What's the optimal timing for a SpaceX IPO?

[A_M_Swallow]

Yup. Only prices available on SpaceX launches for now are $50M/Falcon 9 launch, and the COTS price of $1.6B for 12 cargo flights, with some sort of vague option for a total of up to $3.1B for an unknown number of additional flights. Musk did toss out that $20M/seat figure a few years ago, but that would require pretty aggressive price reductions on SpaceX's part. That will all depend on the market when any any manned capability is ready.

Using the above figure and 7 people in a capsule.

$1.6B = $1600M
$1600M / 12 flights = $133.3M per flight
$133.3M / 7 = $19.05M per passenger assuming NASA provides the pilot.

or $133.3M / 6 = $22.2M

[jimgagnon]

Yup. Only prices available on SpaceX launches for now are $50M/Falcon 9 launch, and the COTS price of $1.6B for 12 cargo flights, with some sort of vague option for a total of up to $3.1B for an unknown number of additional flights. Musk did toss out that $20M/seat figure a few years ago, but that would require pretty aggressive price reductions on SpaceX's part. That will all depend on the market when any any manned capability is ready.

Using the above figure and 7 people in a capsule.

$1.6B = $1600M
$1600M / 12 flights = $133.3M per flight
$133.3M / 7 = $19.05M per passenger assuming NASA provides the pilot.

or $133.3M / 6 = $22.2M

I believe the objections are that the cargo capsule doesn't have everything a manned one will, such as escape system, etc. Besides, usual crew rotation is three people -- that may change as the station gets larger, but that's how it stands today.

We'll find out if and when SpaceX and NASA comes up with an agreement for crew services. Until then, there are no public figures and everything is speculation.

[hop]

I believe the objections are that the cargo capsule doesn't have everything a manned one will, such as escape system, etc. Besides, usual crew rotation is three people -- that may change as the station gets larger, but that's how it stands today.

That doesn't mean only 3 seats would be used. When the US was still rotating crew on the shuttle, the Russians frequently carried a short duration visitor (both "tourists" and ISS partner nation crew members) on Soyuz rotations.

Without the massive amount of cargo on the shuttle and the need for construction EVAs, there won't be as much need for extra hands, but it's still a flight opportunity.

It's also not clear there would always be 3 rotating in or out, there's a lot of ways it could be shuffled if the US vehicle were capable of more. For example, the Russians might only rotate their own 2 crew on Soyuz, with a short duration visitor, while Dragon rotates 4.

We'll find out if and when SpaceX and NASA comes up with an agreement for crew services. Until then, there are no public figures and everything is speculation.

Agreed, but speculation that crew price will be > cargo price is pretty common sense. So is the observation that when the early estimated price is different from the final price, one direction is more likely than the other

[simonth]

Yup. Only prices available on SpaceX launches for now are $50M/Falcon 9 launch, and the COTS price of $1.6B for 12 cargo flights, with some sort of vague option for a total of up to $3.1B for an unknown number of additional flights. Musk did toss out that $20M/seat figure a few years ago, but that would require pretty aggressive price reductions on SpaceX's part. That will all depend on the market when any any manned capability is ready.

Using the above figure and 7 people in a capsule.

$1.6B = $1600M
$1600M / 12 flights = $133.3M per flight
$133.3M / 7 = $19.05M per passenger assuming NASA provides the pilot.

or $133.3M / 6 = $22.2M

As outlined by jimgagnon above, the equivalent to Soyuz would be 3 crew per flight, as NASA only needs 3 crew member rotations (for a total ISS crew of 6).
1.6bn/12 may be 133.3m but what about the LAS? What about vehicle "man-rating", that is additional capsule integration requirements, sensors etc.? What about training of astronauts? What about life support systems? What about capsule recovery systems for recovery of crews? What about the 6-month CRV function that Soyuz provides? What about inflation adjustment for the next 5 years (the first ISS crew flight likely won't be before 2015)?

A Soyuz seat costs 55m in 2014. I would bet a crew seat for a 3-crew rotation flight on Dragon (if that really works out) will cost 200m/3 = 66.7m. Does that matter? Not really, NASA and the US taxpayer would even buy US commercial crew services if a seat costs 300m.

Anyway, we are far off topic here, so I'll stop here.

[Jorge]

A Soyuz seat costs 55m in 2014. I would bet a crew seat for a 3-crew rotation flight on Dragon (if that really works out) will cost 200m/3 = 66.7m. Does that matter? Not really, NASA and the US taxpayer would even buy US commercial crew services if a seat costs 300m.

That is correct. The law requires it.

[mlorrey]

Yup. Only prices available on SpaceX launches for now are $50M/Falcon 9 launch, and the COTS price of $1.6B for 12 cargo flights, with some sort of vague option for a total of up to $3.1B for an unknown number of additional flights. Musk did toss out that $20M/seat figure a few years ago, but that would require pretty aggressive price reductions on SpaceX's part. That will all depend on the market when any any manned capability is ready.

Using the above figure and 7 people in a capsule.

$1.6B = $1600M
$1600M / 12 flights = $133.3M per flight
$133.3M / 7 = $19.05M per passenger assuming NASA provides the pilot.

or $133.3M / 6 = $22.2M

Good to see someone else can do the math.

As for the later objections: yes, NASA may only want three seats to go to ISS. However, all that means is that there is a lot of cargo space to carry more supplies. That space won't go empty, and NASA won't get it for free either. They'll pay the going rate, so they'll still pay the equivalent per seat price for the cargo instead of for the astronaut.

Yes, manned Dragon will require a LAS and a pure cargo Dragon does not. It remains to be seen whether SpaceX decides which saves more money: installing an LAS on all manned and cargo dragon flights, to save the capsule if there is in fact a launch failure, even if its only carrying cargo, or having no LAS on pur cargo flights.

Either way, neither you nor I know what the per flight cost of an LAS is going to be other than that Elon said it will take $50 million to develop it, a capital cost that needs to be recouped in the pricing along with manufacturing and operations costs. It is fair to say the LAS marginal cost will be more than a few million per flight, but not likely to be more than 1 million per seat.

[simonth]

As for the later objections: yes, NASA may only want three seats to go to ISS. However, all that means is that there is a lot of cargo space to carry more supplies. That space won't go empty, and NASA won't get it for free either. They'll pay the going rate, so they'll still pay the equivalent per seat price for the cargo instead of for the astronaut.

Even 4 "empty" seats would only mean an additional cargo mass of 800lbs. But that is only a potential theoretical number, in a crew capsule you have volume constraints as well as safety constraints. I fully expect a US commercial crew capsule like Dragon completing a crew rotation for the ISS of 3 will bring about the same cargo to the ISS per person on the capsule as the Soyuz does - 25-50kg due to volume and safety constraints.

Yes, manned Dragon will require a LAS and a pure cargo Dragon does not. It remains to be seen whether SpaceX decides which saves more money: installing an LAS on all manned and cargo dragon flights, to save the capsule if there is in fact a launch failure, even if its only carrying cargo, or having no LAS on pur cargo flights.

What? Installing a LAS on a cargo flight? You are kidding, right?

Either way, neither you nor I know what the per flight cost of an LAS is going to be other than that Elon said it will take $50 million to develop it, a capital cost that needs to be recouped in the pricing along with manufacturing and operations costs. It is fair to say the LAS marginal cost will be more than a few million per flight, but not likely to be more than 1 million per seat.

Developing a LAS and flying it is one of many things you need to add to a crewed mission. And the 50 million quote is meaningless, the 400 million SpaceX wanted for COTS-D to develop Dragon from a cargo craft to a crew spacecraft is more relevant. And that would just be the NASA part, SpaceX would nearly match that amount of developing costs.

Anyway, crew prices are not about "recouping developing costs", they are about higher operation costs than cargo flights. Look at Soyuz vs. Progress. It's virtually the same spacecraft and launcher and development costs were expensed over many decades and a long time ago. A crewed Soyuz flight still costs double what a Progress flight costs.

[neilh]

Given the Dragon is both crew and cargo capable, and that while the non-dragon Falcon 9 launch price is $49 million, it is clear that the $140 million price is including all the training and capsule processing, crew handling,etc etc, I challenge you to demonstrate why SpaceX wont be able to deliver a manned launch at that price.

Pretty easy. Look at the contract price for CRS. That's all. Anyone who asserts crewed launches (including a LAS, life support etc. etc.) will cost less or the same as a cargo flight has to come up with a very, VERY good explanation...

cost != price, especially when it comes to fixed-price contracts. 

[Jim]

Given the Dragon is both crew and cargo capable, and that while the non-dragon Falcon 9 launch price is $49 million, it is clear that the $140 million price is including all the training and capsule processing, crew handling,etc etc, I challenge you to demonstrate why SpaceX wont be able to deliver a manned launch at that price.

1.  the price is $56 million not 49. and increasing

2. and this proposed requirement document.

http://nspires.nasaprs.com/external/viewrepositorydocument?cmdocumentid=231308&solicitationId={85357053-E659-E2DE-C7AE-BB14600C2E96}&viewSolicitationDocument=1

[jimgagnon]

There had been some speculation on how much money Musk had and how that affects a SpaceX IPO. If you want to hear it from Musk himself, he tells his side of his divorce and current financial state:
  http://www.huffingtonpost.com/elon-musk/correcting-the-record-abo_b_639625.html

[simonth]

Coming back to the optimal timing for a SpaceX IPO.

Here is sort of a matrix of when to launch an initial public offering under which circumstances:

 - Q1/Q2 2011: if COTS Demo 1 succeeds and they say they are on track for CRS services in the second half of 2011
Assumes: no Falcon 1 failure, no other Falcon 9 launch (which there is none planned anyway before Demo 2 in Q2 2011), either a continuing resolution or FY2011 pushed through with a commercial crew contract

 - Q3/Q4 2011: if COTS Demo 1 and 2 succeeds and at least one other Falcon launch is a success (not necessarily CRS)
Assumes: no launch failure, in case of a launch failure, forget the IPO for quite some time, another catalyst that they could build on would be a commercial crew bid that they won

Anyway, no IPO will be coming forth if either a. a launch failure occurs b. the stock market doesn't behave in the next 18 months c. some wired political compromise for FY2011 effectively shuts SpaceX out of ISS support (cargo and crew).

[Jim]

Coming back to the optimal timing for a SpaceX IPO.

Here is sort of a matrix of when to launch an initial public offering under which circumstances:

 - Q1/Q2 2011: if COTS Demo 1 succeeds and they say they are on track for CRS services in the second half of 2011
Assumes: no Falcon 1 failure, no other Falcon 9 launch (which there is none planned anyway before Demo 2 in Q2 2011), either a continuing resolution or FY2011 pushed through with a commercial crew contract

 - Q3/Q4 2011: if COTS Demo 1 and 2 succeeds and at least one other Falcon launch is a success (not necessarily CRS)
Assumes: no launch failure, in case of a launch failure, forget the IPO for quite some time, another catalyst that they could build on would be a commercial crew bid that they won

Anyway, no IPO will be coming forth if either a. a launch failure occurs b. the stock market doesn't behave in the next 18 months c. some wired political compromise for FY2011 effectively shuts SpaceX out of ISS support (cargo and crew).

Huh?  Spacex has a cargo contract.

[simonth]

Coming back to the optimal timing for a SpaceX IPO.

Here is sort of a matrix of when to launch an initial public offering under which circumstances:

 - Q1/Q2 2011: if COTS Demo 1 succeeds and they say they are on track for CRS services in the second half of 2011
Assumes: no Falcon 1 failure, no other Falcon 9 launch (which there is none planned anyway before Demo 2 in Q2 2011), either a continuing resolution or FY2011 pushed through with a commercial crew contract

 - Q3/Q4 2011: if COTS Demo 1 and 2 succeeds and at least one other Falcon launch is a success (not necessarily CRS)
Assumes: no launch failure, in case of a launch failure, forget the IPO for quite some time, another catalyst that they could build on would be a commercial crew bid that they won

Anyway, no IPO will be coming forth if either a. a launch failure occurs b. the stock market doesn't behave in the next 18 months c. some wired political compromise for FY2011 effectively shuts SpaceX out of ISS support (cargo and crew).

Huh?  Spacex has a cargo contract.

Doesn't matter if you call CRS a firm contract or a framework for NASA to use. It's still a contract with likely future revenue for investors.

[mlorrey]

Coming back to the optimal timing for a SpaceX IPO.

Here is sort of a matrix of when to launch an initial public offering under which circumstances:

 - Q1/Q2 2011: if COTS Demo 1 succeeds and they say they are on track for CRS services in the second half of 2011
Assumes: no Falcon 1 failure, no other Falcon 9 launch (which there is none planned anyway before Demo 2 in Q2 2011), either a continuing resolution or FY2011 pushed through with a commercial crew contract

 - Q3/Q4 2011: if COTS Demo 1 and 2 succeeds and at least one other Falcon launch is a success (not necessarily CRS)
Assumes: no launch failure, in case of a launch failure, forget the IPO for quite some time, another catalyst that they could build on would be a commercial crew bid that they won

Anyway, no IPO will be coming forth if either a. a launch failure occurs b. the stock market doesn't behave in the next 18 months c. some wired political compromise for FY2011 effectively shuts SpaceX out of ISS support (cargo and crew).

Huh?  Spacex has a cargo contract.

Doesn't matter if you call CRS a firm contract or a framework for NASA to use. It's still a contract with likely future revenue for investors.

a "framework" eh? Thats a new buzzword from the anti-SpaceX FUD machine. It's a contract with guaranteed revenue provided SpaceX performs. The only thing not guaranteed is any profit.

[simonth]

a "framework" eh? Thats a new buzzword from the anti-SpaceX FUD machine. It's a contract with guaranteed revenue provided SpaceX performs. The only thing not guaranteed is any profit.

I have no idea what you are talking about. Jim's point was (I think) that CRS doesn't mean NASA has to pay for a single cargo flight to the ISS if they don't want to. My point was that there is no doubt that NASA will want to use CRS to delivery cargo to the ISS.

Anyway, this: "It's a contract with guaranteed revenue provided SpaceX performs. The only thing not guaranteed is any profit." is of course incorrect. What guaranteed revenues?

Oh, and why is calling CRS what it is (a framework for individual contracts) "anti-SpaceX"?

[Jim]

a "framework" eh? Thats a new buzzword from the anti-SpaceX FUD machine. It's a contract with guaranteed revenue provided SpaceX performs. The only thing not guaranteed is any profit.

The contract guarantee is around $50k to 100k (standard for IDIQ contracts).   But that doesn't matter, since Spacex has 2-3 CRS missions in the planning cycle and done some special studies, they have received progress payments which have exceeded this amount.   Technically,  the contract could be cancel today, and there would be no recourse for Spacex since NASA has met it obligations.  The CRS contract values are the planned amount or the maximum possible (Don't recall) but neither amount is not guaranteed

[beancounter]

a "framework" eh? Thats a new buzzword from the anti-SpaceX FUD machine. It's a contract with guaranteed revenue provided SpaceX performs. The only thing not guaranteed is any profit.

The contract guarantee is around $50k to 100k (standard for IDIQ contracts).   But that doesn't matter, since Spacex has 2-3 CRS missions in the planning cycle and done some special studies, they have received progress payments which have exceeded this amount.   Technically,  the contract could be cancel today, and there would be no recourse for Spacex since NASA has met it obligations.  The CRS contract values are the planned amount or the maximum possible (Don't recall) but neither amount is not guaranteed

Double negative!!

[shuttle_buff]

OK, no SpaceX IPO for a while (maybe years).

Elon has three major companies and he can't keep managing them all! He has to let some of them go! This is his plan!

I predict Tesla will be taken over by Ford or GM with a stock deal, probably Ford. Could even be this year. Why? Look back at PayPal.

You can't justify buying a company until it's public simply because all cost and revenue is then public. PayPal went public and eBay made an offer. I think Elon knew that would happen. He wanted to "cash out" on PayPal.

So my prediction:

Solar City will be next on the IPO list.

Spacex will be last and it could be a while since Elon knows as you wait and are successful you build value.

I guess time will tell?

[shuttle_buff]

Plus,

Elon took a money loosing company public. How risky is that?

But he has battery technology other companies want, like Toyota and Mecedes!

Then bolt on that "Morgan Stanley" has a price target of $70 a share for Tesla. That's take-over pricing talk!

I used to work for Texas Instruments over 10 years ago and have basically written them off as an inverstment over the last 10 years. TI announced today after the market closed they are buying "National Semi". It appears to be a done deal except for regulator approval.

This will create a huge semiconductor company and anybody that owns "National" stock is the winner!

OK, think about Tesla again?

shuttle_buff

[Downix]

Plus,

Elon took a money loosing company public. How risky is that?

But he has battery technology other companies want, like Toyota and Mecedes!

Then bolt on that "Morgan Stanley" has a price target of $70 a share for Tesla. That's take-over pricing talk!

I used to work for Texas Instruments over 10 years ago and have basically written them off as an inverstment over the last 10 years. TI announced today after the market closed they are buying "National Semi". It appears to be a done deal except for regulator approval.

This will create a huge semiconductor company and anybody that owns "National" stock is the winner!

OK, think about Tesla again?

shuttle_buff

My ex-fiance used to work for NatSemi, and i have many friends which still do.  It was a shock to hear myself, although more that NatSemi had slid that far.  I knew how TI had changed it's fortune around the past decade, and it did so with three letters: A R M.