Musk's asset accrual and paying for Mars

[Robotbeat]

There’s been some skepticism that SpaceX could EVER justify a bull case market cap of $175B, which Morgan Stanley considers as the most optimistic scenario due to Starlink: https://www.cnbc.com/2020/07/20/morgan-stanley-spacex-could-be-175-billion-company-if-elon-musks-starlink-works.html

But it’s not fundamentally insane that an Internet/telecommunications company could be worth that much. Comcast has a market cap of $197B. It’s not likely SpaceX/Starlink will dethrone them any time soon, but such a valuation wouldn’t be all that weird if Starlink does end up competitive. A $175B POTENTIAL MAXIMUM market cap for SpaceX makes a LOT more sense to me than the $300B *CURRENT* market cap for Tesla, which seems a bit frothy as it’s much higher than any other car company.

Folks no doubt sneer at those acknowledging a, say, 10% possibility for $175B valuation. Then when a $50B market cap occurs in a few years, they’ll probably laugh and misrepresent those folk by saying… “look, you said a $175B valuation was guaranteed! Haha. Look at how foolish you were…” Ahem, rocketrepreneur… 😉

[DistantTemple]

Elon plays things close and always has as much of his capital as possible invested. He has figured out how to pay for Starlink and Starship using investor money and not his own by tying their fates together: Starlink in its full manifestation is too ambitious to fly just using Falcon 9, so if investors want to get the full returns of Starlink, they have to fund Starship...

Kind of interesting TBH. In 2016, Elon Musk's net worth was about $10B, and ITS (as Starship was called at the time) was so huge and used carbon fiber that it'd probably cost about $10B to develop, and there wasn't really anything that would justify its existence financially beyond Musk's Mars ambition.

The slide from his 2016 ITS talk on funding:
FUNDING
   Steal Underpants
   Launch Satellites
   Send Cargo and Astronauts to ISS
   Kickstarter
   Profit

Elon's net worth is now over $70B, Starship development cost (at least for the initial version) is probably closer to $2B than $10B (due to shrinking, switching to stainless which doesn't need the biggest autoclave in the world, and simplification), and now Starship has a firm, financial justification in being a launcher for Starlink and Artemis (and less firm, Earth 2 Earth).

Elon now has more than enough raw assets to pay for Starship and the initial missions but he no longer has to!

Fundraising for Starlink (and now Artemis) is the "Kickstarter" step... Very, very clever. As long as Starlink and Starship both enter service successfully, they will continue even if something happens to Elon (as opposed to relying on their sugar daddy). Elon may be less liquid and less straight up wealthy as Bezos, but I actually think the Starship/Mars plan is now on firmer footing than Bezos' grand vision.


I think you could argue that actually serving customers is a better motivation to execute than $1 billion annually in free money.

Another reason for not committing his own resources: As long as he has investors his assets are available if he hits a snag. This is when fresh resources are most needed but least available.

This also references your last post before this Robotbeat.

What sort of underpants is Elon planning to steal?
Well he seems to be well on the way to getting Ford's, GM's, etc... He could very well steal Comcast's underpants! However, he doesn't really need to as there is a massive untapped market, that nobody has bothered to go after, even with subsidies waved around. If SL gets most of the remote and rural broadband POPULATION ... ie all those that just knew broadband was impossible - and accepted it! That will be a good start... and then there's markets around the world.... and he will appeal to populations and governments through the "poorly served users" hook (100% valid) but expand into villages and towns, ..... and before you know it, every terrestrial ISP in the world will have to watch their dirty washing, as SL will be harvesting sacks of underpants, and the incumbents will be left with no clothes!
This sounds like analogy, but there are unhappy subscribers, paying too much for bad service everywhere, and Starlink will start hoovering these up.
Even if the flying saucer appears to be impossible to make for under $10K, going all in and tooling up for millions of units will crack this nut. Just look at the price of CPU, hard drive, CD, or blue-ray technology!!! Elon is changingground rules in every industry, like casting big parts of car frames.... If he has to spend $3Bn to build a phased array factory because no one else will make them affordably, he will do it. He will find a way to take the core business of every sector he enters, by advancing technology, and offering a better service. Nobodies underpants are secure, from peaker-plants, to sewage companies!

[Robotbeat]

Even if Starlink were merely breakeven, it provides the market demand for Starship launches.

If Starlink is competitive enough, they can just keep upgrading it more and more, adding capacity. It could serve hundreds of millions of people.

Requiring like 10-100 Starship-Starlink launches per year pays for the fixed costs of Starship launch and production capacity, making Mars settlement much cheaper as they’d just have to pay for the marginal costs.

[DistantTemple]

And as for SX market cap.... $200Bn will be peanuts in 4 years. And $1T by 2028. Assuming the lunar program works, and SX can offer international governments a moon base for under $2B including several astronaut refreshes... etc (and make 50% profit) etc... etc.. and some success on Mars will be proved by then. And thats forgetting about point-to-point!Now I think it will be faster. Once orbital refuelling, and the winged landing are done, a whole load of (financial) risk will have been delt with. If needed that will be a time for a funding round based on a vastly higher market cap, perhaps $100B, and once a secessful test moon landing has been achieved will be another obvious time.... especially if NASA are still on board, as Elon's long sighted cadre of friends and investors will easily see the possibilities, and the amazing lead SX has.

[Robotbeat]

Telecoms is probably the bigger space market we can hope for in our lifetimes. So unless SpaceX starts getting involved in more terrestrial markets (speculation: power-to-gas? After all, they’ll need that tech for Mars), Starlink will probably dominate their market cap.

[M.E.T.]

Even if Starlink were merely breakeven, it provides the market demand for Starship launches.

If Starlink is competitive enough, they can just keep upgrading it more and more, adding capacity. It could serve hundreds of millions of people.

Requiring like 10-100 Starship-Starlink launches per year pays for the fixed costs of Starship launch and production capacity, making Mars settlement much cheaper as they’d just have to pay for the marginal costs.

That kind of talks to my point, which is that this would be true if Musk was the sole owner, but all the outside investors would most definitely not be happy if Starlink was operated on a break even basis merely to justify and fund Starship development. Because they are in it for returns on investment - based largely on expected Starlink profits. Hence my concern every time Musk’s ownership stake dilutes by yet another fraction.

[M.E.T.]

Telecoms is probably the bigger space market we can hope for in our lifetimes. So unless SpaceX starts getting involved in more terrestrial markets (speculation: power-to-gas? After all, they’ll need that tech for Mars), Starlink will probably dominate their market cap.

My ultimate hope for asteroid mining to be the big ticket permanent revenue source is partly motivated by the need to have something else as an ace in the hole if the Telecoms business eventually doesn’t pan out in as big a way as we hope. The need for something else to support and drive a space economy boom. Because Mars or Moon settlement sure won’t be a profitable venture in its own right. Instead, it will be a massive money sink for probably a century to come.

If all Starlink does is provide the bridge to get us to an operational, mass produced Starship - which is basically the equivalent of a space elevator - that MAY open up asteroid mining as a potentially unlimited revenue source, providing the pull factor needed to support continued human expansion into the solar system. Yes, there are many challenges to profitable space mining - but cheap tonnage to and from space made possible by Starship changes a major part of that equation.

[Robotbeat]

Telecoms is probably the bigger space market we can hope for in our lifetimes. So unless SpaceX starts getting involved in more terrestrial markets (speculation: power-to-gas? After all, they’ll need that tech for Mars), Starlink will probably dominate their market cap.

My ultimate hope for asteroid mining to be the big ticket permanent revenue source....

Mining for WHAT, exactly? Don't say water. Water is a secondary market to other space industries (you're effectively promising that satellite companies won't have to spend as much on launch costs to do stuff they want to do, so you're competing against the launch market and you'll necessarily have less revenue than your customers, the satellite operators who are paying you). Earth has plenty of water.

Look up the actual total market (in millions or billions CURRENT total global market revenue) for the thing you intend to mine that you think will be bigger than telecommunications.

[DistantTemple]

Telecoms is probably the bigger space market we can hope for in our lifetimes. So unless SpaceX starts getting involved in more terrestrial markets (speculation: power-to-gas? After all, they’ll need that tech for Mars), Starlink will probably dominate their market cap.

My ultimate hope for asteroid mining to be the big ticket permanent revenue source....

Mining for WHAT, exactly? Don't say water. Water is a secondary market to other space industries (you're effectively promising that satellite companies won't have to spend as much on launch costs to do stuff they want to do, so you're competing against the launch market and you'll necessarily have less revenue than your customers, the satellite operators who are paying you). Earth has plenty of water.

Look up the actual total market (in millions or billions CURRENT total global market revenue) for the thing you intend to mine that you think will be bigger than telecommunications.

Just because asteroid mining seems to be totally uneconomic in the near term, and has been discussed on NSF repeatedly, including estimates of costs and profits (or none) it doesn't mean anyone who pokes their head above the parapet should be immediately shot down.
If in maybe 30 years there is a space economy with communities on Mars and the Moon... and asteroid mining, there will be intermediate steps between now and then, some not profitable, and funded as research or pathfinders, by government or privately. 
Also a "hope" statement  allows for difficulty or even impossibility! And "ultimate" tends to mean quite some way in the future!

[ZachF]

IIRC, mining is something like 4-5% of world GDP, but the lions share of that is oil/gas/etc. Communications is a larger share of world GDP than non-OG mining sector IIRC.


Just some mining numbers to put context into this argument:

-World gold production is ~3,500 tonnes, at today's prices that's ~$175 billion (surprisingly high IMHO)
-World platinum production is ~160 tonnes, at today's prices that's ~$5 billion
-World palladium production is ~210 tonnes, at today's prices that's ~$15 billion
-World Silver production is ~27,000 tonnes, at today's prices that's ~$20 billion
-World Rhodium production is ~30 tonnes,  at today's prices that's ~$2 billion

All of those put together is a ~$220b market.

Nickel is most likely a stretch at $13,000 per ton, but global nickel production is worth about $28 billion, cobalt at around $30k/ton is $3.5b.

[Robotbeat]

Telecoms is probably the bigger space market we can hope for in our lifetimes. So unless SpaceX starts getting involved in more terrestrial markets (speculation: power-to-gas? After all, they’ll need that tech for Mars), Starlink will probably dominate their market cap.

My ultimate hope for asteroid mining to be the big ticket permanent revenue source....

Mining for WHAT, exactly? Don't say water. Water is a secondary market to other space industries (you're effectively promising that satellite companies won't have to spend as much on launch costs to do stuff they want to do, so you're competing against the launch market and you'll necessarily have less revenue than your customers, the satellite operators who are paying you). Earth has plenty of water.

Look up the actual total market (in millions or billions CURRENT total global market revenue) for the thing you intend to mine that you think will be bigger than telecommunications.

Just because asteroid mining seems to be totally uneconomic in the near term, and has been discussed on NSF repeatedly, including estimates of costs and profits (or none) it doesn't mean anyone who pokes their head above the parapet should be immediately shot down.
If in maybe 30 years there is a space economy with communities on Mars and the Moon... and asteroid mining, there will be intermediate steps between now and then, some not profitable, and funded as research or pathfinders, by government or privately. 
Also a "hope" statement  allows for difficulty or even impossibility! And "ultimate" tends to mean quite some way in the future!

That’s a non-answer. WHAT WOULD YOU MINE?

[M.E.T.]

Telecoms is probably the bigger space market we can hope for in our lifetimes. So unless SpaceX starts getting involved in more terrestrial markets (speculation: power-to-gas? After all, they’ll need that tech for Mars), Starlink will probably dominate their market cap.

My ultimate hope for asteroid mining to be the big ticket permanent revenue source....

Mining for WHAT, exactly? Don't say water. Water is a secondary market to other space industries (you're effectively promising that satellite companies won't have to spend as much on launch costs to do stuff they want to do, so you're competing against the launch market and you'll necessarily have less revenue than your customers, the satellite operators who are paying you). Earth has plenty of water.

Look up the actual total market (in millions or billions CURRENT total global market revenue) for the thing you intend to mine that you think will be bigger than telecommunications.

Just because asteroid mining seems to be totally uneconomic in the near term, and has been discussed on NSF repeatedly, including estimates of costs and profits (or none) it doesn't mean anyone who pokes their head above the parapet should be immediately shot down.
If in maybe 30 years there is a space economy with communities on Mars and the Moon... and asteroid mining, there will be intermediate steps between now and then, some not profitable, and funded as research or pathfinders, by government or privately. 
Also a "hope" statement  allows for difficulty or even impossibility! And "ultimate" tends to mean quite some way in the future!

That’s a non-answer. WHAT WOULD YOU MINE?

All of the above, as soon as you can mine it for an all inclusive cost of $1 less than a terrestrial mining operation could produce it at.

[Robotbeat]

Telecoms is probably the bigger space market we can hope for in our lifetimes. So unless SpaceX starts getting involved in more terrestrial markets (speculation: power-to-gas? After all, they’ll need that tech for Mars), Starlink will probably dominate their market cap.

My ultimate hope for asteroid mining to be the big ticket permanent revenue source....

Mining for WHAT, exactly? Don't say water. Water is a secondary market to other space industries (you're effectively promising that satellite companies won't have to spend as much on launch costs to do stuff they want to do, so you're competing against the launch market and you'll necessarily have less revenue than your customers, the satellite operators who are paying you). Earth has plenty of water.

Look up the actual total market (in millions or billions CURRENT total global market revenue) for the thing you intend to mine that you think will be bigger than telecommunications.

Just because asteroid mining seems to be totally uneconomic in the near term, and has been discussed on NSF repeatedly, including estimates of costs and profits (or none) it doesn't mean anyone who pokes their head above the parapet should be immediately shot down.
If in maybe 30 years there is a space economy with communities on Mars and the Moon... and asteroid mining, there will be intermediate steps between now and then, some not profitable, and funded as research or pathfinders, by government or privately. 
Also a "hope" statement  allows for difficulty or even impossibility! And "ultimate" tends to mean quite some way in the future!

That’s a non-answer. WHAT WOULD YOU MINE?

All of the above, as soon as you can mine it for an all inclusive cost of $1 less than a terrestrial mining operation could produce it at.

Another non-answer. Identify one thing that might be worth mining.

[laszlo]

All of the above, as soon as you can mine it for an all inclusive cost of $1 less than a terrestrial mining operation could produce it at.

That suggests a new strategy. If Musk invested his entire fortune in lobbying, advertising and otherwise being the most vocal environmentalist ever; and managed to get laws passed to include the full environmental cost of mineral extraction in the price of mined resources; and got lease prices raised to reflect the current market value of the ores (instead of some lease price set in the 19th century), the result would be that terrestrial metal production would become entirely recycling-based and all new production would have to move to space. As the owner of the largest space fleet, he'd end up with the biggest pile of underpants.

As a side-effect, many of the Earth's environmental issues would be addressed at the same time.

Maybe he needs to start buying legislators instead of rocket components 

[llanitedave]

Mining asteroids is not going to be a viable proposition -- ever -- for replacing of Earth resources.
Where it will become practical, and necessary, is in the context of martian or asteroid colonization.  The resources will only be practical if they are utilized close to where they are mined.
Mars might be lacking in certain minerals that could be found on asteroids, but we won't know that for sure until we've done some serious prospecting there.  It's not likely to have ore bodies in the same type of geological settings as Earth.  They'll either be in deposits unique to Mars or they're simply be too diluted for practical extraction.  There's enough diversity in asteroid composition to think that all the necessary industrial minerals will be recoverable from at least some bodies.

[Robotbeat]

All of the above, as soon as you can mine it for an all inclusive cost of $1 less than a terrestrial mining operation could produce it at.

That suggests a new strategy. If Musk invested his entire fortune in lobbying, advertising and otherwise being the most vocal environmentalist ever; and managed to get laws passed to include the full environmental cost of mineral extraction in the price of mined resources; and got lease prices raised to reflect the current market value of the ores (instead of some lease price set in the 19th century), the result would be that terrestrial metal production would become entirely recycling-based and all new production would have to move to space. As the owner of the largest space fleet, he'd end up with the biggest pile of underpants.

As a side-effect, many of the Earth's environmental issues would be addressed at the same time.

Maybe he needs to start buying legislators instead of rocket components 

There's a problem with that: reentry produces NOx compounds because of the heat of reentry. About 5% of the mass of the reentered object. The ~100 ton space shuttle is estimated to have made about 5 tons of NOx emissions per reentry. This becomes a major environmental challenge if you're trying to "offload" all mining and industry to space...

[Robotbeat]

Because no one is brave enough to meet my challenge, let's just say it clearly:

Platinum group metals is a tiny market. Maybe $10 billion per year GLOBALLY. MINISCULE compared to the ~$1.5 trillion telecommunications market.


HECK, even all mining revenue globally is only about $700 billion per year!!! Half the size of telecommunications. So even if you insisted on taking over literally the ENTIRE terrestrial mining market (really? you're going to get sand and iron and gravel from space?), it'd be half the size of the market that Starlink is playing in.

Space mining just isn't that big of a thing compared to telecommunications. And it won't be until more people are living in space than on the Earth.

[Eric Hedman]

The Maureen Dowd interview with Elon Musk:

https://www.nytimes.com/2020/07/25/style/elon-musk-maureen-dowd.html

[Slarty1080]

Because no one is brave enough to meet my challenge, let's just say it clearly:

Platinum group metals is a tiny market. Maybe $10 billion per year GLOBALLY. MINISCULE compared to the ~$1.5 trillion telecommunications market.


HECK, even all mining revenue globally is only about $700 billion per year!!! Half the size of telecommunications. So even if you insisted on taking over literally the ENTIRE terrestrial mining market (really? you're going to get sand and iron and gravel from space?), it'd be half the size of the market that Starlink is playing in.

Space mining just isn't that big of a thing compared to telecommunications. And it won't be until more people are living in space than on the Earth.

Platinum group metals are small beer, but the gold market is truly huge - $200 billion per day if they can find a lot of gold it could have a big effect and be very disruptive.

But I doubt we will see anything remotely like that for many decades. refining  such materials in the asteroid belt would be a nightmare.

[Robotbeat]

Because no one is brave enough to meet my challenge, let's just say it clearly:

Platinum group metals is a tiny market. Maybe $10 billion per year GLOBALLY. MINISCULE compared to the ~$1.5 trillion telecommunications market.


HECK, even all mining revenue globally is only about $700 billion per year!!! Half the size of telecommunications. So even if you insisted on taking over literally the ENTIRE terrestrial mining market (really? you're going to get sand and iron and gravel from space?), it'd be half the size of the market that Starlink is playing in.

Space mining just isn't that big of a thing compared to telecommunications. And it won't be until more people are living in space than on the Earth.

Platinum group metals are small beer, but the gold market is truly huge - $200 billion per day if they can find a lot of gold it could have a big effect and be very disruptive....

No, only about $150 billion of gold per year is mined (and it's included in the $700 billion figure I provided above). If you increased that much, the value of gold would drop proportionally. and sure, you could mine more and it'd be disruptive to people who hold gold right now, but all it'd do is make gold like a weak, heavy version of aluminum and your profit would drop dramatically.