Google eyes billions in gains as SpaceX valuation nears $800B
What's the story
Alphabet, Google's parent company, is set to witness a major paper gain from its investment in SpaceX. The upcoming tender offer has valued the private aerospace manufacturer and space transport services company at around $800 billion, a significant jump from earlier valuations. This increase will likely raise the carrying value of Google's long-held investment in Elon Musk's venture.
Investment timeline
Alphabet's investment history in SpaceX
Alphabet has been investing in SpaceX since at least 2015. The company, along with Fidelity Investments, participated in a $1 billion funding round for a combined stake of about 10% at the time. Back in April, the company reported an $8 billion unrealized gain associated with its investment in a private company, widely believed to be SpaceX. This was after a tender offer late last year that valued the company at around $350 billion.
Reporting practices
SpaceX's valuation changes and Alphabet's financial reporting
Though Alphabet doesn't specify individual private holdings in its financial filings, changes in SpaceX's valuation have previously been reflected in earnings as "unrealized gains on non-marketable equity securities." With the latest tender offer indicating a much higher valuation for SpaceX, investors are likely to keep a close eye on Alphabet's next earnings report for indications of another potential accounting boost.