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We Think the SpaceX IPO Is Overvalued

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Re: We Think the SpaceX IPO Is Overvalued

#91

Post by vagab0nd »

kldavis4 wrote: post #10
m-hodges wrote: post #2

> 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…

I think it comes down to scaling and removing the bottlenecks.

If you build one data center on earth, you did just that.

If you build one in space and make it work and cost effective, you can scale infinitely (which is why SpaceX is uniquely positioned), until you hit the next bottleneck (which is why Tesla is building a fab).

Tangential: If you play Factorio or Satisfactory, this is _all_ you do. Removing bottlenecks.

Re: We Think the SpaceX IPO Is Overvalued

#92

Post by GMoromisato »

A lot (everything?) hinges on orbital data centers. If they don't work, SpaceX is overvalued.

SpaceX plans to launch 120 kW satellites, each weighing 1.7 tons. Let's be conservative and say it ends up being a 100 kW satellite massing 2 tons. Let's be conservative and say Starship can launch 50 tons to orbit for $20 million ($5 million more than a Falcon 9 launch).

50 kW per ton x $400K per ton = $8,000 per kW = $8 million per megawatt in launch costs.

That means a 100 megawatt orbital data center will cost $800 million to launch.

You need about 833 satellites for 100 megawatts, so let's round up to 1,000 satellites. Let's say one of these satellites cost $3 million (that's probably high, but let's go with that for now). That's about $3 billion for satellite manufacturing.

Bottom line: It will cost SpaceX $4 billion to launch a 100 megawatt data center.

Anthropic is paying SpaceX roughly $50 million per megawatt per year. SpaceX could sell access to its data center for $5 billion per year. Assuming the satellites last for 4 years, that's $20 billion in revenue from $4 billion in costs.

Please correct my math/assumptions, but this rough calculation shows that SpaceX could be right and Morningstar could be wrong.

Re: We Think the SpaceX IPO Is Overvalued

#93

Post by sumeno »

credit_guy wrote: post #77
adgjlsfhk1 wrote: post #19

Earlier quoted context omitted.

Because 50 rocket launches seems hard to make cheaper than a building.

Why? It seems to me to be much cheaper than a building. Musk's aim is for the cost of one Starship launch to be under $10 million in the long run. 50 rocket launches would be less than half a billion dollars. Can you get a datacenter built on the ground for half a billion dollars?

Half a billion in JUST the rocket launches, you've still got to build the actual data center too.

That's assuming he can get launches down to $10 million which I'm sure will be right behind his flying roadster and cybertruck boat

Re: We Think the SpaceX IPO Is Overvalued

#94

Post by laichzeit0 »

dozerly wrote: post #62
redox99 wrote: post #54

Earlier quoted context omitted.

I think this is a very big issue. If SpaceX is very successful, will he pay out dividends, or will he spend everything on a mission to mars at a massive loss or something like that?

It’s very simple. You should expect he will do whatever benefits himself.

The one thing you can say though, is that “benefits himself” does not mean: buying a super yacht, a casino, an island, etc.

So yeah, he’d YOLO and do the Mars trip before any of the above. Which is what most nerds on HN would love, except their blind hatred for Musk would make them despise even that.

Re: We Think the SpaceX IPO Is Overvalued

#95

Post by lenerdenator »

nickff wrote: post #56
glaucon wrote: post #42

Earlier quoted context omitted.

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…

The voting issue is problematic, but the limits on shareholder class-actions seems like a good idea. Do you know of any shareholder class-action lawsuit that actually benefited the shareholders? They only ever seem to benefit the plaintiff lawyers pursuing the case.

That's because they often don't go far enough, and that's because of limits on things like shareholder class-actions.

If you haven't wiped out their corporate savings and sent the stock price tumbling, you haven't really done anything to get the needed recompense and to discourage the behavior in the future. Right now, many companies are effectively sole proprietorships or partnerships with window dressing made to look like there's real accountability. If it becomes impossible to oust the CEO, you're not a shareholder, you're a bagholder.

Re: We Think the SpaceX IPO Is Overvalued

#96

Post by ncallaway »

GMoromisato wrote: post #92

A lot (everything?) hinges on orbital data centers. If they don't work, SpaceX is overvalued. SpaceX plans to launch 120 kW satellites, each weighing 1.7 tons. Let's be conservative and say it ends up being a 100 kW satellite massing 2 tons. Let's be conservative and say Starship can launch 50 tons to orbit for $20 million ($5 million more than a Falcon 9 launch). 50 kW per ton x $400K per ton = $8,000 per kW = $8 mi…

Morningstar does think it's a possibility that Starship ends up being highly successful as a reusable platform and that orbital data centers end up being very successful, they just assign a 7% chance for that outcome.

Re: We Think the SpaceX IPO Is Overvalued

#97

Post by mayama »

pryce wrote: post #35
hparadiz wrote: post #17

Earlier quoted context omitted.

The video they posted today outlines their specs. They are gonna be smaller. About 100T. Based on Starlink architecture but with way larger radiators and solar panels. Apparently the design is simpler than existing Starlinks because it has fewer different parts. Specs: https://x.com/SawyerMerritt/status/2064108916611420273?s=20

I feel like we are going to relive the hyperloop-decline with the specs of proposed orbital datacentres. But the hyperloop was in one regard a success, in that it built temporary hype. Maybe it was even named after that.

After articles on how starship is never getting off launchpad, I'm sceptical of news regarding elon, pro and anti. Sure, things like FSD are hopium or scam, but not everything could be. Haven't seen hard science estimates on their new ai satellites.

Re: We Think the SpaceX IPO Is Overvalued

#98

Post by GMoromisato »

ncallaway wrote: post #96
GMoromisato wrote: post #92

A lot (everything?) hinges on orbital data centers. If they don't work, SpaceX is overvalued. SpaceX plans to launch 120 kW satellites, each weighing 1.7 tons. Let's be conservative and say it ends up being a 100 kW satellite massing 2 tons. Let's be conservative and say Starship can launch 50 tons to orbit for $20 million ($5 million more than a Falcon 9 launch). 50 kW per ton x $400K per ton = $8,000 per kW = $8 mi…

Morningstar does think it's a possibility that Starship ends up being highly successful as a reusable platform and that orbital data centers end up being very successful, they just assign a 7% chance for that outcome.

Fair point. Even if the math works, SpaceX could fail at execution for any number of reasons.

Re: We Think the SpaceX IPO Is Overvalued

#99

Post by WalterBright »

verandaguy wrote: post #59
oldfuture wrote: post #15

And 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…

This should frankly be disqualifying for any company trying to go public. Super voting shares have their place but there's no scenario in which overall control of the company can be retained by super voting shareholders who make up a small minority of the overall shareholders. The point of a company going public is not to just distribute possible profits among speculators, but to give the public a meaningful voice in…

> The point of a company going public is not to just distribute possible profits among speculators, but to give the public a meaningful voice in company direction

The point is to raise money from investors. The investors get a voice in exchange.

Re: We Think the SpaceX IPO Is Overvalued

#100

Post by SwellJoe »

themafia wrote: post #75
SwellJoe wrote: post #48

Earlier 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…

The consequence of becoming the world's richest man? Oh, the horror. The very wealthy do not face consequences for their actions.

He lies every day about his companies, and no one ever does a thing about it.

DOGE killed a few hundred thousand children for no reason at all; it didn't even save money. He did it purely for the joy of killing black and brown children in the global south. No one with any power to deliver has ever suggested he should face consequences for it.

Why should he be afraid of consequences? There will never be any for him, as long as he is protected by unimaginable wealth and a power structure designed around serving those with wealth.

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