I assume that Elon's struggles with Tesla short sellers have factored into the decision to keep SpaceX private. I don't blame him. They had the honor of being the most shorted company in the world. I believe it is fair to assume that a portion of Tesla's bad press can be traced back to some of these short sellers.

As of a few days ago, Tesla has their lowest short interest to date. https://www.bloomberg.com/news/articles/2021-10-04/tesla-sho...

Elon has long said that the goal of SpaceX is to colonize Mars, and that he did not want to go public because shareholders would happily drop the idea of colonizing Mars in favor of a more profitable one.

Why would this be different with private share owners who don't work for the company? In the end, all investors want to make profit, no?

Generally you can then pick and choose who holds shares and ensure they are of like mind, or possibly even stipulate it as a condition.

SpaceX and a lot of space industry, kinda like IT, seems to capitalize on the like mindedness/idealization and enthusiasm of many that want to work in aerospace.

And I have heard the churn and burnout is real as a result.

I personally have avoided startups and other types of jobs that would require more....time investment and dedication. I know thats not how everone sees it, but for me, my job is a means to an end and that end is family and fun/recreation, not colonizing mars or being a part of the next great innovation, tech or otherwise. As a result its clear I'm not cut out for a place like Spacex or even Amazon (and thats assuming I am even quick enough to hold such a gig). I like my nights and weekends and work/like separation too much.

People who want to go into "passion" careers are easily exploited. They'll put up with more shit because of their idealism/passion and there's usually more of them than there are jobs, so when they burn out they can be easily replaced.

I have no first hand knowledge of this, but my understanding is video game development is a good example of this: the pay and working conditions are far worse than similar software engineering roles in other industries, because so many video game enthusiasts want to grow up to make games.

Game development, pilots, and non-profits. The majority of people who enter those industries are self-selected and are passionate enough about their jobs that they will put up with a lot of abuse.

Unless you are an executive on a nonprofit, then it is of paramount importance that you are paid handsomely because otherwise your irreplaceable leadership skills won't be retained.

Executives at non-profits tend to be pretty underpaid compared to similar executives at similarly sized for-profits. It just sounds outrageous because executive pay is just that high.

Is it exploitation when those people choice themselves where to go AND the same people know they had other options. Its not like SpaceX couldn't get job anywhere else.

Numerous high fives to you. Too few people willing to say that they aren’t interested in riding rockets and changing the world and instead just want to make money to support their families and enjoy life.

There are plenty of people like that; most of the world actually. You’re just hanging out on a site basically target at people that want to ride rockets.

It is not enough to "just" earn some positive return, since all that says is that the shares have a non-zero price.

The value of the shares is the capitalization of all the future profits. The estimation of all of that goes into the stock price -- if investors think the profit will be higher, the share price is bid up in expectations of those future profits, so that for the next investor, they will not get any more risk adjusted profit than if they bought any other stock. Similarly if the expectation of profits declines, then the shares are repriced lower as well so that the for the next investor they are indifferent between SpaceX and any other stock.

This means there is big money to be had by unlocking value -- e.g. buying up the shares, changing the focus of the company to something even more profitable, and then selling the shares at the higher level. This is essentially the price of going public.

Yes, on the one hand you can convert future profits into present cash and make the investors absorb all the risk. But on the other hand, you just sold your company to the market and so have to cede control. Shareholders can elect a new board, replace you, make changes to the corporate bylaws, etc. Shareholders now own the company.

Musk could have issued just a small number of shares and kept the rest himself, to maintain control, but still you are opening the door to a lot of public scrutiny, the need to have shareholder agreements and to not intentionally take steps that would mislead shareholders or violate the agreement, lest you face shareholder lawsuits. Bottom line, if you want to sell your future profits to the market, you can do that, but then you lose control. If keeping control is more important, then it's better to stay private.

Because you can choose who you sell shares to as a private company and even more, you can restrict those people from selling shares to others that you do not approve of.

The "private shares" don't have anywhere near the voting rights that people would typically expect from an IPO.

>Elon Musk’s trust holds 54% of the outstanding shares of SpaceX and has 78% voting control of the outstanding stock.

https://www.rankred.com/buy-spacex-stock-worth/

And the reality is: what does he have to gain by going public? He's found no shortage of private investment. I see a ton of negatives to being public and almost no downside.

> The "private shares" don't have anywhere near the voting rights that people would typically expect from an IPO.

I mean, no one can outvote Zuck in FB, or Page/Brin in Google, Setting up public shares with (effectively) no voting power (unless Brin and Page disagree) turns out to be trivial

How did short sellers actually impact the company's operation? Or was the damage entirely to his ego and his desire to reach milestones so he could vest.

Chanos, the lead short seller here, manufactured a crisis of confidence that made a crucial capital raise difficult. This proved fatal to SolarCity — and also impacted SpaceX, as holder of SolarCity bonds. In 2018, the same playbook from Chanos nearly cratered Tesla.

Here’s a timeline and analysis from a trader:

https://teslamotorsclub.com/tmc/threads/elon-musk-vs-short-s...

... The concept of a car company purchasing a flailing solar company that happened to be owned by the same individual is probably worth of some eyebrow raising. So, I am not sure "manufactured" is the right term here, regardless of the motivation of the people involved.

(I have no vested interest here)

Agreed on that point. A failure mode we're all familiar with -- more dependency arrows, more problems!

But why did Vivint and Sunrun succeed when SolarCity failed? Sunrun apparently had a similar business model and economics. The linked analysis raises this question, although I don't know enough about the solar industry to say whether this is reasonable to ask, or fundamentally an apples-to-oranges comparison.

Elon had roughly the same % of both companies both separately and together, so it's not clear to me how its a big advantage financially for him.

From a strategy standpoint - a no brainer to purchase what is now energy - he knew all the people there, was already working there, had a big stake there, and they may play an important role in his green energy plan.

For everyone saying he should have bought some chinese solar co - he's focused ons speed, and getting up to speed on a new solar company - why?

Secondarily, how are those solarcity or tesla shareholders doing? How is tesla energy doing? You got to be able to take some risks as the boss, that's why he is there. And no question he takes risks.

Tesla is a battery company with a vertically integrated product line.

SolarCity is still alive and well as Tesla Energy.

Yeah, I haven’t pulled the trigger, but they’re by far the best $/watt I’ve seen.

Short sellers have a vested interest in seeing a company fail. So spreading FUD absolutely happens whether it is Tesla or any company being shorted.

It can definitely have an impact on the viability of a company

Has nothing to do with ego.

Short sellers make it harder to raise capital and force CEOs to show more short term progress.

Short sellers have an enormous incentive for the company they short to fail and they will do anything (legal or sometimes otherwise) in order to negatively affect stock price.

It turns out when a company has multiple entities with significant resources trying to make it fail, it sometimes negatively affects the shorted company.

There were people in Palo Alto and Fremont literally harassing employees trying to get them to confess that Elon is lying. Multiple Tesla test vehicles were run off the road. Tesla filed multiple restraining orders against people dedicated to unveiling the company's "fraud".

There was very much a human cost to all of the FUD the short sellers were spreading.

They don’t unless they fabricate news that drives their cost of capital up in a significant way (they were never successful in doing so). “Fighting” short-sellers is something generally only seen with CEOs committing serious fraud so the wall st careerists were all but certain Tesla was a fraud by behavioral pattern recognition that had been working for entire careers. They were wrong, of course, but Elon’s focus on “shorts” was a hugely massive waste of his attention and completely unnecessary. The way you “fight” shorts is by executing and ignoring them.

Short sellers can also lobby the government for policy changes and enforcement actions that harm the company they've shorted.

I understand that so-called "activist" shorts will send private investigators and paparazzi after CEOs, manufacture sexual harassment charges, and all kinds of really dirty stuff.

TSLA is the defacto method of investing into “Elon”, which would include Space X. It’s why the price of the stock is so hard to rate. If Space X went public I’d bet we’d see a TSLA sell off.

You're getting downvoted but I can attest that I did exactly this. It's a completely nonsensical investment to be fair.

My theory was less "invest in Elon" and more that there are a few different scenarios (on decade+ timescales) where either Tesla acquires SpaceX or vice-versa. Seemed like the most practical way to possibly own SpaceX shares one day - even if the probabilities are slim.

It's a nicely hedged bet though. Because worst case, I've just invested in some (not much) TSLA stock.

I would like to buy shares too, but not if an IPO would mean SpaceX changing into something substantially different and less good than they are now. I don't know that there has to be an inherent conflict between meeting shareholder expectations and being a positive influence on the world, but empirically it seems that few companies are able to do the latter at the same level post-IPO.

It's sad. Elon has said he would have SpaceX to be public because it forces short termism on a company. I'd happily buy shares on the understanding the company wouldn't even report (let alone report a profit) for a decade. But that's the nature of public markets, I guess you have to set the rules based on the average idiot CEO and the average idiot Speculator...

> I guess you have to set the rules based on the average idiot CEO and the average idiot Speculator

Idiot CEOs are a self-correcting problem. The rules are there because of smart scoundrel CEOs scamming idiot Investors.

SpaceX isn't going to go public anytime soon. Elon has said though that he wants to spin off Starlink and take that public in the next few years.

I think many would buy shares in NASA - even if it was some token no return souvenir/donation/sponsor a mission kinda share issue.

Back in 1940s, if you wanted to support the war effort, you bought war bonds.

The highway down my parent's house was supported by muni (state-level bonds). I bought bonds to support a hospital in Detroit (and made lots of money on that!!). Etc. etc.

Look up muni-bonds: they support highways, bridges, hospitals, and other infrastructure. I don't know if there's any for NASA specifically, but plenty of options if you actually want to invest in the country itself.

---------

The main downside is that they're tax-free, which means their interest rates are set such that they assume you're a millionare. So if you're paying anything less than the top-tier tax bracket, you're kinda wasting money on a risk/reward basis. That is to say: if "normal bonds" are getting 4% right now, all the munis would be priced at you'd get roughly 2.52%, assuming the top tax bracket of 37%. All bonds have a level of risk that's graded on a sliding scale: AAA bonds are the lowest risk (and lowest %rate), and C being the lowest.

Funny how that works? You write the laws so to favor muni-bonds by making them largely tax free, and then suddenly the free-market takes away the advantage lol.

> Funny how that works? You write the laws so to favor muni-bonds by making them largely tax free, and then suddenly the free-market takes away the advantage lol.

The advantage is still there, it just goes to the municipalities issuing the bonds (where it gets passed on to taxpayers).

I guess that's true.

As someone who'd like to buy more munis however, I'm frustrated that I don't get a "piece" of the tax-savings. But you're right, the perspective is about reducing the %rates that cities / states pay, not about increasing the $$$ in my pocket as an investor.

Owning Starlink shares is the closest you might get, but its IPO is still a few years away.

Fidelity has several funds with some SpaceX exposure.

https://www.mrmarvinallen.com/what-fidelity-funds-hold-space...

You're not wrong, but the exposure is around 0.039% last time I looked into it. Plus you have to own a bunch of Uber, too.

Google (Alphabet) owns a big chunk of SpaceX, maybe around $7B worth now? Given their market cap of 1.856T, that ends up being ~ 0.38% SpaceX.

I've made this comment before, but I have always wondered if there are enough linearly independent SpaceX-holding funds to construct a SpaceX-matching derivative product using only publicly traded securities.

Not an expert, but I think one problem would be the redemption fees from needing to rebalance this portfolio of mutual funds

If only real life were as frictionless as arbitrage theory.

Sadly that means having to put your money in a mutual fund which one may or may not want to for various reasons

Baron Partners owns a good chunk of SpaceX as well. Especially useful if you're buying from an account that can only purchase funds.

https://finance.yahoo.com/quote/BPTRX/holdings?p=BPTRX

Unfortunately that fund holds around 40% of its capital in TSLA alone and only ~5% in SpaceX, so not a very good choice for investment. It also uses leverage. Great choice if you believe in Elon, not so great choice if you have any semblance of risk management.

Presumably someone could take other positions to hedge away all of the other holdings in the fund so that (to a first order approximation) their only exposure is SpaceX, right?

(I only know the basics of investing)

Honestly I'll be happy when it becomes available for mobile installations let alone their IPO. I know it's mostly aimed at land-based installations where the fixed infrastructure is poor, but they'll be making boat dwellers of various kinds very happy!

What's the current best alternative for boat dwellers?

Depends on the type of boat and what you're doing on it. Personally I'm moving onto a sailing yacht next year and I'm planning on being quite nomadic, I'm installing masthead 4G and WiFi aerials and sticking to marinas and anchorages I know for certain have decent coverage until Starlink becomes available for installations like these (I think it might be a while before you can rely on them - the saltwater might be an issue even when they do have mobile coverage). While your options are currently very limited once you're out of line-of-sight radio range from the land, doing your day job on passage as well as having a watch would be pretty difficult anyway for practical reasons so I'm just timing my movements to coincide with annual leave and weekends. My aim is to see the world but slowly and steadily!

If you're on a canal boat or something along those lines you've got a lot better 4G coverage depending on what country you live in. Having said that, none of the canal boat dwellers I've spoken to have worked in tech and most of them commuted into cities so their need for fast and reliable internet wasn't as strong. I imagine permanently moored houseboats have decent WiFi links as well, though I've never really looked into that kind of thing.

Considering they are already in the process of certifying mobile terminals, I would say late 2022 for larger boats and planes. 2023 for something you or I could buy for RV/Boat use.

That's not bad at all! I do wonder how they're going to make the tranceivers rugged enough for the wet and salty environment your average sailing yacht is found in, and I suspect the motion of the waves makes aiming the dish a challenge. I suspect the speed will drop as soon as the boat goes upwind and starts heeling!

That's already built in, I think.

My reading of this news[0] is that they're using much larger phased arrays that sit flat on the deck/roof. 100% electronic steering.

Granted, that's speculation on my part based on a decade of military satellite operations. Starlink stated that they are larger, higher gain, lower power usage, and won't shoot below 25 degrees azimuth. That says to me a 2-4x surface area, lays flat, phased array panel.

I wouldn't expect much drop in speed, even in the worst waters, except for rain fade and if the roll of the boat causes a satellite to go out of sight to the dish. In those scenarios, I think most people can live with Netflix being barely functional.

0: https://arstechnica.com/information-technology/2021/08/starl...

Probably an vsat with an appropiate domed dish. Your latency will be high, but I think you can get unlimited data plans at reasonable downlink speeds.

You'll need a fairly large boat to host the satellite dome I believe, and they aren't cheap.

Starlink on non-huge boats is going to be a bit of a struggle for a while. Since the "dishes" are actually phased array antennas they absolutely chew through energy. They take >100W continuously, which is out of the realm of most midsized to smaller boats.

What? 100 watt solar panel is

> 100-watt panels vary in size based on their efficiency and design, but typically measure around 47 x 21.3 x 1.4 inches.

Says google. Add four of those and some lead acid batteries and you should be able to get 100 watt 24x7. Or only 200 watts of solar if you are ok with not using 24x7

Yeah, it is rather power-hungry but I'll likely be on shore power most of the time I'm using it. For the times I'm not, I've budgeted for much more battery capacity than a typical yacht would need as part of the liveaboard conversion work.

Lie about your accredited status and purchase said shares

I'm sure a large part of HN's audience legitimately qualifies. The majority of FAANG engineers are accredited investors. $200k income per year is the threshold and a college hire at Google can make that these days. Facebook's median compensation is $240k (across all roles, not just engineering).

Unfortunately even an accredited investor can't purchase SpaceX shares because they are not available. You have to be a really big investor to buy shares directly from SpaceX in one of their funding rounds. You can't purchase shares from employees because of trading restrictions. Your options are limited to participation in consortiums or funds and these tend to have really bad terms.

trading restrictions are discretionary and also circumventable

grease some palms if you have to, the consequences aren't always/necessarily your problem

the restrictions are either contractual and discretionary by the issuer, and/or the secondary sale is the issuer's regulatory problem but the accredited-only status can absolve

Can you explain why? Maybe I'm missing a lot here, but what is spacex going to do to justify a valuation of, say, $200m over the next 20 years? If starlink succeeds it might be able to capture probably no more than 5% of the Isp market, which will probably correspond to around $50bn of revenue in a year in a couple of years. The satellite launch market is currently around $5bn a year, I think, or spacex currently has revenues of that amount and I've heard Musk say that he expects that part of their revenue to roughly top out at that amount. Even if that industry, say, doubles in the next 20 years, that's not that much revenue to warrant a >$200bn valuation. Most of the other potential revenue sources are all in theory highly lucrative, but I would seriously doubt that spacex would see any significant revenue from a colony on the Moon or on Mars in our lifetime, though I might just lack the imagination. Can you explain why you would want to own this company?

Spacex is a highly speculative company with extremely large capital requirements, a strong track record of success, and some of the biggest moats of any company around.

If you believe that the launch market could increase by 10x if costs fall by 10x then a 50 Billion/year revenue is achievable within 5-10 years. Satellite internet is a direct bet on this outcome by betting that Spacex could capture substantial portions of the ISP market.

Ultimately as an investor you have to buy into this hypothesis to invest, and success will only occur if you invest a few 10s of billions. Therefore SpaceX will have a valuation in the hundreds of billions less all shareholders immediately dilute themselves. It probably helps that there are a large number of hundred billionaires interested in Space exploration.

It's not that I believe SpaceX isn't a great company, it's just that I think their potential markets lack the size to justify such a valuation.

They're on track with their Mars mission program, and the side effect of the vehicles they're building - and predicted drop in kilogram-to-orbit price tag - will be opening up the whole cislunar space for industrialization. Think in-orbit mining, resource processing and manufacturing. Optimistically, the potential market will explode in size, and ultimately (say, in a century) will be greater than the whole economy of Earth today. So, if you're bullish on space exploration and exploitation, then SpaceX's market has no limit in sight.

You are discounting the potential military contracts that SpaceX will be awarded.

How large is that market? And how much is it expected to grow?

Defense spending as a whole is north of $700 billion a year. But the Space launch market is obviously much smaller, but it is expected to increase at a pretty fast pace.

> The Global Space Launch Services Market size was estimated at USD 12.86 Billion in 2020 and expected to reach USD 14.92 Billion in 2021, at a Compound Annual Growth Rate (CAGR) 16.29% from 2020 to 2026 to reach USD 31.84 Billion by 2026.

https://www.yahoo.com/lifestyle/space-launch-services-market...

Including basically everything invested in space, not just launch, the pie is about $330B/yr now according to this:

https://www.airspacemag.com/daily-planet/cislunar-space-next...

Who knows what growth would be like with much cheaper launch but I'm hoping high.

Something that isn't well covered is the rocket motor supply chain. Prior to SpaceX there hadn't been a US manufacturer for heavy lift booster engines since the 90s. Undoubtedly SpaceX is the recipient of DoD funds to build that supply chain and research pipeline for both missile and lifting purposes.

Thomas Watson thought there was a market for maybe five computers in the whole world. Now computing devices outnumber humans. There's no guarantee that there will be a similar explosion in the size of the orbital (and eventually deep space) markets but it's not a large leap to believe that lower cost of access to space will open up many new opportunities that we haven't even imagined yet.

As part of this, there is no inherent reason to believe that 5-20k rocket rides/interplanetary transit wouldn't rapidly become a major lifestyle/luxury item similar to jetset lifestyles of the 50s/60s.

There are a large number of interesting economic opportunities from resource extraction to supersized science experiments and energy production once we're out of the gravity well at reasonable economics.

The military contracts that a company whose CEO has huge ties to China is expected to get?

I realize the US security and military apparatus has gladly been turning a blind eye to Musk's ties with the CCP, but at some point reality imposes itself on you. You can only ignore it for so long, much to the chagrin of the Trump and Biden administrations.

Boeing has huge civilian aircraft sales to China, that's also leverage. The focus on SpaceX and only SpaceX gives you a clue as to where this "issue" came from.

They’re aiming to reduce the cost/kg to orbit by 2 orders of magnitude. I imagine that that will open up a lot of opportunities that weren’t feasible before, so I wouldn’t rely too much on the current size of the launch market.

Starship is a launch platform that makes possible a space economy.

Think space stations, lunar outposts, mining and manufacturing.

I find myself excited about starship for other reasons. It seems like there is a large range of outcomes for the starship development program—maybe the difficulty of having an effective, durable, and serviceable heat shield really will kill the fully-and-rapidly-reusable goal. Even in that case, though, a stripped-down stainless steel upper stage could reduce the costs of access to Earth orbit such that space-based solar power or sunshades to buy us time to reduce greenhouse gas emissions become feasible, even if the dreams of humans in space/on the moon and Mars colonization don’t pan out (I’m skeptical of the value of those human space presence goals anyways).

Edit: I have no idea if the more modest capabilities of starship/super heavy justify the current valuation, but they at least seem like they would be useful capabilities to maintain.

True. Another thing that I keep thinking is that currently the first stages of the rockets are not reusable. Even if they have to build a new starship per flight, they can just reuse the boosters and still be miles ahead of anyone else, with a Saturn V sized rocket ready to launch.

Plus they can expand the real state in the ISS much cheaper by just docking and leaving it there.

Activist investors don’t always invest based on projected revenue. They consider it just to make sure the company is not a fraud. However, they don’t care about huge revenue. They care about goals like green energy, new technological frontier. Number of companies that have decent products in these spaces are not many, so supply and demand pushed their price to huge valuations that doesn’t make sense for other companies.

I think there is much more than the ISP market. Think about providing backhaul for WiFi/5G at festivals. Or connections to robotic farm machinery. Or IoT devices in remote areas. Or WiFi on aeroplanes, cruise ships, oil rigs.

military contracts

they are one of the most important companies in the world in terms of national security. Musk has said publicly they are talking to the military about making resupply anywhere on the planet possible within 1 hour. They are also multiples cheaper than any competitor in terms of getting things into orbit

https://futurism.com/the-byte/spacex-building-military-rocke...

Great question. Unfortunately, I doubt you will get a detailed answer about valuation in this thread since already, there is a disregard about something called 'competition' and other unknowns in the market that many commenters have totally ignored other than they know that SpaceX is run by Elon Musk and would immediately buy shares on IPO day, whenever that happens.

One certainty is that those private investors involved are already set to take some of their profits on IPO day which means they will dump some of the shares to catch out the retail investors immediately rushing to purchase SpaceX shares at very high prices.

Not saying you shouldn't buy at all, but keep in mind that institutional investors are there to make money and will get their return on investment and can/will manipulate the stock to make even more.