How do Russians invest in money from the future?
On May 30 at 22:22 Moscow time, SpaceX launched the Crew Dragon into space. It became the first private spacecraft in the whole history. As a result, the cost of the organization’s securities on over-the-counter trading platforms skyrocketed, and investors delved into a kind of a buzz. Forbes reporters discussed with Russian investors how they manage to buy SpaceX shares.
Technically, it is impossible to buy shares of the company on the Moscow Exchange or the St. Petersburg Stock Exchange, so the Russians have to bypass this with the help of OTC trading floors. There, SpaceX securities are worth about $250. Demand also remains at a fairly high level. A sales manager at United Traders said that all the company securities were sold in just a couple of hours. Then he offered to purchase a set of shares by pre-order, provided that it will cost at least $10,000.
The company has been investing in SpaceX since 2015, and bought the first securities at $143.35 per unit, said Alexei Makarov, a representative of United Traders.
It is difficult for the Russians and Chinese to become investors in SpaceX, but they successfully circumvent the bans with the help of OTC trading platforms. It’s worth noting that SpaceX’s management is closely monitoring the shareholder register. Therefore, investors acquire stakes in investment funds to get around any possible restrictions. Thus, they don’t participate in the register, but they profit from the company capitalization. United Traders, for example, buy a stake in a specialized organization through one of the counterparties, which is subject to American regulators and takes into account the requirements of SpaceX. Thanks to this, investors are not subject to verification. They don’t need a voice or access to certain types of information. Investors are pursuing purely economic interest.
SpaceX itself doesn’t need small investors, so it doesn’t sell stocks, but specialized companies. Such transactions have their own risks, since it is necessary to sort out the class of papers that the investor buys, in case the organization doesn’t go public.
Arctic Ventures is a relatively small fund of $13 million organized by Anton Alikov, a former partner of the Swiss fund Blackfort Capital AG, to invest in online education, healthcare, cybersecurity, aerospace technology and advertising. Like other investment funds, Arctic Ventures didn’t buy SpaceX shares directly, but through another fund. To get a package of company papers, you need to come to it with millions of dollars, Alikov said. To buy SpaceX shares, his fund had to become a member of an investor collaboration with another fund, MindRock Capital. During the March round of attracting investments, they managed to send an application for the purchase of shares in the amount of $4 million, and later for another $2.8 million, but they were able to receive only $1 million of shares.
Also, Alikov hopes for the “take-off” of one of the StarLink divisions, which will provide Internet access from anywhere in the world. The full-scale launch of the project is scheduled for 2021.
At the moment, the value of SpaceX reaches $36 billion. When the satellites enter orbit, it is likely that StarLink will separate from SpaceX, and investors will receive shares in both companies. Most likely, StarLink will cost much more.
Pavel Cherkashin, managing partner of MindRock Capital, said that he invested in SpaceX, as he is a fan of everything related to space. The investor suggests that Musk’s company can make a breakthrough in this industry. This will mean not only an increase in the capitalization of SpaceX itself, but also the scale of the market as a whole. This will be facilitated by three events: the already completed manned flight, the launch of StarLink and the creation of the StarShip rocket.
Other investors are confident that investors need the nerves of steel to support Elon Musk’s projects. Firstly, you need to go through some illegal procedures that are not consistent with US law to purchase shares. Secondly, many analysts believe that the company is overvalued. They are sure that the market is full of startups that can grow three to four times.