Investing in Aerojet and SpaceX

[PeterAlt]

Any idea when SpaceX will have their IPO?

Also, I recently watched the documentary Revenge of the Electric Car (it's on NetFlix, highly recommended) and learned that Elon Musk is also the CEO of Tesla Motors, which I did not know previously. In that documentary, it shows that Elon did an IPO for Tesla. I would imagine he would do the same for SpaceX.

That would be the stock to invest in. Forget about ones like the overly hyped Facebook IPO!

My projection...

Jim was right, I believe, last time he made a SpaceX projection...

Oh, come on, why would SpaceX not be growth stock, considering the progress they've made with their LAS system and the development of the reusable Falcon? Sure, they keep slipping on launching Dragon, but who didn't expect slips on those early launches? They are making slow-ish progress, but steady successful progress nonetheless.

[Robotbeat]

Because the launch industry is already over-crowded and almost all the other players are subsidized by their respective governments. And SpaceX pays its workers in dollars, which is a pretty strong currency.

Of course, we HOPE that private spaceflight takes off, but it's a pretty risky bet right now (and it's not guaranteed that SpaceX would win it).

[PeterAlt]

Changed the subject to Investing in Aerojet and SpaceX

[apace]

Because the launch industry is already over-crowded and almost all the other players are subsidized by their respective governments. And SpaceX pays its workers in dollars, which is a pretty strong currency.

Of course, we HOPE that private spaceflight takes off, but it's a pretty risky bet right now (and it's not guaranteed that SpaceX would win it).

Dollars? A strong currency ;-) you're joking, not?

[strangequark]

Dollars? A strong currency ;-) you're joking, not?

Compared to Rubles?

[apace]

Dollars? A strong currency ;-) you're joking, not?

Compared to Rubles?

Compared to that what you get for it.

[Robotbeat]

Because the launch industry is already over-crowded and almost all the other players are subsidized by their respective governments. And SpaceX pays its workers in dollars, which is a pretty strong currency.

Of course, we HOPE that private spaceflight takes off, but it's a pretty risky bet right now (and it's not guaranteed that SpaceX would win it).

Dollars? A strong currency ;-) you're joking, not?

Compared to Rubles and Yuan. Wages are a lot higher in the US.

[edkyle99]

Changed the subject to Investing in Aerojet and SpaceX

Here is some financial/stock info on a few publicly traded aerospace companies.  Note how most of these lagged the S&P 500 during the past five years, and how little profit they made compared to one example of 1860s high-tech, the Union Pacific Railroad, and to a hamburger seller, McDonalds.  (Note that the stock return does not include dividends which in some cases substantially offset the stock loss.  LMT, for example, paid 4.7% annual dividend rates recently.)

Company                      2011        Profit   5-YR Stock 
                            Revenue      Margin   Return (Approx)
================================================================
Boeing (BA)                 $68.74B      5.85%     -16%
United Technologies (UTX)   $58.19B      8.56%     +20%
Lockheed Martin (LMT)       $46.50B      5.71%     -12%
ATK                          $4.60B      5.92%     -32%
Gencorp (GY)                 $0.89B      0.20%     -62% 
Orbital (ORB)                $0.87B      5.25%     -19%

S&P 500                                             -7%  

Union Pacific (UNP)         $19.56B     16.83%    +130%
McDonalds (MCD)             $27.01B     20.38%    +125%
===============================================================

   

 - Ed Kyle

[go4mars]

Tesla Motors:  +80%  (since July 2010)

The street factors management teams largely into valuation credibility too, and Elon's companies do well (historically). 

There is something to be said for star power.  The Pareto Principle exists.
It essentially states that 20% of management teams generate 80% of the value within a sector. 
But it goes further:  20% of that top 20% contribute 80% of that top value, etc. 

Implying that 4% contribute 64% of the value. 

Carried further, 0.8% generate 51.2% of the value.   

The exact numbers are inexact, but the trend definately exists. 

Self-made billionaires like Elon are thus entrusted with a lot more capital by money-men (investment bankers and such). 

There are examples in just about every industry: Mike Rose in Tourmaline for example. 

[edkyle99]

Star power only goes so far.  Eventually, the company must make money, which Tesla has yet to do.  It actually lost more than its total revenue last year, for example (revenues $201.15M, net income -$224.28M, profit margin -111.5%). 

 - Ed Kyle

[go4mars]

It actually lost more than its total revenue last year, for example (revenues $201.15M, net income -$224.28M, profit margin -111.5%). 

 - Ed Kyle

Which no one cares about and everyone anticipated...

They are tooling up the factory, and getting things ready for when the rubber meets the road. 

I've owned Tesla since $17/share.   I plan to keep it for a while yet (probably until Tesla Bluestar's are in the market) even though it's worth $31.60 right now.  I didn't buy it for its historic earnings, and neither does anyone else.    It's not Exxon.

In fact, tooling up for future models will probably keep them unprofitible for many years, all the while their production capacity expands. 

Plus I think there are reasonable odds that someone will buy them out at some point (or at least the automotive side of their business). 

[STS Tony]

I hope you guys have invested 20 bucks into NSF by joining the superb L2, allowing this site to survive, and allowing you these interesting threads.

[go4mars]

I hope you guys have invested 20 bucks into NSF by joining the superb L2, allowing this site to survive, and allowing you these interesting threads.

Thanks for that challenge.  Tonight's the night. 

[edkyle99]

It actually lost more than its total revenue last year, for example (revenues $201.15M, net income -$224.28M, profit margin -111.5%). 

 - Ed Kyle

Which no one cares about and everyone anticipated...

They are tooling up the factory, and getting things ready for when the rubber meets the road. 

I've owned Tesla since $17/share.   I plan to keep it for a while yet (probably until Tesla Bluestar's are in the market) even though it's worth $31.60 right now.  I didn't buy it for its historic earnings, and neither does anyone else.    It's not Exxon.

You are a bolder investor than I! 

I want to see solid earnings, steady earnings growth, low to middling P/E ratios, and dividends if I can get them.  Boring stuff, so I can sleep at night. 

 - Ed Kyle 

[wolfpack]

My opinion is to never invest with any sort of emotional involvement at all. You seem to be enamored with these companies, and while that may be admirable, it is hardly a cause to place your own capital at risk. I, too, share enthusiasm for SpaceX, but would not be interested in a share offering at this point.

I would also not give NASA one dime of my money were I not compelled to do so.

Fortunately, I am compelled to do so.

[PeterAlt]

My opinion is to never invest with any sort of emotional involvement at all. You seem to be enamored with these companies, and while that may be admirable, it is hardly a cause to place your own capital at risk. I, too, share enthusiasm for SpaceX, but would not be interested in a share offering at this point.

I would also not give NASA one dime of my money were I not compelled to do so.

Fortunately, I am compelled to do so.

My strategy is to invest in companies that are developing promising technology and products and one who has a CEO who is inspirational (Steve Jobs at Apple for example). In the late 80's, I took all my money and invested in Disney because I believed in its new CEO at the time - Micheal Eisner, knowing the history of what he did at ABC and Paramount, confident that he would bring to Disney the same creative energy. He did and the company grow to the behemoth it is today. When I sold my shares a few years later, I made a killing and got back SEVERAL times the investment!

When Steve Jobs returned to Apple, I should have listened to my gut instinct that said to invest in Apple. I screwed that opportunity up, but had I listened to myself, I would have made even more than what I made with Disney. Now, my gut is telling me to invest in Elon Musk and that Tesla and SpaceX could be the next Apple in a few years.

[PeterAlt]

This just in:

http://www.bloomberg.com/news/2012-02-09/musk-sees-good-chance-of-spacex-stock-offering-by-next-year.html?cmpid=msnmoney

[kevin-rf]

This just in:

http://www.bloomberg.com/news/2012-02-09/musk-sees-good-chance-of-spacex-stock-offering-by-next-year.html?cmpid=msnmoney

So using the standard SpaceX time dilation factor, that would be no sooner than 2015?

[docmordrid]

I would think after FH and/or CRS-1 have flown.

[kevin-rf]

I would think after FH and/or CRS-1 have flown.

CRS-1 might be this year, early 2013 at the latest, but I highly doubt FH will fly before 2014.