The SpaceX IPO: retail investor notes

I talked with my wife about this (MBA, Masters in Economics...). She said treating this kind of company like an established company (PE ratio as indicator... etc.) doesn't work because the company hasn't reached its steady state yet. Not Tesla, and, when it IPOs, not SpaceX either. They're in heavy R&D, where their revenues keep getting plowed into pushing through their emerging phase.

Most of the derision I see for both of these companies takes the form of standard investment analysis for established firms, or simple hatred on ideological grounds. Tesla and SpaceX are like Apple when it was Jobs & Woz in their garage.

Orbital data centers, moon and asteroid mining, more launches, by two orders of magnitude, than any other commercial entity on the planet... SpaceX is going bigger. Yes they might go bust, but evaluating them as though they were Microsoft, GE, or Samsung just doesn't make a lot of sense yet.

Definitely meme stonk territory. IMO Elon is good for making the big bets on things with no competition that don't currently exist. The day to day grind of growing a company and maneuvering all the twist and turns of competition not so much.

I wonder if going public will mean that SpaceX engineers are no longer going to be able to concentrate on rockets, but instead need to work on a variety of distractions meant to excite investors like dancing robots.

For most retail investors, Musk connected securities are a lifestyle product, not an investment.

Meme it till it's true, I guess? People are nuts.

That covers 1 of the 10 points in the second link.

The bigger investors know the dual-use story for SpaceX, so that is what will be used to justify valuations.

https://ioc.exchange/@muskfiles/116333241408716236

> Of course this happens to be a bad time to sell

I mean… it is still up 63% over the last 5 years. It’s not a bad time at all.

If equal-weight funds got more popular, couldn't they end up distorting the price of the smaller-cap companies within an index

If it's any consolation , VTI is free-float weighted so won't pick up very much SpaceX initially.

It fell into place for my dense ass when I heard someone muse that inside SpaceX the joke is "Mars == Wars"

True or not, it rings with reality IMO

Having a trans kid seems to have flipped him from "I must save humanity by colonizing Mars" to "I must save humanity by electing Donald Trump."

Search for Golden Dome

Will he get bailed out by the Feds again though? SpaceX launch 3 failure was bailed out by the DOD. Tesla was bailed out by Obama.

Possibly. I don’t know if being bailed out is a sign of business acumen. Maybe political acumen? In any case bailing out present day Tesla or SpaceX will be very expensive, unclear of taxpayers will go for it.

Which is presumably why Elon is aiming for retail as the bail-outers

Getting fiber to a house is relatively expensive, especially houses in more rural areas which is Starlink's main market. A Starlink satellite costs a lot more but can serve many customers.

Let's say a Starlink satellite costs $2 million all-in. (They launch about 25 at a time, the launch costs something like $25 million, add in another million for the satellite itself and operations.) They have about 10,000 satellites in orbit currently, and about 10 million customers. That's about 1,000 customers per satellite, so a five-year cost of $2,000 per customer. That's a fair bit less than it costs to run fiber to a rural house. And Starlink is pretty much a monopoly in their main markets (terrestrial telecoms is usually at least a duopoly) so they can charge more. I pay $85/month for symmetric gigabit fiber. Starlink charges $80/month for 200Mbps, or $120/month for "max." On top of that, they can charge enormous amounts for commercial users like airliners and cruise ships.

According to https://www.reuters.com/business/finance/spacex-generated-ab..., Starlink revenue last year was north of $8 billion. They'd need to launch 2,000 satellites per year to maintain the current fleet. If $2 million is an accurate price tag for them, then that's $4 billion/year. Pretty nice profit, and there's a lot of room for growth.

The difference with spacex is you can watch the rockets fly. You can also watch them actually build. That's where the goosebumps come from

one livecam view, there are many https://www.youtube.com/watch?v=mhJRzQsLZGg

this guy releases videos about once a week or so https://www.youtube.com/watch?v=X_YDnrjf3G8&t=241s

this aerial photography channel documents bocachica every week or so too. Spacex is absolutely watched from every angle. https://www.youtube.com/watch?v=tnPcEFla3Dw

Someone somewhere probably once thought agriculture was "fake bullshit" and insisted on the hunt instead. I definitely take GP's point (so long as one can afford the longest of plays).

"SpaceX lacks the hardware or a plan with scientific viability for a genuine Mars program. The scientific community has long recognized the facade. A feasibility study published in the journal Nature definitively concluded that a crewed Mars mission using Starship is unworkable. The vehicle’s massive dry weight creates a severe Delta-v deficit, making a return flight physically impossible. Furthermore, the architecture lacks closed-loop life support and relies on massive, non-existent nuclear power and water-mining infrastructure. Instead of building for Mars, Starship is a heavy-lift vehicle with low characteristic energy (C3). This is only a reasonable design for driving mass to low-Earth-orbit constellations—a trajectory that perfectly mirrors decades-old Pentagon objectives, that recently has manifested as Golden Dome.

In the 1980s, Michael D. Griffin architected "Brilliant Pebbles," a global missile-interceptor network made up of thousands of weaponized satellites in Low Earth Orbit. It died alongside Reagan's Strategic Defense Initiative in 1990s after the DC-X reusable rocket program failed to lower launch costs. The architectural dream survived through "New Space" advocacy. Griffin co-founded the Mars Society and recruited Elon Musk after he was brought to his attention by Peter Thiel. In 2001 Griffin and the young Musk traveled together to Russia to examine ICBMs. SpaceX was conceived on the flight home to solve the exact launch bottleneck that killed Brilliant Pebbles. Musk later admitted the company was simply "continuing the great work of the DC-X project," and it was ultimately Griffin—later acting as NASA Administrator—who awarded billions of dollars in contracts that saved a zero-experience SpaceX from bankruptcy.

SpaceX masking began to slip when Gwynne Shotwell publicly confirmed the company's willingness to launch offensive weapons in 2018. That same year, Griffin returned to the Pentagon to establish the Space Development Agency, mandated to build a proliferated LEO constellation for hypersonic missile tracking. In 2019, U.S. General Terrence O'Shaughnessy pitched the Senate on "SHIELD"-a layered orbital missile defense system. Shortly after, O'Shaughnessy retired from the military and joined SpaceX to lead their discreet new division: Starshield.

Three decades later, Brilliant Pebbles is finally materializing as Golden Dome. As Reuters reported, Musk's Starshield is the frontrunner to build this classified SDI successor, pitching the Pentagon on a Golden Dome architecture involving thousands of weapon satellites. Starshield is already deploying these military satellites alongside standard Starlink satellites.

Mars was the necessary myth to recruit talent, capture public imagination, and secure capital. But as the Nature study proves, Starship was never physically capable of planetary colonization. The capabilities SpaceX actually delivered...cheap mass-to-orbit and rapid satellite replenishment...are the exact prerequisites of Golden Dome. "

https://en.wikipedia.org/wiki/Golden_Dome_(missile_defense_s...

I don't know what the correct value is, however my understanding of IPO's is that a bank buys (underwrites) the shares first and then lists them. This would suggest a large bank has taken a massive financial bet on the company, and I trust they understand the market and SpaceX's current value.

I know this is a lame answer because it's an appeal to authority, but I don't have an opinion on the share price other than very knowledgeable people have agreed it's fair and put up a lot of their own money.

What I do have an opinion on is that I think there's plenty of room for them to expand the market and grow. I also know the EBITDA for SpaceX is outrageously high for a hardware company, would would suggest it's a lucrative industry that others have trouble entering with low recurring costs. It seems likely to me they could continue to grow on 15 billion of revenue, and this growth is likely to be profitable.

I would argue all stock prices are speculative, they could quarter their share price in a month or they could 4x it. I've found myself constantly surprised when I look at a company, think "what else could they do?", and then watch the company explode in value again. I disagree that their share price assumes some unspecified massive success

At no point did I say it was likely, if I knew what any stock would be worth in 20 years I'd be day trading from a Miami condo. It's just possible. People who claim to know the future don't, and SpaceX could explode in value in 20 years or it could be worthless.