SpaceX Google Stock Package: $94 Billion in Untouchable Paper Profits
The market has just witnessed one of the most striking examples of long-term venture capital success. Google has disclosed the value of its stake in SpaceX, and the numbers are impressive: the share package is estimated at approximately $94 billion. However, behind this astronomical sum lies a far more complex story than just a lucky bet.
How 10 years turned $1 billion into $94 billion
The roots of this position date back to January 2015. At that time, Google and Fidelity jointly invested $1 billion in SpaceX, acquiring nearly 10% of the company. SpaceX's total valuation at that point barely exceeded $10 billion. Since then, the company's value has grown enormously. In June, SpaceX went public at a price of around $135 per share, with a valuation reaching $1.77 trillion — the largest initial public offering in history. Google's stake has appreciated roughly 100 times. However, due to subsequent funding rounds, Google's share has been diluted, and it now owns about 5% of the shares.
Paper profit, not real cash
The most interesting aspect is how this profit has been reflected in Google's financial statements. The revaluation of the SpaceX stake added about $99 billion to Alphabet's quarterly profit, which reached $112 billion. But this is purely paper profit. Out of the $9.11 earnings per share, as much as $6.26 came from asset revaluation alone. Without this factor, the quarter would have been unremarkable. Moreover, this increase resulted in tax liabilities of $21.9 billion.
The market reacted cautiously to the report: Google's shares fell by about 1.2%. Investors were far more concerned about record spending on artificial intelligence — the company spent $44.9 billion on AI in the quarter, which was $5.9 billion more than its earnings.
A "frozen" asset and early signals
A key nuance: Google cannot simply sell this stake and use the proceeds. According to the financial statements, $80 billion of the $94 billion is locked up, while the remainder will be unlocked later. The real test will come after the lock-up period ends, when Google has the opportunity to exit the position. Incidentally, after the IPO, SpaceX shares surged above $200, but by July 23, they had fallen to around $114. The first lock-up expires in August — at the same time, SpaceX will report as a public company for the first time.
From my perspective, this case is a brilliant example of venture capital patience, but it also highlights how volatile and illiquid "paper" profits from high-tech assets can be. The real value of this investment for Google will only become apparent when the shares can be converted into actual cash flow. For now, it is an impressive but still virtual success.