SOURCES: Stripe & SpaceX Are Buying Back Their Own Shares
SOURCES: Stripe & SpaceX Are Buying Back Their Own Shares
Plus, exclusive financial information on the two companies, both of which are cash-flow positive.
Private companies behave more and more like public companies every day.
Sources tell me that financial payments startup Stripe and the satellite and rocket ship company SpaceX have been buying back their own shares.
That’s common enough among public companies with a liquid market for their shares and the belief that investors are undervaluing the stock. But it’s quite unusual for private startups, which don’t generally have the cash to spare.
Stripe has at times interceded on secondary transactions and invoked its right of first refusal to buy its shares with its corporate balance sheet.
Those buybacks help to fight the dilution created by multiple funding rounds over the years, and create more upward pressure on the value of its stock.
Similarly, SpaceX has been buying up some of its own shares.
“It’s kind of a flex,” one investor observed. “We’d rather own more of our company that let others buy those shares.”
There’s one key shared explanation: sources tell me that both companies are cashflow positive.
Stripe burned through $550 million in cash in 2022.