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A look into the finances of SpaceX

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Re: A look into the finances of SpaceX

#211

Post by TheAlchemist »

jandrese wrote: post #201
TheAlchemist wrote: post #169

Earlier quoted context omitted.

It is very possible, even probable, that Tesla's glory days are already behind it. Their margin are contracting, and it's actually probable they will loose money in Q3, Q4 this year. They don't have any significant advantage on competition anymore, and China's competition is already well ahead Tesla. Elon himself suggested Tesla is worthless as a 'car making company' and it's value will come from solving autonomy wit…

> it's actually probable they will loose money in Q3, Q4 this year. This doesn’t jive with their investor guidance, nor the sales figures. I’m curious where this prediction is coming from. Maybe it is due to the capital expenditures from all of the new factories being built?

It's from the fact that the demand is falling and they need to slash prices to continue to sell. They benefited greatly from Covid price surges, but this is about to end. In a 'normal' year, they can't sell that many cars at the prices they did last year - let alone in a 'recession' year.

I don't think their did any investor guidance about profits - I may be wrong though.

Re factories - I don't think they are building any new factories now - are they ? The only one announced is Mexico, but they still don't even have the official permits yet.

Re: A look into the finances of SpaceX

#212

Post by s1artibartfast »

htss2013 wrote: post #140

Isn't it amazing that you can become the richest person in the world by building companies that lose money? By lose money I mean all money ever put into the company versus profits made. The idea of creating a profitless company that somehow makes you personally rich used to be thought of as a fluke. Yes it's possible but it shouldn't happen and aside from extreme luck it won't. Something has changed. Losing money and…

In addition to what other people have said, it's important to note that Elon Musk hasn't realized any gains from SpaceX.

There's a huge difference between unrealized value and actual profit.

It's like living in a house worth 1 million. That doesn't mean that you have a million dollars to spend on toys. The value might go down or the house might get trashed.

Re: A look into the finances of SpaceX

#213

Post by JumpinJack_Cash »

mgolawala wrote: post #188
htss2013 wrote: post #140

Isn't it amazing that you can become the richest person in the world by building companies that lose money? By lose money I mean all money ever put into the company versus profits made. The idea of creating a profitless company that somehow makes you personally rich used to be thought of as a fluke. Yes it's possible but it shouldn't happen and aside from extreme luck it won't. Something has changed. Losing money and…

The valuation of the company has little to do with the equation of how much profit has been made in the past. It is focused on the companies profit potential in the future. This has always been the case. Sears or Ford may have produced a ton more in profit than was, as you say, put into the company. But the current valuation is based on what profit the market believes it will produce in the future.

> > This has always been the case

Musk is 50, already past his intellectual prime. Has been an entrepreneur (or at least he claims) ever since he was 20.

If he hasn't delivered any profit in 30 years, it's clear that his business model is based on politics, subsidies and aggressive promotion to sell the stock and enrich himself as opposed to building something that improves the quality of life of the avg. citizen.

Re: A look into the finances of SpaceX

#214

Post by flaminHotSpeedo »

tomp wrote: post #151
losteric wrote: post #100

Earlier quoted context omitted.

Gwynne Shotwell deserves all the thanks, she's brilliant

I mean, not all the credit. She might be brilliant, but she's worked other space jobs before. So clearly whatever company Musk has created, has allowed her to actually showcase her brilliance. CEO sets the vision. Without vision, even perfect execution is pointless.

"clearly" is doing so much heavy lifting for you it puts both starship and sls to shame...

If you have evidence to support that takeaway I'd love to see it. I don't have evidence one way or the other, though I have seen unconfirmed scuttlebutt that SpaceX is successful _despite_ Musk, in no small part due to actively distracting and babysitting him to prevent him from meddling

Re: A look into the finances of SpaceX

#215

Post by misiti3780 »

ancientworldnow wrote: post #176
misiti3780 wrote: post #150

Earlier quoted context omitted.

Half of hacker news thinks Elon is some random evil idiot who is got really lucky twice.

You mean the guy that spacex has a created a dedicated handler team for to keep him from interfering with their work?

go away.

Re: A look into the finances of SpaceX

#216

Post by Vecr »

hef19898 wrote: post #31
justrealist wrote: post #27

Earlier quoted context omitted.

That's pretty modest for a company with 100% y/y growth on revenue already in the billions.

Assuming rocket launch demand continues to grow exponentially, which I kind of doubt. Also, I'd love to see how Starlink is accounted for.

Not if the Space Development Agency and SDI have anything to say about it, though I actually doubt they will get funding.

Re: A look into the finances of SpaceX

#217

Post by pclmulqdq »

avmich wrote: post #202
pclmulqdq wrote: post #154

Earlier quoted context omitted.

Falcon rockets can't get to the moon. You need a lot more fuel to do that. That's why SLS and Starship are both being developed.

In 1990's Dan Goldin, the NASA administrator at the time, was looking for ways to return to the Moon for cheap. One of the least expensive variants which was presented included launching multiple Protons and assembling lunar exeditionary complexes on LEO. The quoted number at that time was $1 billion to put boots on regolith again. Falcon-9 is about as capable in terms of payload as Proton. And even without inflation…

That plan was rejected for the reasons I stated in a sibling comment.

Re: A look into the finances of SpaceX

#218

Post by reaperman »

JumpinJack_Cash wrote: post #207
electriclove wrote: post #168

Earlier quoted context omitted.

There is a lot of hate on anything Elon does. The market is valuing his companies based on exactly what you stated. If people read the mission statements of these companies and listen to what Elon says, it is pretty clear on what his goals are. And contrary to what most believe, it is not to make himself tons of money. These companies are going to make money as a means to accomplish their goals. The control could shi…

> > read the mission statements Musk has been making mission statements ever since the days of Paypal. It's been 30 long years. And he has never delivered tangible quality of life improvement for the avarage American You can hate on Gates and Bezos and Zuck, tell you what, I will be joining you in that fight. But the products and services that they signed off are everywhere in society and if you disappeared them you'…

> And he has never delivered tangible quality of life improvement for the avarage American

Neither has Ferrari or Rolex but that doesn't make them failures. Most of Musk's companies deliver good value to customer, just not cash flow profits from revenue to the companies themselves. They do somehow still deliver profit to shareholders via stock price movements though. It's not clear if Tesla will ever achieve long-term cash flow solvency but for now most customers are happy, and most shareholders are happy.

SpaceX seems like it won't be super difficult to achieve long-term positive cash flow. They're dumping tons of cash into Starship R&D but the expected returns are great. There really isn't any competition knocking on their door so they'll have at least a decade of uncontested pricing/margin dominance.

Re: A look into the finances of SpaceX

#219

Post by davmar »

lordnacho wrote: post #190
wddkcs wrote: post #156

Earlier quoted context omitted.

The market is pricing in future growth. You can say the market is incorrectly evaluating the potential return, but it's hard to argue that Tesla and SpaceX aren't going to cash in on that potential. How else should the market be treating companies with obvious high growth potential?

The problem with that argument is you have to have some sort of evidence that the market more or less does this correctly most of the time. We're depending on the feedback mechanism here working correctly. If it doesn't, we are rewarding unproductive behaviours.

evidence: amazon.com

Re: A look into the finances of SpaceX

#220

Post by lamontcg »

htss2013 wrote: post #140

Isn't it amazing that you can become the richest person in the world by building companies that lose money? By lose money I mean all money ever put into the company versus profits made. The idea of creating a profitless company that somehow makes you personally rich used to be thought of as a fluke. Yes it's possible but it shouldn't happen and aside from extreme luck it won't. Something has changed. Losing money and…

If you have a growth company with high return on capital the worst thing to do would be to return the operating profits as taxed dividends or just sit on the cash or something like that. If you can grow the business then the best thing to do with those operating profits is to pump it back into expanding the business and the capital and capturing more revenue next year. You aren't losing money, you're building a larger economic engine for capturing future cashflows, which is doing your investors a favor since they'll own a larger chunk of the economy next year.

This assumes that the business is, of course, growing though and growing at a faster rate than the economy and its competitors, and that it has a positive return on capital from the core of the business.

A growing company with high return on capital which is not aggressively reinvesting in itself would be a red flag.

This should go in one of those "Myths that Engineers Believe about Finance" that all companies that don't produce profits are bad.

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