than $20,000 — the IPO stock purchase commission will be 5% of your transaction amount
- Assets from $20,000 to $49,999 — the commission will be 4% of your transaction amount
- Assets more than $50,000 — the commission will be 3% of the transaction amount.
- And finally, the commission for selling stocks bought at IPO price is 0.5% of the sale transaction.
Make sure to read the T&Cs for your account to be clear on all of the exact charges you will incur.
No news, feature article or comment should be seen as a personal recommendation to invest. Prior to making any decision to invest, you should ensure that you are familiar with the risks associated with a particular plan. If you are at all unsure of the suitability of a particular product, both in respect of its objectives and its risk profile, you should seek independent financial advice.
Investments in securities and other financial instruments always involve the risk of loss of capital.
Investment in IPO may involve additional restrictions. The forecast or past performance is no guarantee of future results.