> 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.
You can't compare falcon to SLS because Falcon cannot do what SLS does.
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.
technically bing should have access to this regardless because it can access the internet (despite its training cutoff date) but its my fault for not digging deeper and trusting its output
> 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.
Of course the Falcon can be compared to the SLS. Both are vehicles designed to take things into space for crying out loud!
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!
Because things in space do not scale linearly, and sending 10x smaller sats is not the same as 1x 10 times larger sat. Some missions require larger fairing/lifting capacities.
> Every report on Falcon 9 costs has made this mistake forever. SpaceX does not release their full costs.
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 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.
> It is not possible to do a fair comparison of launch costs between Falcon 9 and other platforms without knowing the true cost of Falcon 9 launches.
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.
Cost is more important than price in the long run because it tells us whether SpaceX has made genuine efficiency and technology developments that allow their prices to be long-term viable. Any one can sell a service at a loss, but you eventually run out of VC or saudi bucks to make up the difference, and then you have to jack your prices up again.
Anybody who spends even 10min actually thinking about this topic realizes that the idea that SpaceX subsudizes Falcon 9 launches to get price below cost is complete nonsense.
Its just a convieniant attack on SpaceX because they are private. It has no bases in reality.
> Price is not a good metric here you can subsidize your pricing to hell if you have budget.
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.
Nonsense. Complete and uther nonsesens. Anybody who spends even 5 min realizes this is wrong. ULA isnt going away, no-matter how cheap SpaceX is. Arianespace wont go away. China, Russia, India and Japan wont go away. BlueOrigin wont go away.
If anything SpaceX has lead to an explosive increase in competition.
You're correct, we don't have evidence that SpaceX is pricing below cost, because we have no idea what Falcon 9 launches actually cost, because SpaceX refuses to tell us.
And every expert who has analyised it or thought about it know its nonsense. SpaceX has told us, but you simple believe them.
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.
Profit is the result of all operations, not just launches. For instance, starlink is a SpaceX company. Starlink is reported to be responsible for up to 40% of SpaceX's revenue.
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.
> Irrelevant. Hollywood accounting works because (...)
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.
> 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.
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.
That’s not the only relevant number because we know what tech has been over the past 2 decades. It’s been an effort to build non competitive monopolized markets. That’s what Uber is, that’s what the delivery services are, that’s what AirBNB is, that’s what Square is, etc.
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.
Your comment leads me to believe that you know very little about the rocket business.
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.
That's naive. Such leaks are typically planned PR. I expect it is leading to another round of fund raising. They are described as a money incinerator that has already run through the alphabet of rounds. They want to counter that without putting anything on the record because... well, you can guess why.
61 launches is quite a lot. The SLS can do about 100 tons to LEO, a standard F9 can do 22 tons albeit with a much smaller fairing.
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.
You can easily compare what SpaceX charges for a launch. Wikipedia says Falcon Heavy expendible is 63 tons to LEO and $155M. SLS is supposedly 95 tons to LEO and 2 Billion.
Part of those expenses are probably building starlink and starship r&d. I suspect F9 no longer has significant r&d expenses.
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.
I overheard some high-temperature semiconductor guys ("how do you build chips that work on venus / in engine blades / etc") at a NASA facility talking about budgets in a way that suggested a substantial part of their funding came from the launch vehicle budget.
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.
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.)
> 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.
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.
Falcon isn't really comparable to the SLS, but yes the SLS is awful cost wise. Starship will almost surely be between one and two orders of magnitude cheaper per launch vs SLS.
And NASA will probably be very happy to use such a cheap system once they are convinced it meets their reliability standards. The point of SLS IMO is to keep a backup option if SpaceX has some horrific, unpredicted setback or design problem.
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. 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. And SpaceX has not yet demonstrated the ability to land humans on the Moon while NASA has. They're making sure that we can definitely still use big dumb stupid expensive technology to get there. If Starship works they may wind up pivoting away from SLS in the future, but then SpaceX will also get to take its pick up the remains of that program and their engineers (if they aren't already benefiting from a lot of cross-pollination).
> 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.
Yes, Starship is unproven. But Falcon Heavy is very real.
> 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.
If the primary goal is sustainable payloads to the moon. I think Congress considers this a secondary goal over funding and jobs being directed at their states.
It completely fails as a justification for SLS, though. It's preserving nonsense that needs to die, instead of pushing the actually successful part of commercial space.
It's a good thing during down times. But now is not down times. Experienced, qualified space & rocket engineers are in high demand. Employing them to do useless make-work means they aren't available to work on rockets and space systems that will actually be useful in the future.
In 1990's Dan Goldin, the NASA administrator at the time, was looking for ways to return to the Moon for cheap. One of the least expensive variants which was presented included launching multiple Protons and assembling lunar exeditionary complexes on LEO. The quoted number at that time was $1 billion to put boots on regolith again.
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.
SLS is needed only because they were not allowed to adopt on-orbit propellant transfer. With rockets like the Falcons, propellant (which is most of the mass needed to get something to the moon) is launched in smaller quantities and accumulated.
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?
One where we just launch one rocket instead of building a giant orbital bomb slowly (accumulating fuel) and transferring all those explosives through a complex series of difficult rendezvous maneuvers? One rocket is risky enough.
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.
A “giant orbital bomb” is part of the Lunar Starship plan. Starship will launch tankers
> 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.
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.
It's actually less risky. Most of the launches are of propellant, which is completely replaceable. Reliability of a launcher is achieved by using it many many times, exposing all the gotchas. SLS will launch so infrequently it will be extremely risky.
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.
There is plenty of future in space by limiting propellant transfers to times when they are absolutely necessary. We can do them today, and have been able to for 30 years, and yet we rarely do, and never for the volumes of fuel you are proposing.
There's no reason to have humans on board while transferring fuel, the risk to human life from this "giant orbital bomb" (ridiculous fear mongering) is nonexistent. Anyway, the whole thing is a pointless waste of time and money. The only non-pork reason to return to the Moon is to blunt the impact of the PRC doing the same (should that happen.)
Technically so is falcon 9, but they can’t return and they have to be totally dry with no cargo, and definitely not a terrarium full of humans. Falcon heavy is even capable of going to Pluto. But it wouldn’t be a very interesting mission. More interesting would be launching unmanned probes.
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 ;-)
On-orbit assembly, the demonstration of which was the single actual real accomplishment of the Space Station program. And yet NASA just threw that in the garbage.
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?
Maybe they used that experience decide that it would be cheaper to just build a huge rocket? The ISS also had the benefit of the shuttle, while US flights to LEO were in turmoil when the SLS was funded. It also wasn’t clear in hindsight how completely and utterly inept Boeing was and how effective SpaceX was going to be.
It's grossly more expensive the way they are doing it. They were originally going to use smaller commercial launchers until Senator Shelby and others held a political knife to their throats.
SLS has absolutely no redeeming features. You're sunk deep in Stockholm Syndrome if you're still defending it.
It's ironic that Musks two big successes were funded by the Obama administration against vehement Republican objections. Shelby repeatedly tried to kill Space-X and without the $400million DOE loan Tesla would never have been able to start production - and without the electric car tax credit - it never would have been able to sell.
That ~$5billion per launch includes a lot of amortized R&D and other costs that you are not counting in the 61 successful Falcon launches. It may be that the Falcon launchers are significantly cheaper, but the accounting methods are too different to just compare numbers.
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.
Your right that figure isn’t accounting for the $23.8 billion cost of the program so far. That $5billion per launch figure is based on an optimistic number of SLS launches which haven’t happened yet.
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.
$5B (2023: $4.7B) is actually the current yearly run rate for SLS+Orion+EGS. Thus, $5B is what the marginal launch cost would be if SLS was launching yearly, excluding $54B to-date costs of the three. Even NASA's official projections (which are always optimistic) don't show yearly launches, but if unreasonably optimistic numbers still make the point, why quibble over the details?
It's ridiculous what amounts of money these ventures can siphon away in the US. See Uber, AirBNB, etc. I'm not saying they don't pay off, but these businesses literally choke most international competition.
There are probably 1-2 countries in the world that can afford to keep running a business with losses at around $1bn per year.
$1b loss in the space industry is probably the smallest loss for any business in said industry in history. Every launch of the space shuttle was a few billion used up. There has been no completion here, because before SpaceX everyone else was launching 100M-1B+ of rocket that was never reused and other than the payload was a write off. It is always financed by government because there is typically a much larger generalized payoff for the nation state involved regarding capabilities.
> Every launch of the space shuttle was a few billion used up.
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.
Yeah, I'm not talking strictly about SpaceX. I don't know if I have the exact name, but I'm quite sure that one of the big unicorns, probably Uber, was running for several years with multi-billion dollar losses.
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.
I think many governments with state industry routinely run massive deficits in those state industries, and as an extension, state funded industries. Space is such an industry.
Distance is almost completely irrelevant for comparing launch vehicles.
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.
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.
Its revenue will almost double again this year (2023) by looking at the number of launches[1]. Definitely the most exciting company Elon has (personal opinion)
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.
"clearly" is doing so much heavy lifting for you it puts both starship and sls to shame...
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
That's complete nonsense. There is a lot of evidence that Musk makes all the important decisions (like switching Starship to steel) while Shotwell seems to handle mostly day-to-day business. Moreover, Shotwell has, as far as I know, not actually founded any successful companies, while Musk has.
It's a title. It means fuck all. If you start a company, you can name yourself whatever. I'm the director of a company.
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.
Credentials don't matter in the real world. The question is who does the job. And we have plenty of evidence that Musk does that job, weather you like it or not.
> His main talent is extracting subsidies from the US government.
Musk offered the Chief Engineer title to Michael D. Griffin who is discussed elsewhere in this hackernews post. That was mentioned in Liftoff. Griffin basically felt he could pull more strings in Washington.
It's funny how both Tesla and SpaceX are successful despite Musk. Or rather, it's funny how some anti-Musk people can still claim that.
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.
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.
> CEO sets the vision. Without vision, even perfect execution is pointless.
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.
Many of those planned commercial launches will likely slip into 2024. It is common for space companies to not bother updating deadlines that they obviously are not going to meet until they get past some high-risk milestone and are in a better position to give a more realistic deadline.
Interesting site, but it's not clear to me what they count as a failed launch. My guess is some of the Starship tests since I don't think there has been a failed Falcon 9 launch is a few years.
Also, unrelated: This site is the worst case of hijacking the browser back button I've ever seen
I think most people focus on bringing back far-right people to the platform, making the application inaccessible to logged out users and the failed attempts at Twitter Premium or whatever it's being called.
for me it’s the vocal Twitter users who say with a straight face that it’s the “town square” and who talk about “the global conversation” and just won’t accept that only a vast minority of their town or globe actually post on it or participate in the way they’re suggesting.
the whole platform — users and owners — are just incredibly full of themselves in an _annoying_ way.
i remember i think back when jack dorsey stepped down and parag agrawal was slated to be the next ceo all of HN was doing nothing but talking about how the only viable path for twitter was to put the entire thing behind a subscription because there was too much garbage.
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.
I really dislike this argument, it sounds so balanced but it’s disingenuous. Twitter has (had) rules. Nothing to do with political slant. It’s just there are extremes on the right that seem to cross those rules. Correlation is not causation.
Don't worry about SpaceX, it's now an essential part of the US military. Without SpaceX's satellite internet the war in Ukraine would have been much hard to deal with. SpaceX's capacity to launch rockets two or three times a week is something the US military is war gaming around, never mind the same thing but soon with the Starship. SpaceX is in good hands just as its increasing enterprise value shows.
Those numbers are pretty remarkable given how much money they are pouring into developing Starship and expanding Starlink right now. Over half of their launches have been for Starlink, and yet they are close to turning a profit on revenue from the other half and Starlink subscriptions.
When it comes to launching other payloads, there is very little competition out there. Falcon 9 has proven itself itself very reliable and first stage reusability has put them in the place where they can always be under the competitors costs (but not too much under).
I'm using an extension called "Bypass Paywalls Clean", haven't updated it in a very longe while and it still works, looks like the current versions is here: https://github.com/iamadamdev/bypass-paywalls-chrome
I suspect that SpaceX is booking Starlink launches as revenue. My basis for this is that their launch revenue is growing much faster than their non-starlink launch schedule.
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.
SpaceX's detailed financials are secret. This is a simple fact. As a privately held corp they have few disclosure obligations. What they do disclose is usually what they want to disclose. There is no comparison between the detailed, auditable financials that we have for a project like SLS, and the one or two headline numbers that SpaceX has told us about something like Falcon 9.
>There is no comparison between the detailed, auditable financials that we have for a project like SLS, and the one or two headline numbers that SpaceX has told us about something like Falcon 9.
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.
Are there reporting requirements that separate actual revenue, my term for revenue from private parties, and revenue from government grants and contracts? What is the percentage of SpaceX's "revenue" that comes from government grants and contracts?
SpaceX has billions worth of government contracts but why do you ask? Remember that SpaceX is charging the government lower prices than its competitors...
Go work for them on a position that has equity as part of the compensation.
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.
Making Tesla public was clearly elons best ever decision lol. The moment it went ballistic in early 2020 made it well worthwhile - Tesla has access to an effectively unlimited pile of cash from public investors (and gave Elon more money than he could possibly hope for to invest in other pursuits)
> Short of investing in them, you could look for companies in industries that are likely to benefit from cheaper space access.
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.
What I do is browse aimlessly through RH until see a tag like "Industrials". Then, I click this and I can see a list of like 50 companies that do all things yellow-square in sim city.
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.
Typing in "[email protected]" is much faster than providing real contact information, especially when you are trying to plow through a lot of material.
Do we like being added to arbitrary contact lists?
Talk of putting people on Mars is how they recruit young idealistic engineers. I think to understand what SpaceX is actually about you need to understand who Michael Griffin is and what he's all about. He went with Musk when he tried to buy an ICBM from Russia; he conceived of NASA's Commercial Resupply Services program and gave the contract to SpaceX, before SpaceX had ever put anything into orbit. Ditto the Commercial Orbital Transportation Services contract. It's not an exaggeration to say that SpaceX would not exist if not for Michael Griffin.
This has elements of truth but is a conspiracy theory the way you describe it. If you listen to Musk, or listen to people who work for Musk, or the people who work for those people, they all say that the point of SpaceX is to enable human colonization of Mars. It's not just a marketing strategy to acquire talent (unless you think they're all lying -- hence the conspiracy aspect.
Now, to do that, they'll need to scratch the government's back. Doesn't mean that Mars isn't priority #1.
The only person that has to lie is Musk. That's why SpaceX is run as an autocracy. Everyone else drinks the Mars Kool aid. People who have been around a while connect the dots.
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.
This can be true AND Mars can be Musk's #1 priority.
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?
can the internet please decide whether SpaceX is an autocracy, or if (as several media outlets put it) Elons companies succeeded in spite of him as opposed to because of him.
> can the internet please decide whether SpaceX is an autocracy, or if (as several media outlets put it) Elons companies succeeded in spite of him as opposed to because of him.
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.
Corporations are basically late stage feudal systems, close to absolutist systems, depending on the company (see Meta as an extreme example, or most privately held companies such as SpaceX or Valve). Everyone gets an ever smaller fief from the top boss, but the top boss has a lot of power.
Yes, it's literally a theory about a conspiracy. That doesn't mean it isn't true. And Elon Musk saying he wants to create Mars colonies doesn't make it true, anymore than Howard Hughes saying he wanted to mine magnesium nodules off the ocean floor made that true.
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.
> 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.
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.
If they don't start serious habitat development until Starship is ready, then, Starhip will be decades old by the time anybody is ready to make a Mars colony. Besides the structure of the habitats themselves, there a ton of technology that would need to be developed first. Life support equipment and systems, space suits, vehicles, any sort of plan to produce food. Nobody is seriously developing this stuff, you have a few million dollars here and there thrown at university projects but no serious investment. It would take a Manhattan Project sized commitment, but who would pay for that? Not Elon Musk, he says that he assumes other people will. There's no money in Mars colonization, it's a pipe dream for young dreamers.
> 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?
They are literally doing serious hab development for the moon mission right now.
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.
SDI, obviously. Did you click the link? My innuendo is thinner than rice paper, it's a joke to prod you into clicking that link. Michael Griffin's entire career revolves around kinetic interceptor based SDI, e.g. Brilliant Pebbles. The only way to build such a system is to develop rocket boosters that let you launch tens of thousands of satellites, which is what SpaceX has been working towards the entire time.
> During this time, he met entrepreneur Elon Musk and accompanied him on a trip to Russia
> 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?
>I also don't understand how it's not a conflict of interest to award his own company that contract?
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.
The contracts were not given out because of SpaceX issues. This program was ungoing and progressing threw the steps. SpaceX and Orbital were the deserving companies to get the contracts.
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.
It's very likely that if Michael Griffin and Elon Musk had never met, Elon Musk would not be in the space business at all and Michael Griffin would have induced some other person to play the same role. Orbital Sciences and SpaceX both exist to make "proliferated" LEO constellations possible. He founded one and had his fingers all over the founding of the other. He's gone above and beyond to keep both these companies afloat.
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.)
>Elon has been pretty vocal about regretting making Tesla public
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.
No, the way Elon is, no number is high enough. It must get bigger. THAT'S the superstar uber rich lifestyle I meant, where you are playing the equivalent of an Idle Game with Bezos and Gates.
I suspect he actually believes his purpose is to save humanity from nuclear war (per Griffin's approach above). This is when Elon stopped buying and crashing sports cars.
His wealth is not so much about living a rich lifestyle, but about shaping society to his views. His wealth allowed him to buy a media megaphone (TwitterX) to further his political objectives.
Actually SpaceX was 85% government funded according to the guy who gave him the money, Michael D. Griffin. This was front-loaded. Private money was never at risk.
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.
So the government wanted the services and was willing to take some risk paying in advance that SpaceX couldn’t deliver? Smart and successful bet in this case, but I guess they tried that with other companies as well and those didn’t deliver?!
Agree, the point is that the story of Elon taking personal financial risk with SpaceX is false.
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.
If you are following along above, even if SpaceX failed, only the government would have lost money spent. The government contract did not take equity so Elon could liquidate and get all his money back. His cash investment was very little compare to government up front money provided by Griffin.
They had no debt, and plenty of assets funded by the government. Other failed rocket companies liquidated and return value to investors. Elon only had to recover 10% of the spend to be made fully whole.
what uber rich lifestyle? he owns no mansions, no yachts, and i’m not sure he has any super cars. this is a man who sleeps at the office on several occasions.
I'm sure it is - but sleeping in his friend's mansion is most definitely not indicative of Elon needing money to fund his 'uber-rich' lifestyle.
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.
While owning a jet is a valid point, in his case I'm willing to believe its efficiency related as opposed to some luxury purchase (the time savings are simply insane, that's why Warren Buffett has one - would you call him indulgent?)
> 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.
Accredited Investors can invest via Special Purpose Vehicles when SpaceX is raising a round, or buy secondary shares if they know of anyone selling (sometimes these types of secondary offerings are listed on AngelList). A few years ago I saw someone on Twitter organizing an SPV to participate in their funding round at the time and the minimum commitment was $250K.
Mortality Assessments are left as an exercise for the reader.
The current P/E ratio for the S&P 500 (growing far more slowly, obviously) is ~25.
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.
> 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.
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).
They have huge majority of market that’s much smaller than their valuation, and isn’t growing anywhere close at the pace they predicted (if they didn’t burn their own money to lunch hundreds of starlinks, their growth in launches would be pretty flat).
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.
Why don’t you present data that supports your statement?
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.
I didn't give number of launches for the same reason I don't measure how big a courier is by the number of vehicle trips they have. It's just a worse stat. Mass to orbit is still flawed, underweighting high delta-v flights, but not to the extent that it would claim an Electron flight is equivalent to a Transporter mission.
> 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.
Some amount of the value baked-in assumes that SpaceX will earn money on any of the thousands of revenue sources possible in the creation and running of the first large-scale city on Mars.
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.
Hint: Starship cans are comically inadequate to support a martian colony. They might be just adequate to maintain a lunar outpost -- if they turn out to work at all. We don't even know if humans can survive, long-term, in 0.3g; zero g, anyway, is right out. Life in centrifuges on Mars would be even less fun than in cans.
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.
Maybe look into how many launches are needed to loft fuel to send just one can to Mars. And, how many passengers, realistically, fit in a can on a 9-month (note, not 6-month) trip, with supplies for the trip. Hint, not 100, and not 20. Hopefully the supplies needed to survive there are in other cans already there. Literally nothing there is worth exporting except maybe reality TV; not cans, and not even just engines taken off the cans. Never mind homesick colonists.
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.
> Some amount of the value baked-in assumes that SpaceX will earn money on any of the thousands of revenue sources possible in the creation and running of the first large-scale city on Mars.
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.
It’s amazing that after hacker community got to see how full of shit guy making those promises is, with Twitter, some still believe that in other areas he’s not lying.
They can only capture the demand for orbital launch. The Russia aggression in 2022 helped a lot, as SpaceX took 'free' market share, and their superior (or rather, inferior) costs gave them the majority of commercial launches from every country except Russia/China, and they will also probably get most Nasa and US allies (except EU) launches.
I'll say they will cap at 8-10B revenue (+inflation).
Why would you compare it to Sls, that makes no sense. SLS is meant to replace Saturn 5 launchers, no? It will have like max 20 launches.
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.
>Assuming rocket launch demand continues to grow exponentially
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.
you could open a welding supply store in Brownsville. Any investment in Brownsville TX is an investment in SpaceX pretty much. That whole area has been transformed.
They don't have fully reusable rockets in production yet. They just reuse the first stage. Even with that alone, they are the cheapest launch provider by a significant margin, which is why they've captured such a large share of the market.
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.
"Revenue meaning is the money that is produced by carrying out normal business operations and is calculated by multiplying the average sales price by the number of items sold."
Starlink is revenue. Starlink Launches are $0 revenue.
A starlink launch takes lots of money but results in dozens of new satellites in orbit that in theory could be sold to some other company looking to create an internet constellation. That doesn’t seem that different from a factory where it takes money to build the factory, but then the factory can, in theory be sold. Yes the launch disappears, but the thing the launch did doesn’t.
> By definition, spending on something that is consumable (like a rocket launch) is not a capital expenditure.
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.
It's both. The Starlink satellite construction is cap ex (maaaaybe arguably part of the launch, which is required to make the satellite operational? Not sure...) while the launch and operating the network is ongoing op ex.
Isn't it amazing that you can become the richest person in the world by building companies that lose money? By lose money I mean all money ever put into the company versus profits made.
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.
Not sure why this is being upvoted. They are launching mass into space at between 1 and 2 orders of magnitude lower cost than anyone else. The R+D costs on that is insane. And they are almost profitable.
I 100% agree that du-jour saas companies raising 300MM on limited revenue is one thing, but this is not the same.
There is a lot of hate on anything Elon does. The market is valuing his companies based on exactly what you stated. If people read the mission statements of these companies and listen to what Elon says, it is pretty clear on what his goals are. And contrary to what most believe, it is not to make himself tons of money.
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.
> listen to what Elon says, it is pretty clear on what his goals are. And contrary to what most believe, it is not to make himself tons of money.
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.
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
> 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
Tell that to the people who depend on StarLink for rural internet access.
Really?
If Microsoft disappeared we would see a massive jump in Linux and Mac usage.
If Facebook/Instagram people would jump on the next social fad.
If Amazon disappears people would buy there stuff from some BigBox store.
If AWS disappears that would be really painful for a while before people adopt.
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.
> And he has never delivered tangible quality of life improvement for the avarage American
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.
> > Neither has Ferrari or Rolex but that doesn't make them failures
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.
I don’t know what you want us all to agree on here. It sounds like GP disputed you setting the bar at “should have improved the lives of most Americans”. That did seem like an unreasonable bar to judge companies by.
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.
> > I just disputed you setting the bar at “should have improved the lives of most Americans”. That seemed like an unreasonable bar to judge companies by, to me.
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
By TDS do you mean people disgusted by the 4x indicted rapist ex us president?
And that that disgust has somehow morphed into a dislike for a south african immigrant who became the wealthiest man in America?
1 to 2 orders of magnitude? ... Falcon Heavy launches nowadays run at approximately $40-70 million each. So you are implying that others cost minimum $400 to $4 billion per launch! I mean that is still 1/100th the Saturn V but SpaceX hasn't improved the overall costs that much. An improvement, yes, but no where near what they claim.
This is really my only complaint about Space X. I wish they would stop trying to be this somewhat unrealistic hype machine. What they are doing nowadays is amazing - that should be enough!
The market is pricing in future growth. You can say the market is incorrectly evaluating the potential return, but it's hard to argue that Tesla and SpaceX aren't going to cash in on that potential. How else should the market be treating companies with obvious high growth potential?
It is very possible, even probable, that Tesla's glory days are already behind it.
Their margin are contracting, and it's actually probable they will loose money in Q3, Q4 this year. They don't have any significant advantage on competition anymore, and China's competition is already well ahead Tesla.
Elon himself suggested Tesla is worthless as a 'car making company' and it's value will come from solving autonomy with FSD. While Tesla is very good at marketing, there were 2 companies allowed to operate self-driving taxis in SF past month, and there are already several operating in China. It's hard to argue that Tesla still has the lead in that domain.
I don’t understand how people say this with a straight face when Tesla is literally becoming the underlying charging network for the entire continental US. If anything they’re at a higher risk of the feds absorbing them as a public utility then they are of becoming irrelevant.
Look at the financials of this 'underlying charging network for the entire continental US' - the optimistic ones, project that it will bring ... 10B$ in revenues in 5-10 years (revenues, not profit !).
It's absolutely meaningless in the big picture of this company revenues and valuation.
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.
It's from the fact that the demand is falling and they need to slash prices to continue to sell. They benefited greatly from Covid price surges, but this is about to end. In a 'normal' year, they can't sell that many cars at the prices they did last year - let alone in a 'recession' year.
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.
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...)
Does that answer the question, though? Future growth is an estimate and approximation, is not real, and says nothing about current revenues and losses.
What you get paid for isn't realized gains rather selling your future gains at a rate lower than others (i.e. the market) expects them to actual be worth. If the question is about how this makes sense then sure, it answers the question - you're selling your future gains now to fund the company which means the current value of your shares will reflect that future predicted value as well. If the question is "why without involving any future possibilities" then no, it doesn't answer the question, but I'm not sure the question makes any more sense than "why is the sun so hot ignoring fusion".
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.
If you have a growth company with high return on capital the worst thing to do would be to return the operating profits as taxed dividends or just sit on the cash or something like that. If you can grow the business then the best thing to do with those operating profits is to pump it back into expanding the business and the capital and capturing more revenue next year. You aren't losing money, you're building a larger economic engine for capturing future cashflows, which is doing your investors a favor since they'll own a larger chunk of the economy next year.
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.
You're assuming that the only way for a company to not post profits is for all its margins to be flat-to-negative.
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.
The valuation of the company has little to do with the equation of how much profit has been made in the past. It is focused on the companies profit potential in the future. This has always been the case.
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.
I think what amazes OP is that "convincing people that profit will happen in the future" produces better stock value than actual profit happening today. We all know that's how it works but it's still amazing. The market is clearly showing that a bird in hand is worth less than two that might be in the bush 10 years from now.
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.
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.
Wait until you learn about the biotech industry, they often go public with no revenue. I don't think there is anything wrong with this though, markets are pricing future growth, which may or may not materialize.
I actually think this makes sense. It's basically outsourced R&D for pharma companies via acquisition of companies once they get at or near approval of a new drug.
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.
Biotech and drug discovery is inherently gambling. Most May tank, but some have the potential to 10-20x. Traditionally their IPOs allowed them to spread the risk out broadly amongst the public. Then they somehow became stupidly overvalued in 2020-2021
Used to, as of when? The good old days of the 1990s? I think it goes back a lot further than that.
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.
Tesla doesnt lose money. It has been profitable for the past 14 quarters in a row. SpaceX clearly could be profitable if it wanted to be, and it clearly will be in the future. It will probably be very profitable.
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.
Tesla accumulated surplus/deficit (e.g. lifetime net consumption of cash) is much higher than it's lifetime gross burn ($6B) so it's definitely in material value creation territory.
This has also been clear to dedicated observers since 2017 or so, albeit with significant unresolved risk. The market finally priced it in around 2019-2020.
> > Amazon lost a shitload of money before it started turning a profit
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.
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”
Yes SpaceX loses money, but it doesn't matter because it's a nationally strategic company. It's valuation makes sense given the Griffin discussion below.
SpaceX funding is covert US defense spending. It is the most efficient $ spent by Pentagon.
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)
In addition to what other people have said, it's important to note that Elon Musk hasn't realized any gains from SpaceX.
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.
Elon's MO has always been to lose more money than competitors are willing to, then brag about how advanced they are compared to everyone else. New technologies are always unprofitable. There is no magic to what SpaceX has done, or is doing. Only a willingness to grift, sell, and spend.
Losing money makes everything easy. Competitors don’t play that game.
> 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.