Elon Musk’s buddies in Silicon Valley are predicting he’ll emerge laughing from his yr of record-breaking wealth destruction

Tesla CEO Elon Musk recently broke a world record for the biggest lack of a private fortune in history, having shed an estimated $182 billion since November 2021 (one other estimate puts it closer to $200 billion). But he could enjoy a serious turnaround this yr, in line with Silicon Valley insiders, and it will be due to one in all his other corporations, SpaceX.

These insiders are two distinguished Bay Area enterprise capitalists, Jason Calacanis and Chamath Palihapitiya, who once garnered the nickname “SPAC King” for his quite a few investments in special purpose acquisition corporations. Each longtime Musk associates, they were speaking on the All-In podcast in regards to the outlook for 2023. Calacanis’s closeness to Musk was revealed in court, when his private text messages to the Twitter CEO were disclosed as a part of the Twitter acquisition lawsuit, including his oath of fealty: “Board member, adviser, whatever…you’ve gotten my sword. Put me in the sport coach! Twitter CEO is my dream job.” In order that they are likely biased in favor of Musk, but they see one clear way the world’s second-richest man can recuperate some swagger in 2023.

Asked what can be the most important business deal of the yr, Palihapitiya said on the podcast, “This one is straightforward. Starlink will go public.”

Starlink valuation

Starlink is the satellite-broadband unit of SpaceX, which dominates the marketplace for business space launch. It gained attention last yr as a consequence of the war in Ukraine, where its user terminals proved crucial to resisting Russia’s invasion, helping troops stay in contact with one another and leaders in Kyiv despite attacks on infrastructure.

The Starlink valuation “will likely be at the very least half of SpaceX’s current private price,” Palihapitiya predicted.

That might put it at roughly $75 billion, host Calacanis noted. In mid-November, Bloomberg reported that SpaceX was in funding talks that may value it at greater than $150 billion.

Musk himself said in early 2021 that Starlink would go public once its money flow may very well be predicted “reasonably well.”

“I feel it’s gonna go public and I feel it’s gonna be the most effective probability now we have of opening up the capital markets in 2023,” said Palihapitiya on the podcast.

As Fortune’s Term Sheet newsletter noted this week, “the American IPO market was mainly dead last yr.”

Matt Kennedy, senior IPO strategist at Renaissance Capital, a provider of pre-IPO research, told Fortune in December that the equity capital markets environment was “the worst it’s been because the great recession.”

Musk has appeared on the All In podcast himself quite a few times. Besides Calacanis’s name being floated as a potential recent CEO for Twitter, which Musk acquired for $44 billion in late October, the identical goes for one more of the 4 “besties” on the podcast: David Sacks, who was together with Musk was a member of the “PayPal Mafia” as a founding member of that firm.

Palihapitiya noted that he himself is a Starlink customer, as did Calacanis, who said:

“Persons are underestimating the TAM [total addressable market] of this product. The TAM just isn’t existing broadband connections, it’s second connections, it’s connection where connections didn’t exist. It’s on RVs, buses, in villages.”

Palihapitiya noted that, for users of personal jets, Starlink can provide broadband at a fraction of the price of other offerings.

But he also provided one more reason for a Starlink IPO in 2023.

‘Respiration room’ for Musk

“I feel the rationale why is that to ensure that Elon to have complete financial flexibility and to do what he must do and—he talked about this on our pod, in regards to the difficulties and the hazards of margin loans and all of that stuff—he’s gonna create respiration room for himself. That is the only and most evident way for him to do it. It’ll give him a ton of more dry powder.”

In early December, Bloomberg reported that Musk’s bankers were mulling providing him with recent margin loans backed by Tesla stock to interchange a number of the high-interest debt on his Twitter deal.

That followed Musk personally putting up billions when he purchased Twitter and selling Tesla shares to assist make it occur.

Last month, in an appearance on the podcast, Musk reiterated his take that the economy is overdue for recession and said, “I’d really advise people to not have margin debt in a volatile stock market and you understand, from a money standpoint, keep powder dry. You possibly can get some pretty extreme things happening in a down market.”

This story was originally featured on Fortune.com

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