A look into the finances of SpaceX
wsj.com
wsj.com
> In 2022, revenue doubled to $4.6 billion, helping the company reduce its loss last year to $559 million from $968 million, the WSJ reported.
> The company reported about $5.2 billion in total expenses for 2022, up from $3.3 billion the year earlier, according to the report.
That $5.2B of expenses got 61 successful, production Falcon rocket launches in 2022. Vs. some pretty-reasonable estimates put the total cost of NASA's "Space Launch System" at ~$5B per individual launch.
This is more important than it seems on the surface and is often a good thing.
You want to train and preserve local expertise with heavy industries.
That ensures generations of successful companies rejuvenating your economy as opposed to relying on federal handouts.
These people don’t grow on trees(/classrooms).
NASA and ULA like programs trained and built expert training to create those citizens.
Being able to recruit them is a non-goal.
It is in the definition: “for the people”.
These people enjoy a cushy revolving door between several private and public sector aerospace jobs.
If we can't do something as simple as assemble modules in space, exactly what sort of future do you imagine is waiting for us in space?
SLS has absolutely no redeeming features. You're sunk deep in Stockholm Syndrome if you're still defending it.
What sort of future in space do those advocating SLS imagine for us if moving a liquid from one tank to another is too challenging?
There's a huge amount of extra risk involved in that sort of idea, which is why NASA isn't doing it, which can just be avoided with SLS and Starship.
And you didn't answer my question, so I will answer it for you. If simply transferring a liquid from one tank to another is too risky, then there is no future in space. No activities of any significance could ever be done there. With that established, we can shut down the human space program and lose nothing of value.
> Starship HLS requires in-orbit propellant transfer in its mission profile. Prior to the launch of the HLS vehicle from Earth, a Starship variant configured as a propellant depot would be launched into an Earth orbit and then partially or fully filled by between four and fourteen Starship tanker flights carrying propellant. The Starship HLS vehicle would then launch and rendezvous with the already-loaded propellant depot and refuel before transiting from Earth orbit to Lunar orbit.
https://en.m.wikipedia.org/wiki/Starship_HLS
I’m a little confused why you call it a giant orbital bomb. It wouldn’t be particularly giant. Four reusable flights could only bring 600T of propellant to LEO. A single starship is fueled with 4600T of propellant, or 18400T of propellant to get that 600T into LEO. I would argue the starship itself is a much more giant bomb with all sorts of fire and stress and chances to explode. 600T of fuel exploding in orbit might not even be visible. But there’s been a number of tests of in orbit refueling and it doesn’t seem much more complex than, say, docking with a space station and transferring bags of mostly water without damaging them.
Docking isn't a safety risk.
Regardless, the plan is to use starships to build a LEO refueling platform and bring propellant for a lunar lander brought to orbit via a starship. Such a platform could also be used for Mars. It’s a much smarter move than trying to bring everything from earth in a single shot. And I can vouch for the sanity of the plan - I have almost 600 hours on KSP which makes me a bit of an expert ;-)
Falcon-9 is about as capable in terms of payload as Proton. And even without inflation the launch price is comparable. So, Falcon-9 is quite capable to get people on the Moon. It isn't really considered because there are other options and some additional requirements.
https://space.nss.org/lunar-base-studies-1996-human-lunar-re...
hey avmich, thnx 4 the memories ;)
Surely people understand redundancy in aerospace right?
> SLS is about maintaining the ability of the US to build rocket engines like the RS-25 and those massive SRBs
...but why? They're expensive and bad. Maybe the US SHOULD forget about them.
> The Government is worried about waking up some morning and China has leapfrogged us to the Moon and it'll take 20 years for us to institutionally remember how to get back there.
The SLS was indeed created back when this sounded reasonable. But it no longer does. The US can go to the moon now. They just have to pay SpaceX to do it, and failing that, Rocket Lab. But asking Boeing to do it is pretty guaranteed to be a bad idea.
> And SpaceX has not yet demonstrated the ability to land humans on the Moon while NASA has.
Boeing has demonstrated a willingness to not live up to its former glory though. And let's be honest here, this is not NASA vs SpaceX. This is Boeing vs SpaceX. That's the main contractor doing the vast majority of the work. Boeing, as you might remember, STILL haven't shown then can get humans to the ISS anymore! We are still waiting for Starliner to come online.
> They're making sure that we can definitely still use big dumb stupid expensive technology to get there.
I guess...
> If Starship works they may wind up pivoting away from SLS in the future
We can only hope! But again, Falcon Heavy exists NOW.
There's a possible world where the cut corners and the Dear Moon mission winds up with the vehicle burning up on reentry or slamming itself into the ground, killing Tim Dodd and everyone on board, with the resultant investigation looking something like OceanGate.
SLS is big, dumb and stupid and has a LES and a capsule that lands via parachutes. If SpaceX fails as a company after some accident like that, the SLS will just continue to plod along.
> If SpaceX fails as a company after some accident like [starship failing and killing people], the SLS will just continue to plod along.
Well.. yes. But note also that if SLS crashes and kills a bunch of astronauts it will certainly plod along too. That's what the Shuttle did. The difference being one of NASA/Boeing and SpaceX are accountable for killing astronauts, while the other is not.
Gigant SRB are dead technology, totally useless. RS-25 is engine that should be retiered and has no future.
So your theory of techonpgical progrss is to spend huge amount of money into legacy technology rather then actually building new technology.
The reason the US will beat China is the Raptor, not the RS-25.
What you advocate works 100% against what you want to achieve.
And just FYI the shuttle stack never lead us to the moon. In fact its terrible for this task.
I wonder if your NASA figure also includes first launch, that may include r&d?! Because for a single launch, when you substract r&d or even spread out across all planned launches - can't be that high...
I'm just for comparing apples to apples not apples to oranges.
https://arstechnica.com/science/2019/11/nasa-does-not-deny-t...
The ~$5B figure is in the final para. And that still sounds like it excludes ground systems and Orion development costs. (Plus ~4 more years of ever-growing bloat, obviously.)
There is a much more official and up to date figure:
> We project the cost to fly a single SLS/Orion system through at least Artemis IV to be $4.1 billion per launch at a cadence of approximately one mission per year.
https://oig.nasa.gov/docs/IG-22-003.pdf
From what I understand, that number does include ground systems.
For what it's worth, NASA leadership continues to contest this value, although they refuse to publicly give their own value.
To be fair to you, the $4.1B figure does not include development costs. I don't think there's an agreed upon way to include them, so everyone just mentions them separately. And they are quite... large.
Kind of sad that the last living pieces of the shuttle will be dropped into the ocean and left to rust away
I know a lot of people want to get them into museums, but I suspect that every museum that really wants one already has one. And I'd suggest to you that it's much more dignified that they go out as part of a rocket launch than slowly decaying in a warehouse somewhere.
I don't have good intuition for how much of the bloat comes from a top-heavy organization, from grifting contractors, and from good old fashion boondoggles -- but I'd like to add to this pile of possibilities the possibility the categories are poorly drawn and that "things which NASA should be doing but shouldn't be classified under launch vehicles" are nevertheless classified under launch vehicles.
SLS is bad, but it's not quite that bad.
A full launch of SLS + Orion is ~4.1B. A launch of SLS without Orion (a theoretical cargo mission) is "just" ~$2.8B.
https://arstechnica.com/science/2022/08/the-sls-rocket-is-th...
There are probably 1-2 countries in the world that can afford to keep running a business with losses at around $1bn per year.
Again, that's utterly unthinkable for Mercedes or Renault or Mitsubish or Samsung or...
They'd just go under because the rest of the world still has economic gravity, i.e. everything must come down in case of no profits.
Almost all of that money was dumped back into the same economy from which it was collected, albeit inefficiently, so it didn't really disappear. They "used up" a few million dollars worth of material each time.
The damage to the economy was not as bad as you suggest. However the opportunity cost was massive. Decades wasted on a dead-end program. A staggering number of engineer careers essentially wasted, and now they're doing it again with SLS.
You can't compare SpaceX's figures to NASA because NASA has many, many more reporting obligations than SpaceX.
Every report on Falcon 9 costs has made this mistake forever. SpaceX does not release their full costs. What numbers we have for them are PR releases. Meanwhile, NASA's budgets are public and comprehensive, and they have legal parameters on what they have to include in their statements about costs that SpaceX does not have.
SLS was on the schedule to launch humans several years ago. However, failing to qualify means that NASA can NOT ask them to launch a human
Is SLS even certified to carry people into space yet?
It better be because Artemis-II will have people aboard Orion.
> The SLS was created by an act of Congress in the NASA Authorization Act of 2010, Public Law 111–267, in which NASA was directed to create a system for launching payloads and crew into space that would replace the capabilities lost with the retirement of the Space Shuttle.
SLS was "asked" 13 years ago to launch humans, and we are still waiting for that to happen.
10 missions
A crewed mission to the ISS every 6 months plus a handful of commercials.
Your numbers are way off.
I think this was an xkcd.
10 flights with humans so far and more planned: https://en.m.wikipedia.org/wiki/SpaceX_Dragon_2
Not really relevant.
The correct metric to make the comparison on is the fully amortized cost to the government per launch. The government doesn't pay for SpaceX's facilities or development - all of those costs are rolled into the launch price. But that's not true of SLS.
I don't know why you're so obsessed with cost. The only thing that matters when it comes to commercial providers is price. And SpaceX, (as far as I can tell) stands alone among the medium-heavy lift providers by providing a price directly on their website.
Of course, for government launches the government typically wants extra services, which does boost the prices different levels for different missions (I think the Europa Clipper mission is particularly expensive for example). But all of those missions are competitively bid, and SpaceX tends to be the low price bidder, so those extra fees seem like they're probably pretty reasonable.
https://spacenews.com/starlink-may-account-for-up-to-40-of-s...
The documents WSJ viewed are for SpaceX as a whole, not "SpaceX's launcher division". Even if the launcher division charged the Starlink division 9000 megazillion dollars per launch, that would be exactly balanced by the Starlink division having to book 9000 megazillion dollars of expense per launch.
Again, according to the documents WSJ viewed, SpaceX overall has achieved profitability. That's a major accomplishment given it being by far the lowest-cost launch provider in the world.
I don't think you understood what I wrote. GP claimed "SpaceX is profitable, so they're not pricing below cost", but the bulk of SpaceX's revenue can be attributed to the company owner transferring his money around.
Your comment is so far off it reads as something outputted by a poor machine learning model.
My point is that even if SpaceX books Starlink launches as revenue,[1] it would still have to be accounted for as an expense on Starlink's side, so SpaceX's overall bottom line would not change. If SpaceX's confidential internal financials show that SpaceX has achieved profitability then, yes, that indicates that SpaceX is not pricing its launches below cost.
>Your comment is so far off it reads as something outputted by a poor machine learning model.
Sorry, not my fault that you can't comprehend the fact that revenue can't come out of nowhere. It has to always be balanced by expense, and this isn't some magic way for Musk to generate "fake profits".
[1] A fairly common business practice, in and of itself. When an Apple employee receives a new Apple computer for use at work, that computer is booked as revenue for Apple; after all, Apple is acting as a customer for a product, albeit its own. The division that employee works for in turns records the price of that computer as an expense. The revenue amount is going to be lower than what an outside customer would pay—basically, Apple as seller will charge Apple as customer zero markup—but some revenue will be recorded all the same.
1. As far as I know, no one has presented any evidence that SpaceX sells Falcon 9/H launches for less than cost. ArianeSpace used to really talk up this point, but even they've mostly given up.
2. I'm not really sure why it matters. If SpaceX can sell for less than cost at their current volume, well... good for the tax payers - we're getting a deal.
> Elon loves to do this btw.
Really? I thought Tesla was known for it's high margins? I don't think any of Elon's other businesses are public.
At the cost of killing all other competitors and letting SpaceX monopolize so we are stuck with whatever quotes from SpaceX?
1. Are you suggesting that SpaceX will bankrupt Japan (HIII), India (GSLV/PSLV), and Europe (Ariane 6)? That seems unlikely to me.
2. There's very little evidence that SpaceX will jack up prices when they're a monopoly. I mean, they're a defacto monopoly right now (in a limited sense) with ULA transitioning to Vulcan, and ArianeGroup transitioning to Ariane 6. And their prices haven't budged.
3. The DoD (as part of NSSL) and NASA work very hard to split large contracts between multiple launch providers - effectively ensuring that there is no monopoly in US medium-heavy launch providers.
If anything SpaceX has lead to an explosive increase in competition.
This can and is considered predatory pricing, which is a criminal offense in some jurisdictions.
SpaceX has shown these numbers to investors and have received money on good valuation. If not even there core buissness was profitable why would anybody invest in Starship?
The argument that SpaceX subsudizes their launch prices is just a nonsense argument that doesnt hold up to study.
These companies will lose billions for years with this single intention.
The true cost minus the listed price adjusted for years of interest and extremely high VCreturns are all useful numbers to know because that adjusted by a risk multiple will tell you how much wealth the investors are expecting the monopolization to transfer from the taxpayer to their pockets.
1. SpaceX will never have a monopoly over launch because it's competing with lots of governments who will never give up their rocket programs. ArianeGroup, Japan/Mitsubishi, Russia, China, and India all have active launch programs (although Russia and China are isolated right now).
2. There are a truly stupid number of startups trying to compete for a slice of the launch pie. Most of them are in the small-lift launch segment for some reason, even though it's probably impossible to run a profitable rocket launch business in that segment of the market. But there are enough companies that aspire to launch larger rockets that SpaceX needs to be on its toes.
Blue Origin, Rocket Lab, and Relativity are probably the main future competitors to SpaceX. And both Rocket Lab and Relativity have talked up prices that are equal to or lower than what SpaceX is currently offering.
3. The DoD and NASA are actively working to prevent SpaceX from forming a monopoly in the US market.
This whole discussion is centered around cost. The only argument presented in favor of paying SpaceX for launches is launch cost.
If it wasn't for costx why would an org like NASA even consider delegating a critical part of their mission to a third party?
Its just a convieniant attack on SpaceX because they are private. It has no bases in reality.
I disagree. The whole theme of these corporate worship sessions is to praise how efficient they are, and how inefficient everything in comparison.
Claiming that these corporations are free to lie and omit expenses from their reporting to appear efficient goes directly against their supposed superiority.
> The correct metric to make the comparison on is the fully amortized cost to the government per launch.
Not really. The goal is to assess if a government institution meets it's goals in a fiscally responsible and efficient way.
The main goal of NASA is to "Expand human knowledge through new scientific discoveries." This involves all aspects of rocket science. The likes of SpaceX were only possible because NASA invested in research which SpaceX took advantage to design its production services.
Another goal of NASA is to "Address national challenges and catalyze economic growth." This also covers creating and funding demand for skilled high-tech professionals in places where there would otherwise be none. This also contributes to create opportunities in a workforce to support and develop highly specialized and experienced engineers, the likes of which can then transfer their knowledge and experience to the likes of SpaceX. Take, for example, SpaceX's own Gwynne Shotwell, who started her career in aerospace by working in government contracts for the Space Shuttle.
It's perfectly ok to argue that a government can and should buy services from private companies. It's awfully disingenuous to misrepresent both the private companies' offerings and alleged efficiency and the actual roles and responsibilities of government institutions like NASA.
So in total if you split your vehicle up and assemble it in orbit you can launch one that's almost 5x the size for the same price. Maybe more like 3x + extra engineering overhead costs for the orbital assembly, but still much more bang for the buck. The lunar gateway is planned to be a station anyway so those costs will have to be paid regardless.
Thus far, SLS has only done once what Falcon does on the regular: Launch a payload into orbit
The figures are easy to compare as well. Just include these factors in your comparison! Even if we don't know exactly what those factors are, we can make a ballpark estimate the total difference and add that as a percentage to spaceX's final figure.
The idea that things can't be compared because they are different is nonsense. When things are different is the only time comparisons are meaningful to make!
They have quite different fairing capacities, in a playfield that does not scale linearly.
It is like saying that the Boeing 737 is cheaper than the 777, and we can compare them because they were both designed to fly people in the sky.
Apples to oranges comparison. 400km to low earth orbit is not compatible to a 384400km trip to another gravity well.
Also, Falcon 9 has delivered multiple payloads to lunar orbit. Examples are ispace's Hakuto-R Mission 1, SpaceIL's Beresheet, and South Korea's Danuri. In interplanetary space, the Double Asteroid Redirection Test was launched on a Falcon 9.
Danuri: 1,495 lbs
Hakuto-R: 2,200 lbs
DART: 1,340 lbs
Artemis 2: 112,000 lbs
Even by your examples there remains a 10,000% to 5,000% fold scale difference. And SpaceX agrees with this. This difference in scale is why they are working on Starship.
SLS and Orion are dead ends. I wish them well and I am huge space geek but that program is just a gigantic waste. I wish we could take that budget and use it for unmanned missions or public/private space station partnerships with some of the new space companies.
SpaceX's yearly spending would include the 61 flights, but also literally thousands of satellites, presumably a huge number of commercial dishes, their human flight overheads, their Starship development program including ground support and production and testing of about a hundred Raptor engines, their sales and outreach, their specific contract work like HLS, and their mug business by the side.
If you were to amortize SLS's total dev costs (incl. Orion and SLS-specific ground support but excluding Constellation) over its reasonably expected lifetime flights, you'll be lucky as heck to get <$10B/flight, though of course we don't know how that adds up and so report the much smaller marginal numbers instead.
Great changes so far
now that elon is actually instating a paywall (that isn’t compulsory, and still lets you use it for free) all of HN seems to be thinking it’s the wrong decision.
i’d understand if something substantially happened in the intervening time period to give you the impression the subscription model was NOT the way to go, but nothing of the sorts has actually happened at all.
while it’s better than most sites, the groupthink on HN is insane.
also - i might be wrong if dorsey stepping down was the time when everyone was saying this, but i do remember it very clearly, and i only joined in 2020.
Twitter went from not-profitable to profitable-on-ads. The ad model was proven to work. That's what happened in the interim.
the whole platform — users and owners — are just incredibly full of themselves in an _annoying_ way.
She might be brilliant, but she's worked other space jobs before. So clearly whatever company Musk has created, has allowed her to actually showcase her brilliance.
CEO sets the vision. Without vision, even perfect execution is pointless.
If you have evidence to support that takeaway I'd love to see it. I don't have evidence one way or the other, though I have seen unconfirmed scuttlebutt that SpaceX is successful _despite_ Musk, in no small part due to actively distracting and babysitting him to prevent him from meddling
Look you are just doing what everybody does who dislikes Musk.
The reality is we have overwhelming evidence from many sources who have actual knowlage on the topic.
Of course that does matter because a friend friends uncle has a sister at SpaceX who said something about how Musk was bad or whatever.
In the concrete case, Musk has NO credentials for being a chief engineer. He's a bachelor of arts in physics. Ironically a bachelor of science in economics. His main talent is extracting subsidies from the US government.
> His main talent is extracting subsidies from the US government.
That's just flat out inaccurate nonsense.
There’s something to be said about the fact that the other companies tied to Musk are constantly in the headlines for NEGATIVE reasons versus SpaceX… yeah. Tells you a lot.
Yes Musk is a-hole. He has totally bungled Twitter, and he has made the entire world hate him. But let's give credit where credit is due. He has started not one but TWO "impossible" companies.
The chairman of the board on behalf of the shareholders sets the vision. The CEO along with the other C-suite executives executes the vision. But in this case, both the chairman, ceo, cto, founder and majority voting shareholder is elon musk. So you are ultimately right.
You can tell the elon-hate has gone insane when they can't bring themselves to give elon any credit for spacex.
Besides, even if gynne shotwell deserves all the credit for spacex's success, elon deserves credit for hiring her in the first place so elon wins again.
Also, unrelated: This site is the worst case of hijacking the browser back button I've ever seen
Not saying that is what they are doing but they are now in a key position that big mistakes are not necessarily fatal to the company.
https://en.wikipedia.org/wiki/List_of_Falcon_9_and_Falcon_He...
We can't prove or disprove this though, since their financials are secret.
Why do you keep making comments like this in this post, when the whole point of the post is that the WSJ's reporters have viewed (and have written about) confidential SpaceX internal financials? I mean, really.
No one is claiming otherwise, which is why the WSJ article based on said confidential internal SpaceX financials is so interesting.
As others keep telling you, what matters to NASA, DOD, and other SpaceX customers is what they pay per launch, not how much SpaceX's costs are per launch. Obviously, if a launch cost DOD $50 million but it cost SpaceX 9000 megazillion dollars, there would be some concern on the customer's side about whether such a launch could be purchasable again later, but a) we've had many, many dozens of launches that SpaceX has successfully pulled off, so the internal cost per launch for SpaceX can't be that many megazillion dollars. b) According to the WSJ article, SpaceX has achieved profitability as of this year, so we can now be fairly sure that the cost is, in fact, less than $50 million per launch.
Your statement that SpaceX may be booking Starlink launches as revenue is irrelevant. Hollywood accounting works because a film studio can, by shifting expenses to a particular film from elsewhere in the company, always claim that the film is unprofitable; the overall revenue and profit/loss for the studio is unaffected. The documents WSJ viewed are for SpaceX as a whole, not "SpaceX's launcher division". Even if the launcher division charged the Starlink division 9000 megazillion dollars per launch, that would be exactly balanced by the Starlink division having to book 9000 megazillion dollars of expense per launch. Again, according to the documents WSJ viewed, SpaceX overall has achieved profitability. That's a major accomplishment given it being by far the lowest-cost launch provider in the world.
It appears somewhere around 60-70% of the launches are their own missions. This said nothing about costs though.
Still one company matching the rocket launches of the rest of the world is pretty impressive.
Mortality Assessments are left as an exercise for the reader.
This is an Interval Fund - effectively a mutual fund except that you can only sell it one day per quarter due to limited liquidity.
Otherwise, I doubt it. Elon has been pretty vocal about regretting making Tesla public. Additionally SpaceX as a company is oriented around putting humans on mars. Until that happens, I expect a supermajority of ownership would be against the profit seeking motives that an IPO creates.
Short of investing in them, you could look for companies in industries that are likely to benefit from cheaper space access. Might have an easier time there.
Read about the rest of his career and I think you'll figure it out: https://en.wikipedia.org/wiki/Michael_D._Griffin#Career
> In December 2008, with SpaceX again on the verge of bankruptcy, Griffin awarded SpaceX along with his own Orbital Sciences company each contracts with a combined value of $3.5 billion
It's crazy how nepotism is still such an important aspect of success today.
It's very likely had they never known each other, SpaceX would not exist today, and some other company would have thrived instead.
I also don't understand how it's not a conflict of interest to award his own company that contract?
Considering the nature and role of the LEO constellation Michael Griffin wants to build, remember Elon Musk's talk about "preventing extinction". Ostensibly he's talking about making a 'backup' population of humanity on Mars, but that makes zero sense. Serious customers for Mars colonization don't actually exist and SpaceX hasn't invested in the development of Mars habitat technology themselves. What they're actually doing is developing boosters capable of launching proliferated LEO constellations for feasible amounts of money (a capability SpaceX is now demonstrating with Starlink.)
You act as if there was some short cut around that. There isnt. So your argument just fundamentally doesnt work.
What would SpaceX invest in refueling if LEO is all they cared about?
This kind of inside dealing is just the status quo in american businesses today. Every CEO is on the board of the companies where their board members are CEOs. Really easy to get your board to approve a comp increase when they know you will do the same for them.
Big business is a social club and you ain't in it.
This is one of the most successful contract in history.
Griffin didnt invente COTS, that was anouter group that had been wanting to do a program like that and Griffin was just the administrator.
To you have actual evidence the Griffin as administrator actually overwrote the technical comities making these choices in order to help SpaceX.
If you dont have that evidence then you are just full of shit talking out of your ass.
Now, to do that, they'll need to scratch the government's back. Doesn't mean that Mars isn't priority #1.
To be more precise, the company is run by the DoD with significant technical and financial assistance. Elon is the main conduit between those deep resource and the rest of the company. He regularly meets with all teams to ensure they are aligned with "higher purposes".
To be even more precise, Elon is a front-man for a right-wing multi-decade program in American hegemony and actualizing it's crowning achievement--the Strategic Defense Initiative.
both of these cannot be true at the same time.
No, the internet isn't a hive mind, and is never going to have simple unitary opinions except as rare coincidence.
> both of these cannot be true at the same time.
And yet a planet-scale information network can easily include voices that believe each of them simultaneously, because people disagree.
Musk wants to build a Mars colony. DOD wants Brilliant Pebbles / SDI. Perhaps a trade can be made? You'll need much of the same tech for each.
If SpaceX is run by DOD, why is it not run by DOD? Why pretend otherwise? The best engineers won't work to build SDI? Thousands work for Boeing/Lockheed. They're all that much worse?
Look at Starship objectively. It's not a Mars rocket. That bellyflop through the atmosphere stunt won't work on Mars, and man-rating it even for operation around Earth is extremely dubious. The habitats which would supposedly be used for Mars colonization don't exist and aren't in development, so if you think Starship is a Mars rocket you should realize that it's a bridge to nowhere. Starship is being developed to launch tons of satellites cheap. It makes a lot of sense for that and it makes zero sense for Mars colonization.
Given the weight of the circumstantial evidence, particularly the entirety of Michael Griffin's career and role in SpaceX's existence, it is more reasonable to assume they're lying about Mars than to assume Mars is the true motivation. Your prior for Elon Musk lying about anything should be through the roof anyway.
I'm only an enthusiastic layman on the topic of spacefaring, but isn't the launch vehicle a critical variable when designing habitats for other planets? It doesn't seem practical to take anything much further than paper until the constraints of your launch vehicle are known.
Habitats designed to be launched on Starship+Superheavy are going to be wildly different from those made to launch on practically anything else because of the vast difference in lift capacity and available volume. To add to that, it arguably doesn't make sense to develop habitats at all unless something similar to Starship is flying.
So from that perspective, it would seem to me logical to wait and see if SpaceX can actually make Starship+Superheavy work or not before committing to anything. No point in burning money on something that'll never be practical to launch.
> To add to that, it arguably doesn't make sense to develop habitats at all unless something similar to Starship is flying.
It doesn't make sense developing Starship unless you have paying customers lined up. Launching satellite constellations is a market that actually exists, Mars colonization doesn't and won't for decades at least, by which time Starship will likely be obsolete anyway.
Furthermore, you're ignoring the part where Starship isn't a Mars rocket and doesn't even resemble a Mars rocket. If Elon Musk had never spoken of Mars, there would be zero reason to suspect that Starship was meant to be a Mars rocket. His words alone are the basis for this belief. How much are his words actually worth to you?
There is work on suits, life support systems and lots of other things.
Your whole argument is basically 'its hard' and SpaceX doesnt have perfectly worked out plan to solve every single problem. Yeah no shit shirlock.
And Starship is a Mars rocket. Your evidence for that non existant. SpaceX has presented Mars entery and landing profiles. Refueling makes it perfect for Mars.
I tend to trust the people who have actually engineer such systems, have built hardware and have simulations.
The claim that its all a conspiricy theory is simply not credible. Honestly just make yourself look ridicoulus.
They were very close. Elon named his first born son Griffin.
Mike Griffin is all about putting (eventually) hypersonic weapons in space and resurrecting Brilliant Pebbles.
He was the early advocate for reusable launchers https://www.washingtonpost.com/wp-srv/national/daily/may99/r... and the Falcon name came from his DARPA Falcon Project.
I've been investing heavily in domestic tooling, manufacturing and construction. Screw chasing only SpaceX, wouldn't you also like to capitalize on things like our gigantic semiconductor mfg build-out?
Playing the supply chain is often times better than having direct access to the thing you want exposure to. It's just not as fun for certain elements of the monkey brain to operate one or two degrees removed.
It's like fish in a barrel if you have patience to sort through the information and type fake contact info into investor web forms to get at presentation materials.
You definitely don't need a Bloomberg terminal subscription to do this stuff.
Do we like being added to arbitrary contact lists?
That's laughable, because without making Tesla public he wouldn't be able to live the superstar uber rich lifestyle he thinks he deserves. Pretty much everything he has personally is owed to Tesla public valuation.
to be fair that lifestyle was enabled for the rest of his life in the paypal days. i don't think anything he does now is driven by getting a new car or eating at a fancier restaurant. He's been able to have as luxurious lifestyle as possible for a long time.
PayPal's money wouldn't even be enough to get him a sports team.
You haven't refuted my points of him not owning anything indicative of his 'uber-rich' lifestyle, and considering the amount of work he is very visibly doing, I see no reason to somehow assume he's just laying around buying stuff for the heck of it.
> Several supercars in the past Valid point - I remember seeing him crash his McLaren. That was, however, 20 years ago, and have seen no indications of him indulging in any supercars or anything of the sorts in the past 10 years.
>Goes on stage with a famous comedian Seems to be more of an attention-seeking thing as opposed to a luxury lifestyle.
Search for the word 'excessive' https://historycollection.jsc.nasa.gov/JSCHistoryPortal/hist...
Griffin is arguing against himself there in giving all that money-- covering his tail. The important part if you read the contracts is a majority of the money was awarded before SpaceX built any hardware, they just had to present plans and half the money was transferred. Elon never risked his own money as all the costs were covered up front and if they failed they would only lose the other half of the contract.
Elon was very scrappy and cheap in the initial builds because he didn't want to risk his own cash.
For Tesla, besides the huge DOE grant, he had SpaceX loan some of the excess government money to Tesla in the first few years to derisk his investment there as well.
Besides that, there are plenty of firms taking government money but Elon actually delivered.
Read the links above, this is not speculation.
Some other ways:
- Invest in a company or fund that owns a significant chunk of SpaceX (like Google, Bank of America).
- Convince an insider to part with their shares (either directly or through one of the secondary marketplaces).
- Get a job at SpaceX.
The equity upside at hire # 12,001, when the market cap is $150B... is probably not great.
I mean it might be a ton of fun, I just wouldn't do it for the 100x returns.
The issue here is the market doesn't know where we are on the S curve. If we've looking at space shuttle prices, we are at the end of the curve. If SpaceX pulls off reusability with the starship, then I'm going to make guesses we are much lower on the curve then most expect.
If they can get 'cheap' launches of 100-200T to orbit then a massive number of new possibilities open up and SpaceX won't sit around as just a cheap transport monopoly, they expand horizontally into other space based markets.
I'll say they will cap at 8-10B revenue (+inflation).
But this year, SpaceX will
If the only launch vehicle was the SLS, the market size would be $0. That's not meaningful!
The market size is limited, because, well, why would you send stuff up there? GPS, telco, science (iss). I guess if you make it cheap enough, high class hostels? (doubt it, and you have to have human rated spacecraft).
Until space mining is a thing, and in that case you should rather invest in mining companies, the market size is limited.
By many historical metrics, the stock markets are insanely overvalued these days. Far too much cash in the system, bidding up the "values" of anything that remotely resembles an investment.
SpaceX is insanely overvalued.
Maybe you think it isn't going to happen - and sure there is some risk (!) - but in the successful case, SpaceX should be worth many trillions. At least.
If some follow-on vehicle were ever developed adequate to support a martian colony, and lunar gravity were to turn out to suffice, getting any actual value return from such a vehicle is hard to imagine. You might try to use it to support automated mining of platinum-group metals from asteroids, but it is far from clear how that could be made to work out. That it seems possible in principle is usually not considered a sound basis for investment.
Musk certainly understands all of the above. He will cash out long before it is demonstrated to all be a pipe dream.
How could any rocket that can deliver several tons be inadequate for that?
Pressure suits for everybody on board might be crammed in, but more likely just two or three to use collecting more from cargo ships already landed.
For that to make any sense at all, somebody would need to figure out a profitable economy for a Mars colony. Nobody has been able to do that.
Big defense contracts from the US military is where SpaceX will strike gold, if they do. All the money is in launching stuff into Earth orbit to serve some practical purpose on Earth.
But anyway, op used P/E ratio to justify spacex valuation, in a totally wrong way. Their P/E ratio is in thousands (assuming there’s no creative accounting to show that profit, as they have many money burning projects and keep on raising billions). And they own a lot of the market and market itself isn’t growing fast.
You can justify their valuation with lofty goals and mission, if that’s your thing. But not with financial numbers and market sizes.
False.
https://docs.google.com/spreadsheets/d/1aoRFnOFX_CzxTTOFLl8h...
Note that this significantly understates market growth because Amazon's 83 launch deal did not include SpaceX, as Starlink is a competitor.
Weight to orbit isn’t number of lunches. They’ve been doing around 30 per year, for paying customer, for many years now. And one of deals may push it higher, like Amazon, but so far they didn’t show ability to sustainably grow the whole market.
> They’ve been doing around 30 per year
(N+1 means N dedicated launches, plus 1 Starlink rideshare.)
This is pure invention. They've done 24+1 this year, putting them on pace for 33+1 to 34+2 — the schedule is for 46+1, but there are always customer delays. They did 27+2 last year. Then 14+2 before that, then 12+1, then 11. There was a small one-time launch glut in 2016-2017, when they were emptying the built-up commercial backlog other providers had underserved, but that's 18 and 21 launches, still much lower than their current run rate, and you can hardly blame satellite providers for taking a few years to adapt to build their new satellites.
We saw the same thing play out with Falcon Heavy, for example. After its initial flights, it was left without a lot to do. Only very recently have the satellites built for its capabilities shown up, and in the last 12 months it has flown 4 times, with yet two more planned for this year alone.
On the Falcon Heavy point, we're also seeing new valuable launch niches, with not just Heavy flying regularly, but an increase in commercial crewed launch too. Transporter flights are not especially expensive but they're clearly a valuable market that could not exist without SpaceX.
> And one of deals may push it higher, like Amazon, but so far they didn’t show ability to sustainably grow the whole market.
The pretense that an 89 launch deal for a long-lived constellation isn't growing the market is nonsense. That's like 10 years of flights at ULA's heyday, from one customer's initial launch deal alone.
Right. This is the same stock market that at one point said Tesla was worth more than every other car manufacturer. Combined.
Worth more than: Toyota, Volkwagen Group, Hyundai/Kia, General Motors, Ford, Nissan, Honda, Fiat Chrysler, Renault, Suzuki, Daimler, BMW, Mazda and Mitsubishi. Combined. (Plus several Chinese manufacturers: SAID, Geely, Changan, Dongfeng).
In my opinion, the more interesting part is the valuation in light of no tangible exit strategy.
I wonder what time frame investors are looking at in order to realize their gains.
At this point it seems pretty plausible that if they succeed in making a whole rocket reusable at a decent cadence, instead of throwing away an upper stage with each launch, then costs will drop dramatically.
They are still heavily investing in starship and starling though so that is a large pot of why they are running at a loss
Are they considered revenue? Capex? Expenses?
I guess it depends on the exact corporate structure.
A capital expenditure is when you buy something whose value slowly decreases with time.
If a factory buys a building for $10MM, it isn't any poorer. Yes, it has $10MM less in the bank, but it also has a building worth $10MM.
As the building loses value with time the factory gets poorer: it's that loss of value which can be depreciated.
It's cool that a tech change can also change the accounting.
Uh, I was talking about the Starlink satellites which SpaceX owns, not the rockets. I am not, in fact, an idiot. But thanks for assuming so and giving me capex 101. Much appreciated.
Starlink is revenue. Starlink Launches are $0 revenue.
Move Starlink into a separate entity, have SpaceX build satellites and perform launches for them, and it becomes SpaceX revenue (and Starlink costs)
Have SpaceX rent out those satellites to Starlink, and the picture changes again.
The idea of creating a profitless company that somehow makes you personally rich used to be thought of as a fluke. Yes it's possible but it shouldn't happen and aside from extreme luck it won't.
Something has changed. Losing money and getting rich anyway has gone from fluke to something else, and it feels like we are lying about how the game really works.
Most tech companies lose money before they make money. Amazon lost a shitload of money before it started turning a profit, now Jeff Bezos is the 2nd richest person in the world.
Amazon businss model was/is based on selling books/toys etc. online. Basically Walmart but online + obsession over customer and improving the quality of life of the customer + AWS Cloud.
Tesla business model is based on the political choice to do away with fossil fuels. They aren't the same.
Tesla is the product of a centrally planned economy because the avg. person didn't jumpstart the Tesla/EV phenomenon. Matter of fact when the avg. person is left free to choose with their wallet they stil buy ICE cars, despite all the billions in subsidies, funny math and psyop over the population to convince them that they are evil because they don't have the same time horizion of a SV billionaire who thinks that we should go to Mars because the Earth will be destroyed by the sun 5bn years from now.
I 100% agree that du-jour saas companies raising 300MM on limited revenue is one thing, but this is not the same.
These companies are going to make money as a means to accomplish their goals. The control could shift away from him in the future and then at that point the goals could change to shareholder profits but that is not the case currently.
Musk has been making mission statements ever since the days of Paypal. It's been 30 long years.
And he has never delivered tangible quality of life improvement for the avarage American
You can hate on Gates and Bezos and Zuck, tell you what, I will be joining you in that fight. But the products and services that they signed off are everywhere in society and if you disappeared them you'd have chaos if not outright civil war by the end of the month. (Note that I said 'signed off' not 'built')
Disappear Tesla and SpaceX and you'd have the manbun and big latte crowd throw a tantrum on ExTwitter and not much else. Life will go on as usual, for all practical purposes it's like you disappeared Tiffany&CO
Neither has Ferrari or Rolex but that doesn't make them failures. Most of Musk's companies deliver good value to customer, just not cash flow profits from revenue to the companies themselves. They do somehow still deliver profit to shareholders via stock price movements though. It's not clear if Tesla will ever achieve long-term cash flow solvency but for now most customers are happy, and most shareholders are happy.
SpaceX seems like it won't be super difficult to achieve long-term positive cash flow. They're dumping tons of cash into Starship R&D but the expected returns are great. There really isn't any competition knocking on their door so they'll have at least a decade of uncontested pricing/margin dominance.
In fact Rolex, Ferrari, Fender etc. aren't valued at 680 billions. They are valued like status symbol companies . Again like Tiffany & CO.
As they should be, Musk convinced people that Tesla will deliver 'Standard Oil-esque type quality of life jump in the life of the avg. citizen.
Instead it's just a Ferrari made in Silicon Valley. When people will wake up it's gonna hurt many people who believed in this dream, which was more a mirage tbh.
It’s not super controversial that Tesla is likely overvalued, but shareholders generally still have a reasonable expectation of upside on new shares purchased so they continue to buy. I’d hope most of the qualified shareholders understand those returns are coming from speculation rather than valuation.
“Silicon Valley” seems inaccurate, most Tesla employees are in Nevada, Texas and China.
Also you talked about “Elons companies”, not just Tesla. The only company I can think of that maybe hadn’t been delivering value to both customers and shareholders is SolarCity. It’s acquisition was super sketchy but it no longer exists in any case.
No, for a company that has reached the status of top 5 most valuable it isn't unreasonable to ask for concrete quality of life improvement for most people.
Moderna and BioNtech aren't even in the top500 and yet delivered quality of life on a global scale by de-facto ending the Covid pandemic
Tell that to the people who depend on StarLink for rural internet access.
On the other hand. If Tesla disappears all the competitors will keep milking their ICE cars, since none of there EV make any profit. If Starlink disappears Ukraine is fucked, yes even if Elon has secretly given Putin access to all the satellites or whatever is the rumor of the day.
If you believe that, I have a social network to sell you...
Come on, the guy who keeps cozying up to the political party that denies global warming and loathes environmental protections is just looking out for the planet? The guy who spends hours on twitter trolling people, and refuses to honor contracts and severance payments is actually a misunderstood good guy?
Elon is great at attracting talented people and investors to his companies, and a big part of that is his ability to spin a compelling yarn about saving the planet or living on mars bases. That doesn't mean he's actually trying to save humanity. We're already seeing him pivot to a totally different persona, or maybe just not bothering to hide his true self as much.
This is really my only complaint about Space X. I wish they would stop trying to be this somewhat unrealistic hype machine. What they are doing nowadays is amazing - that should be enough!
Does that answer the question, though? Future growth is an estimate and approximation, is not real, and says nothing about current revenues and losses.
Another way to think of it is if I spent 10 billion to make a company which now successfully produces gold bricks from wood in a way most think I'll be historically net positive in 5 years then it's not really a mystery why waiting 5 years for the number to hit 0 is not particularly relevant to when people may be interested in buying parts of the company.
Their margin are contracting, and it's actually probable they will loose money in Q3, Q4 this year. They don't have any significant advantage on competition anymore, and China's competition is already well ahead Tesla.
Elon himself suggested Tesla is worthless as a 'car making company' and it's value will come from solving autonomy with FSD. While Tesla is very good at marketing, there were 2 companies allowed to operate self-driving taxis in SF past month, and there are already several operating in China. It's hard to argue that Tesla still has the lead in that domain.
Look at the financials of this 'underlying charging network for the entire continental US' - the optimistic ones, project that it will bring ... 10B$ in revenues in 5-10 years (revenues, not profit !).
It's absolutely meaningless in the big picture of this company revenues and valuation.
No one said irrelevant either, but that their best days are behind them. From an investor's point of view that could certainly be correct.
It's not that he will solve FSD, Tesla is valuable until FSD is solved as then it becomes just a car company.
And he picked the correct impossible puzzle that will never be solved. Same with the SpaceX premise.
The market value is the desire of groups of people that it be solved.
The lesson here is what impossible problem is our domains that we can market that our company is attempting to solve it and which of those impossible problems happens to intersect with a large group of people wanting said problem solved.
This doesn’t jive with their investor guidance, nor the sales figures. I’m curious where this prediction is coming from.
Maybe it is due to the capital expenditures from all of the new factories being built?
I don't think their did any investor guidance about profits - I may be wrong though.
Re factories - I don't think they are building any new factories now - are they ? The only one announced is Mexico, but they still don't even have the official permits yet.
https://ir.tesla.com/#quarterly-disclosure
Deliveries are currently on track and each vehicle delivered is profitable, with a larger margin (18.2%) than any other major car manufacturer. This may not be true with the first Cybertruck deliveries later this year, but total number of delivered Cybertrucks will be tiny. Cybertruck deliveries should ramp up in 2024 and the margins should improve.
About those large margins - yes, they are a bit higher than others, but it's not that much - and they appear much more price sensitive now. Thing is, they compare themselves to Ford / Toyota etc, while they don't sell nearly as many cars. A much better comparison is to the likes of BMW / Mercedes - but it doesn't paint the same picture.
Cybertruck deliveries are definitely not happening this year (unless we talk about <100 units for marketing purposes - much like the Tesla Semi deliveries start a year ago...)
We're depending on the feedback mechanism here working correctly. If it doesn't, we are rewarding unproductive behaviours.
This is why I don't take seriously any stats about pharma R&D spending. They don't consider acquisitions to be R&D even though it often effecively is.
For a much more thorough look at how our modern financial systems produce what naive thinkers would consider to be bizarre results, I highly recommend Mariana Mazzucato's "The Value of Everything." It's a challenging read, but it goes into the details of how economic and political thought has shifted over the centuries regarding the concept of wealth and value creation, and how the game really works.
Wages before profits. His companies has paid worker salaries from day one and continues to pay wages for over 127,000 people every month.
/s
This chart is quite amazing:
https://apolloacademy.com/40-of-companies-in-russell-2000-ha...
In Russell 2000, 40% companies lost money in 2022. It's higher than the peak of dot-com bubble, and almost as high as at the worst of financial crisis in 2008-2009. And it seems to be the norm lately. Eventually though, everything comes back to earth.
It's plenty easy to lose money and stay poor.
Only a handful of people in the world have "lost money and became kings"
Want to do the same? You live in the same capitalistic society as Elon/Bezos...
Sears or Ford may have produced a ton more in profit than was, as you say, put into the company. But the current valuation is based on what profit the market believes it will produce in the future.
Musk is 50, already past his intellectual prime. Has been an entrepreneur (or at least he claims) ever since he was 20.
If he hasn't delivered any profit in 30 years, it's clear that his business model is based on politics, subsidies and aggressive promotion to sell the stock and enrich himself as opposed to building something that improves the quality of life of the avg. citizen.
Are you one of these people who believe contracts/loans are subsidies?
Say you make $1 of profit, does that translate into $1 your company can control for its benefit? If kept as profit part of that dollar flows out of the company, to other companies and possibly to the government as taxes (god forbid).
If the company reinvests then it fully benefits from its would be $1 as opposed to someone spending it elsewhere.
IMO Accounting is the only reason many companies don’t turn an external “profit”
Those investments will basically be a money printer by lowering the cost to orbit drastically below any possible competitor.
It’s a long term play and it’s very smart.
There's a huge difference between unrealized value and actual profit.
It's like living in a house worth 1 million. That doesn't mean that you have a million dollars to spend on toys. The value might go down or the house might get trashed.
This assumes that the business is, of course, growing though and growing at a faster rate than the economy and its competitors, and that it has a positive return on capital from the core of the business.
A growing company with high return on capital which is not aggressively reinvesting in itself would be a red flag.
This should go in one of those "Myths that Engineers Believe about Finance" that all companies that don't produce profits are bad.
Growing a company that loses on its unit economics (eg. WeWork) ought not to make founders rich
If the company has high operating margins and high growth then it makes sense to take those profits and reinvest in capital and R&D to make the company bigger. That is the definition of an efficient economic machine builds itself, and the way to a very good stock for the investor.
That is different from the pathological stock with flat operating margins which is growing on debt, spending $1 to make less than $1 at the margins and will only consume itself as it grows.
And learning to tell the difference between those two requires learning to read 10-K's, you can't just look at the net earnings bottom line.
It us economically inefficient but every thing in US defense is so mindbogglingly economically inefficient that it makes SpaceX look like amazing value. (and IMO justifiably so)
Losing money makes everything easy. Competitors don’t play that game.
Profits are indeed unprofitable