Author Topic: New purported SpaceX funding round of $500MM  (Read 14296 times)

Offline Johnnyhinbos

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New purported SpaceX funding round of $500MM
« on: 12/18/2018 04:54 pm »

According to the WSJ, SpaceX is looking to raise another $500MM in funding, including from Tesla's largest private investor (at %7.5), Baillie Gifford.

Here's an Ars piece on it, since the WSJ is behind a paywall...

https://arstechnica.com/information-technology/2018/12/spacex-raising-500-million-to-help-build-satellite-broadband-network/
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Online rockets4life97

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Re: New purported SpaceX funding round of $500MM
« Reply #1 on: 12/18/2018 04:57 pm »
So, a more straightforward explanation for why the bank loan was reduced: they got money from somewhere else .

Online kessdawg

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Re: New purported SpaceX funding round of $500MM
« Reply #2 on: 12/18/2018 05:01 pm »
Or they had to replace the $500 million they were forced to reduce their debt by.

Online docmordrid

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Re: New purported SpaceX funding round of $500MM
« Reply #3 on: 12/18/2018 10:13 pm »
Or they had to replace the $500 million they were forced to reduce their debt by.

Except for the reports SpaceX received enough offers to get the full $700+m but declined all but $200+m worth.
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Offline Dante2121

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Re: New purported SpaceX funding round of $500MM
« Reply #4 on: 12/19/2018 02:11 am »
Or they had to replace the $500 million they were forced to reduce their debt by.

Except for the reports SpaceX received enough offers to get the full $700+m but declined all but $200+m worth.

Likely discovered they could get a better price with this equity raise.

Offline M.E.T.

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Re: New purported SpaceX funding round of $500MM
« Reply #5 on: 12/20/2018 01:11 am »
Back of the envelope, the article stated a current valuation of $30.5bn so $500m would be only around 1.5% of the share value, which should leave Elon still owning more than 50%, although he is dropping ever closer to that threshold each time more shares are sold.

Unless he is one of the investors buying these new shares in order to maintain his shareholder percentage, which is possible, I guess. Thatís what I would do if I was him and had a spare $255m lying around.
« Last Edit: 12/20/2018 01:12 am by M.E.T. »

Online docmordrid

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Re: New purported SpaceX funding round of $500MM
« Reply #6 on: 12/20/2018 02:39 am »
Back of the envelope, the article stated a current valuation of $30.5bn so $500m would be only around 1.5% of the share value, which should leave Elon still owning more than 50%, although he is dropping ever closer to that threshold each time more shares are sold.
>

Reuters...

Quote
WHO OWNS SPACEX?

A Musk trust owns 54 percent of the outstanding stock of SpaceX, and has voting control of 78 percent of the outstanding shares, according to a 2016 U.S. Securities and Exchange Commission filing, SpaceXís most recent.
>
« Last Edit: 12/20/2018 02:41 am by docmordrid »
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Offline RedLineTrain

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Re: New purported SpaceX funding round of $500MM
« Reply #7 on: 12/21/2018 03:18 pm »
WHO OWNS SPACEX?

It has changed over the last couple of years as his stock has been diluted a bit.  From the FCC filing for the latest constellation modification request dated November 8.

Quote
SpaceX is a privately held company in which the sole shareholder who is the beneficial owner of a 10% or greater interest is Elon Musk, as trustee of a private trust. Mr. Muskís trust currently owns 50.5% of the outstanding stock of SpaceX and has voting control of 78.7% of the outstanding stock of SpaceX.

The recent funding round may lower that 50.5% a bit.  But his voting control has actually gone up.
« Last Edit: 12/21/2018 03:20 pm by RedLineTrain »

Offline Dante2121

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Re: New purported SpaceX funding round of $500MM
« Reply #8 on: 12/22/2018 02:42 am »
Does he have shares with special voting rights? Or whose shares does he have control over?

Offline Nomadd

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Re: New purported SpaceX funding round of $500MM
« Reply #9 on: 12/22/2018 02:51 am »
Does he have shares with special voting rights? Or whose shares does he have control over?
There are about 200 different ways stocks can be issued. The terminology is used fairly inconsistently, but the end result is that some stock has voting rights and some doesn't. Stock issued to management and investors is often non voting.
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Online ncb1397

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Re: New purported SpaceX funding round of $500MM
« Reply #10 on: 12/22/2018 05:02 am »
Does he have shares with special voting rights? Or whose shares does he have control over?
There are about 200 different ways stocks can be issued. The terminology is used fairly inconsistently, but the end result is that some stock has voting rights and some doesn't. Stock issued to management and investors is often non voting.

Sounds like buying bit coin. No aspects of ownership of something tangible is actually conferred to these investors. Non voting shares basically entitle you to share in dividends. But it is questionable if those will ever occur. They seem to be doing very well in the launch/cargo/HSF business, but I would bet that no dividends have been paid. And what incentive is there for Elon Musk to pay out dividends, when he has 100% control of assets that stay in the company, but only his shareholding percentage of control of assets paid out through dividends. You can see this in Facebook where Zuckerberg has minority shareholding control, majority voting control, made $5 billion dollars last quarter and has never paid a dividend.

So, yeah, you can make money playing the bitcoin game and you can make money here...but I bet a lot of people are turned off by this and the pool of people is basically limited to Musk true believers which explains the notable investor being from Tesla and why they have to raise cash through both equity and debt (a lot of both markets are scoffing at the terms).
« Last Edit: 12/22/2018 05:03 am by ncb1397 »

Offline Lars-J

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Re: New purported SpaceX funding round of $500MM
« Reply #11 on: 12/22/2018 07:20 am »
If you think owning SpaceX stock is an equivalent investment to bitcoin, I donít know what to tell you.

And there is a lot more to stock investment than voting rights.

Online ncb1397

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Re: New purported SpaceX funding round of $500MM
« Reply #12 on: 12/22/2018 07:26 am »
If you think owning SpaceX stock is an equivalent investment to bitcoin, I donít know what to tell you.

And there is a lot more to stock investment than voting rights.

No, it is exactly like bitcoin. It only has value because people think it has value. You can't do anything with a share. You can't vote with it. You don't get dividend distributions. You can't buy out more shares and gain ownership of the company. You could own 55% of the company and Musk could kick you out of the SpaceX factory in Hawthorne. But like bit coin, you can sell it because some other sucker thinks it has value. You might be able to frame a stock certificate which might have some personal sentimental value.
« Last Edit: 12/22/2018 08:35 am by ncb1397 »

Offline JamesH65

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Re: New purported SpaceX funding round of $500MM
« Reply #13 on: 12/22/2018 07:46 am »
You just described the entire monetary system, which is based on a belief in value of, for example, a dollar bill.

Online ncb1397

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Re: New purported SpaceX funding round of $500MM
« Reply #14 on: 12/22/2018 07:51 am »
You just described the entire monetary system, which is based on a belief in value of, for example, a dollar bill.

No, the dollar bill has tangible value because a massive government with massive territory and a massive military says it has value. For instance, if I owe $100,000 to the bank, the bank can bring police with guns, and physically remove me from use of my shelter. Now, I could get a posse and start a small war over this, but most likely I would lose to the police, and if not the police, the guard and if not the guard, the active duty military. On the other hand I can take 1000 pieces of worthless paper with $100 written on it and hand it to the bank, this doesn't happen. This has tangible benefits to the owner because certain legal aspects confer on them rights and powers. These shares are shares but stripped of any legal rights or powers as if some dollar bills weren't legally required to be accepted for payment of debts. Conferring on them value would be based on belief, but no such currency exists in the United States.
« Last Edit: 12/22/2018 07:59 am by ncb1397 »

Offline su27k

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Re: New purported SpaceX funding round of $500MM
« Reply #15 on: 12/22/2018 10:46 am »
If you think owning SpaceX stock is an equivalent investment to bitcoin, I donít know what to tell you.

And there is a lot more to stock investment than voting rights.

No, it is exactly like bitcoin. It only has value because people think it has value. You can't do anything with a share. You can't vote with it. You don't get dividend distributions. You can't buy out more shares and gain ownership of the company. You could own 55% of the company and Musk could kick you out of the SpaceX factory in Hawthorne. But like bit coin, you can sell it because some other sucker thinks it has value. You might be able to frame a stock certificate which might have some personal sentimental value.

What you described is true for all the silicon valley tech stocks, hardly unique to SpaceX. And I would say this is actually a feature, not a bug, it allows the founder of the company to execute their vision without being hindered by pressure for short term profit.

And there is one important difference between stock and bitcoin: when you buy stock from the company, the money goes to employees for developing new things and make the world a better place; when you buy bitcoin, your money goes to some Chinese coin farm for doing useless calculation that generates more greenhouse gases.
« Last Edit: 12/22/2018 10:47 am by su27k »

Online ncb1397

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Re: New purported SpaceX funding round of $500MM
« Reply #16 on: 12/22/2018 08:15 pm »
If you think owning SpaceX stock is an equivalent investment to bitcoin, I donít know what to tell you.

And there is a lot more to stock investment than voting rights.

No, it is exactly like bitcoin. It only has value because people think it has value. You can't do anything with a share. You can't vote with it. You don't get dividend distributions. You can't buy out more shares and gain ownership of the company. You could own 55% of the company and Musk could kick you out of the SpaceX factory in Hawthorne. But like bit coin, you can sell it because some other sucker thinks it has value. You might be able to frame a stock certificate which might have some personal sentimental value.

What you described is true for all the silicon valley tech stocks, hardly unique to SpaceX. And I would say this is actually a feature, not a bug, it allows the founder of the company to execute their vision without being hindered by pressure for short term profit.

Whether this is a good or bad thing depends on the founder's vision. Musk had a dream about the "alien dreadnought" that didn't work and whose construction nearly bankrupted Tesla. Perhaps the only thing that stopped it finishing the job was the countervaling pressure for short term profits that applies modestly to Tesla but not SpaceX.
« Last Edit: 12/22/2018 08:31 pm by ncb1397 »

Offline RedLineTrain

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Re: New purported SpaceX funding round of $500MM
« Reply #17 on: 12/22/2018 08:19 pm »
but I bet a lot of people are turned off by this and the pool of people is basically limited to Musk true believers which explains the notable investor being from Tesla and why they have to raise cash through both equity and debt (a lot of both markets are scoffing at the terms).

Doesn't look like they have a shortage of potential investors.  SpaceX is one of the toughest companies to get into -- long velvet rope and a line with well-dressed folks with bags of cash.

Offline JamesH65

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Re: New purported SpaceX funding round of $500MM
« Reply #18 on: 12/23/2018 08:53 am »
You just described the entire monetary system, which is based on a belief in value of, for example, a dollar bill.

No, the dollar bill has tangible value because a massive government with massive territory and a massive military says it has value. For instance, if I owe $100,000 to the bank, the bank can bring police with guns, and physically remove me from use of my shelter. Now, I could get a posse and start a small war over this, but most likely I would lose to the police, and if not the police, the guard and if not the guard, the active duty military. On the other hand I can take 1000 pieces of worthless paper with $100 written on it and hand it to the bank, this doesn't happen. This has tangible benefits to the owner because certain legal aspects confer on them rights and powers. These shares are shares but stripped of any legal rights or powers as if some dollar bills weren't legally required to be accepted for payment of debts. Conferring on them value would be based on belief, but no such currency exists in the United States.

Exactly....it has value because people believe it has value. Can I suggest reading this book...Sapiens by Yuval Noah Harari. He explains it better than I can.


Online lonestriker

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Re: New purported SpaceX funding round of $500MM
« Reply #19 on: 12/23/2018 09:47 am »
but I bet a lot of people are turned off by this and the pool of people is basically limited to Musk true believers which explains the notable investor being from Tesla and why they have to raise cash through both equity and debt (a lot of both markets are scoffing at the terms).

Doesn't look like they have a shortage of potential investors.  SpaceX is one of the toughest companies to get into -- long velvet rope and a line with well-dressed folks with bags of cash.

And, you can actually sell SpaceX stock even though it's not a public company.  Email Elon sent to SpaceX employees about reasons not to go public:

https://www.valuewalk.com/2018/01/elons-email-spacex-employees-regarding-taking-company-public/

So, even though you can't vote with a share, it has value that can potentially be realized by selling it (though much more restrictive than owning public shares.)

Elon has stated multiple times that companies shouldn't invest in SpaceX and expect a return any time soon. He's not coy about it and yet there are companies lined up to give them their money.  So it's a bit bigger market than just "true believers."

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