This Hedge Fund Has Billions Invested in SpaceX
Key Points
SpaceX is a long-term conviction for Phillippe Laffont.
Laffont believes SpaceX could be a $10 trillion company someday.
Space Exploration Technologies (NASDAQ: SPCX) was an exciting IPO, with a large rise on day one followed by a few days of strong gains before selling off. However, the stock seems to have settled into the $135 per share range over the past few weeks, which is exactly where it was supposed to debut on the public markets.
There may have been a few funds that purchased shares at the beginning or after the sell-off, but there's one notable one that has been a SpaceX investor for a long time: Coatue Management, run by billionaire Philippe Laffont. Coatue didn't buy into SpaceX at the IPO. Instead, it invested in the company in an earlier investment round that then turned into the multi-billion-dollar position it has today.
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Just how big is it? Let's take a look.
Image source: The Motley Fool.
SpaceX is a major conviction for this fund
As of June 30, Coatue Management's SpaceX stake was $3.2 billion, and made up about 6.5% of its total holdings. That's a high-conviction bet, and shows that its initial SpaceX investment was sizable too, potentially over a billion dollars.
However, we'll have to stay patient to find out how strong Laffont's fund's conviction is.
SpaceX has a staggered lockup period that ends over the year following SpaceX's IPO. If Coatue Management holds on to its SpaceX shares over the next year, then it's committed to being a long-term investor in the business, rather than just looking to make a quick buck from a soaring stock price.
Laffont has spoken about the potential of space and artificial intelligence (AI) stocks, and these are both areas that SpaceX is involved in. In an interview with CNBC, Laffont noted that he believes there will be a $10 trillion company in this industry, and with his firm's major stake in SpaceX, it's clear that he believes that SpaceX is the best option. Because of that, I don't think this is a short-term investment -- Coatue Management is in it for the long haul.
I think this is the perfect mindset to have with SpaceX stock, as right now the financials don't coincide with the multi-trillion-dollar valuation of SpaceX. With SpaceX, you're investing in the future of space exploration and AI, both of which may take the next decade to fully manifest. However, if Laffont is right and SpaceX can become a $10 trillion company over the next decade, an investment today makes a lot of sense, as it would easily crush the market over that time frame.
Keithen Drury has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.