This is the most white collar “we call bullshit” type of writing I’ve seen in a long time and I’m here for it. Not a good sign for the next two AI IPOs either. SpaceX had the hubris to release their S-1 publicly and whatnot. This is going to be “Hot Garbage Summer” in the equities market lmao. GG VCs.
We Think the SpaceX IPO Is Overvalued
81–90 of 301 posts
Re: We Think the SpaceX IPO Is Overvalued
#82And water is wet
Re: We Think the SpaceX IPO Is Overvalued
#83I need to understand what possible benefit there is to doing DCs in space. The cost would be, no pun intended, fucking astronomical. The cooling situation would make no sense at all -- the major up-and-coming application of DCs, LLM training, has absurd cooling requirements even here on earth where convective cooling is an option, to the point where many DCs use open-loop cooling. Latency might be better, in some cas…
It's so you don't have to ask anybody for permission. That's it.
Right now, 70% of the country is at least skeptical of DCs and at worst absolutely hate them. NIMBY is basically the rallying cry. That's why you go "up" (if they can make starship work). The physics is "hard" but doable, you can keep them cool enough in a sun synchronous orbit. The math pencils out. It's not my field, but back of the envelope math seems to work. Scott Manley has a video on it if you're skeptical.
But, people keep thinking about this like "return on investment" is the only thing driving this play. They're literally the only company with a mostly reusable system (unless you count that company trying in China?). They're the closest company to a fully reusable launch vehicle. They have a ton of government contracts with star shield. After Bezos' rocket blew up last week, there's basically nobody close to competing with starlink...
I am not a Musk fanboy, but, like, there is literally no other serious space competitor right now. I mean, "maybe" Boeing? But not really - they're years away...
So, like if you read about the Memphis Datacenter - Colossus I think? They're unable to get power, they're pulling in power from Mississippi to keep the thing running. You know how many times they have to ask permission for that? The infrastructure costs there just to power it start to get absurd too. Then the unending line of approvals and environmental impact studies and permits. For all the people saying, "it'd be cheaper on earth" it might be in terms of dollars, but if you can basically iterate entirely unfettered in space, it's the obvious choice if you can make it happen.
Like, seriously, go try to build something, there are a LOT of rules outside of rural areas. It's literally why my wife and I decided to build our cabin where we are building, because there were basically no restrictions. Meanwhile in town, my buddy's deck was a nightmare to permit... it was a deck, not bridge. Seriously, to all the people saying, "it's easier" go try to get something built in a big city or where you have to fight through permit hell.
These tech oligarch guys view this (I think rightly - it's one of the only things I view them as right on) as a race to AGI against the Chinese. We're in the lead right now, cool, but the Chinese have excess kilowatts and we don't. In fact, we don't have adequate power plant infrastructure at all and we couldn't get the power plants built if we wanted to (the Ezra Klein and Derek Thompson book Abundance touches on this topic if you're curious as to why). It's not going to happen.
But up? No NIMBYs in space (yet). So they're going to go where nobody will tell them "no." At least, that's what I would do if I owned a literal rocket company.
People are all looking at this stuff through the lens of "money" as if that matters hardly at all after AGI, lol. The analysts are looking at this like it's 1995. I mean, PE ratios are important, don't get me wrong, but after 2016, and Trump, and the applications of transformers, and the war in Ukraine (and current shit show in Iran), and the rising price of fuel, and, well I'll stop, the list goes on and on, but acting like the "normal" rules of investment apply is just silly. This stuff is about power, and he who controls access to orbit is worth a basically unlimited amount of money...
Do I wish it was happening differently? Yup. But hey, we decided to give up on space as a country like 50 years ago, maybe we can try to do cool stuff in space now.
Re: We Think the SpaceX IPO Is Overvalued
#84I need to understand what possible benefit there is to doing DCs in space. The cost would be, no pun intended, fucking astronomical. The cooling situation would make no sense at all -- the major up-and-coming application of DCs, LLM training, has absurd cooling requirements even here on earth where convective cooling is an option, to the point where many DCs use open-loop cooling. Latency might be better, in some cas…
It's easy to see the benefit in DC's in space if you look at a few ingredients: 1. The recent Iran drone attacks on AWS data centers 2. Growing anti-AI and anti data center sentiment at home, plus Larry Fink (ceo of Blackrock) in a recent interview being terrified of dissident groups using consumer drones to attack data centers. 3. Anthropic, Grok, and other AI vendors becoming more and more integrated into defense a…
1 -- Signal jamming exists.
2 -- Space also belongs to the citizens and not the corporations.
3 -- The defense industry is the single worst most corrupt and idiotic industry we still shackle ourselves to.
Re: We Think the SpaceX IPO Is Overvalued
#85And the prospectus says it plainly: "Mr. Musk will be able to control the outcome of matters requiring shareholder approval." Musk holds over 85% voting power through Class B super-voting shares (10 votes/share). Public investors combined will have 15%. What Musk Controls: - CEO removal = his consent. You can't fire him even if he destroys the company - Take business for himself. SpaceX gets a rocket deal? Musk can s…
I haven't read the prospectus but I would be interested to know, when he dies, to what degree the "... control the outcome of matters requiring shareholder approval" part will be inherited. Does that facility just go along with the Class B super-voting shares? And if it does what does it mean if more than one person inherits his shares? On the subject of the governance structure this [1] is worth a read ... "The comp…
Per the S-1, the class B 10x voting shares Elon owns are converted to class A upon transfer or sale.
Re: We Think the SpaceX IPO Is Overvalued
#86And the prospectus says it plainly: "Mr. Musk will be able to control the outcome of matters requiring shareholder approval." Musk holds over 85% voting power through Class B super-voting shares (10 votes/share). Public investors combined will have 15%. What Musk Controls: - CEO removal = his consent. You can't fire him even if he destroys the company - Take business for himself. SpaceX gets a rocket deal? Musk can s…
It is seriously baffling to me who is going to buy shares in this with 1) this structure and 2) at this valuation. And it is a LOT of money that he is floating ($77B) so there have to be dumb people at scale for this to work.
Look at Tesla stock and you have your answer. This will be another meme stock
Re: We Think the SpaceX IPO Is Overvalued
#87> Even at $63 per share, we give SpaceX a lot of benefit of the doubt in two of the three scenarios, in which we assume the company can achieve a rapidly reusable Starship rocket enabling multiple launches per week and successfully commercialize data centers in space. > In our downside scenario, orbital data centers won’t work or offer any advantage over terrestrial ones. We surmise that the company, having invested…
The orbital data center thing is really strange. Without some kind of massive technological breakthrough the physics of an orbital data center make no sense. Napkin math for a single data center including solar panels, radiators, compute and structure is somewhere on the order of ~6500 tonnes. Let's say Starship can put 100-150 tonnes into orbit per launch, that is somewhere between 40-65 launches for just one single…
It's a litmus test of who understand basic physics and thermodynamics
Re: We Think the SpaceX IPO Is Overvalued
#88Earlier quoted context omitted.
It also achieved Musk's actual goal: derailing and delaying mass transit initiatives, the California High-speed Rail project, in particular. He knew it was bullshit. He's dumber than most people realize, but he's not dumb enough to actually believe all the bullshit he spouts.
> the California High-speed Rail project The state government of California was doing a bang up job of destroying this project on their own. He didn't really need to help them. Moreover given the rise of remote work I'm not sure it has as much value as it would have had it been constructed when it was designed. > but he's not dumb enough to actually believe all the bullshit he spouts. Yet he's not afraid of the conse…
He has never faced an actual meaningful consequence, of course he isn't afraid of them.
Re: We Think the SpaceX IPO Is Overvalued
#89And the prospectus says it plainly: "Mr. Musk will be able to control the outcome of matters requiring shareholder approval." Musk holds over 85% voting power through Class B super-voting shares (10 votes/share). Public investors combined will have 15%. What Musk Controls: - CEO removal = his consent. You can't fire him even if he destroys the company - Take business for himself. SpaceX gets a rocket deal? Musk can s…
If we were a saner society, this would not be a valid way to carry out corporate governance.
This is just sole proprietorship with window dressing.
Re: We Think the SpaceX IPO Is Overvalued
#90Earlier quoted context omitted.
He's sending the weirdest mixed signals. If we want to hit anywhere near 1 on the Kardashev scale we're gonna need a planet wide high speed rail system. They should just give the major tech companies naming rights to the stations for 35 years for like 2-3 billion a pop and scale up construction 5x. I don't get the slow roll on this thing. The stations in LA and SF are gonna end up sort of like Tokyo station for the S…
Planet wide high speed rail doesn't make much sense, it is better of medium sized trips. Flights are will always be better for intercontinental trips. Vacuum trains could be faster but would be so expensive to build. Issues would be big deal in evacuated tunnels. CA HSR is slow partly because the state government has limited funds and giving out slowly. The federal government should have been contributing more. The o…
There should be a high speed rail for every minor leg along the way. Efficiency is relative. People should be able to ship their car by this system instead of renting if they chose. Or use it to go sight seeing in any direction along it's web. The whole point is freedom to move around.
The cost of the HSR is tiny and inconsequential. For the 40 million residents of California it amounts to about $20 a month over the 10 years the fund has been going. It hasn't even spent 50% of the total fund yet. If construction was even 2x the current rate we would already have the central valley done. So I know they are slow rolling it. That's my point. They can speed things up even just a little.