SpaceX plans to sell shares next month at $150B valuation | Hacker News Reader

SpaceX plans to sell shares next month at $150B valuation

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43 pointsironyman82 comments

Title is somewhat misleading since this would be another tender offer to select investors, not a public offering. Which is disappointing to me since I'd really like to buy some shares myself. Starlink is perhaps overvalued, but their primary launch business is so far ahead of the competition already that it's kind of ridiculous. With the progress of Starship, I'm expecting another massive step ahead of everyone else within the next 3 years, which would in turn expand the launch market itself to people who couldn't afford it before.

https://amp.cnn.com/cnn/2023/06/09/investing/premarket-stock...

Private wealth is so massive now that many companies don't need the public.

What this means for the future of investing for your retirement is unclear...

A lot of retirement funds invest in private companies.

Don't worry, you'll get a chance to buy in once all the private investors have made their killing.

"all the private investors"

AFAIK there is still some limit before the company is treated like a public one from various legal perspectives. Something like "no more than 2000 private investors"?

Given that there are probably over a million qualified investors in the US alone, that is just a very small fraction of those.

Accredited vs non-accredited is meaningless in the grand scheme of things. There are millions of accredited investors in this country would would love to invest in SpaceX (and OpenAI and the rest) if given the chance. Heck I bet most people reading this are accredited even if they don't know it ($200K annual salary isn't all that crazy in tech even at the entry level). The real barrier is always convincing someone to let you invest in their venture. And why on earth would they? What exactly does your dollar bring into the picture that they don't otherwise have already?

I‘ve read a lot of books about Buffett‘s strategy and the goal is to find as many investment opportunities as possible and then invest in the one which most likely has the best returns. For this strategy, it doesn’t matter so much whether there are many privately funded companies. There are tens of thousands of public market stocks, many of which are overlooked. Or, put differently, it doesn’t matter if a company is producing state-of-the-art technology or, say, building houses. If the price doubles in two years, then you‘ve made money.

Thank you SEC.

And in case people don’t know, this is referring to an accredited investor which is a government enforced way for the rich to get richer.

To be fair it is mostly a way to prevent scammers from fleecing the common man.

It is unfortunate that the laws also forbid many sound investments, but not as large a problem as you might think because most of the real oppertunities would never have been offered to random people anyway.

You can just self-claim to be an accredited investor. I did this for ages until it started becoming true.

But it's probably best they stay private. As you can see in these HN comments, public investors lack the ability to see the project through. i.e. there will be failures, planned and unplanned.

This is also why I think Kickstarter projects should be restricted to people who understand that they can end up with nothing.

I know of at least a couple low-profile high-value things that are invite-only and I'm only a part of because I'm in the network. This is probably the future of these things. Being able to constrain your audience to only somewhat wealthy people insulates you from the lumpenproletariat, perhaps at the cost of some smart and unwealthy.

And to be honest, the lumpenproles usually demand to be protected from these things, so it's a good idea to give them that since there's an easy way to segment the population.

More info on what counts as an accredited investor:

https://www.sec.gov/education/smallbusiness/exemptofferings/...

Well they try to justify it by saying that we unwashed masses don't have enough savvy to be investing.

The unwashed masses don’t have enough savvy. They’re gambling on crypto coins and 0DTEs. Or they’re dumping their life savings into crypto “earn” products where the yield is from a ponzi and they’re surprised when the whole thing vaporizes.

One thing ChatGPT taught me, is that it can reason and argue better than me about basically everything I'm not already an expert in.

If you don't trust ChatGPT to make investments, you shouldn't trust the masses (including me) either.

Have you browsed through the Wall St Bets subreddit? Not that pre-IPO investing is any more reckless than throwing away money on naked options, but it gives a good sense for the savviness of the average investor.

When the company is private; it's hard to get access even if you are accredited.

If the SEC was the only barrier then millions of private investors would own SpaceX shares right now. Turns out Elon just doesn't want to sell to you.

I think you mean "doesn't need to" and some see this as a problem. What happens over time to people's retirement funds as the real stock market shifts towards private investment.

Then we go back to pensions and social security instead of gambling. Things would probably be better off that way.

How does one convert a 401k into a pension?

pensions don't work with a collapsing population

>I'd really like to buy some shares myself ...their primary launch business is so far ahead of the competition already that it's kind of ridiculous. ... which would in turn expand the launch market itself to people who couldn't afford it before.

the breadcrumbs from SpaceX multi-trillion dollar business table will be at 100B-scale. I.e. one can start a small launch company to pick up those crumbs, or one can develop some tech that the SpaceX or their clients would find useful in a few years - like ionic drive fed from solar panels or nuclear drive for Earth-Mars ships (either way beating the chemical drive) - or just develop some business to utilize the coming huge Starship launching capacity ($500K/person weekend trips around the Moon anybody?). So, while more speculative, the upside of investing in such companies may be higher.

My understanding is that SpaceX will not IPO until they reach Mars. And I think most of the value in what they’re developing is going to be extracted after that point rather than before.

Even if we accept that SpaceX is going to Mars, wouldn't they want the IPO money to finance the Mars mission?

The goal of Starship is to make Mars missions significantly less capital intensive in the first place, and to make lift to orbit orders of magnitude less expensive. This is going to open up qualitatively different commercial markets that will bring tons of money into SpaceX. They don’t even need to make money off of Mars itself; it’s more that reaching Mars requires them to actually deliver on the other stuff.

Still need retail suckers to buy shares so the rich private select investors can cash out.

> IPO until they reach Mars

So when the massively tank their valuation by spending an insane amount of money with no potential of any meaningful return?

Why would a private/commercial company ever go to Mars?

A money seeking company might not want to go. But there likely will be co-op based groups that would go. Similar to this project that helped develop parts of Alaska at a time where it was considered to be nothing but snow and ice:

https://en.wikipedia.org/wiki/Matanuska_Valley_Colony

https://www.nps.gov/teachers/classrooms/twhp-matanuska-colon...

All of these costs virtually peanuts compared to what a trip let a lone a colony on Mars would cost. It's inconceivable that any non-profit seeking non government organization/group could ever pool enough resources together for that (and if they could all of that energy/resources/money would be better spent on fixing more relevant problems back on earth)

Favorable labour laws (that is, a lack thereof)

Imagine the massive Tesla and SpaceX factory-sweatshops, cranking out cars and starships on a barren red planet.

It's a long flight home. We haven't had that kind of excuse for indentured servitude for centuries.

And at the bottom of a gravity well.

LOL, the idea that anything elon's touched could be worth $150B...

How can it be a good idea to have such an important company to national security public?

Last thing you want is funds having their say on how to run the company. Didn't work well with Boeing either.

> Last thing you want is funds having their say on how to run the company.

And who exactly do you think owns 58% of SpaceX that Mr. Musk does not own? [1] It's not like being private means the company is not owned by funds or they have no say on how to run it. What does mean they have no say on how to run it, though, is that although Mr. Musk owns only 42% of SpaceX, he controls 78% of voting rights [again, 1]. Given that he already has a complex scheme to have full control over public Tesla [2], I doubt if SpaceX goes public, Mr. Musk will lose his control over the company.

> How can it be a good idea to have such an important company to national security public?

It doesn't really matter who "owns" the company, it matters more who is on the board and who have most voting rights. Anyway, if national security is of any concern, better ask why Lockheed Martin or Raytheon are public.

1. https://archive.is/7jbAd 2. https://www.thestreet.com/investing/stocks/how-elon-musk-con...

The alternative is to leave it all in the hands of the existing private shareholders, which… well, regardless of your opinion on literally anything else he does, how much do you trust Musk on matters of national security?

There’s no way anybody even nearly as problematic as Elon Musk would have been in charge of important rocket development projects during the Cold War /s

Cheeky but I don't think Von Braun working in a public agency had the sort of discretionary power a part owner-CEO like Musk has.

What, no, I meant the other guy, the one who was really into Aleister Crowley and did sex magick with L. Ron Hubbard!

https://en.wikipedia.org/wiki/Jack_Parsons

But seriously, while I’m sure a lot of people in the government are mad at Elon’s hot takes, the government has just as much leverage over SpaceX as they did over Von Braun. In either case they could have turned the screws; the only leverage Elon has is that SpaceX delivers what nobody else can. Which was also true of Von Braun. (Jack Parsons, it turned out, wasn’t worth the headache in the long run; his story has a sad ending.)

> How can it be a good idea to have such an important company to national security public?

They've made themselves important by working very hard... It's interesting how the narrative switches immediately from mocking someone for trying something impossible to being worried about them being a danger to national security. It's very bad for the country that some people seem to think there is nothing in between. You're either irrelevant or you're too important.

> Last thing you want is funds having their say on how to run the company. Didn't work well with Boeing either.

We're a couple decades at least away from SpaceX reaching a Boeing-like position.

> How can it be a good idea to have such an important company to national security public?

Well, it is not going public.

Isn't the privatised version called NASA? And they stopped doing a few things deliberately because they couldn't compete. And we don't know what the voting structure will be so it might not be "funds having their say" in a big way, right?

Can you enlighten me about when NASA stopped doing things? I got the impression that NASA has 'always' used companies to build things for them. I'm quite cynical so I assume it's always been an tax->government->industry funding process.

I'm not American but it was my impression they stopped the space shuttle program for so long because it wasn't cost effective and they instead partnered with private enterprises for those use cases?

NASA has always paid someone for launch. In the past they owned the IP. Now they don't. They have their own rocket and it costs only 2 billion dollars to launch

The last rocket blew up and now they need more money to build another?

This is why it’s a good thing it’s staying private, public investors would focus only on the high profile explosions of a test vehicle rather than on the fact that SpaceX has a 99.3% mission success rate, the record for the most launches in a year, the only company to have reusable first stage in use, and the only way for American astronauts to reach orbit in the current geopolitical climate, all of this at a fraction of the cost of competitors.

Even if it hadn't blown up, it would've been destroyed as part of the flight plan. Just by high-speed impact with the water in the Gulf of Mexico and off the coast of Hawaii rather than by flight termination system.

This is why governments don't build rockets any more.

"Experimental test rocket blew up", yea, they tend to do that.

People pretending "move fast and break things" is a given in this field. SLS first launched in 2022 and not only reached space but flew around the moon and dropped off some satellites. Very first launch, no giant explosions. Don't get me wrong, SpaceX is incredible and will figure this out, but it's not at all obvious their approach to making a giant rocket is faster or more efficient than what the conventional players have done in the past. Each step, reaching orbit, the moon, Mars, is huge step that comes with new challenges.

And how many billions of dollars did that single SLS rocket cost. How much will the one after that cost? And the one after that, wait, they aren't building but a few at a few billion each. The giant rockets before then were built with a percentage of the national GDP.

At the end of the day spaceX will come in way cheaper per rocket in total and it will be reusable.

With SLS having a cost per kg to orbit about 10x that of Falcon Heavy, this isn't particularly convincing evidence that "move fast and break things" is the wrong approach though.

And Starship promises another 10x (_after_ already applying a 3x "Musk exaggerating multiplier") improvement.

They have seven boosters under construction, three of which are already undergoing engine installation. If they need more money it’s for more than just one more rocket.

it's a tender offer, more likely the purpose is to allow employees to cash out some of their shares without having to IPO

I will never get people who have never been in the wild salivating at the idea of having 500Mbit broadband while in the wild. That's overkill in a city, let alone while you are busy enjoying Nature.

I mean this company is solely based on this idea of bringing broadband to the wild, because if God forbid any ICBMs are ever launched they'd be launched all at once so even if the booster makes it back thanks to SpaceX tech the US/NATO would have no MIRVs to re-load.

My infrastructure bet is on 5G and fiber to dominate connectivity, however my poker mind would love to scoop some SpaceX shares to offload to bigger fools down the road, for some reason people have this weird fetish about Space irregardless of practical applications. Ever since the Apollo days.

As someone living in the wild (actually rural), people out here have businesses and we were in dire need of broadband to run them, plus the usual lifestyle benifits. It's not all sitting around enjoying natures view.

As for 5G it has a ~500m range. Are telcos going to daisy chain towers down peoples driveways to reach one customer? 500m is not far in many rural and remote areas.

If you go to Vietnam, which is about the size and shape of California, and travel around the entire country, the government owns the cell towers and there was excellent 4G reception in even the most remote areas. This was back in 2018-2020 when I was exploring all around there.

I've done the same explorations in California and reception was 1000x worse.

My point is, yes... it is possible...

1) Swapping to discuss 4G, is not 5G. It does have better coverage but will increasingly limit people as bandwidth requirements ever increase.

2) Vietnam/California are quite densely populated compared to the majority of the world so even if this worked here (but doesn't) one still cant assume its a wider solution.

3) Vietnam does have a significant mobile blackspots: https://www.nperf.com/en/map/VN/-/167.Viettel-Mobile/signal/...

So, sure anything is possible, but a good solution, far from it from what I can see.

1) I left Vietnam in Jan 2020 (couldn't go back thanks to covid), so that's where my knowledge stops. 5G wasn't being rolled out yet.

3) A lot of those empty places are where nobody lives. All the major spots are well covered. I spent 2 years on a motorbike traveling the entire country and including into many super remote areas... I never once had coverage issues.

Vietnam has 2.5 times the population of California, what a bad comparison.

Most of the population of Vietnam, lives in a few major cities.

Starlink is an actual order of magnitude faster than the next best option (centurylink dsl) in my town of 2k people. Considering that we never even got broadband out here its been great. Starlink has applications beyond an off-grid cabin in the backwoods, if only because ISPs have utterly failed the rural broadband mandate. And as an elon anti-fan it pains me to pay him monthly.

I live on the edge of a small city. I have one option for internet above 20Mbps. It’s fine, but I would absolutely love a better option.

Prior to this, I lived in a small city. One internet option for most of the time. It took a terrible route to get to the nearer major city, meaning I had huge amounts of latency for just about everything.

Normally 5G and fiber would win out because on paper, they’re cheaper and more practical.

It’s more complicated than that, though, at least in the US. Big telcos have little interest in rural connectivity because it’s not ever going to bring in the metro area revenue they crave. Smaller telcos and new entrants struggle with obstruction from big telcos, NIMBYs, and local politicians who won’t let anything through unless they’re getting a cut of the pie among other things.

Starlink and similar constellations neatly sidestep a lot of those issues, at least for now.

> > at least in the US

The US has 83% people living in urban areas and only increasing

Decent broadband is probably not the main reason for urbanization but it doesn't help that economics will never make sense for non-urband broadband (and other stuff)

Perhaps those people are mining some unobtainium that is crucial for our cushy urban lives ... ?

I'm just looking forward to having true broadband and/or at least somewhat reliable tolerable-bandwidth (as in single digit Mbps) connectivity in Germany outside of major cities. SpaceX sadly seems like the most likely way of that happening.

It's already available in Germany.

I will never get people who have never been in the wild salivating at the idea of having broadband while in the wild.

1) This isn't just for people, "in the wild." If you're just rural enough to not have broadband, Starlink is one of your best options.

https://www.youtube.com/watch?v=bn_prpVDMRo

This is going to be a huge boon for the 3rd world! Also note how much of a benefit it was to Ukraine. (And no, Elon Musk didn't cut off bandwidth from Ukraine. That's demonstrably false media spin.)

2) If you've ever felt screwed by your broadband ISP, but had no other choice -- know that this still happens to people in 2023.

My infrastructure bet is on 5G and fiber to dominate connectivity, however my poker mind would love to scoop some SpaceX shares to offload to bigger fools down the road.

Folks like Jim Chanos have lost billions betting against Elon. And lots of people have made their fortunes taking him at face value. (I'm one!)

>just false media spin

Musk himself states he personally ordered starlink interruptions for Ukraine…

Where did you read that?

Check this interview with Ukraine’s military intelligence boss. See for yourself:

https://www.thedrive.com/the-war-zone/exclusive-interview-wi...

I looked up your bogus claims on google and nearly the first 3 pages of results were Elon muck himself stating he disrupted the connectivity.

>thedrive

I don’t really care what conservative propaganda pieces have to say on the topic on Ukraine.

This is an interview with Ukraine's top spy. i.e Ukrainian propaganda undiluted

> > And lots of people have made their fortunes taking him at face value. (I'm one!)

Congrats, that's only half of the battle though, in order to make the bag worthwhile you need to avoid getting screwed when you convert your $TSLA money into stuff and experiences, lots of savvy salespeople in the real estate, vehicles and hospitality sector looking for fools to take them at face value.

Watch out because the next salesman you take at face value will sell you a 75k package for the Vegas GP and you'll end up with seats obstructed by rails and a 1 sec handshake with one of the (retired) drivers.

> ... lots of savvy salespeople in the real estate, vehicles and hospitality sector looking for fools to take them at face value.

That's not wrong but if they were that savvy they'd be the ones sitting on a fortune, without needing to being leeches living of the fortune made by others.

Apples and oranges

Making money by selling overpriced stuff face to face is a totally different feeling than making money on the stock market because a company was propelled to all time highs for trillions of reason outside of your control

catching lobsters with traps vs fishing swordfishes.

Some people are wired to do one vs the other

> Folks like Jim Chanos have lost billions betting against Elon.

Yeah like him or not there’s much easier money to be made than betting on Musk’s failure.

> > Yeah like him or not there’s much easier money to be made than betting on Musk’s failure.

The infrastructure part of my portfolio is not betting on Musk failure but on 5G and Fiber success, which is a given considering that regardless of what the cultists say the majority of people live in urban areas and the % is only increasing.

Lagos will be 100M by 2065 and VERY dense, fiber cable and 5G towers with a 5mi range makes way more sense at such population densities than 20,000 km back and forth with a dish . Also developing countries have a huge problem because Sat Dish get stolen by thugs, but of course the cultists sending 50k deposits for cars that will never be built they never had to deal with poverty nor thugs.

Lacking skepticism and antibodies to salesmen they represnt the perfect target for predators.

I've been to Lagos, pretty much every techie (working remotely) that doesn't have 5G or Fiber has starlink because they already have modems for the 6 providers in Lagos available to them.

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