Alphabet’s $900 million SpaceX bet explodes to $94 billion after IPO, a 100X return

Alphabet’s early bet on SpaceX has turned into one of the biggest venture investment windfalls in corporate history.

Google’s parent company invested $900 million in Elon Musk’s rocket company in 2015. More than a decade later, Alphabet disclosed a SpaceX stake worth roughly $94.2 billion at the end of June, according to a Reuters analysis of quarterly regulatory filings. That puts the value of its position at more than 100 times its original investment.

Alphabet has emerged as the largest reported institutional shareholder in SpaceX following the rocket company’s blockbuster $86 billion IPO in June. The filing offers a rare look at just how valuable an early ticket into SpaceX became as the company moved from a closely held startup into the public markets.

Alphabet held 551.2 million SpaceX shares at the end of the second quarter. At SpaceX’s June 30 closing price of $170.86, those shares were worth about $94.2 billion.

The comparison is unusually clear. Alphabet publicly disclosed its $900 million SpaceX investment back in 2015, giving investors a benchmark for measuring what happened to that early stake.

The gain remains largely on paper. SpaceX shares closed Thursday at $141.29, putting Alphabet’s disclosed position at roughly $77.9 billion at that price. That is still about 86.5 times the original investment.

Alphabet sits atop a concentrated group of SpaceX investors

Alphabet is far ahead of other reported institutional holders.

Fidelity Investments ranked second with 302.6 million shares, followed by Gigafund Management with 171.8 million. Baillie Gifford reported 51.4 million shares, and BlackRock held 51 million.

Those five firms accounted for nearly three-quarters of the SpaceX shares reported in the filings Reuters analyzed, showing how concentrated institutional ownership is among a small group of investors.

Elon Musk remains in a different league. SpaceX disclosed in a separate regulatory filing that Musk owned 48.4% of the company.

Institutional filings have limits. The data reflects positions as of June 30 and does not capture trades made since then. It does not show which investors acquired shares before the IPO or whether those shares remain subject to lockup restrictions.

“It’s very, very difficult to tease out which of these institutions were holding pre-IPO shares,” Steve Sosnick, market strategist at Interactive Brokers, told Reuters.

Alphabet is one of the few cases where the trail stretches back far enough to make a meaningful comparison.

SpaceX went public June 12 at $135 per share. The stock closed Thursday at $141.29, 4.7% above its IPO price but 17.3% below its June 30 close. Shares have climbed 30% since August 5.

Investor appetite has remained strong. Sosnick told Reuters that SpaceX is one of the most actively traded stocks among Interactive Brokers customers, receiving a “fresh jolt of buying last week when market fears about what would happen when the first lockup expiry arrived proved to be unfounded.”

Retail sentiment may be shifting. Data from Vanda Research showed individual investors became net sellers of SpaceX shares Friday for the first time since the IPO, selling a net $4.5 million.

The bigger story stretches far beyond a few days of trading. Alphabet placed a $900 million bet on SpaceX when Musk’s company was still private and years away from proving the full commercial potential of Starlink and its launch business.

Eleven years later, that investment had a reported quarter-end value north of $94 billion.

For Alphabet, one of its most spectacular investments may have had nothing to do with search, advertising, Android, or artificial intelligence. It was a bet on rockets.