Musk's asset accrual and paying for Mars

[ncb1397]

SpaceX's private share price & valuation have spiked, largely based on StarLink...

NY Post...

“We just traded some at $340 a share,” a Wall Street source who brokers such deals told The Post. That’s up by a quarter from the stock’s $270-a-share value on Aug. 18, when ­SpaceX completed a weeks-long private share offering that raised $1.9 billion, the source said.

The dizzying rally implies a market capitalization for SpaceX nearing $58 billion — up from $46 billion in August and more than double its valuation in April 2018, when the shares were changing hands at $169 each.

A perfect example of why capital raises should be delayed as long as possible. The $1.9B raised in August would have been closer to $2.5B if they waited just a month longer, based on the above numbers. For the same number of shares sold.

Wait 5 years and those same shares might be worth $20B.

There is potentially a big gap between selling "some" shares at $340 and selling 7 million shares at that price.

[M.E.T.]

SpaceX's private share price & valuation have spiked, largely based on StarLink...

NY Post...

“We just traded some at $340 a share,” a Wall Street source who brokers such deals told The Post. That’s up by a quarter from the stock’s $270-a-share value on Aug. 18, when ­SpaceX completed a weeks-long private share offering that raised $1.9 billion, the source said.

The dizzying rally implies a market capitalization for SpaceX nearing $58 billion — up from $46 billion in August and more than double its valuation in April 2018, when the shares were changing hands at $169 each.

A perfect example of why capital raises should be delayed as long as possible. The $1.9B raised in August would have been closer to $2.5B if they waited just a month longer, based on the above numbers. For the same number of shares sold.

Wait 5 years and those same shares might be worth $20B.

There is potentially a big gap between selling "some" shares at $340 and selling 7 million shares at that price.

The point is the share price trajectory over time. Which is up, and steeply so.

And the basic logic that the more successful a venture is at the time of a share issue, the more value the issuer can extract from the capital raise.

[OTV Booster]

SpaceX's private share price & valuation have spiked, largely based on StarLink...

NY Post...

“We just traded some at $340 a share,” a Wall Street source who brokers such deals told The Post. That’s up by a quarter from the stock’s $270-a-share value on Aug. 18, when ­SpaceX completed a weeks-long private share offering that raised $1.9 billion, the source said.

The dizzying rally implies a market capitalization for SpaceX nearing $58 billion — up from $46 billion in August and more than double its valuation in April 2018, when the shares were changing hands at $169 each.

A perfect example of why capital raises should be delayed as long as possible. The $1.9B raised in August would have been closer to $2.5B if they waited just a month longer, based on the above numbers. For the same number of shares sold.

Wait 5 years and those same shares might be worth $20B.

Investing is not my strong suit but there's an objection I see in this. Straighten me out if I'm missing it.


Presumably the $1.9b raised was some reflection of funds that were available for investment. If there had been a feeding frenzy for those stocks it would have driven the price higher. or perhaps that 1.9b was the end result of a feeding frenzy. Either way, 1.9b represents what the market could bear. Would there have been more money available one month later when the same number of stocks could have reaped 2.5b?


If no, fewer shares would have sold but still totaling 1.9b. This 'less successful' round of raising capital might itself have caused a price drop or at least a flattening of the price trajectory.


When it comes to stocks rapidly changing value ISTM that gut reactions and follow the leader psychology are a greater influence than fundamentals. This gets into a mushy area where actions sometimes have counterintuitive results and historians make their reputations on figuring where it all went wrong.


Now that I've got the doom and gloom out of the way, could it be that be that a reasonably successful program to raise capital can itself contribute to rising stock prices?


Personally, I think weather forecasting is easier than predicting the stock market.

[r8ix]

Investing is not my strong suit but there's an objection I see in this. Straighten me out if I'm missing it.


Presumably the $1.9b raised was some reflection of funds that were available for investment. If there had been a feeding frenzy for those stocks it would have driven the price higher. or perhaps that 1.9b was the end result of a feeding frenzy. Either way, 1.9b represents what the market could bear. Would there have been more money available one month later when the same number of stocks could have reaped 2.5b?


If no, fewer shares would have sold but still totaling 1.9b. This 'less successful' round of raising capital might itself have caused a price drop or at least a flattening of the price trajectory.


When it comes to stocks rapidly changing value ISTM that gut reactions and follow the leader psychology are a greater influence than fundamentals. This gets into a mushy area where actions sometimes have counterintuitive results and historians make their reputations on figuring where it all went wrong.


Now that I've got the doom and gloom out of the way, could it be that be that a reasonably successful program to raise capital can itself contribute to rising stock prices?


Personally, I think weather forecasting is easier than predicting the stock market.

No, if fewer shares had been sold to raise the 1.9billion, the price per share would have been higher. But it’s not always in the company’s interest to have the price rise too fast.

[AC in NC]

A perfect example of why capital raises should be delayed as long as possible. The $1.9B raised in August would have been closer to $2.5B if they waited just a month longer, based on the above numbers. For the same number of shares sold.

Wait 5 years and those same shares might be worth $20B.

Investing is not my strong suit but there's an objection I see in this. Straighten me out if I'm missing it.

Presumably the $1.9b raised was some reflection of funds that were available for investment. If there had been a feeding frenzy for those stocks it would have driven the price higher. or perhaps that 1.9b was the end result of a feeding frenzy. Either way, 1.9b represents what the market could bear. Would there have been more money available one month later when the same number of stocks could have reaped 2.5b?

You've got it basically correct.  The notion that a one month wait could've done that is flawed "based on the above numbers".

Think of it like this.  The two share prices involved are entirely different figures just like the bid and the ask on a stock quote.  And those are notoriously wide on thinly traded equities.  And a private company is VERY thinly traded.

SpaceX raised $1.9B at the BID (or what investors were offering to pay).  The private investor disgorged some shares from another party at the ASK (or what that other party -- one with lots of sexy SpaceX shares that are hard to come by -- was willing to sell at).  That latter has little to do with what SpaceX could've gotten one month later.

[M.E.T.]

A perfect example of why capital raises should be delayed as long as possible. The $1.9B raised in August would have been closer to $2.5B if they waited just a month longer, based on the above numbers. For the same number of shares sold.

Wait 5 years and those same shares might be worth $20B.

Investing is not my strong suit but there's an objection I see in this. Straighten me out if I'm missing it.

Presumably the $1.9b raised was some reflection of funds that were available for investment. If there had been a feeding frenzy for those stocks it would have driven the price higher. or perhaps that 1.9b was the end result of a feeding frenzy. Either way, 1.9b represents what the market could bear. Would there have been more money available one month later when the same number of stocks could have reaped 2.5b?

You've got it basically correct.  The notion that a one month wait could've done that is flawed "based on the above numbers".

Think of it like this.  The two share prices involved are entirely different figures just like the bid and the ask on a stock quote.  And those are notoriously wide on thinly traded equities.  And a private company is VERY thinly traded.

SpaceX raised $1.9B at the BID (or what investors were offering to pay).  The private investor disgorged some shares from another party at the ASK (or what that other party -- one with lots of sexy SpaceX shares that are hard to come by -- was willing to sell at).  That latter has little to do with what SpaceX could've gotten one month later.

But the number of Starlink sats in orbit and more importantly, the number of paying customers signed up very much does.

SpaceX shares will be worth far more when they have 1 million paying Starlink customers than at present, when they have zero. And that is a function of time. The longer they wait, the more advanced their business model will be and the more they can raise per share issued.

[ncb1397]

But the number of Starlink sats in orbit and more importantly, the number of paying customers signed up very much does.

SpaceX shares will be worth far more when they have 1 million paying Starlink customers than at present, when they have zero. And that is a function of time. The longer they wait, the more advanced their business model will be and the more they can raise per share issued.

Depends on what the environment is. Viasat has ~.64 million subscribers but doesn't have 64% of SpaceX's current $46 billion market cap (it is worth $2.3 billion as of today). As such, having a million subscribers isn't necessarily sufficient to get a better valuation than the current $46 billion. There has to be other factors involved. Anyways, a million subscribers for starlink is probably already priced in, if that is all they get, then there won't necessarily be any move upward. We saw this with Tesla. In october 2015 and in october of 2019, their shares were priced roughly the same ($40-$55 per share) despite having way more customers and cars produced at the end of 2019 than they did at the end of 2015. Selling shares in october 2015 or october 2019 wouldn't make much of a difference as the cost per share was pretty comparable. Now, selling shares in october 2020 compared to october 2015 is a different story, whether you can wait 5 years instead of 1-4 years is another story though.

[AC in NC]

SpaceX raised $1.9B at the BID (or what investors were offering to pay).  The private investor disgorged some shares from another party at the ASK (or what that other party -- one with lots of sexy SpaceX shares that are hard to come by -- was willing to sell at).  That latter has little to do with what SpaceX could've gotten one month later.

But the number of Starlink sats in orbit and more importantly, the number of paying customers signed up very much does.

SpaceX shares will be worth far more when they have 1 million paying Starlink customers than at present, when they have zero. And that is a function of time. The longer they wait, the more advanced their business model will be and the more they can raise per share issued.

And is so uncontroversial as to be not worth spending the time to point out.  There's very little evidence as to the original contention about waiting a month "based on the [private transaction] numbers" because the two prices are for two different things for a variety of reasons.

This is uncontroversial as well and shouldn't need be said.

[M.E.T.]

https://www.google.com/amp/s/www.cnbc.com/amp/2020/10/14/tesla-investor-ron-baron-spacex-has-a-chance-to-be-just-as-large.html

Major investor in Tesla believes SpaceX will become as large as Tesla. Thats about ten times their current market capitalisation, for context.

[ncb1397]

https://www.google.com/amp/s/www.cnbc.com/amp/2020/10/14/tesla-investor-ron-baron-spacex-has-a-chance-to-be-just-as-large.html

Major investor in Tesla believes SpaceX will become as large as Tesla. Thats about ten times their current market capitalisation, for context.

He said that it could, not that it will.

[M.E.T.]

https://www.google.com/amp/s/www.cnbc.com/amp/2020/10/14/tesla-investor-ron-baron-spacex-has-a-chance-to-be-just-as-large.html

Major investor in Tesla believes SpaceX will become as large as Tesla. Thats about ten times their current market capitalisation, for context.

He said that it could, not that it will.

Either way, a statement of belief. Backed by his real money, in this case, as evidenced by his ramped up investment in SpaceX.

[oldAtlas_Eguy]

https://www.google.com/amp/s/www.cnbc.com/amp/2020/10/14/tesla-investor-ron-baron-spacex-has-a-chance-to-be-just-as-large.html

Major investor in Tesla believes SpaceX will become as large as Tesla. Thats about ten times their current market capitalisation, for context.

He said that it could, not that it will.

Either way, a statement of belief. Backed by his real money, in this case, as evidenced by his ramped up investment in SpaceX.

Two things together could make SpaceX have that massive spurt of capitalization evaluation.

The first is a high subscriber rate (the subscriber monthly growth rate being significant) once commercial operation has begun. Current indications are that that is not a far fetched thing but a likely occurrence.

The second is the successful launch to orbit and recovery/landing of the SS. This proves out the basic design in it's capability to be a fully reusable SHLV. Then followed soon by a SS flying a second time. Making fully reusable SHLV a reality. Suddenly Moon bases, Mars Bases, large space stations big, supper LEO constellation on the cheap, etc is only a small easy step away. This has a multiplying effect of the first enabling more capable Starlink sats to be deployed for cheaper than current. Which allows for more subscribers, which enables lowering subscriber monthly subscription rates, which then encourages even more subscribers...

What is seen is a fairly rapid ramp up in value over the next few years (2 or 3). A 1000% ROI is something that many would put some money into.

[OTV Booster]

https://www.google.com/amp/s/www.cnbc.com/amp/2020/10/14/tesla-investor-ron-baron-spacex-has-a-chance-to-be-just-as-large.html

Major investor in Tesla believes SpaceX will become as large as Tesla. Thats about ten times their current market capitalisation, for context.

He said that it could, not that it will.

Making predictions is really hard, especially if it's about the future (Yogi Berra?)

[OTV Booster]

https://www.google.com/amp/s/www.cnbc.com/amp/2020/10/14/tesla-investor-ron-baron-spacex-has-a-chance-to-be-just-as-large.html

Major investor in Tesla believes SpaceX will become as large as Tesla. Thats about ten times their current market capitalisation, for context.

He said that it could, not that it will.

Either way, a statement of belief. Backed by his real money, in this case, as evidenced by his ramped up investment in SpaceX.

Two things together could make SpaceX have that massive spurt of capitalization evaluation.

The first is a high subscriber rate (the subscriber monthly growth rate being significant) once commercial operation has begun. Current indications are that that is not a far fetched thing but a likely occurrence.

The second is the successful launch to orbit and recovery/landing of the SS. This proves out the basic design in it's capability to be a fully reusable SHLV. Then followed soon by a SS flying a second time. Making fully reusable SHLV a reality. Suddenly Moon bases, Mars Bases, large space stations big, supper LEO constellation on the cheap, etc is only a small easy step away. This has a multiplying effect of the first enabling more capable Starlink sats to be deployed for cheaper than current. Which allows for more subscribers, which enables lowering subscriber monthly subscription rates, which then encourages even more subscribers...

What is seen is a fairly rapid ramp up in value over the next few years (2 or 3). A 1000% ROI is something that many would put some money into.

Even ignoring StarLink, SX launches more and cheaper per kilo than anybody using the F9. Did I see something about them doing more than half of all launch's last year? Bring SS on line and well...


There is nobody in a position to compete except maybe Blue and national efforts that will go on for pride or national security reasons. The Chinese are showing grid fins on rockets. The Russians are touting a future F9 clone with 1/2 F9 capacity. Neither will be able to even reuse a booster before SS scoops up what's left of the orbital market with SS.


Despite being a fan there is this whisper in my ear that says monopoly. They are shaking up an industry that's ripe for it and this is good. Elon would be the most benevolent of monopolists but whatever structure he builds to fund mars will probably outlive him, as will SX.


Call this concern trolling, but it is a long term consideration. I still remember The Phone Company.

[Star One]

Cross posting this here as well

https://www.investors.com/news/defense-stocks-spacex-most-valuable-lockheed-boeing/

[novo2044]

Cross posting this here as well

https://www.investors.com/news/defense-stocks-spacex-most-valuable-lockheed-boeing/

100 billion, with a bear valuation of 5, bull valuation of 200+ billion. SpaceX must have minted quite a few millionaires, and the first few employees have a fair shot at joining the billionaire club.  Here's hoping they held fast.

It's a real treat reading Elon's letter regarding stock options and IPO, as well as the reaction to it, from 2013.
 https://www.reddit.com/r/spacex/comments/3f4idq/elons_email_to_spacex_employees_regarding_taking/ Back then he estimated the value of the company at 4 to 5 billion.

[ncb1397]

This seems relevant.

Tesla Inc.’s Elon Musk collected the fourth tranche of his moonshot award this month, bringing his aggregate haul to $11.8 billion.

The company recently surpassed the performance thresholds for market value and adjusted earnings before adjusted interest, taxes, depreciation and amortization, according to a regulatory filing on Monday, unlocking yet another 8.44 million options for the billionaire chief executive officer.

https://www.detroitnews.com/story/business/autos/2020/10/26/elon-musk-cruises-11-8-billion-haul-his-moonshot-award/6038985002/

For reference, and to put this in perspective, this executive compensation for 2020 is equivalent to the top ~820 U.S. chief executives combined based on AFLCIO's database of CEO pay (for 2019).

https://aflcio.org/paywatch/highest-paid-ceos

[Star One]

This seems relevant.

Tesla Inc.’s Elon Musk collected the fourth tranche of his moonshot award this month, bringing his aggregate haul to $11.8 billion.

The company recently surpassed the performance thresholds for market value and adjusted earnings before adjusted interest, taxes, depreciation and amortization, according to a regulatory filing on Monday, unlocking yet another 8.44 million options for the billionaire chief executive officer.

https://www.detroitnews.com/story/business/autos/2020/10/26/elon-musk-cruises-11-8-billion-haul-his-moonshot-award/6038985002/

For reference, and to put this in perspective, this executive compensation for 2020 is equivalent to the top ~820 U.S. chief executives combined based on AFLCIO's database of CEO pay (for 2019).

https://aflcio.org/paywatch/highest-paid-ceos

He really is Tony Stark isn’t he!!!

[novo2044]

This seems relevant.

Tesla Inc.’s Elon Musk collected the fourth tranche of his moonshot award this month, bringing his aggregate haul to $11.8 billion.

The company recently surpassed the performance thresholds for market value and adjusted earnings before adjusted interest, taxes, depreciation and amortization, according to a regulatory filing on Monday, unlocking yet another 8.44 million options for the billionaire chief executive officer.

https://www.detroitnews.com/story/business/autos/2020/10/26/elon-musk-cruises-11-8-billion-haul-his-moonshot-award/6038985002/

For reference, and to put this in perspective, this executive compensation for 2020 is equivalent to the top ~820 U.S. chief executives combined based on AFLCIO's database of CEO pay (for 2019).

https://aflcio.org/paywatch/highest-paid-ceos

I'll be honest, even as a believer I thought his Tesla compensation package was bananas.  People were pretty openly skeptical, to put it kindly, about his 500 billion valuation targets as recently as 3 years ago.  Dude has been a founder/CEO of enough billion dollar companies that it's probably time to stop betting against him at least.

The question is how much can he free up without losing control?  And how does that compare with actual revenue?  He could cash out 5 billion from just his spacex holdings and still have voting control, but how does that compare to the cost to colonize Mars, or the annual income from Starlink in 5 years?  I suspect while it won't trivial, it wouldn't be near enough either.

[oldAtlas_Eguy]

Musk may never have to even touch TESLA holdings. With a split off of Starlink to a seperate company simultaneous with an IPO. Where SpaceX sells some of it's original 100% ownership like 20% when the IPO valuation for Starlink is $80B gives SpaceX $16B in cash while SpaceX ends still owning 80% of Starlink voting shares. Then if Starlink needs cash it can do a additional stack offering to raise cash or just pursue investors to purchase non-common stock. By this timeframe Starship is operational and has lowered launch costs for Starlink to 1/4 of it's current $500K each to a value of ~$100K each. Add the cost of the sat of $300K each and the deployment cost of $800K drops to ~$400K. 1000 sats is a cost of just $400M. At a lunch rate of 5000 sats a year that is $2B needed to pay for deploying new sats. Some money for this would come from revenue other would come from Starlink corporation doing funding rounds.

With $16B in cash and not needing any cash to do anything with Starlink. Actually Starlink corporation would be covering all launch and sat manufacture costs in payments to SpaceX plus a minor profit margin. SpaceX could do quite a few Mars missions. With a total cost to launch a Mission to Mars (the SS that actually travels to Mars + the tanker to fuel it in LEO) of around $250M each. $16B would fund $8B for 32 SS and $8B for development manufacture of the Mars adapted payloads to send including the payrolls etc for about 8 crew missions with a nominal total of 400 - 800 persons traveling to Mars.

So with the current valuation growth of SpaceX itself there are other options than for Musk to sell his TESLA stock.