SpaceX hits $100B valuation after secondary share sale

Re:SpaceX hits $100B valuation after secondary share sale by FiberBundle on Friday October 08, 2021 @11:40AM (#28800471)

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?

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Re:SpaceX hits $100B valuation after secondary share sale by lumost on Friday October 08, 2021 @11:48AM (#28800556)

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.

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Re:SpaceX hits $100B valuation after secondary share sale by FiberBundle on Friday October 08, 2021 @11:54AM (#28800624)

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.

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Re:SpaceX hits $100B valuation after secondary share sale by TeMPOraL on Friday October 08, 2021 @03:26PM (#28803112)

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.

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Re:SpaceX hits $100B valuation after secondary share sale by izend on Friday October 08, 2021 @11:57AM (#28800666)

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

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Re:SpaceX hits $100B valuation after secondary share sale by FiberBundle on Friday October 08, 2021 @12:01PM (#28800746)

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

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Re:SpaceX hits $100B valuation after secondary share sale by minhazm on Friday October 08, 2021 @12:19PM (#28801011)

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...

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Re:SpaceX hits $100B valuation after secondary share sale by Symmetry on Friday October 08, 2021 @03:03PM (#28802839)

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.

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Re:SpaceX hits $100B valuation after secondary share sale by lumost on Friday October 08, 2021 @04:33PM (#28803868)

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.

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Re:SpaceX hits $100B valuation after secondary share sale by Mountain_Skies on Friday October 08, 2021 @01:00PM (#28801409)

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.

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Re:SpaceX hits $100B valuation after secondary share sale by lumost on Friday October 08, 2021 @01:10PM (#28801523)

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.

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Re:SpaceX hits $100B valuation after secondary share sale by tenpies on Friday October 08, 2021 @12:52PM (#28801313)

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.

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Re:SpaceX hits $100B valuation after secondary share sale by wumpus on Friday October 08, 2021 @02:48PM (#28802669)

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.

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Re:SpaceX hits $100B valuation after secondary share sale by ericd on Friday October 08, 2021 @01:06PM (#28801486)

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.

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Re:SpaceX hits $100B valuation after secondary share sale by kiba on Friday October 08, 2021 @12:06PM (#28800812)

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

Think space stations, lunar outposts, mining and manufacturing.

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Re:SpaceX hits $100B valuation after secondary share sale by rotexo on Friday October 08, 2021 @12:47PM (#28801263)

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.

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Re:SpaceX hits $100B valuation after secondary share sale by cfcosta on Friday October 08, 2021 @01:08PM (#28801505)

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.

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Re:SpaceX hits $100B valuation after secondary share sale by rehitman on Friday October 08, 2021 @04:45PM (#28803981)

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.

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Re:SpaceX hits $100B valuation after secondary share sale by 7952 on Saturday October 09, 2021 @04:07AM (#28807940)

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.

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Re:SpaceX hits $100B valuation after secondary share sale by ren_engineer on Friday October 08, 2021 @02:30PM (#28802497)

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...

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Re:SpaceX hits $100B valuation after secondary share sale by rvz on Friday October 08, 2021 @12:17PM (#28800970)

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.

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