It's likely an artifact of the nitty-gritty details of SpaceX's corporate structure; usually when you see something like this, it's reflective of a clause in their corporate charter saying something along lines of, "from now on, all additional equity stock issued for fundraising purposes will be in the form of a warrant that will convert to common once the preferred holders are able to cash out."
Private venture-backed companies sell stock in the form of "preferred stock", which comes with certain rights like liquidation preferences (they get their money back first) and protective provisions (i.e. "SpaceX can't do Y without getting our permission first"). Preferred stock is "convertible" into common stock because, upon an IPO or other exit, it's generally desirable for those early investor special rights to go away, as they won't make sense anymore. Liquidation preferences would be obsolete, and the veto rights in protective provisions don't usually belong in a public company.
>Space Exploration Technologies Corp. added another $100 million to its latest fundraising round, bringing the total to nearly $450 million, according to an amended regulatory filing.
>The closely held company founded by Elon Musk had disclosed in August raising about $350 million the previous month. The round values the company at more than $21 billion, according to Equidate.
Uses Rule 506(b):
"If the issuer will not use general solicitation or advertising to market the securities then the sale of securities can be issued under Rule 506(b) to an unlimited number of accredited investors[4] and up to 35 other purchasers."[1]
If I understand correctly I believe they are pointing out that after a certain point in raising funds they will be forced to go public because they will have too many investors.
Elon seems pretty bent on having SpaceX do regular trips to Mars and back before IPO. I would guess that he will ensure that SpaceX stays within the private company rules so as not to go public until the Mars trips are commonplace.
Also, does this mean that SpaceX could raise funds indefinitely without going public as long as they come from the same source?
Is this true, I heard it a while ago: They will be forced to release the same financial information to the public as public companies do once they have too many investors however they do not have to go public in the sense of floating their stock.
And it is an amendment to a previous filing, basically it just re-opened the previous round to allow another $100M in investment at the same terms.
I have seen this done when someone comes along who would really like to invest in your privately held company but the company doesn't want to go through the whole process of evaluation and term negotiations of a new funding round. If your current investors are ok with it, you re-open the previous round (same price per share so only your post money valuation changes) same terms and same rights. If everyone signs off then you collect the money, issue the additional shares and carry on.
At the time (July of this year) they were valued at $21B so $100M is about .5% of the company. I'd probably take that deal if I had $100M to spare and Elon would let me put it into SpaceX :-)
I read SpaceX, exactly as written in the title. My brain convolved it with Tesla, and I started reading the comments thinking 'This won't do much to increase Tesla's runway'.
And this is why Blue Origin will ultimately come out ahead in the private launch race. This, for the most part, is technology that once shown possibly, is possible to replicate.
But what it takes is money, lots and lots of money. Bezos has that....
That’s probably the same game rules Elon is playing, make the best tech, get competitors licking their chops, they make it main stream and bring down prices of essential parts down. The market is so big even if they come out ahead, he still wins
SpaceX has consistently developed technology for a small fraction of what it costs anyone else.
As a case in point, Blue Origin started before SpaceX. They have put more money into development than SpaceX. But they have yet to launch a single rocket into orbit.
And yet, Blue Origin is not bad. They appear to be in the same ballpark of costs as NASA originally estimated for development on the Falcon 1. They are just failing to rewrite the rules the way that SpaceX has consistently done.
That said, if SpaceX ever fails as a business because Elon takes one risk too many, I'm sure that Blue Origin will happily buy the technology...
Well, Blue Origin is in a certain dimension re-writing rules. They are using a new more efficient engine design. SpaceX has been pretty conservative with engines if I'm not mistaken.
The Raptor engine in development is also very efficient (full flow staged combustion of methalox).
And while the Merlin series has been conservative in most aspects, Merlin 1D has a few unique characteristics, like the pintle injector (previously used in the Apollo LM), phased-shutoff (or whatever the spelling is, from Tom Mueller's interview from half a year ago), use of subchilled propellants and a very tightly manufacture process that makes it very cheap to produce.
On top of that it's now the engine with highest thrust-to-weight ratio in history that has flown, despite being open cycle (gas generator). And not a single M1D failed so far.
SpaceX is wisely recycled NASA and Russia Tech too. Why reinvent all the wheels? SpaceX lured away some of the best industry engineers by promising projects that actually get launched. Accomplishment is as important as money to some of us techies.
Yeh what's that story of the engineer saying they need a heat shield solution. So spacex just bought the company that made what he recommended they look into.
Is that a lot or a little? How am I supposed to judge? It looks like SpaceX is well over $1B with a B in funding in total now. In comparison Blue Origin just gets money from Bezos, so "no" funding?
Just for comparison, $19 billion is what the first operational fusion power reactor is budgeted to cost. Instead of Whatsapp, the world could have fusion power. Tell me that makes sense.
> Instead of Whatsapp, the world could have fusion power.
I'm sure if HN could combine savings from annual budget the $5 lattes and $2,000+ annual refreshes of the Shinybook Pro, we'd be halfway there. But hey, maybe the value provided in an affordable SMS replacement to a billion people isn't all that, right? It's just a replaceable app, why don't they get iPhones and use iMessage. /s
HN can be hilariously condescending - "I don't use this, it doesn't impact me, I don't understand it - therefore it can't be worth much".
> Tell me that makes sense.
WhatsApp provides massive value to its users, especially when they supported feature phones. What's the human value of a poor rural farmer sending a message to their child in the next city over "Your mom isn't feeling well, please send money for a clinic visit"? I bet it is more than the $1/year WhatsApp originally charged. Communication is a force-multiplier - someone smarter than me has probably already calculated the value WhatsApp has added to the world by merely existing.
I'm not a Facebook fan- I hate that Facebook changed the monetization model and are dropping WhatsApp support for feature phones in pursuit of features. However, Facebook paid $19 billion because WhatsApp was potentially an existential threat to Fb. Why don't you and a small team develop a fusion reactor and see how much GE/Saudi Aramco will pay - I bet it would be north of $19 billion.
First it starts by claiming that I don't understand, use, or appreciate messaging in general. This is of course without any background or support, and is simply an ad hominem. I have a more extensive background in messaging than most people in tech. There is no condescension in making a value judgement of yet another messaging application vs a fundamental energy source technology.
Next you make some statements in support of value for WA. Regardless of the value of messaging in general, WA is is simply yet another app in a very crowded market. Its purchase was clearly anti-competitive, rather than innovative, and as such can not be justified based on function.
Last you hurl some weird non-sequitur that implies my judgement is incorrect because I'm not a fusion researcher/implementor working on disrupting the world energy market, combined with some kind of conspiracy theory about Saudi Aramco? That's just plain specious. One can clearly judge the value of working fusion energy without being a physicist.
So please, re-read the posting guidelines and reconsider how you address others and their arguments. Thank you.
> There is no condescension in making a value judgement of yet another messaging application vs a fundamental energy source technology.
This is the root of our disconnect - I strongly disagree with your assertion that WhatsApp was merely "yet another messaging application". If it were, why aren't Slack and the rest of them being snapped up for $19 billion?
You have an extensive background in messaging tech - I have a more extensive background than most in the 3rd world. I witnessed the phenomenon that was WhatsApp firsthand. What other messenger supported feature phones (think Nokia S40 and S60)? This probably doesn't matter in your world, and probably gives you a blindspot that causes you to not see the value that is readily apparent to me.
Our disconnect may boil down to this: in my view, WhatsApp's features are, in hindsight, obvious, simple, and easy to implement by any competitor. The advantage (and value) in WA is in the already grown network, the familiar marketplace network effect growing out of that.
Facebook acquired WA for the network of users, not the messaging features. It could easily and more cheaply have fielded an identical app with the same or superior features. It didn't, though, because it wanted to not leave a competitor in the marketplace.
Thus the judgement that it was $19B of mis-allocated capital from a larger viewpoint. We apparently disagree on this point.
On the other hand, working fusion power technology would be hugely consequential for most of the human race, especially in places like Africa that are so energy-needy at this point in their development.
I completely agree with your first 2 paragraphs. I am furious with Fb dropping support for basic phones - and this is making WA "yet another messaging app" in pursuit of crowding out Snapchat.
> Thus the judgement that it was $19B of mis-allocated capital from a larger viewpoint. We apparently disagree on this point.
I almost agree, only I believe there's more nuance to this. Fb was never going to invest $19B in fusion power, so to say it was mis-allocated feels wrong. The only reason it spent so much was that WhatsApp was a potential existential threat to Fb. This was the point I was attempting to put across, abeit poorly - that a scrappy company that manages to achieve fusion would be an existential threat to energy companies and would be worth billions for that reason alone.
Just as a side note, that's such a weird thing to compare against... What intuition does the average reader have about the price of container ships? If anything, I learnt that container ships are less costly than I would have guessed...
It’s probably a misunderstanding of common media units of measure. If an Olympic swimming pool or an Empire State Building are a valid unit of measure, why not a container ship?
Those are probably weird too, but most people have some idea of how tall tall buildings are (even if they haven't been to NYC), and likewise have probably been to a pool.
people i know are using it less because of how buggy/slow it has gotten and how hard the basic activity of curating your boards has become. i also now avoid clicking anything related to pinterest because they break the web and make it hard to visit the source website and view their site on mobile. Too many walls around that garden.
I once clicked on a recipe that was pinned to a Pinterest board and it would not allow me to view it without registering for an account. They lost my eyeballs forever that day and I'm sure there's many others like me out there. Given their target revenue model was presumably ad/affiliate referral based, keeping potential consumers outside the wall made zero sense to me.
Same for me. I think this might be the actual reason they're losing out. The moment they started requiring to log in to view stuff discovered through Google anyway was the moment I stopped using them, even though I actually have an account.
The funny thing is that you are obviously right about their problems and despite the fact that an anonymous stranger on a forum can easily answer this, the billion dollar machine won't change to save its life.
Exactly, been thinking this for years now. It's scary how fast a company can grow too big to actually do anything remotely new or change a small thing to save itself. Same actually how SpaceX came to be, stop tossing away perfectly fine rockets.
I am one of those guys. I don't really understand the value of pinterest. So a drop in performance made my exit far easier. I am probably not their target user.
This $100 million is a follow-on to a $350mm round started this summer, bringing this year's total to $450mm. This puts them up to $1.68 billion in funding, including their $1 billion funding from Google and Fidelity in January 2015. Latest valuation is reportedly $21.5 billion.[0]
A conservative estimate of annual payroll on /r/spacex from this week was $700mm.[1] Each Falcon 9 costs about $62mm, though some of the oldest contracts are for far less and government missions are more (plus Dragon). Cash-flow-wise, payments are broken up over the separate phases of the contract. They have launched 16 rockets this year, 8 last year and 6 the two years before. (Not counting one failure in each 2015 and 2016 — though we know SpaceX earned at least part of its CRS-7 milestone payments by getting off the pad.)
I know it's probably in the docs somewhere but I'm feeling lazy: how much does it cost SpaceX to launch a rocket? I'm sure there's some variation so a range or average will suffice. Thanks.
Edit: Turns out that was a bit of a silly question. Thanks for the replies.
SpaceX doesn't publish their costs. But http://www.spacex.com/about/capabilities says that they will let you launch 50k pounds of stuff into orbit for $62 million.
Their BFR system is aiming to launch more weight at a cost of a few hundred thousand dollars per launch. But they need to find customers to recoup several billion in development costs on it.
> at a cost of a few hundred thousand dollars per launch
They only stated publicly that will cost "less than Falcon 1" per launch. That means less than ~$6 million. The few hundred thousand dollars figure is the cost of the fuel, which will become the main cost after full reusability is achieved.
Off the top of my head I'd guess it's $30M for the rocket launch itself:
- SpaceX charges $60M per launch.
- Elon said fuel is $200k-$300k when explaining the value of reusability.
- majority of cost is probably engine, followed by fairing, which Elon has said is expensive enough to want to reuse.
Keep in mind that there're a lot of operational and R&D expenses, and the launches have to cover that too, so I assume a healthy margin on each launch.
Majority of the cost is probably operational and R&D costs.
A F9 rocket is 14 tons of mostly aluminium alloys. The materials aren't a big fraction of the costs.
Manufacturing is very expensive, but due to the accuracy, repeatability and size of parts needed, the vast majority of the work is semi-automated. It's the tooling and design thats expensive, not each individual rocket.
Wouldn't that suggest that the first rocket in a line, say the F9, would be very expensive, and subsequent F9s would be close to the cost of the raw inputs?
I am glad that they are not. While I would like to invest in them, them being public would mean that Elon has to spend a lot of time doing what investors want (making the most money) instead of doing what he envisions the company to do (going to mars). There is a reason Elon regret ps that Tesla is public but it was the only way it could have survived.
By staying private, Elon can choose whom to allows to invest in so that the missions stays what he wants it to be. It’d rather not make money from SpaceX then have them going on the wrong path and become yet another government competing space company that does little innovation and just sucks up government money.
Unfortunately, the amount I'm capable of investing in SpaceX is not worth Elon's time, so appealing to him is not going to work. I just want a piece of the action in one of the greatest ventures of our time!
Lots of people complain about how unfair it is that the US has billionaires, but without billionaires would we have SpaceX? I doubt it.
There's a distinction though. Billionaires are people, identities, faces you can love or hate depending on what they do, but investments like these are done by faceless corporations. I don't mind corporations to have billions, spacex, tesla, apple, etc all have that and they can use that money for investing in Stuff.
> Lots of people complain about how unfair it is that the US has billionaires, but without billionaires would we have SpaceX? I doubt it.
A thousand million-dollar startups can probably do more innovation between them than one billion-dollar startup. Maybe we would've ended up with a different structure - maybe one company would make a better engine and sell it to Boeing or whoever, and another would make better structural components, and another would come up with the landing systems by licensing control systems from yet another... but I think without billionaires (and remember Musk is one billionaire of many, he's by no means the median example) we'd get more value for society overall.
I think there's a bigger danger to becoming a profit-centered publicly traded company than just them not innovating.
The character of future society on Mars will in large part depend on the policies of the large corporations that provide the technology and infrastructure to make it possible, and I would rather that Mars society looks like a diverse, free, liberal democracy with reasonable opportunities for homesteading and an efficient economy with multiple competing vendors for various resources and not like a forced labor camp where you work your 80 hours a week in exchange for the CO2 filters you need to survive, or like a tourist destination where one company owns the whole Mars Experience.
In the short term it's probably inevitable that one company will have a transportation-to-Mars monopoly, but if that company has some good founding principles and a vision that doesn't involve milking every last dime out of their monopoly status, then I can at least feel a little better that Mars has a chance of not becoming a dystopia.
That's a bit err, breathless optimism? SpaceX is a business that makes money off of sending shit to space, and it's optimizing for profit and/or lowering costs by reuse. The Mars philosophising is mainly for generating goodwill, they're not going to go there unless it makes them direct money or gives them PR credit.
If the sf gate article is correct, Fidelity had a $84 million investment in SpaceX. This was part of a $1.0 billion round with Google that SpaceX says was just under 10%.[1] Looks like Google owns about 9% of SpaceX (I can't find this spelled out directly anywhere just goggling around).
If SpaceX is valued at about $20 billion, Google owns 9%, and Google's market cap is $720 billion, buying Google gets you 0.25% of that investment into SpaceX. Almost nothing, but better than Fidelity's exposure.
The stock market news cycle is a constant barrage of criticism every quarter: commentary on whether they made some random analyst's projections, investors asking the same inane questions over and over... How many times has he given the "there's no point in giving you delivery estimates for specific months because the ramp will be exponential and small factors can change individual months by an order of magnitude" speech? I've heard him say that at least 10 times, and yet investors keep asking the same dumb questions every earnings call.
Which isn't really that huge of a time sink, but then people go and make a big deal out of that stuff in the press, "Model 3 production was supposed to be 5,000 by year end, and it's looking more like 500... Tesla suffers 90% crash in production rate! It's all over folks!" Even though Musk described this scenario two years ago, and said it was accounted for in their planning.
Now imagine he's trying to get to Mars and every 3 months he has to go in front of investors who are asking, "So, your orbital launch rate for this quarter seems to be 50% lower than projections, would you say that's more due to your incompetence or is it more that your business model is fundamentally flawed?"
He's not optimizing for quarterly revenue. He's not optimizing for revenue at all, he's optimizing to make something fundamentally new and valuable happen, and he's calculating that the value will come, although it's never clear what year. But a segment of public investors seem unable to accept that story.
Unlike Tesla, Spacex is not a threat to any other publicly traded company AFAIK. So the barrage of negativity will be minimal.
For every incompetent investor who comes on board, you'll have a great investor who'll trust you. This is the case in Tesla too. I mean, the odds that most of your investors will be incompetent is fairly low.
It's not that much of a time sink, if you are running just one public company. Running two is a miracle. Jack Dorsey is doing it, so I wouldn't put it past Elon.
All said and done, given a choice, Musk will keep Spacex private forever.
> For every incompetent investor who comes on board, you'll have a great investor who'll trust you.
Incompetence is blind trust. A good investor actually cares about the performance of the companies in which they invest - and that includes its ability to realistically project and meet those projections. A CEO who promises the moon on a stick and delivers little is not doing his job well. I am a fan of Elon, but you can't take a whole heap of money and then complain that people are interested.
As people have said, you can avoid this obligation to your shareholders by not having any.
A CEO who promises the moon on a stick and delivers little is not doing his job well
But Elon is not promising the moon. He is very clear when he states his goals, that these goals are very ambitious goals and that the probability of meeting them is fairly low.
well that and they don't have to have a 10 K report which can reveal more about the true state of a company that they wish to be public. in other words, you can go and stand before crowds all day and make glowing promises and reports but up against the SEC and investors you best damn have your ducks in a row.
there is a lot of additional reporting for publicly traded companies and that is a good thing.
It must really sting; a company emits stocks back in the day for idk, $10 apiece and run with that, then for the rest of the company's existence they look at those same stocks and see them become worth $100, $1000, etc - the main people making money off of stocks are stock traders, not the company it was intended to fund.
Does cash flow cover operations with existing technology? They will launch 18 or 19 times in 2017, most with paying customers. I could see new capital going to new technology like the Falcon Heavy and Human launches.
They spend everything they earn, plus more, on R&D. The whole goal of SpaceX is to get to Mars. No one else would take them there so they want to build spaceships and rockets that will. To fund that they build the Dragon 9 and are working on their satellite internet constellation. Everything SpaceX does is meant to fund getting to Mars. So they could potentially be cash positive, but Mars.
Adding to this: Reinvesting everything you can in a productive way is exactly what you want in a low-interest rate economy. It can be debated whether you should also raise more/borrow in order to further increase investment, if you are capable of investing it in a constructive way.
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[ 2.9 ms ] story [ 35.3 ms ] threadhttps://www.sec.gov/Archives/edgar/data/1181412/000118141217...
So maybe this is about shares conversion?
- fmr investment banker
- Source: venture lawyer, but not your lawyer
https://www.bloomberg.com/news/articles/2017-11-27/elon-musk...
>Space Exploration Technologies Corp. added another $100 million to its latest fundraising round, bringing the total to nearly $450 million, according to an amended regulatory filing.
>The closely held company founded by Elon Musk had disclosed in August raising about $350 million the previous month. The round values the company at more than $21 billion, according to Equidate.
[1] https://en.wikipedia.org/wiki/Regulation_D_(SEC)#Rule_506
Also, does this mean that SpaceX could raise funds indefinitely without going public as long as they come from the same source?
I have seen this done when someone comes along who would really like to invest in your privately held company but the company doesn't want to go through the whole process of evaluation and term negotiations of a new funding round. If your current investors are ok with it, you re-open the previous round (same price per share so only your post money valuation changes) same terms and same rights. If everyone signs off then you collect the money, issue the additional shares and carry on.
At the time (July of this year) they were valued at $21B so $100M is about .5% of the company. I'd probably take that deal if I had $100M to spare and Elon would let me put it into SpaceX :-)
I read SpaceX, exactly as written in the title. My brain convolved it with Tesla, and I started reading the comments thinking 'This won't do much to increase Tesla's runway'.
Need... deprogramming... now...
But what it takes is money, lots and lots of money. Bezos has that....
As a case in point, Blue Origin started before SpaceX. They have put more money into development than SpaceX. But they have yet to launch a single rocket into orbit.
And yet, Blue Origin is not bad. They appear to be in the same ballpark of costs as NASA originally estimated for development on the Falcon 1. They are just failing to rewrite the rules the way that SpaceX has consistently done.
That said, if SpaceX ever fails as a business because Elon takes one risk too many, I'm sure that Blue Origin will happily buy the technology...
And while the Merlin series has been conservative in most aspects, Merlin 1D has a few unique characteristics, like the pintle injector (previously used in the Apollo LM), phased-shutoff (or whatever the spelling is, from Tom Mueller's interview from half a year ago), use of subchilled propellants and a very tightly manufacture process that makes it very cheap to produce.
On top of that it's now the engine with highest thrust-to-weight ratio in history that has flown, despite being open cycle (gas generator). And not a single M1D failed so far.
Generally I dont feel money always wins these things. It can certainly help but its only one of many variables to success.
Big wikipedia list of private space companies (no funding info): https://en.wikipedia.org/wiki/List_of_private_spaceflight_co...
Overall venture funding going up (from 2015): http://fortune.com/2016/02/22/vcs-invested-more-in-space-sta...
Sure reality is more nuanced than that, but it's a fun comparison to make.
Just shows where humanity’s overall priorities are, funny enough.
Just for comparison, $19 billion is what the first operational fusion power reactor is budgeted to cost. Instead of Whatsapp, the world could have fusion power. Tell me that makes sense.
I'm sure if HN could combine savings from annual budget the $5 lattes and $2,000+ annual refreshes of the Shinybook Pro, we'd be halfway there. But hey, maybe the value provided in an affordable SMS replacement to a billion people isn't all that, right? It's just a replaceable app, why don't they get iPhones and use iMessage. /s
HN can be hilariously condescending - "I don't use this, it doesn't impact me, I don't understand it - therefore it can't be worth much".
> Tell me that makes sense.
WhatsApp provides massive value to its users, especially when they supported feature phones. What's the human value of a poor rural farmer sending a message to their child in the next city over "Your mom isn't feeling well, please send money for a clinic visit"? I bet it is more than the $1/year WhatsApp originally charged. Communication is a force-multiplier - someone smarter than me has probably already calculated the value WhatsApp has added to the world by merely existing.
I'm not a Facebook fan- I hate that Facebook changed the monetization model and are dropping WhatsApp support for feature phones in pursuit of features. However, Facebook paid $19 billion because WhatsApp was potentially an existential threat to Fb. Why don't you and a small team develop a fusion reactor and see how much GE/Saudi Aramco will pay - I bet it would be north of $19 billion.
First it starts by claiming that I don't understand, use, or appreciate messaging in general. This is of course without any background or support, and is simply an ad hominem. I have a more extensive background in messaging than most people in tech. There is no condescension in making a value judgement of yet another messaging application vs a fundamental energy source technology.
Next you make some statements in support of value for WA. Regardless of the value of messaging in general, WA is is simply yet another app in a very crowded market. Its purchase was clearly anti-competitive, rather than innovative, and as such can not be justified based on function.
Last you hurl some weird non-sequitur that implies my judgement is incorrect because I'm not a fusion researcher/implementor working on disrupting the world energy market, combined with some kind of conspiracy theory about Saudi Aramco? That's just plain specious. One can clearly judge the value of working fusion energy without being a physicist.
So please, re-read the posting guidelines and reconsider how you address others and their arguments. Thank you.
This is the root of our disconnect - I strongly disagree with your assertion that WhatsApp was merely "yet another messaging application". If it were, why aren't Slack and the rest of them being snapped up for $19 billion?
You have an extensive background in messaging tech - I have a more extensive background than most in the 3rd world. I witnessed the phenomenon that was WhatsApp firsthand. What other messenger supported feature phones (think Nokia S40 and S60)? This probably doesn't matter in your world, and probably gives you a blindspot that causes you to not see the value that is readily apparent to me.
Our disconnect may boil down to this: in my view, WhatsApp's features are, in hindsight, obvious, simple, and easy to implement by any competitor. The advantage (and value) in WA is in the already grown network, the familiar marketplace network effect growing out of that.
Facebook acquired WA for the network of users, not the messaging features. It could easily and more cheaply have fielded an identical app with the same or superior features. It didn't, though, because it wanted to not leave a competitor in the marketplace.
Thus the judgement that it was $19B of mis-allocated capital from a larger viewpoint. We apparently disagree on this point.
On the other hand, working fusion power technology would be hugely consequential for most of the human race, especially in places like Africa that are so energy-needy at this point in their development.
> Thus the judgement that it was $19B of mis-allocated capital from a larger viewpoint. We apparently disagree on this point.
I almost agree, only I believe there's more nuance to this. Fb was never going to invest $19B in fusion power, so to say it was mis-allocated feels wrong. The only reason it spent so much was that WhatsApp was a potential existential threat to Fb. This was the point I was attempting to put across, abeit poorly - that a scrappy company that manages to achieve fusion would be an existential threat to energy companies and would be worth billions for that reason alone.
Has Pinterest even reached product/market fit?
You could even set a custom search engine keyword that searches Google Images with the above included automatically.
A conservative estimate of annual payroll on /r/spacex from this week was $700mm.[1] Each Falcon 9 costs about $62mm, though some of the oldest contracts are for far less and government missions are more (plus Dragon). Cash-flow-wise, payments are broken up over the separate phases of the contract. They have launched 16 rockets this year, 8 last year and 6 the two years before. (Not counting one failure in each 2015 and 2016 — though we know SpaceX earned at least part of its CRS-7 milestone payments by getting off the pad.)
[0] https://equidateinc.com/company/space-exploration-technologi...
[1] https://www.reddit.com/r/spacex/comments/7fk828/estimation_o...
[2] http://www.spacexstats.xyz/#section-launchhistory
https://news.ycombinator.com/item?id=15782634
I'd call it "Moonbucks".
Edit: Turns out that was a bit of a silly question. Thanks for the replies.
Their BFR system is aiming to launch more weight at a cost of a few hundred thousand dollars per launch. But they need to find customers to recoup several billion in development costs on it.
They only stated publicly that will cost "less than Falcon 1" per launch. That means less than ~$6 million. The few hundred thousand dollars figure is the cost of the fuel, which will become the main cost after full reusability is achieved.
- SpaceX charges $60M per launch.
- Elon said fuel is $200k-$300k when explaining the value of reusability.
- majority of cost is probably engine, followed by fairing, which Elon has said is expensive enough to want to reuse.
Keep in mind that there're a lot of operational and R&D expenses, and the launches have to cover that too, so I assume a healthy margin on each launch.
A F9 rocket is 14 tons of mostly aluminium alloys. The materials aren't a big fraction of the costs.
Manufacturing is very expensive, but due to the accuracy, repeatability and size of parts needed, the vast majority of the work is semi-automated. It's the tooling and design thats expensive, not each individual rocket.
By staying private, Elon can choose whom to allows to invest in so that the missions stays what he wants it to be. It’d rather not make money from SpaceX then have them going on the wrong path and become yet another government competing space company that does little innovation and just sucks up government money.
Lots of people complain about how unfair it is that the US has billionaires, but without billionaires would we have SpaceX? I doubt it.
A thousand million-dollar startups can probably do more innovation between them than one billion-dollar startup. Maybe we would've ended up with a different structure - maybe one company would make a better engine and sell it to Boeing or whoever, and another would make better structural components, and another would come up with the landing systems by licensing control systems from yet another... but I think without billionaires (and remember Musk is one billionaire of many, he's by no means the median example) we'd get more value for society overall.
The character of future society on Mars will in large part depend on the policies of the large corporations that provide the technology and infrastructure to make it possible, and I would rather that Mars society looks like a diverse, free, liberal democracy with reasonable opportunities for homesteading and an efficient economy with multiple competing vendors for various resources and not like a forced labor camp where you work your 80 hours a week in exchange for the CO2 filters you need to survive, or like a tourist destination where one company owns the whole Mars Experience.
In the short term it's probably inevitable that one company will have a transportation-to-Mars monopoly, but if that company has some good founding principles and a vision that doesn't involve milking every last dime out of their monopoly status, then I can at least feel a little better that Mars has a chance of not becoming a dystopia.
And that right there is the reason that SpaceX will not be public. SpaceX is an investment in humanity, not a financial investment.
http://blog.sfgate.com/pender/2015/03/25/see-which-fidelity-...
If SpaceX is valued at about $20 billion, Google owns 9%, and Google's market cap is $720 billion, buying Google gets you 0.25% of that investment into SpaceX. Almost nothing, but better than Fidelity's exposure.
[1]http://www.spacex.com/news/2015/01/20/financing-round
"I wish we could be private with Tesla. It actually makes us less efficient to be a public company." - https://www.rollingstone.com/culture/features/elon-musk-inve...
The stock market news cycle is a constant barrage of criticism every quarter: commentary on whether they made some random analyst's projections, investors asking the same inane questions over and over... How many times has he given the "there's no point in giving you delivery estimates for specific months because the ramp will be exponential and small factors can change individual months by an order of magnitude" speech? I've heard him say that at least 10 times, and yet investors keep asking the same dumb questions every earnings call.
Which isn't really that huge of a time sink, but then people go and make a big deal out of that stuff in the press, "Model 3 production was supposed to be 5,000 by year end, and it's looking more like 500... Tesla suffers 90% crash in production rate! It's all over folks!" Even though Musk described this scenario two years ago, and said it was accounted for in their planning.
Now imagine he's trying to get to Mars and every 3 months he has to go in front of investors who are asking, "So, your orbital launch rate for this quarter seems to be 50% lower than projections, would you say that's more due to your incompetence or is it more that your business model is fundamentally flawed?"
He's not optimizing for quarterly revenue. He's not optimizing for revenue at all, he's optimizing to make something fundamentally new and valuable happen, and he's calculating that the value will come, although it's never clear what year. But a segment of public investors seem unable to accept that story.
Incompetence is blind trust. A good investor actually cares about the performance of the companies in which they invest - and that includes its ability to realistically project and meet those projections. A CEO who promises the moon on a stick and delivers little is not doing his job well. I am a fan of Elon, but you can't take a whole heap of money and then complain that people are interested.
As people have said, you can avoid this obligation to your shareholders by not having any.
But Elon is not promising the moon. He is very clear when he states his goals, that these goals are very ambitious goals and that the probability of meeting them is fairly low.
there is a lot of additional reporting for publicly traded companies and that is a good thing.