Neuralink's Valuation Surge Prompts Employee Interest in Stock Sales

Elon Musk's Brain Chip Company Neuralink Employees Eye Stock Sale After Valuation Surge: Report

The value of Neuralink, the brain implant company founded by Elon Musk, has skyrocketed following its first human trial, leading some employees to reportedly gear up for a possible stock sale. What Happened: Neuralink might initiate a tender offer as soon as next month to repurchase shares from staff looking to sell, reported Reuters, citing two people briefed on the matter. The company's shares are not publicly traded, and selling them without Neuralink's approval involves intricate procedures on specialized private market exchanges. See Also: 'If You're A Lawyer For Crowdstrike, You're Probably Not Going To Enjoy The Rest Of Your Summer': Microsoft-Crowdstrike Outage Could Top $1B In Costs, Analyst Says Neuralink's valuation has reportedly climbed to as much as $8 billion, over twice its value last year, based on secondary market trades. The brain implant company's inaugural human trial was deemed a success, and Neuralink is gearing up for additional trials in Britain and Canada. Musk has traditionally created a scarcity of shares in his startups, including SpaceX and xAI, making them highly coveted, according to the report. This scarcity is evident in recent trades, with buyers on private exchanges paying a premium of between 84% and 137% to Neuralink's valuation in its last private fundraising round in November, the report noted. Neuralink did not immediately respond to Benzinga's request for comments. Why It Matters: This surge in Neuralink's valuation comes amidst increasing competition in the brain-computer interface market, with rivals like Paradromics gearing up for human trials of their own brain implants. In May, Noland Arbaugh, the first Neuralink patient, reached the 100-day milestone since having the chip implanted in his brain. "I would like to find some way to provide for myself long-term, build a house for me and my family if I can, and not be a burden on those around me any longer," Arbaugh stated at the time. Earlier this month, during a video update, Musk said that Neuralink aims to increase the number of brain implant patients to high single digits by the end of the year. He has also spoken about his ambitious goal of achieving 1,000 Neuralink chip implantations by 2026. Photo courtesy: Shutterstock Read Next: Apple Skips TSMC's 2nm Chip For iPhone 17, Unveils First iOS 18 Public Beta And More: This Week In Appleverse Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors. Market News and Data brought to you by Benzinga APIs

Neuralink's value jump leaves some Musk employees itching to cash out

July 23 (Reuters) - Some of the staff at Elon Musk's Neuralink are making preparations to sell the brain implant company's stock in the wake of its valuation jumping following its first human trial, according to people familiar with the matter. Stock compensation is a big incentive for employees at startups such as Neuralink. The shares they receive are not publicly traded, and employees that want to sell them without the company's blessing have to use complex turnarounds on niche private market exchanges. Now some of Neuralink's employees and investors are preparing for Musk's company to launch a tender offer as early as next month to buy back shares from staff that wish to sell, according to two sources briefed on the matter who requested anonymity because they were not authorized to speak publicly. Neuralink and Musk did not respond to requests for comment. The jump in Neuralink's valuation following the launch of its first human trial in January is evident in secondary market trades. While these trades are thin in volume and do not provide a reliable number for Neuralink's current valuation, they all point to a rise in value -- some to as much as $8 billion, more than double what the company was worth last year. Neuralink has called its first human trial a success. It said it remedied an initial problem of the implant's threads retracting from its first patient's brain and is preparing for more trials in Britain and Canada. Musk recently said the company plans to implant a second patient soon. It could not be learned whether Neuralink has formally scheduled a tender offer or what its terms would be. Last fall, Neuralink launched a tender offer for employees that priced at around $19 per share, when some shares traded on the secondary market close to $35, according to a review of trades by Reuters and sources familiar with the matter. It is common for startups to launch tender offers at a discount to secondary market values. Musk has for years created scarcity for shares in his startups, which also include rocket company SpaceX and artificial intelligence developer xAI, turning them into exclusive clubs that accept only a few investors, such as Peter Thiel's Founders Fund. This scarcity has made the shares sought after and investors content with receiving little information on how the startups have fared once they invested, according to investors and people who have worked closely with Musk. A spokeswoman for Founders Fund declined to comment. The impact of this scarcity is reflected in recent trades. Buyers on private exchanges paid a premium of between 84% and 137% in the last few weeks to the $3.5 billion valuation Neuralink attained in its most recent private fundraising round last November, according to a Reuters analysis of trades recent trades and PitchBook data. Most startups' shares don't trade at such premiums, and the majority of them trade at a discount. The median private company trades at a 32% discount from the valuation of its most recent fundraising, according to brokerage Forge Global. Neuralink's valuation has soared since it was started in 2016, and employees that were given shares at the launch or soon after at a fraction of their current value are in for a big windfall. Some buyers are offering as much as $50 a share, up from about $35 around when the human trial began in January, said Sim Desai, chief executive of Hiive, who said his secondary platform matches buyers and sellers interested in trading Neuralink shares. SpaceX, Musk's most valuable company besides electric car maker Tesla, also trades at a premium on the secondary market. One recent transaction at $130.11 valued the company at $232 billion, according to secondary trade data. The company valued itself at about $180 billion in a private fundraising round in April, according to Pitchbook. SpaceX did not respond to a comment request. The sources said Neuralink asks its employees not to trade their shares on the secondary market, preferring they sell stock during tender offers that the company can control. One reason, according to Hiive's Desai, is that federal regulation prevents private companies from having more than 2,000 direct shareholders. Allowing limitless trading on the secondary market, especially for hot companies like Neuralink, could push a company up against the limit, Desai said. The other reason is companies retaining the ability to funnel access to investors they want at their chosen price. "Basically, it's an opportunity for a company, if they restrict the trades, to do their close friends and insiders a favor," Desai said. Due to restrictions on trading placed by Neuralink, Hiive only facilitates the matchmaking for shares, and the parties have to arrange for payment and the transfer of shares on their own, he said. (Reporting by Rachael Levy in Washington, D.C. Editing by Greg Roumeliotis and Anna Driver)

Neuralink's value jump leaves some Musk employees itching to cash out

July 23 (Reuters) - Some of the staff at Elon Musk's Neuralink are making preparations to sell the brain implant company's stock in the wake of its valuation jumping following its first human trial, according to people familiar with the matter. Stock compensation is a big incentive for employees at startups such as Neuralink. The shares they receive are not publicly traded, and employees that want to sell them without the company's blessing have to use complex turnarounds on niche private market exchanges. Now some of Neuralink's employees and investors are preparing for Musk's company to launch a tender offer as early as next month to buy back shares from staff that wish to sell, according to two sources briefed on the matter who requested anonymity because they were not authorized to speak publicly. Neuralink and Musk did not respond to requests for comment. The jump in Neuralink's valuation following the launch of its first human trial in January is evident in secondary market trades. While these trades are thin in volume and do not provide a reliable number for Neuralink's current valuation, they all point to a rise in value -- some to as much as $8 billion, more than double what the company was worth last year. Neuralink has called its first human trial a success. It said it remedied an initial problem of the implant's threads retracting from its first patient's brain and is preparing for more trials in Britain and Canada. Musk recently said the company plans to implant a second patient soon. It could not be learned whether Neuralink has formally scheduled a tender offer or what its terms would be. Last fall, Neuralink launched a tender offer for employees that priced at around $19 per share, when some shares traded on the secondary market close to $35, according to a review of trades by Reuters and sources familiar with the matter. It is common for startups to launch tender offers at a discount to secondary market values. Musk has for years created scarcity for shares in his startups, which also include rocket company SpaceX and artificial intelligence developer xAI, turning them into exclusive clubs that accept only a few investors, such as Peter Thiel's Founders Fund. This scarcity has made the shares sought after and investors content with receiving little information on how the startups have fared once they invested, according to investors and people who have worked closely with Musk. A spokeswoman for Founders Fund declined to comment. The impact of this scarcity is reflected in recent trades. Buyers on private exchanges paid a premium of between 84% and 137% in the last few weeks to the $3.5 billion valuation Neuralink attained in its most recent private fundraising round last November, according to a Reuters analysis of trades recent trades and PitchBook data. Most startups' shares don't trade at such premiums, and the majority of them trade at a discount. The median private company trades at a 32% discount from the valuation of its most recent fundraising, according to brokerage Forge Global. BIG WINDFALL Neuralink's valuation has soared since it was started in 2016, and employees that were given shares at the launch or soon after at a fraction of their current value are in for a big windfall. Some buyers are offering as much as $50 a share, up from about $35 around when the human trial began in January, said Sim Desai, chief executive of Hiive, who said his secondary platform matches buyers and sellers interested in trading Neuralink shares. SpaceX, Musk's most valuable company besides electric car maker Tesla (TSLA.O), opens new tab, also trades at a premium on the secondary market. One recent transaction at $130.11 valued the company at $232 billion, according to secondary trade data. The company valued itself at about $180 billion in a private fundraising round in April, according to Pitchbook. SpaceX did not respond to a comment request. The sources said Neuralink asks its employees not to trade their shares on the secondary market, preferring they sell stock during tender offers that the company can control. One reason, according to Hiive's Desai, is that federal regulation prevents private companies from having more than 2,000 direct shareholders. Allowing limitless trading on the secondary market, especially for hot companies like Neuralink, could push a company up against the limit, Desai said. The other reason is companies retaining the ability to funnel access to investors they want at their chosen price. "Basically, it's an opportunity for a company, if they restrict the trades, to do their close friends and insiders a favor," Desai said. Due to restrictions on trading placed by Neuralink, Hiive only facilitates the matchmaking for shares, and the parties have to arrange for payment and the transfer of shares on their own, he said. Reporting by Rachael Levy in Washington, D.C. Editing by Greg Roumeliotis and Anna Driver Our Standards: The Thomson Reuters Trust Principles., opens new tab Rachael Levy Thomson Reuters Pulitzer Prize-winning business correspondent based in Washington, D.C. who has reported on the inner workings of Wall Street, Silicon Valley, American health care and national security. She can be reached at 202-967-6233. If it's sensitive, use the encrypted app Signal. Reuters provides additional secure ways to contact her: https://www.reuters.com/investigates/special-report/tips/

Neuralink's value jump leaves some Musk employees itching to cash out

Now some of Neuralink's employees and investors are preparing for Musk's company to launch a tender offer as early as next month to buy back shares from staff that wish to sell, according to two sources briefed on the matter who requested anonymity because they were not authorized to speak publicly. Neuralink and Musk did not respond to requests for comment. The jump in Neuralink's valuation following the launch of its first human trial in January is evident in secondary market trades. While these trades are thin in volume and do not provide a reliable number for Neuralink's current valuation, they all point to a rise in value -- some to as much as $8 billion, more than double what the company was worth last year. Neuralink has called its first human trial a success. It said it remedied an initial problem of the implant's threads retracting from its first patient's brain and is preparing for more trials in Britain and Canada. Musk recently said the company plans to implant a second patient soon. It could not be learned whether Neuralink has formally scheduled a tender offer or what its terms would be. Last fall, Neuralink launched a tender offer for employees that priced at around $19 per share, when some shares traded on the secondary market close to $35, according to a review of trades by Reuters and sources familiar with the matter. It is common for startups to launch tender offers at a discount to secondary market values. Musk has for years created scarcity for shares in his startups, which also include rocket company SpaceX and artificial intelligence developer xAI, turning them into exclusive clubs that accept only a few investors, such as Peter Thiel's Founders Fund. This scarcity has made the shares sought after and investors content with receiving little information on how the startups have fared once they invested, according to investors and people who have worked closely with Musk. A spokeswoman for Founders Fund declined to comment. The impact of this scarcity is reflected in recent trades. Buyers on private exchanges paid a premium of between 84% and 137% in the last few weeks to the $3.5 billion valuation Neuralink attained in its most recent private fundraising round last November, according to a Reuters analysis of trades recent trades and PitchBook data. Most startups' shares don't trade at such premiums, and the majority of them trade at a discount. The median private company trades at a 32% discount from the valuation of its most recent fundraising, according to brokerage Forge Global. Neuralink's valuation has soared since it was started in 2016, and employees that were given shares at the launch or soon after at a fraction of their current value are in for a big windfall. Some buyers are offering as much as $50 a share, up from about $35 around when the human trial began in January, said Sim Desai, chief executive of Hiive, who said his secondary platform matches buyers and sellers interested in trading Neuralink shares. SpaceX, Musk's most valuable company besides electric car maker Tesla, also trades at a premium on the secondary market. One recent transaction at $130.11 valued the company at $232 billion, according to secondary trade data. The company valued itself at about $180 billion in a private fundraising round in April, according to Pitchbook. SpaceX did not respond to a comment request. The sources said Neuralink asks its employees not to trade their shares on the secondary market, preferring they sell stock during tender offers that the company can control. One reason, according to Hiive's Desai, is that federal regulation prevents private companies from having more than 2,000 direct shareholders. Allowing limitless trading on the secondary market, especially for hot companies like Neuralink, could push a company up against the limit, Desai said. The other reason is companies retaining the ability to funnel access to investors they want at their chosen price. "Basically, it's an opportunity for a company, if they restrict the trades, to do their close friends and insiders a favor," Desai said. Due to restrictions on trading placed by Neuralink, Hiive only facilitates the matchmaking for shares, and the parties have to arrange for payment and the transfer of shares on their own, he said. (Reporting by Rachael Levy in Washington, D.C.; Editing by Greg Roumeliotis and Anna Driver)