Blue Owl sells SpaceX stake at 10x return; raises dividend 25%, stock +11%

$1.25T valuation·$315B AUM·9.23% dividend yield…$1.75T expected at IPO

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Blue Owl Capital stunned the market on April 30 with Q1 earnings, announcing it sold half its SpaceX stake at a $1.25T valuation for 10x returns. Shares surged over 11% on the day.

Co-CEO Marc Lipschultz disclosed the details directly on the analyst call.

We achieved approximately 10x returns on SpaceX. We sold half at a $1.25 trillion valuation and continue to hold the remaining half.

Marc Lipschultz, Co-CEO of Blue Owl Capital

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How Blue Owl entered SpaceX

Blue Owl initially engaged with SpaceX as a lender. In 2021, it converted to equity, purchasing two classes of stock for approximately $27M. That investment ballooned into over $150M in unrealized gains, making SpaceX the largest contributor to unrealized profits in Blue Owl's Technology Finance Fund.

The $1.25T valuation basis came from SpaceX's February all-stock acquisition of Elon Musk's AI company xAI. Grok, X, and xAI's GPU infrastructure were consolidated into SpaceX.

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The remaining half could be worth more

Reports indicate SpaceX is targeting a June IPO at a $1.75T valuation—40% higher than Blue Owl's sale basis. The remaining half stake could appreciate proportionally.

As covered previously, a key IPO condition includes Musk's bonus target of relocating 1 million people to Mars. The IPO could be the largest in history.

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Q1 results themselves beat estimates

Beyond SpaceX, operational results impressed. Q1 distributable EPS of $0.19 exceeded consensus of $0.18. Revenue of $753.8M beat consensus of $692.6M. AUM grew 15% year-over-year to $314.9B.

AUM expanded 15%, dividends increased 25%, and share buybacks continued. Fee-related profit margin held at 58.4% with a full-year target of 58.5%.

Quarterly dividend set at $0.23 per share (payable May 27, record date May 13). Annualized dividend yield approximates 9.23%.

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Risk — AI threatens software lending portfolio

Concerns persist that software companies in Blue Owl's concentrated lending portfolio may struggle with loan repayment if AI automation erodes profitability. Software lending exposure risk is a key topic across the private credit market.

Valuation is also concerning. Trading at ~100x P/E and 7x+ P/B, even modest earnings volatility could pressure shares. CFRA has lowered its price target, while UBS and JPMorgan maintain neutral ratings.