What's the optimal timing for a SpaceX IPO?

[baldusi]

Don't be so quick to call "scam". Growth is the most difficult aspect of valuation. Specially, when you still have to find ways to "monetize" your clientele. It's not only extremely difficult. It's also a very perverse game. Everybody wants to get a place on the "sure shot" IPO (say UPS, Google, etc.). But the people doing the IPO put too low a price, they will have too many orders for the available stock. So you have to manage expectations to get enough people to cover the issue, but not so much that the price is above the expected long term value.
I think FB case was a mixture of the issuing agent getting a cut of the total amount (thus wanting to maximize IPO total price), owner's desire to get money now, and a complete lack of good available investments in the world. More than a premeditated scam I would say a criminal optimism.
In any case, going public has to make sense for the owners of a company. That happens when they have huge growth opportunities but it require the sort of investment that can only be get cheaply on an IPO, or when they want to get money. SpaceX currently has neither problem. They have more manifest than they can handle, and Elon, apparently, is here for the long run. So I don't see an IPO in the next two years.

[IRobot]

Don't be so quick to call "scam".

40 lawsuits ongoing.
3.7B$ revenue for a company valued at +100B$. Heck, even Portugal has some 10 companies that have better revenues than FB!
They (and Morgan Stanley) set the price knowing it was way off. Zuckberg and others cashed in, buyers got scammed.

FB will drop to something below $10, maybe $5. My personal analysis would target at $3 looking at their financial data. And if you take in account the prospects of growth, I would put it at $9.

How was it valued 8x more? Hype around tech companies. Nothing against Elon, he sure knows how to spend the profit he made from a previous company!! But he also knows he can get much more if he can keep the hype.

[Idiomatic]

Don't be so quick to call "scam".

40 lawsuits ongoing.
3.7B$ revenue for a company valued at +100B$. Heck, even Portugal has some 10 companies that have better revenues than FB!
They (and Morgan Stanley) set the price knowing it was way off. Zuckberg and others cashed in, buyers got scammed.

FB will drop to something below $10, maybe $5. My personal analysis would target at $3 looking at their financial data. And if you take in account the prospects of growth, I would put it at $9.

How was it valued 8x more? Hype around tech companies. Nothing against Elon, he sure knows how to spend the profit he made from a previous company!! But he also knows he can get much more if he can keep the hype.

First man on Mars directly to an IPO 20 minutes later. Value SPCX at 10TN

[BobCarver]

No IPO until the other side of the 2013 recession which follows the run over the Fiscal Cliff. Could be a while coming.

[Robotbeat]

Don't be so quick to call "scam".

40 lawsuits ongoing.
3.7B$ revenue for a company valued at +100B$. Heck, even Portugal has some 10 companies that have better revenues than FB!
They (and Morgan Stanley) set the price knowing it was way off. Zuckberg and others cashed in, buyers got scammed.

FB will drop to something below $10, maybe $5. My personal analysis would target at $3 looking at their financial data. And if you take in account the prospects of growth, I would put it at $9.

How was it valued 8x more? Hype around tech companies. Nothing against Elon, he sure knows how to spend the profit he made from a previous company!! But he also knows he can get much more if he can keep the hype.

First man on Mars directly to an IPO 20 minutes later. Value SPCX at 10TN

Which, after 150 years of 5% inflation is only ~$6 billion.

[beancounter]

At one point, an IPO was probably necessary to fund expansion of their programs however recently SpaceX have received monetary backing via normal banking channels.  This coupled with the ongoing bad economic outlook in the U.S. as well as internationally, probably makes an IPO far less likely in the next couple of years.  After that, well, who knows!

[oldAtlas_Eguy]

http://www.spacenews.com/commentaries/120831-fromwires-musk-holding-co.html

There was an interesting statement in this article -

Musk has said an initial public offering of Hawthorne, Calif.-based SpaceX may happen next year

.

Dosen't say when he made this supposed statement or if there were any qualifiers.

[BobCarver]

Musk knows rockets, I know markets. SpaceX will not IPO next year because the market will be crashing.

[dcporter]

Musk knows rockets, I know markets. SpaceX will not IPO next year because the market will be crashing.

Quoted for posterity. Let's return here in a year.

[Tea Party Space Czar]

I am hoping an IPO is not required.  Will change some of the rules of the game SpX is currently playing, and winning.

[BobCarver]

I am hoping an IPO is not required.  Will change some of the rules of the game SpX is currently playing, and winning.

An IPO is not required. Musk stated that the decision to IPO would be more to allow the public to participate in the company than to raise cash.

[A_M_Swallow]

Musk knows rockets, I know markets. SpaceX will not IPO next year because the market will be crashing.

Quoted for posterity. Let's return here in a year.

Make it a year and a half.  Markets fall in the fall.

[AlexCam]

Musk knows rockets, I know markets. SpaceX will not IPO next year because the market will be crashing.

Quoted for posterity. Let's return here in a year.

Make it a year and a half.  Markets fall in the fall.

It is much more relevant whether SpaceX can get to 5-6 launches per year on a reliable basis in the next 2 years without any failures. Investors will not provide the price SpaceX wants without a proven track record. The space industry just had too many failures.

[ArbitraryConstant]

I am hoping an IPO is not required.  Will change some of the rules of the game SpX is currently playing, and winning.

How so? Musk retains a controlling interest either way.

[LegendCJS]

I am hoping an IPO is not required.  Will change some of the rules of the game SpX is currently playing, and winning.

How so? Musk retains a controlling interest either way.

Unlike some larger aerospace players, SpaceX has shown considerable interest in managing managing its public perceptions and enthusiastic following.  At the very least its a part of how they attract a their talent.  An IPO might not change the rules in a functional sense, but it could certainly affect this more intangible aspect of SpaceX.

[BobCarver]

I am hoping an IPO is not required.  Will change some of the rules of the game SpX is currently playing, and winning.

How so? Musk retains a controlling interest either way.

Unlike some larger aerospace players, SpaceX has shown considerable interest in managing managing its public perceptions and enthusiastic following.  At the very least its a part of how they attract a their talent.  An IPO might not change the rules in a functional sense, but it could certainly affect this more intangible aspect of SpaceX.

If he's smart, he'll be looking for the public IPO to:

1. Make some of his best engineers wealthy. This might sound like something undesirable, but engineers who love to do rockets will have no monetary worries and will be able to do what they do best. They won't retire, that's boring. They want to do space. And, they'll have the perfect place to do it.

2. Incentivize the best and brightest young talent to join his winning team.

3. Fund the Mars and other advanced projects where extra investment can speed the process.

[CapitalistOppressor]

I am hoping an IPO is not required.  Will change some of the rules of the game SpX is currently playing, and winning.

How so? Musk retains a controlling interest either way.

Unlike some larger aerospace players, SpaceX has shown considerable interest in managing managing its public perceptions and enthusiastic following.  At the very least its a part of how they attract a their talent.  An IPO might not change the rules in a functional sense, but it could certainly affect this more intangible aspect of SpaceX.

If he's smart, he'll be looking for the public IPO to:

1. Make some of his best engineers wealthy. This might sound like something undesirable, but engineers who love to do rockets will have no monetary worries and will be able to do what they do best. They won't retire, that's boring. They want to do space. And, they'll have the perfect place to do it.

2. Incentivize the best and brightest young talent to join his winning team.

3. Fund the Mars and other advanced projects where extra investment can speed the process.

Absolutely.  Going public is the easiest way to lock in the talent and reward them for their effort.

Folks who are worried about how it will affect SpaceX management are overthinking the problem.  Musk will still be majority shareholder and have total control of the company, just like he does now.

The only real difference is that there will be more transparency in how SpaceX reports its business.

[Arceus12345]

I am not an expert in the investment market, but i hope SpaceX doesn't become like Facebook. Such a move would destroy their reputation and push back many projects.

[BobCarver]

I am not an expert in the investment market, but i hope SpaceX doesn't become like Facebook. Such a move would destroy their reputation and push back many projects.

In my opinion, Elon is far smarter than the FB guy and would not succumb to that kind of blatant money grab. He isn't IPOing SpaceX this year. Next year's stock market will be so disheveled that he likely won't consider an IPO. By the time the market bottoms, valuations should be in the lowest quintile (they're in the highest quintile right now based upon Shiller 10-year PE Ratios) and any shares of viable companies will outperform substantially once the final bottom is reached.

The thing I worry about is a collapse of government and the financial system as we know it. Dec 2012-Feb 2013 looks bad, but after a bounce into May 2013, the market will be moving hard down into the end of my map (Sep 2013).

[Prober]

Don’t trash the messenger on this one.   I didn’t write the article.   But the Solar City IPO might be of interest to some here.    Remember two sides to a story.

Treasury Dept. Fingers SolarCity in Exploration of the Dark Underbelly of Solar Leasing
http://www.renewableenergyworld.com/rea/news/article/2012/10/treasury-dept-fingers-solarcity-in-exploration-of-the-dark-underbelly-of-solar-leasing?cmpid=SolarNL-2012-10-16

"A new government investigation of SolarCity on the eve of its initial public offering (IPO) may explain how solar leasing is fleecing federal taxpayers and making U.S. residential solar more expensive than in other countries."

Edit: add quote marks