What's the optimal timing for a SpaceX IPO?

[PreferToLurk]

Apple had a massive cash hord that it might have had long term plans for, but one of their stock holders filed a suit to force Apple to dispense some of that cash hord to the investors as a dividend.

You can sue anyone for any reason.

Apple won.

No they didn't. The suit was withdrawn after Apple caved.  Not wanting to actually use their cash hoard, Apple issued their first ever debt in the form of 17 billion in bonds. The raised money used to fund a stock buyback program and other measures to satisfy Einhorn and his allies.

http://online.wsj.com/article/SB10001424127887324482504578454691936382274.html

[QuantumG]

They never paid the dividend.. they won.

[PreferToLurk]

They never paid the dividend.. they won.

sort of, but they had to spend a ton of money on other measures to satisfy those shareholders.  Thats the point...  I think... 

Lots of extra headaches associated with issuing public stock.  Unless you absolutely can't do what you want to do without the cash, it is not a bad move to stay private. Have some periodic small stock sales to existing investors who share your vision, and IPO when you can't afford not to.

Might also might just be that Musk doesn't want to IPO because he can't yet justify the valuation he would like to demand, and doesn't want to sell his company short. The "share holders are a pain" argument may just be a cover.

[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.

Hi Bob! Today is the last US trading day before one year has passed since your prediction. Let's see how the day goes!

[DJPledger]

Elon Musk has tweeted a month or two back that there will be no SpaceX IPO until after the Mars Colonial Transporter is flying regularly. So this means that there will be no SpaceX IPO for a long time.

[savuporo]

Hmm .. thats bad news. Could you specify if that "very long" value is given before or after SpaceX dime dilation factored in ?

Oops, gotta go.

[Mader Levap]

They want to do IPO as far in future as possible. It is good news, not bad news.

IPO means Musk would have to listen to someone else beside Musk.

[spectre9]

It would be interesting to know how much non-Musk SpaceX stock is out there now.

[meekGee]

At some point in the near future, Musk will start talking about concrete Mars plans.   Whether this will be done under SpaceX (as opposed to a different company) might depend on the mix of shareholders, private or public.

If SpaceX is a public company, even if the company's goal is stated as "go to Mars", it will be constrained by shareholder's desire to increase the near-term value of the stock - because there's still a perception that SpaceX is REALLY only about the launch business.

If SpaceX is private, then quite the opposite - Elon can explain very long-term plans to investors, get a green light, and not worry about it.  From their point of view, just being able to have the launch business is not large enough of a prize.  They're looking for the next Google-size prize, and are willing to wait for it.  (While having the shiniest toy in town, meanwhile)

So for this reason - no IPO until there's a wide understanding in the public about where SpaceX is going, and a perception that they'll be successful.

[RocketEconomist327]

The nice thing about hanging around this place for so long is you can quote yourself:

We do not want an IPO with SpaceX.

I may be the biggest capitalist here; but when it comes to SpaceX, I want a benevolent dictator who can "close control" the business.  I could care less about Tesla and his other companies.

You do not want market pressures effecting the decision making process.  I will disagree with Jim and say business is business.  Some business' can suffer a failure and survive while others cannot.  You do not want the bottom line driving SpaceX.

SpaceX is relatively "flat".  Not a lot of fat there (at least right now).

SpaceX has a kick ass CEO/CTO who doesn't need oversight to make the company grow.  Elon has demonstrated he knows how to run a company.

SpaceX is doing just fine without public share holders.  Once you go public it opens up all sorts of worms.  Moreover, the SEC will regulate the hell out of how SpaceX runs it's business.

I am very much AGAINST an IPO for SpaceX.

IMHO

VR
RE327

The nice thing is three years later this still stands.

You do not want SpaceX (Spacex for Jim) going public.  You just don't.  Speculation is fine I suppose.  However, if Musk and SpaceX don't need to be public then they shouldn't.  ITAR (Eye-tar for Blackstar) is enough of a pain in the ass... dealing with the loons at the SEC would just take away their laser like focus on the task at hand.

VR
RE327

[BobCarver]

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.

Hi Bob! Today is the last US trading day before one year has passed since your prediction. Let's see how the day goes!

The economy is still in a recession (unless you believe government numbers---I don't). Luckily, Elon is smart enough to realize that the right time to go public isn't today, but down the road. The stock market is not the economy and any company doing an IPO today faces a huge markdown in the future, just as soon as the Fed is forced to taper its firehose of money into the banks.

[Robotbeat]

Regardless, the markets aren't "crashing" (which implies getting significantly worse off than when you made that statement). And sure the stock market isn't the entire economy, but in the context of an IPO, it certainly matters.

Just admit you were wrong.

The Dow Jones is up 13% since a year ago when you made that statement.

[joek]

The health of the market and economy are factors, but not necessarily the only or primary factors.  SpaceX would IPO only if they need the money and that cost of money is cheaper than the alternatives (far from given); significant shareholders want an exit sooner rather than later that they can not otherwise obtain; or if SpaceX needs more fungible instruments (e.g., stock rather than cash) for acquisitions.  None of those appear to be likely driving factors for an IPO for the foreseeable future.

[oiorionsbelt]

No IPO until the MCT is working, sounds just right for spaceflight enthusiasts.

[QuantumG]

No IPO until the MCT is working, sounds just right for spaceflight enthusiasts.

MCT might not be as far away as enthusiasts seem to think.

[meekGee]

No IPO until the MCT is working, sounds just right for spaceflight enthusiasts.

MCT might not be as far away as enthusiasts seem to think.

With that, I agree.  Their development team can't have been fully occupied with F9 1.1 and Merlin 1D.

There's significant work on Dragon 2.0, I'm sure, but that's not the propulsion people.

[sublimemarsupial]

No IPO until the MCT is working, sounds just right for spaceflight enthusiasts.

MCT might not be as far away as enthusiasts seem to think.

With that, I agree.  Their development team can't have been fully occupied with F9 1.1 and Merlin 1D.

There's significant work on Dragon 2.0, I'm sure, but that's not the propulsion people.

Propulsion has some of the biggest changes for Dragon 2.0 with the dev and qual of superdraco plus the alteration of the propellant plumbing systems to be able to supply the superDs and the regular dracos from the same tabks

[QuantumG]

They don't want Pad 39A for golf practice.

[ChrisWilson68]

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.

Hi Bob! Today is the last US trading day before one year has passed since your prediction. Let's see how the day goes!

The economy is still in a recession (unless you believe government numbers---I don't). Luckily, Elon is smart enough to realize that the right time to go public isn't today, but down the road. The stock market is not the economy and any company doing an IPO today faces a huge markdown in the future, just as soon as the Fed is forced to taper its firehose of money into the banks.

Funny, in your original quote you misspelled, "the economy will be in a recession that only I can see because the numbers everyone else uses will say it's growing" as "the market will be crashing".

[meekGee]

No IPO until the MCT is working, sounds just right for spaceflight enthusiasts.

MCT might not be as far away as enthusiasts seem to think.

With that, I agree.  Their development team can't have been fully occupied with F9 1.1 and Merlin 1D.

There's significant work on Dragon 2.0, I'm sure, but that's not the propulsion people.

Propulsion has some of the biggest changes for Dragon 2.0 with the dev and qual of superdraco plus the alteration of the propellant plumbing systems to be able to supply the superDs and the regular dracos from the same tabks

True, the SDs are a big part of Dragon....  But I don't think they occupy the propulsion team to its capacity.  Also, when was it that we saw the first tests?  They've built another test stand since, and have had a lot of time to get to the bottom of them.

We should take this to "general discussion" though - basically trying to guess what's in the development pipeline right now.