FDA approval boosts Elon Musk-owned Neuralink's valuation to $5 billion
The valuation of Elon Musk's brain implant start-up Neuralink has gone up from around $2 billion in 2021 to $5 billion right now based on privately executed stock trades, according to Reuters. With bullish investors by his side and the approval of human trials for the revolutionary chip, the company is expected to reach greater heights in the coming years.
How has human trial approval boosted confidence?
Following the Food and Drug Administration's (FDA) approval in the US, Neuralink marketed its shares privately to investors at a valuation of $7 billion or roughly $55 (around Rs. 4,544) per stock. The high prices were charged citing the FDA approval making the deal "sweeter." However, it is unclear whether any private buyers have traded stock at that valuation.
A look at Neuralink's financial dealings
Back in 2021, Neuralink conducted its last fundraiser. At that time, the firm raised $205 million at a valuation of $2 billion. Now at its current valuation ($5 billion), shares have been sold to the firm's early backers and employees, in place of new investors. This has given rise to questions about whether the company's hefty valuation is indeed justified.
What are the concerns surrounding the firm?
Neuralink's recent stock buyers are mostly small investors intent on buying a small slice of the company in the hope of making it big in the future. They did not take the valuation into consideration. The real test is when the bigwigs come into play. Critics also claim that Neuralink's chips are at least a decade away from commercial application.
What is Neuralink's goal?
Neuralink is working on a brain implant known as Link. Using it, people with severe paralysis could operate external technologies like smartphones and computers via neural signals or simply said, by using their thoughts. The chip could also be used to treat depression, autism, obesity, and schizophrenia in the future. The approval of human trials should speed up its development.
Probes against the company are currently underway
Neuralink is being probed by the US Department of Transportation due to concerns about the illegal transportation of pathogens from chips removed from monkey brains, sans proper containment. Meanwhile, the Agriculture Department is investigating possible animal welfare violations by the firm.
