What's the optimal timing for a SpaceX IPO?

[Lurker Steve]

It appears that the Solar City IPO isn't going that well. It appears that the company is only worth half (585 million) vs the Billions that they thought the IPO would yield.

Probably doesn't help that Solar City lost money for the first 9 months of this year, despite the falling prices of solar panels.

[Elmar Moelzer]

IIRC, Musk does not plan to do an IPO of SpaceX. He wanted to do an IPO at some point, but since he is making enough profit now and has a solid revenue stream from NASA, he does not have to do one.
As he put it: "You do an IPO when your company is in a certain position [it needs money to make investments to grow the business but does not have enough revenue to pay for all of them] and SpaceX was in that position but is not anymore." (or something like that).
Musk wants to keep control over the direction SpaceX is going. If he does not absolutely need the money, he wont do an IPO.
AFAIK, Solar City lost money the past 9 months, because they made a lot of investments to grow their business. You can accept making losses for a period of time, if you think that your investment will increase profits afterwards.
For the same reason Tesla made losses too. They built several new manufacturing lines and developed several new models (and released one new model to the market). You can not do that without spending money. The really important question is, whether they will get a return on that investment any time soon.

[Tea Party Space Czar]

 @elonmusk SpaceX will go public at some point, as I think it should ultimately be owned primarily by the public "@bm_ will SpaceX go public?"

@TEA_in_Space @elonmusk @bm_ Elon, we all hope you hang on as long as possible. I would hate to see "the board" do anything with SpaceX

God I hope Elon hangs on as long as we can.

Respectfully,
Andrew Gasser
TEA Party in Space

PS - no idea how to link the actual tweets - I apologize

[Lars_J]

Andrew, the way find a URL to tweets directly is (in the web view) is to click on the time indicator. (the one that says "7m" or "5h" or date) - It's not obvious, but it is there.

https://twitter.com/elonmusk/status/278913921891586049 (this link also shows the whole conversation)

The main tweet quoted:

Elon ‏@elonmusk
SpaceX will go public at some point, as I think it should ultimately be owned primarily by the public "@bm_ will SpaceX go public?"

[Elmar Moelzer]

Interesting! Thanks for sharing Andrew!
That somewhat contradicts what Musk said in an interview after the successful COTS demo mission (might have been after CRS1, but I think it was after the demo).

[Elmar Moelzer]

Interesting! Thanks for sharing Andrew!
That somewhat contradicts what Musk said in an interview after the successful COTS demo mission (might have been after CRS1, but I think it was after the demo).

Once again you were wrong

Maybe about him doing an IPO eventually, but I am right about him saying  what I quoted him saying about an IPO in that interview (I can try and find it when I have time).
Besides, right now this is only a hobby for me. My main job is in a very different field. So I am bound to make mistakes every now and then. What is your excuse?

[Jim]

Interesting! Thanks for sharing Andrew!
That somewhat contradicts what Musk said in an interview after the successful COTS demo mission (might have been after CRS1, but I think it was after the demo).

Once again you were wrong

Maybe about him doing an IPO eventually, but I am right about him saying  what I quoted him saying about an IPO in that interview (I can try and find it when I have time).
Besides, right now this is only a hobby for me. My main job is in a very different field. So I am bound to make mistakes every now and then. What is your excuse?

What mistakes?
And not now and then for you but daily

[QuantumG]

Maybe about him doing an IPO eventually, but I am right about him saying  what I quoted him saying about an IPO in that interview (I can try and find it when I have time).

No you're not and you didn't even quote him.

Stop talking like you know what you're talking about.

[Elmar Moelzer]

You know, I actually went through the trouble of looking through a bunch of video interviews with Musk in order to find this quote. There are just too many and I cant remember anymore which one it was.
Either way, he obviously changed his mind again and it seems like the SpaceX IPO is now planned for 2013. So anything he might have or might not have said in the past is irrelevant anyway and not worth my time.

Maybe about him doing an IPO eventually, but I am right about him saying  what I quoted him saying about an IPO in that interview (I can try and find it when I have time).

No you're not and you didn't even quote him.

Stop talking like you know what you're talking about.

[Jason1701]

You know, I actually went through the trouble of looking through a bunch of video interviews with Musk in order to find this quote. There are just too many and I cant remember anymore which one it was.
Either way, he obviously changed his mind again and it seems like the SpaceX IPO is now planned for 2013. So anything he might have or might not have said in the past is irrelevant anyway and not worth my time.

Maybe about him doing an IPO eventually, but I am right about him saying  what I quoted him saying about an IPO in that interview (I can try and find it when I have time).

No you're not and you didn't even quote him.

Stop talking like you know what you're talking about.

He has said the time to take SpaceX public is when they have a steady stream of launches at their long-term flight rate. That won't be 2013.

[BobCarver]

And, with the economy in recession now, it's a bad time now to take any company public. 3 of the 4 indicators which define a recession have been declning since July. Employment is the only one rising and it's about to fall. See http://www.businesscycle.com/ecri-news-events/news-details/economic-cycle-research-us-recession-start

[wolfpack]

Markets time IPOs. Realize that a company has to get a brokerage to do the IPO - if the brokerage thinks the timing is wrong, they ain't gonna do it. Or they're going to give you a dog of an IPO price. You also have to road-show your company for a few weeks prior. It's a giant distraction from doing actual business.

So, it's actually akin to the rocket business in a sense. You IPO when you're ready. Not before.

[BobCarver]

Markets time IPOs. Realize that a company has to get a brokerage to do the IPO - if the brokerage thinks the timing is wrong, they ain't gonna do it. Or they're going to give you a dog of an IPO price. You also have to road-show your company for a few weeks prior. It's a giant distraction from doing actual business.

So, it's actually akin to the rocket business in a sense. You IPO when you're ready. Not before.

Google did it through a Dutch auction, which made them non grata with brokers, but they didn't really raise as much money that way.

Elon was on CNBC this morning talking about his Solar City IPO, so it looks like he's trying to sneak in under the wire before the investment public realizes we're in a recession right now.

[Rhyshaelkan]

IPOs are for when someone wants to "cash out." As Elon is still doing a bang-up job. That will not be for awhile.

For now Musk should see about selling 1-5 year bonds. SpaceX bonds paying 3-5% interest per annum. He surrenders no control while still receiving funding and paying dividends to investors. Not sure what regulations and or oversight he would have to deal with to make it happen.

Edit: Or Certificates of Deposit as it would be. Deposit $100 into Musk Financial Establishment. Collect $104 after a years time. Better than most CDs these days. Will flush SpaceX with money. While giving each of us a little pride in helping mankind get someplace. And being paid for it too.

[Lars_J]

Markets time IPOs. Realize that a company has to get a brokerage to do the IPO - if the brokerage thinks the timing is wrong, they ain't gonna do it. Or they're going to give you a dog of an IPO price. You also have to road-show your company for a few weeks prior. It's a giant distraction from doing actual business.

So, it's actually akin to the rocket business in a sense. You IPO when you're ready. Not before.

Google did it through a Dutch auction, which made them non grata with brokers, but they didn't really raise as much money that way.

Elon was on CNBC this morning talking about his Solar City IPO, so it looks like he's trying to sneak in under the wire before the investment public realizes we're in a recession right now.

Newsflash... We have been in recession for many years now. 

[BobCarver]

Newsflash... We have been in recession for many years now. 

Very true. If the inflation rate were reported properly, it would be obvious that statement is correct.

[Elmar Moelzer]

Hmm, seems like the Solar City IPO is not going so badly after all:
http://nextbigfuture.com/2012/12/first-day-of-solar-city-ipo-going-well.html

[wolfpack]

Google did it through a Dutch auction, which made them non grata with brokers, but they didn't really raise as much money that way.

Elon was on CNBC this morning talking about his Solar City IPO, so it looks like he's trying to sneak in under the wire before the investment public realizes we're in a recession right now.

The public has nothing to do with an IPO. If it's a lucrative one, Joe Investor has ZERO shot at it. The big boys will scoop up all the shares at T-0.

Most companies try to "bake in" an upside on an IPO. Doesn't always work (FB, for example). But if you're compensating your employees heavily with stock, you need to shoot for that. IIRC, employee option holders will be locked out for 30 or maybe more days, so you need that initial buoyancy in the shares to keep people happy. IMO, stock-based compensation is a dangerous thing. It's kind of like positive feedback. When things go right, they really go right, but when they go wrong, they REALLY go wrong. It's not very stable. It also allows for malignant corporate culture to grow when things are going well. Employees are "golden-handcuffed", and their squelch level for bullsqueeze is high. But as soon as the share price stumbles, or they've vested out, that level drops like a rock and the exit door is wide open. I wish all the SpX'ers good luck with this, but it WILL change the nature of the company. No two ways about it.

I've been through this myself so many times it's almost like a broken record.

One of the reasons I will start my own engineering company in 2014. Hey, Elon, wanna invest? Dragon needs some high-speed serial interfaces, right? 

[QuantumG]

The public has nothing to do with an IPO. If it's a lucrative one, Joe Investor has ZERO shot at it. The big boys will scoop up all the shares at T-0.

You don't know what you're talking about.

[Prober]

Markets time IPOs. Realize that a company has to get a brokerage to do the IPO - if the brokerage thinks the timing is wrong, they ain't gonna do it. Or they're going to give you a dog of an IPO price. You also have to road-show your company for a few weeks prior. It's a giant distraction from doing actual business.

So, it's actually akin to the rocket business in a sense. You IPO when you're ready. Not before.

Google did it through a Dutch auction, which made them non grata with brokers, but they didn't really raise as much money that way.

Elon was on CNBC this morning talking about his Solar City IPO, so it looks like he's trying to sneak in under the wire before the investment public realizes we're in a recession right now.

no money in Solar unless the check comes from the government.