Author Topic: New purported SpaceX funding round of $500MM  (Read 14294 times)

Online 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 .

Offline 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.

Offline 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. »

Offline 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.
Those who danced were thought to be quite insane by those who couldn't hear the music.

Offline 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.

Offline 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.

Offline 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 »

Offline 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.


Offline 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."

Offline ncb1397

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Re: New purported SpaceX funding round of $500MM
« Reply #20 on: 12/23/2018 09:52 am »

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.

No, we are not in agreement. Your contention is that the dollar bill has no actual value but is perceived to have value. This would make it indistinguishable from bitcoin in that regard - obviously people think bitcoin has value because people steal it/people buy it. My contention is the dollar has value because its value is enforced by actual physical assets in the physical world that can and do materially affect people's lives. It isn't perceived value, it is actual value.

There is no enforcement that stipulates that these shares have actual value. If you owned 55% of shares, Musk still controls the company and dictates everything that occurs. You could be arrested for entering property that you supposedly own. He owns the company, not the owners of these shares. The only legal rights these shares entitle you too are access to dividends, but there is no legal requirement that dividends have to be paid. So, it very well could mean rights to nothing. If there was a police/military force that enforces ownership rights for these shares as there is a police/military force that enforces the legal value of the dollar, this would be a different story.
« Last Edit: 12/23/2018 10:07 am by ncb1397 »

Offline ncb1397

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Re: New purported SpaceX funding round of $500MM
« Reply #21 on: 12/23/2018 10:18 am »

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.)

Only because the market is under a mass delusion that ownership of these shares represents ownership in the company and rights to a share of the companies' wealth. Its similar to bitcoin. It has value because somebody would buy it. No other reason than that.

Offline philw1776

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Re: New purported SpaceX funding round of $500MM
« Reply #22 on: 12/23/2018 04:00 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.

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."

What a well written, informative and helpful letter.  Being an engineer who has worked in startups and who also has an MBA in finance, I respect his perspective.  His advice to employees is spot on.  I wish I knew a good fraction of what Elon demonstrably knows about finance.
Subsequent events at publicly held Tesla add emphasis to the public company caveats he expressed in the letter.

P.S.  My suggestion to folks is to take Heinlein's advice and stop the pig wrestling in this thread.
« Last Edit: 12/23/2018 04:02 pm by philw1776 »
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Offline envy887

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Re: New purported SpaceX funding round of $500MM
« Reply #23 on: 12/23/2018 08:46 pm »

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.)

Only because the market is under a mass delusion that ownership of these shares represents ownership in the company and rights to a share of the companies' wealth. Its similar to bitcoin. It has value because somebody would buy it. No other reason than that.
So you're saying that Musk could vote to sell all of SpaceX's real assets and IP, and then take all that money himself because he has voting control?

Offline lonestriker

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Re: New purported SpaceX funding round of $500MM
« Reply #24 on: 12/23/2018 10:24 pm »

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.)

Only because the market is under a mass delusion that ownership of these shares represents ownership in the company and rights to a share of the companies' wealth. Its similar to bitcoin. It has value because somebody would buy it. No other reason than that.
So you're saying that Musk could vote to sell all of SpaceX's real assets and IP, and then take all that money himself because he has voting control?

I don't think this is really worth even arguing over.  ncb1397's stance is that a share of stock without voting rights is akin to a fiat currency issued by SpaceX, who's only intrinsic value derives from the belief of true believers.  We just need someone with a finance background to refute that (with citations if needed) and move on.  Everything I know tells me this is false, but that's not my area of expertise.


Offline Mongo62

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Re: New purported SpaceX funding round of $500MM
« Reply #25 on: 12/23/2018 10:37 pm »

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.)

Only because the market is under a mass delusion that ownership of these shares represents ownership in the company and rights to a share of the companies' wealth. Its similar to bitcoin. It has value because somebody would buy it. No other reason than that.
So you're saying that Musk could vote to sell all of SpaceX's real assets and IP, and then take all that money himself because he has voting control?

I don't think this is really worth even arguing over.  ncb1397's stance is that a share of stock without voting rights is akin to a fiat currency issued by SpaceX, who's only intrinsic value derives from the belief of true believers.  We just need someone with a finance background to refute that (with citations if needed) and move on.  Everything I know tells me this is false, but that's not my area of expertise.

Non-voting shares are also called "preferred shares", because they have a higher claim on earnings and assets than voting, or "common shares". Dividends to preferred shares are paid out before dividends are paid out to common shares, and those dividends are generally greater than with equivalent common shares.
« Last Edit: 12/23/2018 10:38 pm by Mongo62 »

Offline ChrisWilson68

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Re: New purported SpaceX funding round of $500MM
« Reply #26 on: 12/23/2018 10:49 pm »

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.)

Only because the market is under a mass delusion that ownership of these shares represents ownership in the company and rights to a share of the companies' wealth. Its similar to bitcoin. It has value because somebody would buy it. No other reason than that.
So you're saying that Musk could vote to sell all of SpaceX's real assets and IP, and then take all that money himself because he has voting control?

I don't think this is really worth even arguing over.  ncb1397's stance is that a share of stock without voting rights is akin to a fiat currency issued by SpaceX, who's only intrinsic value derives from the belief of true believers.  We just need someone with a finance background to refute that (with citations if needed) and move on.  Everything I know tells me this is false, but that's not my area of expertise.

Non-voting shares are also called "preferred shares", because they have a higher claim on earnings and assets than voting, or "common shares". Dividends to preferred shares are paid out before dividends are paid out to common shares, and those dividends are generally greater than with equivalent common shares.

No.

Preferred and non-voting are two independent properties a share of stock can have.  You can have a preferred share that is non-voting or a preferred share that is voting.

When venture capital firms fund a start-up, they are typically issued shares that are both preferred and voting.

Offline ChrisWilson68

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Re: New purported SpaceX funding round of $500MM
« Reply #27 on: 12/23/2018 10:54 pm »

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.)

Only because the market is under a mass delusion that ownership of these shares represents ownership in the company and rights to a share of the companies' wealth. Its similar to bitcoin. It has value because somebody would buy it. No other reason than that.
So you're saying that Musk could vote to sell all of SpaceX's real assets and IP, and then take all that money himself because he has voting control?

I don't think this is really worth even arguing over.  ncb1397's stance is that a share of stock without voting rights is akin to a fiat currency issued by SpaceX, who's only intrinsic value derives from the belief of true believers.  We just need someone with a finance background to refute that (with citations if needed) and move on.  Everything I know tells me this is false, but that's not my area of expertise.

ncb1397 is incorrect.

A non-voting share still has rights to money generated by the company.  If the company makes money and returns it to shareholders through a dividend, the non-voting and voting shares get the same dividend.

And it is incorrect that Musk could just choose to give himself SpaceX assets.  The board of directors would have to approve that, and the board has a fiduciary duty to all shareholders.  Just because Musk has all the power to vote for the board members doesn't change that.  They still have an equal fiduciary duty to every share, voting or not.  If the board did something to benefit Musk at the expense of other shareholders, they would sue the board, and they would win.  The board might go to jail, too.

Offline ncb1397

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Re: New purported SpaceX funding round of $500MM
« Reply #28 on: 12/23/2018 11:24 pm »

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.)

Only because the market is under a mass delusion that ownership of these shares represents ownership in the company and rights to a share of the companies' wealth. Its similar to bitcoin. It has value because somebody would buy it. No other reason than that.
So you're saying that Musk could vote to sell all of SpaceX's real assets and IP, and then take all that money himself because he has voting control?

I don't think this is really worth even arguing over.  ncb1397's stance is that a share of stock without voting rights is akin to a fiat currency issued by SpaceX, who's only intrinsic value derives from the belief of true believers.  We just need someone with a finance background to refute that (with citations if needed) and move on.  Everything I know tells me this is false, but that's not my area of expertise.

ncb1397 is incorrect.

A non-voting share still has rights to money generated by the company.  If the company makes money and returns it to shareholders through a dividend, the non-voting and voting shares get the same dividend.


If you look above, I mention this is what these shares gives you right to. But there is a trend where very large and highly profitable companies with multi-voting schemes where the founders maintain voting control do not pay dividends. I think this will be another one of those cases.

Quote
And it is incorrect that Musk could just choose to give himself SpaceX assets.  The board of directors would have to approve that, and the board has a fiduciary duty to all shareholders.  Just because Musk has all the power to vote for the board members doesn't change that.  They still have an equal fiduciary duty to every share, voting or not.  If the board did something to benefit Musk at the expense of other shareholders, they would sue the board, and they would win.  The board might go to jail, too.

Such a scheme is called tunneling and is illegal. But there is a way around that. Just keep the assets within SpaceX as an effectively Musk controlled trust. You still can do pretty much anything you want with it such as build a brick tower on SpaceX property which was recently completed. Its effectively his fun money. He once boasted that he could buy an island and make it his personal fiefdom with his personal fortune after Paypal. He effectively could do this with company money as well, he just has to effectively dress it up as a factory or launch site or something.

Speaking of tunneling and being sued by shareholders, Musk came very close to that by using Tesla money to buy Solar City, a company he(and his family members) had a large stake in. He was sued by shareholders and it is proceeding to trial.
« Last Edit: 12/24/2018 12:04 am by ncb1397 »

Offline envy887

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Re: New purported SpaceX funding round of $500MM
« Reply #29 on: 12/24/2018 02:10 am »
If you look above, I mention this is what these shares gives you right to. But there is a trend where very large and highly profitable companies with multi-voting schemes where the founders maintain voting control do not pay dividends. I think this will be another one of those cases.

Because those profits are being used to aquire more assets (real estate, factories, IP) for the company. Assets that will generate future income, and that if sold will be revenue that the shareholders have a right to receive. That's why those shares have real value. They have real assets behind them.

Offline Lar

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Re: New purported SpaceX funding round of $500MM
« Reply #30 on: 12/24/2018 02:07 pm »
(mod) I think we're starting to veer off topic. ncb1397 has a view of things that isn't generally accepted but it's at best incidental to whether SpaceX did or didn't go to the equity market for funding.
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Offline oldAtlas_Eguy

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Re: New purported SpaceX funding round of $500MM
« Reply #31 on: 12/24/2018 08:03 pm »
In 2015 Google invested $1B into SpaceX when it was valued at $21B. Now after 3 years it is valued at $30+B. Google has realized if it sold it's shares now a gain of 50%. This is why investors are lined up and SpaceX has no problem in getting what it needs so long as the totals of investment in a year is less that a few percent of valuation.

What can SpaceX do with this $500M + the $200M+ loan? The cost of a Starlink Sat to manufacture is ~$1-2M. Launch on F9 ~$1M. The total cost per launch is somewhere between $50M and $100M. But now subtract all the capital equipment expenditures (Starlink - buildings and tooling ~$100M and Starship/Super Heavy - buildings, pad, and tooling $150M) which leaves $500M for launch vehicles and sats. Now add the profit margin from the operational launch side of ~ $300M + and there is a lot of cash to do a lot of manufacture and launches.
« Last Edit: 12/24/2018 08:05 pm by oldAtlas_Eguy »

Offline RedLineTrain

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Re: New purported SpaceX funding round of $500MM
« Reply #32 on: 12/24/2018 09:39 pm »
My guess is that this year's fundraising is going toward one-time costs -- e.g., real estate, construction, and tooling.  I don't think it would be a good practice to make payroll with it.

Offline MechE31

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Re: New purported SpaceX funding round of $500MM
« Reply #33 on: 12/26/2018 02:27 am »
In 2015 Google invested $1B into SpaceX when it was valued at $21B. Now after 3 years it is valued at $30+B. Google has realized if it sold it's shares now a gain of 50%. This is why investors are lined up and SpaceX has no problem in getting what it needs so long as the totals of investment in a year is less that a few percent of valuation.

When Google invested $1B, The value was closer to $10B. Using your first numbers, that's an annualized return of 14%, which isn't spectacular considering the risk level. With the updated numbers, it's around 40%, which will have people lining up.

With that said, there's "only" been a jump off 10% since April based off the article.

Online Llian Rhydderch

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Re: New purported SpaceX funding round of $500MM
« Reply #34 on: 12/30/2018 11:22 am »
MechE is correct.  When Google first invested in SpaceX in 2015, the amount invested was somewhere under US$1 billion and SpaceX was then valued at c. $10+ billion. (this article or this one).

The numbers I'd always seen was they got about got about 8.3% of equity on their investment on a $12 billion valuation.

This raise then, and the raise they are doing now, seems like smart financial capital acquisition on the part of Elon

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Offline ChrisWilson68

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Re: New purported SpaceX funding round of $500MM
« Reply #35 on: 12/30/2018 12:08 pm »

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.)

Only because the market is under a mass delusion that ownership of these shares represents ownership in the company and rights to a share of the companies' wealth. Its similar to bitcoin. It has value because somebody would buy it. No other reason than that.
So you're saying that Musk could vote to sell all of SpaceX's real assets and IP, and then take all that money himself because he has voting control?

I don't think this is really worth even arguing over.  ncb1397's stance is that a share of stock without voting rights is akin to a fiat currency issued by SpaceX, who's only intrinsic value derives from the belief of true believers.  We just need someone with a finance background to refute that (with citations if needed) and move on.  Everything I know tells me this is false, but that's not my area of expertise.

ncb1397 is incorrect.

A non-voting share still has rights to money generated by the company.  If the company makes money and returns it to shareholders through a dividend, the non-voting and voting shares get the same dividend.


If you look above, I mention this is what these shares gives you right to. But there is a trend where very large and highly profitable companies with multi-voting schemes where the founders maintain voting control do not pay dividends. I think this will be another one of those cases.


If you had claimed SpaceX would not pay dividends in the near future, nobody would have disagreed with you.  What you actually claimed was "Only because the market is under a mass delusion that ownership of these shares represents ownership in the company and rights to a share of the companies' wealth.".  That is not the same thing.

Companies can keep growing their value by reinvesting profits.  Even when companies distribute their profits to shareholders, these days they often do it by buying back stock, so no dividends.  It doesn't mean investors are being fleeced or that they don't make money or it's some kind of ponzi scheme.  There's a lot of real, tangible value in SpaceX.  Claiming that SpaceX stock only has value because of a "mass delusion" is not a rational assessment.

Quote
And it is incorrect that Musk could just choose to give himself SpaceX assets.  The board of directors would have to approve that, and the board has a fiduciary duty to all shareholders.  Just because Musk has all the power to vote for the board members doesn't change that.  They still have an equal fiduciary duty to every share, voting or not.  If the board did something to benefit Musk at the expense of other shareholders, they would sue the board, and they would win.  The board might go to jail, too.

Such a scheme is called tunneling and is illegal. But there is a way around that. Just keep the assets within SpaceX as an effectively Musk controlled trust. You still can do pretty much anything you want with it such as build a brick tower on SpaceX property which was recently completed. Its effectively his fun money. He once boasted that he could buy an island and make it his personal fiefdom with his personal fortune after Paypal. He effectively could do this with company money as well, he just has to effectively dress it up as a factory or launch site or something.

Speaking of tunneling and being sued by shareholders, Musk came very close to that by using Tesla money to buy Solar City, a company he(and his family members) had a large stake in. He was sued by shareholders and it is proceeding to trial.

Thanks for making my point for me.  If SpaceX is being sued for buying Solar City, imagine the lawsuits if they built a private island for Musk.

Anyway, Musk wasn't talking about making a private island with company money.  It's clear he meant because he'd have personal wealth and use that.

Offline aero

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Re: New purported SpaceX funding round of $500MM
« Reply #36 on: 12/30/2018 11:32 pm »
SpaceX being sued for buying Solar City? Last I heard, Tesla bought Solar City.
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Offline philw1776

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Re: New purported SpaceX funding round of $500MM
« Reply #37 on: 12/30/2018 11:36 pm »
SpaceX being sued for buying Solar City? Last I heard, Tesla bought Solar City.

The poster meant that SpaceX's Elon Musk as Tesla CEO was being sued for the Solar City aquisition.
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Offline Lar

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Re: New purported SpaceX funding round of $500MM
« Reply #38 on: 01/02/2019 04:51 pm »
Off topic alert. Second Warning!!!!

How the money supply works, what people can buy on desert islands, whether stock is just a delusion?

WAY off topic.

'nuff said I hope.
« Last Edit: 01/02/2019 04:52 pm by Lar »
"I think it would be great to be born on Earth and to die on Mars. Just hopefully not at the point of impact." -Elon Musk
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Offline calapine

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Re: New purported SpaceX funding round of $500MM
« Reply #39 on: 01/03/2019 06:07 pm »
SpaceX updates on new funding round

Quote
SpaceX (SPACE) discloses that it sold $227M worth of shares to 8 investors as part of its new $500M funding round.

Elon Musk is listed in the filing as one of the investors.

https://seekingalpha.com/news/3420459-spacex-updates-new-funding-round

Edit: I found the SEC Form D that is the basis for the article:
https://www.sec.gov/Archives/edgar/data/1181412/000118141219000001/xslFormDX01/primary_doc.xml
« Last Edit: 01/03/2019 06:39 pm by calapine »

Offline Dante2121

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Re: New purported SpaceX funding round of $500MM
« Reply #40 on: 01/03/2019 10:55 pm »
Musk often borrows money on his Tesla shares.  My guess is thatís what he did here.

Offline ncb1397

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Re: New purported SpaceX funding round of $500MM
« Reply #41 on: 01/04/2019 12:09 am »
SpaceX updates on new funding round

Quote
SpaceX (SPACE) discloses that it sold $227M worth of shares to 8 investors as part of its new $500M funding round.

Elon Musk is listed in the filing as one of the investors.

https://seekingalpha.com/news/3420459-spacex-updates-new-funding-round

Edit: I found the SEC Form D that is the basis for the article:
https://www.sec.gov/Archives/edgar/data/1181412/000118141219000001/xslFormDX01/primary_doc.xml

Looks like 273 million sold. 227 million was the unsold amount.




Offline su27k

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Re: New purported SpaceX funding round of $500MM
« Reply #42 on: 01/04/2019 01:00 am »
Quote
Elon Musk is listed in the filing as one of the investors.

Is he? The form D lists him under "Related Persons", which is just a list of executives and directors, I don't think the form actually discloses who the investors are.

Offline ncb1397

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Re: New purported SpaceX funding round of $500MM
« Reply #43 on: 01/12/2019 02:35 am »
And it is incorrect that Musk could just choose to give himself SpaceX assets.  The board of directors would have to approve that...

maybe not?

Quote
Boring Company was spun out of SpaceX and Musk got 90 percent of its equity. And SpaceX's board -- which includes Peter Thiel, whose Founder's Fund invested in SpaceX, did not authorize Musk to channel the SpaceX funds to dig the Boring Company's tunnel.
https://www.inc.com/peter-cohan/elon-musk-just-took-peter-thiels-spacex-money-did-something-incredibly-unethical-with-it.html

Online FutureSpaceTourist

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Re: New purported SpaceX funding round of $500MM
« Reply #44 on: 01/13/2019 07:15 am »
I assume the latest figure is derived from this funding round:

https://twitter.com/jonerlichman/status/1083905927999352832

Quote
SpaceX valuation:

Jan 2019: $30.5 billion
May 2018: $25 billion
Nov 2017: $20.8 billion
Jan 2015:  $10 billion
Oct 2010:   $1 billion
Jun 2009: $547 million
Aug 2008: $410 million
Mar 2007: $280 million
Mar 2005: $163 million
Dec 2002:  $27 million

Source: WSJ, Pitchbook

Edit to add: quick graph of the numbers - axis now corrected!
« Last Edit: 01/13/2019 08:50 pm by FutureSpaceTourist »

Offline philw1776

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Re: New purported SpaceX funding round of $500MM
« Reply #45 on: 01/13/2019 02:05 pm »
Log scale would help.
In round #s the first decade to 2010 growth was ~30x.  Coincidently the 2nd decade growth was also 30x to now.
IF SpaceX is worth another 30x more by 2019/2030 they will have accomplished their missions.  Although they won't need to be worth anywhere 30X more to have done so. 
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Online FutureSpaceTourist

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Re: New purported SpaceX funding round of $500MM
« Reply #46 on: 01/13/2019 08:52 pm »
Log scale would help.
In round #s the first decade to 2010 growth was ~30x.  Coincidently the 2nd decade growth was also 30x to now.
IF SpaceX is worth another 30x more by 2019/2030 they will have accomplished their missions.  Although they won't need to be worth anywhere 30X more to have done so.

Log scale version now also attached to my previous post.

Offline oldAtlas_Eguy

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Re: New purported SpaceX funding round of $500MM
« Reply #47 on: 01/15/2019 02:45 pm »
Log scale would help.
In round #s the first decade to 2010 growth was ~30x.  Coincidently the 2nd decade growth was also 30x to now.
IF SpaceX is worth another 30x more by 2019/2030 they will have accomplished their missions.  Although they won't need to be worth anywhere 30X more to have done so.

Log scale version now also attached to my previous post.
This graph illustrates why SpaceX can get investments in the $100M's. The annual valuation increase rate is 40% (factor of 1.4).

Starlink success will maintain this valuation growth over the next decade.

Starship success will add to the growth in second half of next decade and keep it going into the next.

But they have to be successful. Else valuation growth slows and can even loose value.
« Last Edit: 01/15/2019 02:47 pm by oldAtlas_Eguy »

Offline Robotbeat

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Re: New purported SpaceX funding round of $500MM
« Reply #48 on: 01/16/2019 03:48 am »
If Starlink is successfully deployed, even the initial version, valuation will be like $100 billion or so, vying for the largest private company ever. Particularly if BFR reaches orbit and the whole thing is recovered (thus making second half of Starlink viable... reusable super heavy launch by itself isn't enough to dramatically increase SpaceX's value!).
« Last Edit: 01/16/2019 03:49 am by Robotbeat »
Chris  Whoever loves correction loves knowledge, but he who hates reproof is stupid.

To the maximum extent practicable, the Federal Government shall plan missions to accommodate the space transportation services capabilities of United States commercial providers. US law http://goo.gl/YZYNt0

Offline ncb1397

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Re: New purported SpaceX funding round of $500MM
« Reply #49 on: 01/16/2019 03:59 am »
If Starlink is successfully deployed, even the initial version, valuation will be like $100 billion or so, vying for the largest private company ever. Particularly if BFR reaches orbit and the whole thing is recovered (thus making second half of Starlink viable... reusable super heavy launch by itself isn't enough to dramatically increase SpaceX's value!).

Hmm, maybe. Direct TV is worth $20 billion. Dish is worth $13 billion. Iridium is worth $2 billion. ViaSat is worth $4. Intelsat is worth $3. Add them all to SpaceX's current valuation, and you get around $70 billion. And this isn't even factoring in that Starlink is already partially priced into their current valuation. Is Starlink internet going to go into iPhones and Samsung galaxy phones? Are people going to switch off their wired internet in favor of satellite? Those are not slam dunks to put it mildly. You could try a price war with the like of Comcast, but their network is already deployed and they would be forced to match you and they could as their network is already paid for. It would take a long time for that to atrophy.
« Last Edit: 01/16/2019 04:09 am by ncb1397 »

Offline Robotbeat

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Re: New purported SpaceX funding round of $500MM
« Reply #50 on: 01/16/2019 04:09 am »
Yes, Starlink is going to be bigger than all of those combined. A lot bigger.


The world is growing.
« Last Edit: 01/16/2019 04:09 am by Robotbeat »
Chris  Whoever loves correction loves knowledge, but he who hates reproof is stupid.

To the maximum extent practicable, the Federal Government shall plan missions to accommodate the space transportation services capabilities of United States commercial providers. US law http://goo.gl/YZYNt0

Offline ncb1397

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Re: New purported SpaceX funding round of $500MM
« Reply #51 on: 01/16/2019 04:20 am »
Yes, Starlink is going to be bigger than all of those combined. A lot bigger.


The world is growing.

Dude, it is internet. There are a gazillion providers. And they aren't bad providers or providers in bad financial positions either that are easy targets. These players have Jeff Bezos' war chest, but with the advantage of being the established player. This isn't rocket launch. I am not talking about dialup (that is an option though if you want to pay $10 a month).
« Last Edit: 01/16/2019 04:24 am by ncb1397 »

Offline Robotbeat

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Re: New purported SpaceX funding round of $500MM
« Reply #52 on: 01/16/2019 04:26 am »
And? Youíre talking like 3-5 billion people on the Internet today, a number that will just grow. This is multiple trillion dollars per year... Not only is the market big enough for SpaceX, but itís big enough for multiple SpaceXes.

...and thereís no reason they couldnít bundle other services like TV.


Comcast has a market cap of $163 billion, and theyíre fairly US centric. Starlink will be global.
« Last Edit: 01/16/2019 04:28 am by Robotbeat »
Chris  Whoever loves correction loves knowledge, but he who hates reproof is stupid.

To the maximum extent practicable, the Federal Government shall plan missions to accommodate the space transportation services capabilities of United States commercial providers. US law http://goo.gl/YZYNt0

Offline lonestriker

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Re: New purported SpaceX funding round of $500MM
« Reply #53 on: 01/16/2019 04:47 am »
If Starlink is successfully deployed, even the initial version, valuation will be like $100 billion or so, vying for the largest private company ever. Particularly if BFR reaches orbit and the whole thing is recovered (thus making second half of Starlink viable... reusable super heavy launch by itself isn't enough to dramatically increase SpaceX's value!).

Hmm, maybe. Direct TV is worth $20 billion. Dish is worth $13 billion. Iridium is worth $2 billion. ViaSat is worth $4. Intelsat is worth $3. Add them all to SpaceX's current valuation, and you get around $70 billion. And this isn't even factoring in that Starlink is already partially priced into their current valuation. Is Starlink internet going to go into iPhones and Samsung galaxy phones? Are people going to switch off their wired internet in favor of satellite? Those are not slam dunks to put it mildly. You could try a price war with the like of Comcast, but their network is already deployed and they would be forced to match you and they could as their network is already paid for. It would take a long time for that to atrophy.

Any reason why you didn't include Comcast's market cap?  They alone are $160+ billion (high around $200 B).  If Starlink is successful, they may actually do so being partners with the various ISPs and backbone providers.  Starlink can provide high-speed Internet to almost every place on Earth; many of those communities do not have good options currently.  So the upside potential for Starlink is very high if they can actually produce and launch those satellites for a reasonable cost.  And, they'll have to keep launching replacements so it's both a money sink and a forced upgrade cycle that could continually expand bandwidth to the system.

A lot of technical and financial hurdles to clear, but the reason why SpaceX is valued currently at $30 B is Starlink's potential.

Offline ncb1397

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Re: New purported SpaceX funding round of $500MM
« Reply #54 on: 01/16/2019 05:19 am »
If Starlink is successfully deployed, even the initial version, valuation will be like $100 billion or so, vying for the largest private company ever. Particularly if BFR reaches orbit and the whole thing is recovered (thus making second half of Starlink viable... reusable super heavy launch by itself isn't enough to dramatically increase SpaceX's value!).

Hmm, maybe. Direct TV is worth $20 billion. Dish is worth $13 billion. Iridium is worth $2 billion. ViaSat is worth $4. Intelsat is worth $3. Add them all to SpaceX's current valuation, and you get around $70 billion. And this isn't even factoring in that Starlink is already partially priced into their current valuation. Is Starlink internet going to go into iPhones and Samsung galaxy phones? Are people going to switch off their wired internet in favor of satellite? Those are not slam dunks to put it mildly. You could try a price war with the like of Comcast, but their network is already deployed and they would be forced to match you and they could as their network is already paid for. It would take a long time for that to atrophy.

Any reason why you didn't include Comcast's market cap?  They alone are $160+ billion (high around $200 B).  If Starlink is successful, they may actually do so being partners with the various ISPs and backbone providers.  Starlink can provide high-speed Internet to almost every place on Earth; many of those communities do not have good options currently.  So the upside potential for Starlink is very high if they can actually produce and launch those satellites for a reasonable cost.  And, they'll have to keep launching replacements so it's both a money sink and a forced upgrade cycle that could continually expand bandwidth to the system.

A lot of technical and financial hurdles to clear, but the reason why SpaceX is valued currently at $30 B is Starlink's potential.

The initial claim was the claim that the initial constellation of 4000 20 gbps satellites will support a valuation of $100 billion. To compete with comcast, you need to price internet around $.2 dollars per gigabyte. The per year revenue then is ((4000 satellites * 20 gbps) /8 (bits per byte)) * 3600 (seconds in day)* .3 (land coverage) * 365 (days in year) * .2 (dollars per gigabyte) or ~$19 billion per year. Comcast's net income is more than that. As such, it won't support a Comcast like valuation of $100 billion. Not in my opinion.
« Last Edit: 01/16/2019 05:20 am by ncb1397 »

Offline docmordrid

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Re: New purported SpaceX funding round of $500MM
« Reply #55 on: 01/16/2019 05:29 am »
The article by WSJ quoting the StarLink satellite revenue estimates is paywalled, but this chart isn't

https://si.wsj.net/public/resources/images/P1-BZ810_SPACEX_9U_20170112174544.jpg
DM

Offline ncb1397

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Re: New purported SpaceX funding round of $500MM
« Reply #56 on: 01/16/2019 05:42 am »
The article by WSJ quoting the StarLink satellite revenue estimates is paywalled, but this chart isn't

https://si.wsj.net/public/resources/images/P1-BZ810_SPACEX_9U_20170112174544.jpg

These are SpaceX's own numbers (i.e. their pitch). It looks like about $500 million for internet revenue in 2019. The year is about 5% over and it is at 0. You need about a million subscribers for a whole year to reach that. That is 1 million installs. Where are these thousands upon thousands of flat antennas and their installation infrastructure to do 1 million + installs. Good luck meeting that one.

edit: Just looking at the last numbers for 2025. They are projecting 22 billion in profits on 36 billion in revenue. It is hard to find an example even close to comparable. At first, you would think Microsoft given they sell product with almost zero marginal cost. Google? Nope, not even close. If that is the case, anybody with a buck is going to be out to get them. They will be throwing money at Greg Wyler like a...well...you get the idea.
« Last Edit: 01/16/2019 06:03 am by ncb1397 »

Offline AC in NC

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Re: New purported SpaceX funding round of $500MM
« Reply #57 on: 01/16/2019 06:14 am »
If Starlink is successfully deployed, even the initial version, valuation will be like $100 billion or so
Hmm, maybe. Direct TV is worth ...
To compete with comcast, you need to price internet around $.2 dollars per gigabyte. The per year revenue then is ((4000 satellites * 20 gbps) /8 (bits per byte)) * 3600 (seconds in day)* .3 (land coverage) * 365 (days in year) * .2 (dollars per gigabyte) or ~$19 billion per year. Comcast's net income is more than that. As such, it won't support a Comcast like valuation of $100 billion. Not in my opinion.
They are projecting 22 billion in profits on 36 billion in revenue.
Global Internet Access Market Cap[1] is about $2T at a Price/Sales of about 1.85 and that discounts any penetration expanison or other service bundling.  A piece of the pie is large.

--  Comcast's valuation is constrained by its growth potential.
--  It's not necessarily required to compete with Comcast on price.
--  Revenue can be generated on the seas [2]
--  NIT:  Your math was right but there are 86,400 seconds in a day.
--  SEMI-NIT: Profit and Operating Income are different measures.

[1] - https://www.prnewswire.com/news-releases/the-global-internet-access-market-had-total-revenues-of-9814bn-in-2016-300553419.html
[2] - https://assets.weforum.org/editor/LuTYoYw52_caPda9ay4cLZbNmFSEiqfWPoG_a5YjOSk.jpg
« Last Edit: 01/16/2019 07:22 am by AC in NC »

Offline docmordrid

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Re: New purported SpaceX funding round of $500MM
« Reply #58 on: 01/16/2019 06:15 am »
>
These are SpaceX's own numbers (i.e. their pitch). It looks like about $500 million for internet revenue in 2019. The year is about 5% over and it is at 0. You need about a million subscribers for a whole year to reach that. That is 1 million installs.

Raw estimates which didn't account for unpredictables  like regulatory delays etc.

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Where are these thousands upon thousands of flat antennas and their installation infrastructure to do 1 million + installs. Good luck meeting that one.
>

They've designed their own phased array, which they could farm out for fabrication or do themselves.

https://patentscope.wipo.int/search/en/detail.jsf?docId=WO2018152439

They also have a silent partner; Google, which holds the rights to the meshed constellation patent and owns a piece of SpaceX. Larry Page is also a Friend of Elon from waaaayyyy back.
« Last Edit: 01/16/2019 06:18 am by docmordrid »
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Offline niwax

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Re: New purported SpaceX funding round of $500MM
« Reply #59 on: 01/16/2019 08:13 am »
Quote
Where are these thousands upon thousands of flat antennas and their installation infrastructure to do 1 million + installs. Good luck meeting that one.
>

They've designed their own phased array, which they could farm out for fabrication or do themselves.

https://patentscope.wipo.int/search/en/detail.jsf?docId=WO2018152439

They also have a silent partner; Google, which holds the rights to the meshed constellation patent and owns a piece of SpaceX. Larry Page is also a Friend of Elon from waaaayyyy back.

On that note, where do those Google Wifi balloons get their internet access from?
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Offline jpo234

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Re: New purported SpaceX funding round of $500MM
« Reply #60 on: 01/16/2019 08:24 am »
Where are these thousands upon thousands of flat antennas and their installation infrastructure to do 1 million + installs. Good luck meeting that one.

Not StarLink, but here you go:
https://twitter.com/greg_wyler/status/1081989389453066240

You want to be inspired by things. You want to wake up in the morning and think the future is going to be great. That's what being a spacefaring civilization is all about. It's about believing in the future and believing the future will be better than the past. And I can't think of anything more exciting than being out there among the stars.

Offline docmordrid

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Re: New purported SpaceX funding round of $500MM
« Reply #61 on: 01/16/2019 08:29 am »
>
On that note, where do those Google Wifi balloons get their internet access from?

AIUI,

ISP <--> ground station <--> balloon mesh network <--> users
« Last Edit: 01/16/2019 08:31 am by docmordrid »
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Offline jpo234

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Re: New purported SpaceX funding round of $500MM
« Reply #62 on: 01/16/2019 08:50 am »
On that note, where do those Google Wifi balloons get their internet access from?

Or WebPass: https://webpass.net/about_us

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In 2016, we were acquired by Google Fiber.
« Last Edit: 01/16/2019 08:52 am by jpo234 »
You want to be inspired by things. You want to wake up in the morning and think the future is going to be great. That's what being a spacefaring civilization is all about. It's about believing in the future and believing the future will be better than the past. And I can't think of anything more exciting than being out there among the stars.

Offline envy887

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Re: New purported SpaceX funding round of $500MM
« Reply #63 on: 01/16/2019 01:05 pm »
* .3 (land coverage)

This is not the relevant metric. You need the percentage of time that the satellite is above the horizon of a subscriber, which is much higher since each satellite can see 1000 km sideways, plus ships and planes. There is enough ship and plane density in the latitudes covered by Starlink that this number will approach 1.

Also, SpaceX can get much more than 20 cents per gigabyte in the remote areas where the satellites will spend a lot of time. The subscriber fee will undoubtedly vary by location and application (fixed or vehicle-mounted).

Offline jpo234

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Re: New purported SpaceX funding round of $500MM
« Reply #64 on: 01/16/2019 01:20 pm »
My assumption has always been that the last mile model for StarLink is:
1) WebPass or similar local services for densely populated areas (e.g. Cities)
2) Loon for medium population density
3) individual StarLink terminals for sparsely populated areas

This has the assumption baked in that Google is the partner that provides the customer service.
« Last Edit: 01/16/2019 01:35 pm by jpo234 »
You want to be inspired by things. You want to wake up in the morning and think the future is going to be great. That's what being a spacefaring civilization is all about. It's about believing in the future and believing the future will be better than the past. And I can't think of anything more exciting than being out there among the stars.

Offline oldAtlas_Eguy

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Re: New purported SpaceX funding round of $500MM
« Reply #65 on: 01/16/2019 04:40 pm »
This funding round is for the Internet transport not content providers. It is also for the SH/SS development. So a little less about Starlink revenue speculation an d a little more on how the funds will be actually used.

Offline AC in NC

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Re: New purported SpaceX funding round of $500MM
« Reply #66 on: 01/16/2019 05:05 pm »
This funding round is for the Internet transport not content providers. It is also for the SH/SS development. So a little less about Starlink revenue speculation an d a little more on how the funds will be actually used.

That's a very good point.  In hopes that we can acknowledge a bit of what both "sides" were offering.

There are a few good numbers in the counterpoint arguing against a $100B valuation.  And the established and nascent competition is not to be discounted  nor ordinary business and time risk along with uptake..   

However, there are some arguable figures within those calculations as well as valuation factors discounted by the skeptical argument and some unique advantages for Starlink.

I think it's fair to say that a valuation of $100B at the aforementioned 4000 sats is certainly not a given, but far from an impossibility.  Let's leave that there and get back on-topic.

Cheers!!!   ;)
« Last Edit: 01/16/2019 05:07 pm by AC in NC »

Offline ncb1397

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Re: New purported SpaceX funding round of $500MM
« Reply #67 on: 01/16/2019 06:02 pm »
* .3 (land coverage)

This is not the relevant metric. You need the percentage of time that the satellite is above the horizon of a subscriber, which is much higher since each satellite can see 1000 km sideways, plus ships and planes. There is enough ship and plane density in the latitudes covered by Starlink that this number will approach 1.

Also, SpaceX can get much more than 20 cents per gigabyte in the remote areas where the satellites will spend a lot of time. The subscriber fee will undoubtedly vary by location and application (fixed or vehicle-mounted).

With full satellite constellation utilization, that is $63 billion per year. The Atlantic Ocean is about 20% of the Earth's surface. Even if we assume 10% because satellites above the ocean can service coastal land masses out to 1000 km, they would need ~$6.3 billion per year from Trans-atlantic in just the 10% left over. That is $17.3 million per day.

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In 2015, 44 million seats were offered on the transatlantic routes, an increase of 6% over the previous year.
https://en.wikipedia.org/wiki/Transatlantic_flight

Let's assume that SpaceX services this entire market with no competitors and that is their revenue over the oceans. Project the 6% growth per year out to 2025. That is 79 million passengers per year or ~200,000 passengers per day. Revenue per passenger to be 1:1 with the revenue I use for terrestrial would have to be on the order of ~$80 per passenger. Looking at in flight wifi pricing, it seems like $20 for a day is ball park. That isn't even counting revenue sharing agreements with the airlines and that is revenue per user, not revenue per passenger. So, yes, over oceans, revenue is likely to drop off significantly.

Add in that they likely won't get landing rights over Russia and China (Russia is complaining about One Web and they have contracts with them via Arianespace), this substantially offsets the portion of the oceans that have land line of sight and a .3 utilization factor is as good as any. Utilization/revenue over land isn't going to be 100% and over water it isn't going to be 0%. Whether the reality vs the calculation works out in Starlinks favor or against it...who knows.
« Last Edit: 01/16/2019 06:29 pm by ncb1397 »

Offline Robotbeat

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Re: New purported SpaceX funding round of $500MM
« Reply #68 on: 01/16/2019 08:15 pm »
If Starlink is successfully deployed, even the initial version, valuation will be like $100 billion or so, vying for the largest private company ever. Particularly if BFR reaches orbit and the whole thing is recovered (thus making second half of Starlink viable... reusable super heavy launch by itself isn't enough to dramatically increase SpaceX's value!).

Hmm, maybe. Direct TV is worth $20 billion. Dish is worth $13 billion. Iridium is worth $2 billion. ViaSat is worth $4. Intelsat is worth $3. Add them all to SpaceX's current valuation, and you get around $70 billion. And this isn't even factoring in that Starlink is already partially priced into their current valuation. Is Starlink internet going to go into iPhones and Samsung galaxy phones? Are people going to switch off their wired internet in favor of satellite? Those are not slam dunks to put it mildly. You could try a price war with the like of Comcast, but their network is already deployed and they would be forced to match you and they could as their network is already paid for. It would take a long time for that to atrophy.

Any reason why you didn't include Comcast's market cap?  They alone are $160+ billion (high around $200 B).  If Starlink is successful, they may actually do so being partners with the various ISPs and backbone providers.  Starlink can provide high-speed Internet to almost every place on Earth; many of those communities do not have good options currently.  So the upside potential for Starlink is very high if they can actually produce and launch those satellites for a reasonable cost.  And, they'll have to keep launching replacements so it's both a money sink and a forced upgrade cycle that could continually expand bandwidth to the system.

A lot of technical and financial hurdles to clear, but the reason why SpaceX is valued currently at $30 B is Starlink's potential.

The initial claim was the claim that the initial constellation of 4000 20 gbps satellites will support a valuation of $100 billion. To compete with comcast, you need to price internet around $.2 dollars per gigabyte. The per year revenue then is ((4000 satellites * 20 gbps) /8 (bits per byte)) * 3600 (seconds in day)* .3 (land coverage) * 365 (days in year) * .2 (dollars per gigabyte) or ~$19 billion per year. Comcast's net income is more than that. As such, it won't support a Comcast like valuation of $100 billion. Not in my opinion.
No, that wasnít the original claim. Valuation is anticipatory of the next big step. If the pieces are in place for the full constellation (ie successful orbital BFR plus deployment of the initial constellation), then market cap is likely to anticipate the rest of the constellation being deployed, too, just like the current market cap anticipates a reasonably high chance of the initial deployment succeeding.
Chris  Whoever loves correction loves knowledge, but he who hates reproof is stupid.

To the maximum extent practicable, the Federal Government shall plan missions to accommodate the space transportation services capabilities of United States commercial providers. US law http://goo.gl/YZYNt0

Offline AC in NC

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Re: New purported SpaceX funding round of $500MM
« Reply #69 on: 01/16/2019 10:21 pm »
The initial claim was the claim that the initial constellation of 4000 20 gbps satellites will support a valuation of $100 billion.
No, that wasnít the original claim. Valuation is anticipatory of the next big step. If the pieces are in place for the full constellation (ie successful orbital BFR plus deployment of the initial constellation), then market cap is likely to anticipate the rest of the constellation being deployed, too, just like the current market cap anticipates a reasonably high chance of the initial deployment succeeding.

Those are really saying the same thing different ways.  ncb1387 though is (arguably incorrectly IMO) discounting the magnitude of the forward looking growth component of the valuation based on initial constellation (which I suspect we all think is basically dependent on BFR).  I don't think it's like he's saying his view of valuation is based on spinning-off the 4K Sats with no further plans.

We really need to accept the bigger picture being argued from both "endzones".  It's both true that initial constellation MAY NOT support a $100B valuation but it's also NOT TRUE that it CANNOT.  My opinion is it's a relatively sane "stake-in-the-ground" considering potential growth.  Optimistic but not outlandishly so.  Also matters of course what we're valuing (eg:  Starlink independently or SpaceX current valuation projected out a couple years plus the Starlink add-on).

« Last Edit: 01/16/2019 10:27 pm by AC in NC »

Offline Robotbeat

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Re: New purported SpaceX funding round of $500MM
« Reply #70 on: 01/17/2019 02:25 am »
The initial claim was the claim that the initial constellation of 4000 20 gbps satellites will support a valuation of $100 billion.
No, that wasnít the original claim. Valuation is anticipatory of the next big step. If the pieces are in place for the full constellation (ie successful orbital BFR plus deployment of the initial constellation), then market cap is likely to anticipate the rest of the constellation being deployed, too, just like the current market cap anticipates a reasonably high chance of the initial deployment succeeding.

Those are really saying the same thing different ways. ...
No, they aren't, because ncb was referring to an "initial claim," which was mine, not his.

The current valuation of SpaceX anticipates the first part of Starlink probably succeeding. If the first part DOES succeed, that improves the odds that the next phase will succeed, thus supporting my claim that the full constellation (12000 birds, upgraded capability compared to original birds) may well support a valuation of $100 billion or more even though the 4000 satellite constellation probably won't produce enough revenue by itself to justify that price.
Chris  Whoever loves correction loves knowledge, but he who hates reproof is stupid.

To the maximum extent practicable, the Federal Government shall plan missions to accommodate the space transportation services capabilities of United States commercial providers. US law http://goo.gl/YZYNt0

Offline AC in NC

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Re: New purported SpaceX funding round of $500MM
« Reply #71 on: 01/17/2019 02:35 am »
No, they aren't, because ncb was referring to an "initial claim," which was mine, not his.

No.  I know exactly what claim ncb was referring to and exactly where you are each talking past each other.  They are basically the same thing.  But it's not worth it.  I tried.  Carry on with your stalemate from the trenches.

Offline Mongo62

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Re: New purported SpaceX funding round of $500MM
« Reply #72 on: 01/20/2019 01:48 pm »
Musk often borrows money on his Tesla shares.  My guess is thatís what he did here.

Last known data point has his pledged shares at >40% of owned.  There is a 25%LTV requirement from the BOD on his Tesla borrowings that would trigger before other risks listed in Tesla filings.

The layoffs at both companies along with the WSJ article the day before raise announcement should be taken in context together.  It sheds light on what is happening in Boca Chica.

I don't follow Tesla that closely, but IMHO the layoffs at SpaceX were part of a shift away from F9/FH design/production and towards SS/SH design/production. You do not need CF engineers or kerolox propulsion experts for SS/SH. It's unpleasant for the people who have been let go, but absolutely standard -- and indeed required to survive -- for this to happen as part of a major shift in direction in this sort of industry.

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