SpaceX has reduced the cost of getting a ton of mass into orbit by a factor of 10 and with their new system (Starship) it's poised further reduce that to 100x. They launch, land and re-use their rockets so often now that what was considered impossible 15 years ago is now routine. They currently put more things into space than the rest of the world combined and by a huge margin. They also have the most advanced internet infrastructure in the world and are poised to replace legacy ISPs and even mobile carriers in the coming decade. Oh, and they're doing all this while making a profit ($16B last year) despite their massive R&D spending and even with the money sink that is xAI their profits will be higher this year. It's hard to say that this isn't one of the most innovative and fast moving companies in the world. $1.75T maybe seems excessive, but less so than a lot of other companies out there.
That article claiming $8b profit is indeed mislabeling EBITDA as profit. EBITDA removes any recurring replenishment costs, the cost of building the satellite, launching the satellite, the user equipment manufacturing and returns, all ground infrastructure build and replacement, all employee stock compensation (not counted!), no advertising costs (and they've actually had to do a lot of that lately to scrounge customers that are remote enough that their network isn't too congested to serve), no taxes are counted (though they get out of that because they have no profit!). Not to mention payments servicing all their debt and Starship development.
*they actually use "Adjusted EBITDA" which is even more nonstandard and means they define the accounting however they want!
Good for you! It’s fun when you realize it’s a constructed language that also tends towards precision. While accounting is not my favorite, financial models as a whole are incredibly powerful reasoning tools. On par, for me, with engineering or physics based first-principles reasoning.
Which financial models best describe reality in your opinion?
I'd always wanted to view affairs from a different lens, though I often feel the people who think everything revolves around bond rates or inflation numbers can miss the social picture of why things happen.
> Which financial models best describe reality in your opinion?
The most-powerful ones for individuals are the micreconomic mechanisms. Understanding how leverage, tranching and moving risk (and reward) across stakeholders and time, work, for instance. The necessary mechanisms and tradeoffs one must make, as well as the ones one should.
If you're looking for a formal model, it's the balance sheet. But not the accountant's. The financier's. Sources and uses, and uses and sources. Payments in, payments out. How do they balance over time; how do they change exposures to different layers of economic and legal control.
The primitives of these models are transactions and people. When you look through them, they're defining human wants and ambitions, faults and fears, patience and mortality.
Hey are absolutely not replacing “legacy” isps and certainly not mobile. Even if they had perfect coverage, sat signals are way too sensitive to obstructions.
True. They're replacing legacy ISPs in areas where your choices are high latency geostationary satellite service, dialup, or DSL where the nearest DSLAM is far enough away that it may as well be dialup.
Their technical accomplishments are doubtlessly notable, but does the expected business growth justify this valuation? Honest question, how many things do we really need to send up there that reducing the cost to orbit by 100x will trigger Jevon's paradox and lead to 100x more launches?
I suppose "data centers in space" is the current answer but again, I'm suspicious about its feasibility.
Barring that, until we have another "killer app" besides Starlink, like a giant orbital space station or a moonbase, I'm curious whether there is enough demand.
Personally, I think that valuing businesses by their expected growth is doing really bad things to our society.
We used to value businesses by their current returns, usually dividends paid to shareholders. And we treated any statements about their future plans as interesting but not something anyone should trust.
Now we value stocks on what their price will do in the near future, because the primary return to shareholders is an increase in share price, effectively speculation rather than dividends as the method of returning value to shareholders. So we're incentivising companies to be constantly pushing their share price up (rather than paying decent dividends), which does bad things to both the company and the economy as a whole.
It's not how the system was intended to work and we find ourselves on a treadmill of constant growth that is killing everything good.
Valuing anything by its expected, long term value is just accurate. You'd consider the longevity of, say, a garment when you purchase it. The fact that a car has a lot of miles in it, and therefore will need replacing earlier, is something that any reasonable person will consider with its valuation. We spend money educating children not because of the value of the knowledge that second, but the expected value in the future, including how it'll be useful to learn other things.
So of course we price businesses based on the expected long term value of the shares, as best as we can guess it. But the fact that a company degrades in value as it "overgrows", and engorges itself to become an entity that can't innovate or do anything efficiently in itself goes into the price too. It's not as if a place like IBM doens't want to grow: We just know they won't.
As for speculation rather than dividends, I suspect the real medium why this happens isn't just need for infinite growth: Again, as growth expectations slow down, price moderates: See Paypal vs Stripe. The issue is mroe of a principal-agent situation, as it's very difficult for the median shareholder to, say, force Zuck to stop spending money on the metaverse. And it's not just at the top level: We have a lot of incentives in organizations for people to push for more hires, even when there's very little value to be had. Anyone with a long career can see how much less tense a growing company is that one that has decided its headcount is stuck for a long time, or possibly shrinking.
Principal Agent problems are just much more annoying to put a blame on, because instead of being able to blame some exec all on their own, we get to look at ourselves too, and how what is good for us differs so much from what is good for employers too. The blame is spread thinly, and the behaviors that would lead to more efficient companies are also worse for workers. Then it's suddenly people easier to like, and we don't like where "try to be profitable at the most optimal size" takes us.
You’re free to invest that way if you want. You might one day wake up and wonder why your Blockbuster Video shares did so badly. But Netflix seemed way overpriced.
Investing in future prospects encourages companies to plan for the future, rather than extract what they can from the present. The stock price is a big motivation for execs, so they can only invest in R&D if the market understands why it makes sense to spend money now in expectation of future profits.
Imagine valuing Google in early 2000s on its revenue and dividends. It would have nearly zero value, but if you bought then you knew it was going to be one of the biggest companies in the world.
Only boring stable companies that have no growth like Coca-Cola make sense only valuing without further growth.
Agree, but Coca-Cola has plenty of value despite being "boring" and "stable".
The post I was replying to was saying that SpaceX had no growth and therefore little value. That's a mindset that sees companies as speculative assets that are only valuable if their price is set to change in a way that a speculative profit can be made.
SpaceX is making money and doing well, the business fundamentals are working out, and it is valuable because of that. If it turns into a boring, stable, company then that's a good thing - it's less likely to spend $10B of shareholder funds chasing some sci-fi pipe dream (instead of, say, spending $1B testing its assumptions first) in the hope of continuing to be valued as a "high-growth" stock.
Coca Cola indeed has a lot of value its market capitalization is USD 76 billion making it one of the 30 most valuable companies in the world!
The problem with SpaceX is that its valuation is almost entirely driven by its expected future growth. For 2025 SpaceX reported EBITDA of USD 7.5 billion. Other mature aerospace companies (Lockheed, Northman, Airbus, Boeing etc.) are currently valued as ~19x EBITDA (i.e., Market Cap / EBITDA is ~19x). But SpaceX is being valued at 166x EBITDA (USD 1.25 trillion market cap / USD 7.5 billion EBITDA).
What drives this difference in valuation? The answer is quite simple, investors expect the EBITDA to grow and quite rapidly. EBITDA could grow via higher margins (EBITDA margins is EBITDA / Revenue, and for SpaceX it is already a decent 50%), but even at 100% EBITDA margin (i.e., zero operating cost) its valuation multiple would b 83x EBITDA. So the only way to justify SpaceX valuation is if its revenue grows and gorws rapidly.
A quick back of the envelop calculation would shows that investors expect SpaceX revenue to grow at minimum of 65-70% annually for the next 5 years. If the revenue grows at less than that the investors are unlikely to earn a good return on their investment.
Starlink seems like a no-brainer at this late date, but I remember thinking "He'll never be able to make money from internet satellites. This has to be some kind of scam. Look what happened to Irridium."
Data centers in orbit certainly seem like a pipe dream, but SpaceX certainly has the technology it needs to put them there, and that's a huge competitive advantage (like it was for Starlink) if they do turn out to be feasible.
It's not meant to replace terrestrial networks, it's a space-based alternative that serves areas carriers have no financial incentive to cover. Terrestrial cellular towers cost between $150k to $500k per tower, and are not economically feasible in less populated areas. There are also many dead-zones in mountainous regions, since cell signals are blocked by mountains.
Starlink Mobile supplements this, it's simply cheaper for mobile providers to partner with them than do their own buildout. Currently only 5% of the earth's surface is covered by cellular signals. Starlink will push that up to 85+%, and is backward compatible with existing cellphones.
> it's a space-based alternative that serves areas carriers have no financial incentive to cover
In a nutshell: they're serving a market that has less money to spend using more expensive tech than the current industry leaders. Maybe I'm wrong but it doesn't scream "massive profit".
I think Airplanes are going to be pretty profitable. They are sort of running a market cornering operation there. But, there will be competition eventually. Starlink is way faster than the alternatives so most airlines have switched and Starlink has rapidly increased their prices for aviation. Idk if it's enough though, they are definitely running lots of promos for home customers.
That sounds pretty niche. And airlines have already extremely thin margin (that have been eaten by fuel price increase). I wouldn’t be surprised if they drop that type of luxury
> I think Airplanes are going to be pretty profitable.
Anything at sea, too. Going on a cruise? The cruise ship can offer you Wifi backed by Starlink for another few bucks. Or even your cell provider could get you hooked right up to Starlink for some phones.
Container ships, military vessels, even fishing expeditions could enjoy an internet connection and cell service.
Amazon Leo just signed delta as a customer so competition is indeed close behind.
I think SpaceX is an incredible company but at this valuation I’d expect it to have something as pervasive as the iPhone or Nvidia chips. It seems to have only small niches.
I have been flying a lot post Covid between it being a hobby of ours and consulting - I’m currently Platinum Medallion on Delta.
Frequent flyers choose their airlines for a lot of reasons - which airline has the most direct flights from their city, who has the best frequent flyer program, etc. The latency of the Internet is seldom a factor or the difference between 10Mbps and 50Mbps.
Non frequent flyers just buy the cheapest flights. The major three airlines make money off of business travelers, business and first class flights and credit cards.
If I’m flying for work and Starlink is that much better, quite possibly. My wife’s experience with other in-flight WiFi providers has been quite poor, often to the point that it barely works. Having said that, neither of us has been on a flight with Starlink yet.
No but the airline might choose starlink. I think a gogo business install is on the hundreds of thousands and annual costs in the tens of thousand for their Eutelesat based system.
> Terrestrial cellular towers cost between $150k to $500k per tower
I'd be interested to find out exactly where this cost exists. I would expect the majority of the cost (especially in rural/mountainous areas) to be more with power and backhaul, rather than the physical radio gear. Because it's rural, you should be able to easily just use coverage bands (ie 850 MHz or 900 MHz) with relatively high transmission power. This would easily be able to cover 300 km2.
Because of the higher transmission power, and the fact that the tower would be in the middle of nowhere, wouldn't the OPEX be higher, with smaller numbers for CAPEX?
A lot of the cost is regulatory. I used to work at a mobile provider, and it took months to get permission from all the various government agencies before we could actually start building. Even if the tower is in BFE, you still have to get all your plots to the FCC, you need EPA signoff for batteries and fuel tanks and such. Plus there's always state and local permits of various kinds. We had a custom workflow application just to track all of that and there were dozens of steps.
Cell towers aren't very expensive on an ongoing basis, but every few years you're rolling out the next big technology (we went from analog to 1x to 3g to LTE while I was there) and it's a headache.
Well if you make the argument that it will replace terrestrial networks and that's why its worth X trillion $ then yes, you do actually need to cover the 1% of earth surface where the waste majority of people actually spend most of their time.
The question is not if its a good business, the question if its a 2 trillion $ business, and if you only cover the 95% of earth without coverage. That more like a couple 100 billion $ business at best.
In regions like Nigeria or the Philippines, Starlink costs over 100% of the average monthly income. The individual addressable rural market really is closer to 1% than 40%.
5G Non-Terrestrial Networks (NTN) is already part of the 5G standard. It's not a replacement for terrestrial carriers, it's an expansion that enables devices to be always connected and select the appropriate terrestrial vs satellite connection transparently. ~75% of the land mass on Earth has no cell coverage, ~90% if you include the oceans. It's the same transition in theory that we had from landlines to cell towers.
Great, but the overwhelming majority of money is made from the place people actually live. Those places are called cities. Only about a few % of earth are built on, and even among those the top 1% is where most people live.
Don't get me wrong, that fucking great business, but its not 'replacing terrestrial ISP' level great.
They said the same thing about cell phones vs landlines back in the day. Based on Starlink's revenue doubling year on year, and a six fold increase since 2022, I don't think anyone really knows what the upper bounds for global access is yet. And traditional telcos are usually limited to a region whereas Starlink is global. Just the top 20 global telcos alone are almost $2 trillion in market cap and $1.35 trillion in revenue. Starlink has captured less than 1% of that revenue to date.
McKinsey estimated the global market for cellphones would be 900,000 units in 2000.
They were off by 100 million.
Even until the 90s some telcos believed that cell usage would never eclipse landlines which would remain the base of their business. It sounds ridiculous today because cell numbers outnumber landlines almost ten to one and have been dominant for over two decades.
my most altruistic view : they said it through actions.
Rural areas were the last areas to join the mobile networks.
This is just a practical thing though; why would you build a tower for a community of 900 people when there are still gaps in the major metropolitan areas? It can't all happen simultaneously regardless of how badly we wish it could.
There were a lot of people back in the early '90s who thought cell service would never be widely adopted because of the cost. It was clear you didn't need a mobile phone -- we'd all gotten long just fine without one.
It doesn't not seem like anything approaching a lucrative business.
TAM: How big is the market for high speed internet that can pay $1200+/year and isn't already well-served by comcast/at&t/etc? And of course, this is all with finite spectrum too. So you can't serve the major cities.
No doubt there exist buyers. But rural Montana doesn't have that many households. Add that 5 year replacement cycle and Musk's Trump alignment that has Europe building their own for security reasons.
These are US telecoms, the satellites blanket the entire Earth at all times. Lower ARPU, but still. Also, it seems like they're swallowing a large percentage of flight/cruise/military internet. And direct-to-cell data coverage of the entire Earth.
It has technical merit and it is impressive. But I doubt it's worth that much. I guess Musk has the talent of pushing and getting what he wants, so I guess we'll see how it plays out. I'm just afraid for the future is SpaceX in these crazy crazy times.
thats the game though. Elon is selling a "slice of the future" and everyone starts having FOMO... the result is a P/E ratio of 300 or whatever crazy number. We will all agree that the company isn't worth that, but theres a bunch of people happy to buy meme stocks that will make a ton of money without the slightest idea of how to value stocks. Botton line an asset is worth what people are willing to pay for it.
Sure, but factor of 10 cheaper in a market that is tiny still isn't that much. Even if you assume a 10x market size increase, its still tiny.
> They also have the most advanced internet infrastructure in the world and are poised to replace legacy ISPs and even mobile carriers in the coming decade.
That's quite the claim. I believe Starlink is a great business, the largest sat business for a long while to come (unlike space datacenter) but even if you are, very, very bullish on it, its not enough to justify the price.
You basically need to believe that:
- Launch market to 10x and grow faster then it ever has for decades
- Starlink goes from already being amazing systematically crushing terrestrial competition.
- xAi wins the AI race (this is almost absurdly optimistic)
- AI data-center becoming a insanely thing (also absurdly optimistic)
And even then this is hard to justify. And I certaintly don't believe 3. or 4. And 1 is a stretch. And while I believe in Starlink continued growth, terrestrial infrastructure still has lots of advantages for cities, where most people actually live.
I used to watch him a lot, but he started talking about AI (I work at a big lab) and it was all wrong, so I'm not sure if I can trust his analysis anymore :(
Unfortunately it's kind of impossible for a YouTube to make weekly/bi-weekly videos that are actually in-depth to an expert level. The best thing you can do is interview experts, but even then, everyone has their own biases.
He packages things to present them as analytical, but it's really just click bait for people to hear something they want to hear. He did a take over a year ago on why the EV revolution crashed with such gems as presenting less growth (but still growth) as lower sales. The comment section was full of never EV crowd who got their fix that everything will be alright and that nothing will change. Of course a year later there were booming sales worldwide.
The sad reality I'm coming to realize is that there is very little real and quality analysis, critical but with open eyes on the future. Most of it is just pandering to crowds. The war in Iran is the latest example - you have one side saying Iran is almost done, and the other that they're winning. Who's right? Doesn't matter, being correct is not the point.
Yea. It's hard to tell what's true anymore. I thought Russia would be out of resources in 3 months. It's been 4 years. I thought Rafah would survive. It's completely flattened. Thought global markets would crash after tariffs. It has survived.
I'm convinced we're in some kind of propaganda machine right now.
Propaganda aside (which exists), the world is just an extremely complex place and the people writing these things are taking guesses a lot of the time. That’s it.
You don't have to believe. If you have a 401k you will be an investor 15 days after launch.
The IPO will go great, because the company will float a fairly small issuance. The big shareholders will not immediately sell. They will hold on and maybe even buy to support the price.
Then, after 15 days, it will enter the indexes and everyone's 401k will start auto-buying this stock.
You might say this is an obvious flaw in how the indexes work if they start immediately accept a brand new IPOed stock with limited float. You'd be right, which is why they won't list for a year.
I really wish more people were aware of this. It's a major scandal and definitely not being talked enough about.
Nevermind SpaceX, which at least have some importance for US defense industry, but xAI ? We will be investing in Elon's private venture, at the price that he himself set and which is at least 2 orders of magnitude too high...
There are enough Elon haters that you can rest assured there will be an inverse ETF so that you can easily hedge away your index exposure if you really want to.
Well, we elected a bunch of criminals, and Elon fired everyone who regulates this. The SEC was gutted like a fish, and contract terminations resulted in a large percentage of FINRA staff being laid off.
You have to be more specific when talking about "socialist europe". The Netherlands, for example, has the best-managed pension system in the world. Despite what many people believe, "Europe" isn't one country and it doesn't have a single healthcare system, pension system, or anything else related to the welfare state.
US social security on the other hand is exactly as you describe pension systems in "socialist europe". Money taken from current workers and invested in state debt.
In order to be incredulous at xAI, you'd have to be incredulous of the AI business in general, which is fair.
But then you'd also be basically betting against the entire tech sector, and really the entire US economy and against the value add of AI. That kind of bet is much more difficult to swallow.
They absolutely succeeded because they had a better search engine. Without a doubt. I imagine there’s more than a few folks around here who used shit like askjeeves, altavista, et. al. Google was heads and shoulders better than those, and continued to get better over time.
No, I’m no Google fan, but it’s revisionist history to say they didn’t have the best search engine.
I was using Alta Vista and preferred it. It had fairly sophisticated search options that Google never got like stem and wildcard searching.
The problem was that yahoo killed it. They shut down its crawler and it started going stale.
Plus they didn't have as good a solution to index spam as Google's pagerank.
It was basically a story of product developing a lead, getting sold for a quick buck, then the acquirer shuts down innovation and tries to milk it, with bad timing because google was chomping at its heels.
I'm not trying to rewrite history either, but this makes me wonder how deeply the Google lore really affected some people.
I'm in my late 30s, so fair enough. I was there, but not really "there" to see what happened. My understanding and memory was that there was good word-of-mouth in the 90s because it was marginally better. By around 2000, the media was strongly pushing this narrative about Google being this great technological triumph with their PageRank algorithm. This coincided with AdWords being rolled out, dotcom hype, and people generally taking SEO more seriously while Google was best positioned to take advantage.
Now, I'm not saying I know much but I'd be very surprised to hear that nobody else ever thought about setting up a scheme with Markov chains to measure "link juice". That seems like low-hanging fruit for just about any students excited about the topic, but again what do I know. To me, the Google story was always more of a business success than anything else. They got so much praise and so effectively leveraged their nerd cred that people optimized for their results and it all snowballed from there.
This time around with LLMs, they can't claim to have the best. The space is way too volatile. What they can say is everyone uses it because everyone eventually searches on Google, if not by default. Google just has to be good enough and the easiest to use.
As an adult working in tech in the 90s, Google hit the Internet like a bomb. They were a relatively late entrant, long after most people had their favorite 2-3 they used (I was primarily Altavista). There was word of mouth, but search engines advertised heavily to raise awareness.
Then Google hit. Materially every person who used it stopped using their previous favorite search engine within 1-2 uses. It spread like wildfire. It was fast, accurate, and the results weren't cluttered (aka lightweight, aka friendly for people on dialup). Some competitors at the time were showing display ads on search results pages.
Google did not have to advertise that I can recall. It was like one day, search was like the auto market : lots of makes, types, etc. The next day it was all Google. It happened really fast in my recollection.
And to your point -- as far as I can recall, the big competitors simply did not try to clone Google. They kept their cluttered pages and did not optimize performance. Excite pivoted to home Internet via a merger with @Home.
A couple of close analogs you may have seen up close. AWS for having a lane virtually to themselves for a long time. Azure & Google & IBM etc. didn't really even suit up until AWS was entrenched reminds me of Yahoo! etc. sticking to their portal strategy well past its sell-by. ChatGPT for the speed of adoption. Google was like a combination of these two.
The word of mouth was real. I was working in tech at the time, and had Google recommended to me by a mate. I tried it, and it rocked. This would be about 1996, I guess, somewhen around then.
Every techie converted to Google, and we converted our friends and family. Sure they got media coverage, but remember at that time journos had very little clue about tech and relied on their techie friends and family for tips about what was going on. And, obviously, the internet was the big story at the time. I would absolutely not be surprised if it turned out that Google paid nothing for media coverage and were fighting off journos clamouring for interviews.
As far as I'm aware, PageRank was a completely unique innovation that no-one else had done or tried before. There may have been imitators, but they never got the traction that Google did.
By 2000, and AdWords and all the rest, Google was already the dominant search engine, at least with tech folks. SEO was just beginning around this time, because of that dominance.
And yeah, Gemini is an also-ran, despite all the money and tech expertise Google have thrown at it. It'll be interesting to see if they cancel it, like they have other products that have not done as well in the market (G+ being the classic case). Same for Meta (and, well, Meta).
I think that’s a fair point. What I would say in response is that you should bear in mind the times back then.
The internet had just blown up. CompSci programs at major universities were still teaching Fortran and COBOL. Linux had its very first release in 1991 I think (when the initial Google folks were in high school), people knew what BSD stood for back then, web protocols were not horribly dissimilar to the Wild West, and don’t even get me started on web standards.
In addition to all of that, they actually fixed search. There was this golden era where searching worked. The other responses you’ve had so far are much more enlightening than mine, I’m spent. I didn’t meant to come off as an ass, it’s interesting to hear your perspective on this.
You can post-IPO - depending on liquidity. I don't think that'll be an issue here.
And if the thesis of "it's going to look good for the first 15 days" holds, you can indeed be very profitable by e.g. buying ATM puts. (The problem being that markets don't like sticking to time tables just to accommodate your investment thesis ;)
So yes, you'll be able to take a bearish position fairly shortly after the IPO.
Sure. It's the market that's irrational, not the people here. The people here are the truly enlightened rational ones and know what the true value of things are.
xAI's value is irrelevant here. This is about Elon throwing his weight around and rigging the game to create an artificial squeeze so him and his early investors can make bank by transferring wealth from everyone's retirement fund.
The company is irrelevant. The focus should be on the money making scheme
Overall it's worse than the other frontier models, but it's decent for queries about breaking news, due to being trained on twitter data.
It's also better for queries about controversial topics, and topics that the other labs have deemed to be "unsafe".
Politically, it differs quite a bit from other models.[0] It's right leaning, although it's closer neutral than other models, defining what neutral is a challenge though.
The study you link to doesn't take into consideration the Overton window of opinions. Perhaps there's some dimension along which you could say that one ideology lies 'opposite' to another political persuasion, but that doesn't necessarily mean that the two ideologies are equally acceptable to support in a given society.
I don't think calling defining neutral a 'challenge' does the question justice - neutral will always be context-dependent, and what may be in the center of the Overton window of one society may be unpopular or even highly illegal in a different society.
Grok and Elon's ventures in general should really get the Purpose of a System treatement in public discourse. For all we know the purpose of Grok is to make nude edits of people. You can assign this to left or right leaning as you please.
I tried it when it has the most extensive free offering, and it definitely answers my worldbuilding questions in more detail than I expected and compared to Gemini or Chatgpt. Can't say anything about hallucinations tho.
I use it, overall, it is not too bad. I wouldn't use it for coding etc, but its access to X means it can answer news related stuff much better. Its guardrails are lower so it does fairly innocuous things that will have ChatGPT or Gemini refusing to do.
Right wingers and generating creating nude images of girls and women who post on xitter, without their consent? Those are the only things I even associate with Grok anymore. The venn diagram may line up pretty nicely between them, too.
SpaceX are widely reported to be planning to raise $75Billion in new capital. It may seem small a % for the valuation target. However that is about 3 times previous highest raise of $29B when Saudi Aramco went public few years back. The market simply may not be that deep[1]
There is a good chance this one becomes the Wework of this decade. The valuation, amount being raised, cooling interests in AI, and middle eastern capital changing priorities, interest rate outlook for the rest of the decade. These are all strong head winds to overcome even when not raising the largest ever amount in an IPO.
That is not say that it is destined to fail, Elon is excellent salesman of vision when fundamentals are weak, There is no better proof than Tesla P/E .
It is by no means clear this would be successful or not. The valuation, funds being raised, future growth potential are all not based on just SpaceX core businesses which would have been an easy sell.
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[1] i.e. it could be still under-subscribed even if everyone buys into the vision, growth projections, is comfortable with valuation gets fully onboard including retail.
Even in this best case scenario SpaceX would have to sell at the lower end of the target range or go even lower and still end up being short matter what, because there could simply be not enough money in the market.
I think you have to temper the skepticism a bit though.
SpaceX has dramatically lowered the cost of launching things into space. They are still the leader here. They can put a kg into orbit cheaper than anyone, even heavily subsidized state operations (EU and China).
Their order book continues to be full. Every single launch vehicle they roll off the line was pre-sold years ago, including its re-use flights.
I agree that Elon is their biggest potential problem and a big risk but their launch business is sound and wildly successful. If you believe access to space will be a growing segment of the economy in the future it isn't exactly a bad investment.
I remember all the people putting Tesla down when they IPO'd. I bought $4k of stock (all I could afford at that time). Sold $100k of it a few years ago, still have the other half worth near $220k. Their numbers at IPO time were garbage and it wasn't clear they would even survive. Then they started shipping hundreds of thousands then a million cars.
YMMV, consider all sides and make your own judgement. Just be careful about trusting the anti-SpaceX case. Even if everyone is technically correct about them it can still be a huge miss not to invest! The future is not static and if they can put the raised capital to productive use the IPO could end up being a fantastic deal. And FWIW I also agree the largest immediate risk is they are over-valued. Only time will tell on that front.
At current launch numbers it may not be worth 1.5+ trillion but valuations aren't about current, they're about discounted future cash flows.
It seems logical that there could/will be far more demand for launch if the price were lower. Prices are quite extreme currently, a standard 3U cubesat (loaf of bread size) is $300k and that's just for orbit.
There could be lots of startups that want to try robotic space mining but launch costs just make that mostly impossible currently so there are only a select few. It's like valuing the Dutch East India company based on the trade volumes in 1603. Of course people are not going to be buying much pepper or nutmeg if it costs them weeks of labor, but build lots of reusable ships, and with each voyage, more people can afford your pepper and nutmeg until it's a common household item.
discounted future cash flows is discounted by risk. There is a lot of risk on growing future revenue is the point.
>seems logical that there could/will be far more demand for launch if the price were lower.
This thesis hasn't played out much in the 10 years since Falcon landed in first 2015.
The non Starlink component of revenue has not massively grown beyond what size the market in 2015 to today. SpaceX isn't lowering launch price to induce demand beyond out being the cheapest just by enough, they would be going lower if cost was the only barrier for more revenue.
It not that businesses aren't possible there at lower launch prices. Starlink is testament that it is.
The problem is that rest of the world is not able to innovate fast enough to take advantage of it even after 10 years. The industry struggles with things like manufacturing satellites at scale or raising money for it, or executing on innovation etc.
What that means for SpaceX is that even if launch costs are cheaper than now, the launch market simply may not grow quick enough for the valuation number to make sense. They would need to enter a lot of new markets directly and be their own launch customer beyond Starlink. This comes with its own set of execution, regulatory and other risks. The data-center[1] in space play is an attempt to do this.
Either DC play or something else, they will need to find and sustain a large business to grow, maybe they will, maybe not.
It is not very clear now and that is a lot of risk so any future cash flow projection has to be discounted heavily.
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[1] I am not qualified to comment on the technical feasibility, however to analyze the company finances that is not needed, it is just one more risk factor, depending on how you feel you can assign 0 or 1 or anything in between.
In 2024 66% of their launches were for Starlink. So it’s not quite correct to suggest there’s a vibrant external market for their product, a lot of it is sort of self dealing.
> it’s not quite correct to suggest there’s a vibrant external market for their product
There is a very large demand for launch services. SpaceX balances launching customers and launching Starlink. It's not like they give every launch slot to customers and then launches Starlink whenever there's an opening they couldn't fill.
I think you have to temper the glazing a bit though.
These people and their endeavors are thoroughly, irredeemably corrupt. It’s nice you got a taste, but their impact on society has been calamitous, and will take decades to recover (if at all).
>There is a good chance this one becomes the Wework of this decade.
It's very different from WeWork which was basically just subletting office space with beer taps. At least SpaceX had done significant stuff with the rockets and Starlink.
The comparison was not about the strength of the business, it was about how the attempt to IPO and the original S-1 was the trigger for more realistic price discovery for Wework
My comment was that it is possible that by trying/becoming public SpaceX also will go through that same
process once their numbers become available.
S&P500 held fast to their rules on consecutive quarters of profitability and forced TSLA to meet them (must be profitable in qX + sum to net profit over the past year). If they hold to them this time, SpaceX would need to be profitable over a year while public to enter the index.
They have instituted rules and gone back on them eventually (most notably for several years they had a "no going public with different classes of voting shares designed to allow control forever, if IPO is after today" rule that they eventually dropped) but they are generally pretty good about following rules.
I am not an expert, but my understanding is most funds don't change allocations immediately, but it would be part of normal rebalancing, e.g. VOO and other indexes that track the S&P500 do it quarterly
They all smear the purchases and sales from index changes, but I don't think they publish on what timescale. Most funds try to minimize tracking error. There are funds that take this to a different level. When a stock is added to the big indexes, it tends to do poorly over the next year, and on the flip side when a stock is removed it tends to perform well. Dimensional funds have automatic rules to take advantage of this type of thing. There are other companies that have funds of this style, but overall they are much less widely used than the big index funds from vanguard, blackrock, state street, etc.
If you have $100k, you can do it with direct indexing at Schwab. The management fee is 0.40%.
I looked into it, but there are gotchas with wash sale rules and taxes. You really need $500k-$1M to avoid tracking errors. End of the day, the overhead seemed more problematic than the problem, so I ended up increasing my global allocation instead.
If you have a big enough portfolio, direct indexing (using something like Frec or Wealthfront) could be an interesting option, and weighting the companies that you don't want at 0.
Wealthfront offers the ability to blacklist stocks in your account (the feature is meant for people legally prohibited from investing in certain tickers).
It won’t exclude from regular indexes, but it will exclude from the direct indexing. I’ve been using it to exclude NVDA ever since it peaked (or at least reached the peak valuation I’m comfortable with)
Wealthfront’s portfolio minimum used to be $100k, but I think they have a new direct indexing product with a $5k minimum.
Based on the list of businesses at the top, the stock market seems like it rewards profit margin and profits, by businesses that sell meaningful products and services.
Can you provide an example of any of the businesses on that are on that list due to "mass stupidity"? They all seem to operate factories, employ many highly qualified people, and make a material difference in many or even most people's lives around the world.
Meanwhile, SNAP has returned -14.98% per year to its shareholders since it IPO'd (Jun 3 2017), and at an $8.27B market cap, it makes up a negligible portion of any broad market index fund, so not sure how SNAP's shareholders have been rewarded by mass stupidity, especially given that the founders still own half of the business. They would have been far better off liquidating their shares and investing in SP500.
Tesla is a great example. It’s 30% retail, 25% elon and insiders, and the remainder institutional, mostly index funds.
The investment thesis for Tesla is absurd. They built the market cap on hype and it got big enough that it remains a force. It’s a flailing company, kept afloat by bullshit.
The bigger issue is the death of small cap. Massive venture, sovereign wealth and PE funds don’t need the public market capital anymore, so they harvest the vslue and spit out the company late in the value cycle.
Snap, cool as it is, is a social media loser. The investors cashed out their shares to the public, who took the loss.
> The investment thesis for Tesla is absurd. They built the market cap on hype and it got big enough that it remains a force. It’s a flailing company, kept afloat by bullshit.
Maybe, or maybe they are one of the few businesses people want to bet on to be able to create new streams of revenue. Intel used to be big, and now it isn’t. It being big didn’t help stop its demise.
> The investors cashed out their shares to the public, who took the loss.
They didn’t. The biggest investors, the founders, still have almost 50% of the shares. Also, SNAP peaked at $131B in September 2021, 2 years after SNAP went public at $27B.
Would you have written then that “The investors cashed out their shares to the public, who took the loss”?
Of course not. Because index fund investors did not cause it to go to $131B, and they didn’t cause it to go to $6B.
The fact that founders still own 50% of the shares doesn't mean that they didn't sold some of ones they had. Also Snap gives very generous stock options to their C-team, meaning that they can sell overtime while keeping their large stash.
> so they harvest the vslue and spit out the company late in the value cycle.
So SNAP executives IPO’d at $27B, and over the next 4 years, the market cap increased to $131B, which anyone in the public could have benefited from.
Yet now you are saying SNAP execs are wrong for selling their equity over time?
It doesn’t seem like there is any winning here for SNAP’s executives, even though they gave the public the ability to quadruple their money in 4 years. What more can you ask for?
The flaw is the limited float. Indexes will be forced to buy a huge number of shares which don't exist, driving up the price.
For general investors if this is going to eventually happen, the earlier the indexes buy in the better. Otherwise more sophisticated investors will buy ahead of the indexes and grab the profit.
if they weighted (fully) by float (perhaps the average float from the trailing 90 days to the re-balance) it would not be as easy to game. The Nasdaq is accounting for float, but not completely.
They are, but SpaceX is trying to get rules changed. They want the index to buy at a multiple of the float, so they release say 5% but get bought as if they had released 15% float. They also normally wouldn't be eligible for index inclusion for ~1 year, after showing multiple quarters of good stewardship, etc. They're trying to bypass all that
I don't know about the funds, but it's really about the index. Both for the index funds that use the index, and the active mutual funds and index funds benchmark to that index.
Initial public offerings whose market capitalizations rank within the Nasdaq 100’s top members will normally be eligible to be included after 15 days of trading, Nasdaq said in a statement. The timeline is shortened from at least three months currently.
“Industry professionals, including asset managers and institutional passive portfolio managers, were mostly supportive of the Fast Entry proposal and proposed timing,” Nasdaq said in the statement.
15 days vs 90 days isn't some huge shift nor is it inherently some "flaw." These changes have been asked for long before Elon entered the White House.
ok so it seems pretty bad that they changed the index rules both to allow spacex in early and the wonky weighting stuff.
But if one already has index-based things that are likely to be captive on the wrong side of this, and one wanted to benefit or at least balance out, to confirm my limited understanding the goal would be:
- buy shortly after the IPO, ideally less than 15 days
- and sell less than 6 months later when lockups would end and insiders are set to cash out?
Thank you for posting that. I also read that on some less authoritative source I don't remember. It's truly scandalous. I wish ETFs will revolt and apply the old rule for inclusion, but I have no illusion it will happen.
Why do people keep claiming that every 401k invests in the NASDAQ 100? Few do, and you probably have a choice of a couple of 401k plans, at least one of which will not include SpaceX.
Do the ETF managers have no discretion in determining when to buy? I was under the impression that they usually handle these changes to indices gradually even under normal circumstances.
The operators of the fund are allowed to do whatever they outlined in the prospectus to track the index, some funds allow futures, options, and swaps along with equity shares to maintain parity with the index.
There are ways to gain exposure to a single stock without directly purchasing shares, options and swaps being the most common. Owning the actual shares makes things easy for the fund operators, but there are other ways.
I can see both sides of it though. The old rule made more sense when companies ipo’d at small valuations. It could be argued it’s wrong to keep one the top five market cap companies off the sp500 for a year.
But a low stock float. I once had a meeting with a guy who said his company was worth $100m. How did he get that valuation? He sold 0.4 % of stock to friends and family at $400k.
Is there something about why spacex wants to go public ? if not then this is definitely about xai... to hide unprofitability and offload it on general public ASAP.
"If you have a 401k you will be an investor 15 days after launch."
This is not a given.
Many people have many different kinds of investments inside a 401k. Your 401k can own a rental property. Or gold. Or, in a more mundane scenario, the Russell 2000.
If it weren't for the glacial pace of plan administrators and plan holding companies there would be an opportunity for a fund provider to offer "S&P500exSpaceX". It's just another index, after all ...
My 401k has BrokerageLink set up and invests in VT/VTI. It takes less than 15 days so if your company offers BrokerageLink, you can avoid investing in SpaceX.
SpaceX will not be part of the S&P 500 when it lists, so you can avoid owning SpaceX for now by sticking with non-NASDAQ funds. IIRC it would take about a year for SpaceX to qualify for the S&P 500, four consecutive profitable quarters is needed I believe.
If you own a NASDAQ fund or total US stock market fund, you will have exposure to SpaceX.
This place discusses SpaceX technical things all the time. But SpaceX is not a research lab. It's a company. That does business. And is going public. Taking a little time off from arguing about thrust and payload to talk about their business paratices, lobbying and late-stage capitalism is not only appropriate here...
Look around you. This may be called "Hacker News," but it is run by and for the benefit of a business, YCombinator. Speaking bluntly, if you come here only to talk tech, you're only getting half of the HN value proposition. The value of HN is that it mixes business with pleasure, so to speak. Many people here will either work for a tech business or found one. You can find technical discussions everywhere. Business discussions tailored for tech? That's actually very, very valuable.
I have long suspected that the next major move will be to roll Tesla into Space X, thus completing the Musk consolidation. After that is when it gets interesting as the whole staggeringly massive business has to be profitable long term.
It could be a good thing as it is very diversified but it can also open the whole thing up to a lot of risk factors.
On what grounds would the SEC actually block the merger? It's not anticompetitive, it's not even vertical integration. They can't stop things just for being dumb.
I'm genuinely waiting to see at what the valuation lands at. The gap between what SpaceX charges per launch and what everyone else charges is so wide that the moat basically is the rocket. Hard to compare against anything even now.
That feels like a surprisingly weak moat though; costs have already fallen to the point where launch isn't the biggest cost of space hardware any more, the competition is hotting up, and whilst launch costs give Starlink an advantage over other LEO satcomms constellations, other countries have strategic incentives to underwrite the existence of that competition, and once those assets have been sent to space it's a straight fight for subscribers in a remote broadband connectivity market which is definitely real but also looks... actually not that huge, relative to a trillion dollar valuation, unless they're able to drop their prices to wired broadband levels without service degradation. Launch cadence is a bigger advantage for SpaceX than cost, but again something other entities plausibly will match, when the demand is there.
The real question is what comes first: viable commercial large scale infrastructure in space that might create new demand for SpaceX launches, or the competition?
SpaceX is pitching their own orbital data centres as a ready to go source of demand for lots and lots of Starship launches, but the unit economics of those vs boring old ground-based server racks and solar farms look dubious even before one considers just how convenient a justification it is rolling Elon's loss making businesses into the IPO.
The cadence point is understated. SpaceX launched 130+ times in 2025. The next closest was around 15. That's not a gap that closes in 2-3 years even with heavy subsidies, because it's not just the rocket, you need to account for the operational framework of doing it every 3 days.
the cadence is very important, but I don't think the operational framework is much of a moat (not having reusability and/or actual demand is a bigger obstacle to overcome). SpaceX went from 30 to >130 between 2021 and 2024, launching most of the satellites currently in orbit in the process.
You don't do that without pre-planning or being very very good at what you do, but most of the competition (including those that will fail) is targeting that. They don't need to scale as big or as fast as SpaceX to deliver enough comms satellites to orbit to kill any hopes of Starlink becoming a permanent low-latency connectivity monopolist. Plus of course most competitors in the connectivity space are able to spend a fraction of their overall hardware budget launching on SpaceX...
The valuation only makes sense if you price in Starlink becoming a top 3 telecom and Starship opening up entirely new markets. Possible, sure, but the launch business alone doesn't get you anywhere near 1.75T. They're betting the multiple on revenue lines that don't fully exist yet.
Which is a synonym for impossible. As far as the latest serious analyses have
shown, data centers in space are a pipe dream. Starlink’s total addressable
market was also shown to be way smaller than expected. The IPO in this case
just signals they’re desperate for liquidity and with no clear path to
profitability, if you discount unlikely, major breakthroughs happening very
soon. They’re changing the rules of stock indexes just to shove SpaceX in.
It goes to show how far the establishment is willing to go to save face. Elon’s
company going under would poke an unpatchable hole in the US entrepreneurial mythology. They can’t afford that right now and they rather crash the whole economy.
Could you link to those serious analyses? The ones I've seen don't portray it as a total impossibility? Scott Manley did a runthrough that seemed reasonably positive on the possibility.
Could you build a data center in space? Yes, absolutely I am sure there are no physical barriers. We have computers in space now, and those computers have telecom links to Earth.
Without even going into the numbers, terrestrial data centers have significant cost advantages. They don't have to spend $$$$$$$ to get to orbit. They can upgrade and/or fix components easily (likely safe to assume a hypothetical orbital DC would plan to never replace anything). They don't have to pay for the full capex of their power generation facilities. Lower-latency Internet. Heat dissipation is a (possibly unsolved?) problem. For every input cost to a data center, moving it to orbit massively increases that cost.
From a pure engineering standpoint: orbital data centers are not optimized to solve any common problem faced by data center operators or users. Permitting can get difficult in parts of the US, but at least permitting is a solved problem.
I think you're understating the permitting problem - it's a major reason for the very large/rapid price hikes on power in the PJM region, and the populist backlash against data center construction, including moratoriums on DC construction. The difficulty in getting new electrical generation interconnected in many parts of the US is one of the major marks in favor of the plan.
I'm not understating it. But I'm not buying the line that suddenly it's impossible to build industrial buildings in the US. I am realizing that there are thousands of jurisdictions in the US with wildly different permitting regimes, and then hundreds of other countries in the world that might be more welcoming.
But let's say they need to stay in the US. Are DC operators offering to buy down utility capex costs so that existing residents don't see a spike in rates? If not, obviously that is going to create opposition as nobody wants their utility bills to rise rapidly. It would probably be cheaper & easier to e.g. write a check to Southern Company to prevent rate hikes directly tied to their DC than to put a DC in space.
The math also barely pencils? IF Starship hits its $100/kg, getting a single rack of servers to orbit will cost ~$100k. A 500MW data center might have ~5k racks, so ~$500m to orbit. SpaceX estimates $100/kg - $300/kg so it could be $1.5B - $2B just to put the racks in orbit, plus the cost of the servers, plus the cost of the actual orbital data center itself, plus the cost of getting the orbital data center to orbit. That's getting into the "hand every resident a check for $100k in exchange for their county approving the permit" territory.
One Vera Rubin rack costs $3-7M and eats something like 600 kw, so you’re probably looking at more like 800 racks for that 500 MW DC. $100k launch costs per rack doesn’t seem too terrible if that’s what it works out to. I’m sure there’s a mountain of solar panels that aren’t included, though?
And it’s not that simple, building out power generation is very constrained, the interconnection queue is years long in many places, and the current backlog for new natural gas turbines is multiple years right now. Fixing the permitting isn’t impossible with some political will, but energy permitting reform is something that’s been bandied around for years in Congress and hasn’t made it across the finish line. EPRA almost made it at the end of last Congress but that session ended before it did. Hopefully it makes it this time, everyone should contact their congresspeople and ask them to support energy permitting reform.
As it stands, most if not all institutional and journalistic research around this topic I would consider compromised because they’re in some way or another financially interested in this becoming the next big thing. Aravolta included. That’s why most articles will counter each hard constraint with a handful of hopeful speculations.
As for pure scientific analysis, like the Scott Manley one, they tend to entertain themselves too much with the physics and mathematics and forget the economics behind it all.
Take Google’s own paper (https://arxiv.org/pdf/2511.19468) that estimates that launch costs, just to roughly match data center energy costs on earth, would need to reach 200USD/kg, which requires a 10 fold cost reduction relative to the current launch costs of Falcon 9. And that is to launch a _disposable_ server into orbit, that will disintegrate after a few years and likely have hardware failures well before that.
And these servers are not anything like a “data center”, and they won’t run the applications that we are already scrambling to find demand in earth. No, these would theoretically run some ultra-niche, highly experimental workloads maybe for NASA or the military. That alone can’t possibly justify the investment, at least not for the retail investor that actually expects a positive ROI. Nevertheless the tech elite and their pet journalists are more than happy to sell this fantasy to the average people.
Hell, I’m still waiting for Project Natick to materialize, Microsoft’s data center on the ocean, which makes far, far more sense than data centers on frigging space. Still they didn’t manage to make that one work in any meaningful sense.
Thanks, I took a look, couple things - the inlet temp on the VR is 45 C, but that’s not the radiator operating temp, you can probably run those chips closer to 90-100 C. And they’re building custom silicon for this, presumably that’ll be one of their design targets. Also, most bit flips should be fine when you’re running inference, you’re presumably running with some randomness anyway. If a node fails/becomes too unreliable, it can be detected and shut off.
Idk, building in the ocean seems a lot harder to me than space. Salt water is ridiculously corrosive, extreme pressure, etc. And one of the main justifications for this is massively increasing the output of solar and making it consistently output its nameplate capacity, which space is great for, and ocean is terrible for. The only benefit for that one I can see is some power savings on cooling, and a whole boatload of drawbacks, whereas we might not be able to keep up with demand with terrestrial power. So I can totally see why they never bothered to complete their subsea datacenter.
They’re definitely not aiming to put niche applications up, they want to run models by the bucketful.
I don’t see how the economics make it impossible? To be clear, I’m not saying that it’s something that’s going to end up happening, I have no idea if it will, but I don’t see how it’s structurally impossible, and I can see some things to commend it if token usage volumes grow like I think they will.
The question for me is just timeline. The "rest of the galaxy" revenue is decades out, while Starlink revenue is now. Most of the 1.75T has to be priced on Starlink working at telecom scale. If not, 1.75T seems like a steal for the first true "Universal" investment...
In space development, I don’t think there are any competitors at SpaceX’s level at the moment. On top of that, they are trying to do something most people would never even imagine: building data centers in space using SpaceX’s technology. If that becomes a reality, they will almost certainly dominate when it comes to energy.
How will they make money? From governments? With Elon's beliefs, few will be able to afford the vacation trips to space, except a few and they can already do this if they wanted, but haven't in droves.
If anything this just proves that the Overview Effect (traveling to space changes you) is just BS, Bezos and the others never changed.
I've watched Patrick's videos for enough years that I know he is not, but I still wonder from time to time. His voice is incredibly flat and uniform, he always uses fake backgrounds and there is extremely high use of jump cuts in his edits.
I'm a SpaceX investor, and from reading the comments here, I think most people here are missing why SpaceX has an outrageously high valuation.
SpaceX's valuation only makes sense if you buy into their mission of creating a civilization on Mars, and that the Space Exploration Technologies Corporation is the vehicle that creates this future. If SpaceX achieves this, it would be the most valuable company ever created. It would be worth $10s of trillions.
I personally believe SpaceX has a 70% chance of achieving its Mars ambitions. So I find the current $1.75 trillion valuation very logical, if not a little underpriced.
If you believe there's a SpaceX won't achieve these ambitions, which I'd assume most people in this thread belong to, then you'd assign a <1% chance of this happening. Then you'd value the company based on it's financials, at a more realistic $200B. You'd explain the 8x valuation gap though a mixture of financial engineering and Elon grifting, both of which I agree are happening.
The current $1.75 trillion valuation comes from the ratio of people in camp A to camp B.
It’s funny, I hear the exact same phrasing used when justifying Tesla’s valuation. “It only makes sense if…” … if you ignore what the actual, physical business does today, and picture it doing something entirely different, beyond its current capabilities (robotaxis, androids, etc)
The difference with this pie-in-the-sky ambition (Mars Colony) is that I don’t even understand how it would be profitable if achieved. What do you get from a Mars colony? What on earth (no pun intended) could you extract from it that would command that amount of value? This isn’t like colonization of the americas, where there was a trove of readily available natural resources to extract and sell back to the mainland markets - nothing is going to get shipped back from Mars any time soon. A Mars colony could only be supported through significant public investment - so is the valuation justified via the expectation that SpaceX will be the primary vehicle for public investment in Mars exploration, or through the centuries-long payback period of founding a self-sustaining civilization? Or both?
My belief is that Mars will be colonized for ideological reasons, not for profit. A Mars colony won't be profitable. But it will be colonized, mostly for prestige, and also because of overcrowding & pollution, which will become bigger issues in the coming decades.
But why? We’ve not colonised either of the poles of our own planet in any real way out of a sense of prestige. Heck there’s huge areas in Canada and Russia uninhabited and these are all a dream to live in compared to Mars.
Turns out the real overpopulation is in places people want to live.
Because I don't believe our species should be trapped this planet forever. If we don't become multiplanetary now, then when? And there is an incredibly short window for us to become multiplanetary. We currently live in a golden era of abundance that will not last, and we must make the most of this time period.
I think most people don't realize how inherently unstable our society is, and how quickly civilization can devolve.
Nuclear war is a huge issue. We've had three conflicts this decade that could have led to a nuclear war. All of which are still unresolved.
> Nuclear war is a huge issue. We've had three conflicts this decade that could have led to a nuclear war. All of which are still unresolved.
I'm kicking myself for engaging with this at all, but that's poor reasoning if you're worried about nuclear war. The risk of MAD forces a detente, if there were a (perceived) hedge against it, that increases the likelihood of MAD happening.
If nuclear war happens, Mars colonies depend on expensive, technical supply chains on Earth that will be destroyed.
We take for granted a whole damn planet where water falls from the sky, food and fuel come out of the ground and there's abundant amount of replenishing atmospheric O2 available for ubiquitous reaction and combustion.
Without resupply from a nuked Earth, you're left with the fact that food, manufacturing, construction, etc all depend on, at the very least, atmospheric oxygen, and Mars will never hold a meaningful atmosphere. Without atmospheric oxygen, and thus combustion, when it comes to supply chains required for existing anywhere, you aren't building infrastructure, you aren't growing food without nutrient supplies, and you aren't manufacturing sustainably, efficiently, or at all.
And that ignores that Martian dust and soil is toxic[1] to life, which requires even more resources to mitigate, remove, keep out/off of people and living things, and even more resources to treat and maintain the soil if you ever want to use it to grow food.
Earth is the one shot people have, and a nuked Earth is infinitely more habitable than Mars. Even the bottom of the ocean is more habitable than Mars. It just does not make sense as a backup option to Earth. And if Mars is a pipe dream, life isn't leaving this solar system and surviving independently as anything resembling humans.
The ecological cost of moving the amount of people to even put a tiny dent in the earth's population would kill more and adjust the number that way than the actual moving would.
If SpaceX is on track to achieve those goals, then why does it need special treatment to be included in fund indexes earlier than it would otherwise be?
"I personally believe SpaceX has a 70% chance of achieving its Mars ambitions."
When will that be? There are so many unsolved problems with Mars that creating a civilization on Mars will probably be decades or centuries away. Creating an autonomous station on Antarctica or the moon is child's play compared to Mars. And we are far away from that too.
The asteroid belt likely contains more easily-obtained rare metals that also don’t have to escape Mars’ terminal velocity.
Reading a comment like the grandparent’s while we’re surrounded by many tangible crises on earth is sickening. Especially many of them manufactured by the same man who the grandparent comment seems to deify (DOGE AIDS funding).
Anyway, I find myself feeling contempt for the people in this industry pretty often.
In the 2040s. The upcoming wave of robotics will push the cost of goods down enormously low, robotics + need for compute + cheap goods will cause a huge increase in demand for raw resources; mining on earth will not be able to keep pace & environmentalists will get generally upset about environmental destruction caused by resource extraction.
People's attention will shift to obtaining resources from outer space, which leads to more demand for space exploration, and then space manufacturing to avoid polluting earth. Then the general sentiment towards a lunar/Mars colony will trend towards positive, and people will desire to run away from political problems on Earth. So significant investment towards building a Mars colony will happen then.
The technical problems with a Mars colony are not insurmountable, it's completely possible to build a colony with 2026 technology, just the cost is too high. Better technology (robots) and innovations (i.e. upgraded Starship) will push the cost down.
The "most valuable company" ever created when talking about a future around 2030-40 is a mindset pre-singularity. Sounds like a caveman back then saying that in 500 years, if their group keeps growing, they will be able to control a whole continent, and have more access to good quality rock for pointy daggers, completely ignoring the fact the world will change in ways they can't fathom at the time.
A civilization on Mars would not create value. It would be a money incinerator. Mars is a shithole with nothing to offer humanity economically or in quality of life. Quite the opposite, in fact.
250 years ago, you could make this exact argument about the British colonization of Australia, and it would be entirely correct. The early colony was a pure fiscal drain on Britain with almost no return.
We also have a lot of easily accessible resources via agriculture and mining, things Mars does not have. And even if it did having mining potential, the cost of returning the goods to Earth would be wild.
is there an article or document covering the value proposition and realistic timeline of Mars colonization available to read somewhere ? i certainly think it's good for humanity to do it but as a casual observer i imagine it will cost a lot of money over the next ~20 years as opposed to making any.
I don't know one off the top of my head, I learned most of my information about space and SpaceX from youtube, mainly from Scott Manley and Noise In Space.
Was the British colonization and funding of Canada, New Zealand, and Australia profitable? All three colonies were not profitable for decades after their formation.
Yet looking back, colonialism was probably the most profitable venture ever undertaken. All three of them ended up becoming key allies and instrumental trading partners.
Not a good metric imo. The majority of people have no interest in, and have no idea what's happening at SpaceX or in the space industry in general. Any predictions they have are based on vibes, not evidence.
I wouldn't follow the majority for advice. They're not aware of what's happening. Take Starlink V3 direct-to-cell as an example, I believe less than 5% of the general public even knows what this is (even after a massive marketing campaign), and even fewer understand how it works.
Issue is, Musk is making pretty much every one invest by forcing indexes to bend the rules and include SpaceX into their ranks thus forcing index funds to buy at the early public valuation of SpaceX.
It's not a fake quote. It's an extreme distillation of the apparent core of your argument. It's how it appears to me. It's related to what you wrote in that someone read it and came away with that conclusion.
The thing i'm not looking forward to is SpaceX will now be beholden to Wall Street. With Startship testing being so public, there's a whole cottage industry of youtubers watching their every move, there's going to be lots of ups and downs on the stock price.
I get the feeling investors are going to watch Starship explode and explode while it's being developed without understanding the trial/error, hardware rich, approach SpaceX takes and not like it. That's going to hurt the stock price and therefore hurt the company. Before, when Starship exploded people just pointed and laughed at Musk but SpaceX kept going. For better or for worse it doesn't really bother him, don't forget he got literally laughed out of the room when he proposed a re-usable orbital booster. Now those people actually matter because they'll sell/short and kill the stock price and therefore materially hurt the company. I replied to a sibling about Tesla, remember the shorts nearly killed Tesla before it even had a chance. The technology was there and the concept proven but the shorters almost killed the whole thing. IMO Tesla went public way too early and it almost cost them everything. idk what SpaceX has to gain by going public, are they hurting for cash? Based on the pace of development in Boca Chica it doesn't appear so.
/not a finance or investment expert just my observations and feelings
> get the feeling investors are going to watch Starship explode and explode while it's being developed without understanding the trial/error, hardware rich, approach SpaceX takes
Investors have been doing this since SpaceX first raised outside funding. American capital markets are not that risk averse.
tbf those investments weren't traded on a liquid market, and I suspect Founders Fund are less worried about short term setbacks than your average mutual fund or mug punter.
But of course we also know that Musk-run public companies are immune to normal dynamics of worrying about next quarter's returns (or even worrying about the CEO publicly torching his brand equity) so the very last thing I'd imagine happening is SpaceX becoming risk averse and profitability focused
Those funds have more capital to allocate to profitable publicly traded companies than they did to speculative bets on unicorns, and more importantly now have an easy offramp if their investment thesis isn't as aligned with the Kardashev scale as the true believers.
The risks they care about will be more "Starlink growth slows" or "orbital datacentre has horrible operating economics" than "Starship launch anomaly" though, and I agree it'll make zero difference to how SpaceX operates both because Elon isn't afraid to tank valuations and because retail loves him unconditionally. And the bull case for SpaceX is still stronger than the bull case for Tesla which happily trades at valuations north of $1b.
I expect that the amount of "good influence" institutional shareholders can exert on SpaceX leadership and operations is about zero, and the amount of "bad influence" is more than that. Thus, the only way this can affect SpaceX's leadership is negative.
A big part of how SpaceX did what they did is that they weren't beholden to institutional pressures. They could afford to take major risks. This may change when a pool of investors who don't care about space and just want the line to go up end up being stakeholders.
None and that's the problem, the shorts almost killed Tesla for no other reason than being short. I think watching Starship after Starship blow up while being tested when investors don't really understand what they're looking at is going to be bad for the stock price. In a public traded company so goes the stock price so goes the business.
I wonder if this ends up like Tesla - China copies it and makes it cheaper -
GG if not protected by huge tariffs/bans. It seems like US these days is just a testing ground for new tech that later scaled further and optimized in China. Are there any hard moats protecting SpaceX from that?
SpaceX does internal sales of stock twice a year, so there will not be pressure from existing stockholders to sell. But there will be buyers. SpaceX is/was a great brand (before it became SpaceTwitter).
The Artemis II launch, despite the heat shield risk, is clearly a way to hype up the general retail investor before the SpaceX IPO. I really hope that nothing bad happens to the astronauts up there... but if it does, shame on NASA, and shame on everyone else involved. Big money, unfortunately, always wins.
It's going to have a big impact on short-term volatility, but it's going to take a big drop in prices in a month. But I think it's a company that needs to be invested in the long run.
I feel the global instability could easily be very disruptive to SpaceX. Just imagine if Russia gets vindictive and starts destroying these satellites or blowing up their satellites to create orbital debris that could knock satellites out of orbit. A really bad solar storm could be devastating.
Just saying there are some decent risks, and pricing it at 1.75T IPO seems risky enough. I would not take that gamble.
> imagine if Russia gets vindictive and starts destroying these satellites
Sounds like lots of demand for new launches from the military-industrial complex.
> imagine if Russia gets vindictive and starts destroying these satellites
Space is big. It’s almost always cheaper to individually target satellites than to try and blanket orbits. And with Starship vs ASAT, the cheap drones are the satellites. Russia would bankrupt itself trying to sink Starlink and Starshield.
(They would also set a precedent that would let the U.S. deny China a LEO constellation.)
> It’s almost always cheaper to individually target satellites than to try and blanket orbits.
The problem is that even one satellite could start the Kessler syndrome due to how many are currently in orbit, and the numbers are expected to keep increasing rapidly - everyone wants their "sovereign" Starlink now that it has been shown to be feasible and performant.
It is insane to think that this year multiple "startups" are going to IPO at valuations greater than that of the largest company in the world in ~2018. We have printed so much money in that period that these numbers have completely lost touch with reality.
Now or never. If the stock market goes bust because of the war then most IPO windows will close or will result in a much lower subscription rate. You can expect a flurry of these in the next few weeks.
> In the United States, SpaceX accounts for five of every six launches into space, according to Georgetown University’s Center for Security and Emerging Technology.
In June? That is why Trump is talking about an Iran ceasefire. Replenish the weapons, flip some companies to the public, then start the war again. Bonus points for disrupting EU energy supplies for longer.
Donald Trump Jr., who already profited from groq, is invested via 1789 capital:
Not to mention that the PayPal mafia is now playing ball with respect to Epstein (Tracey was on all-in downplaying the whole thing), so Musk himself will be in good graces again.
> Money raised from a public offering would most likely help SpaceX finance its long-term goals of launching artificial intelligence data centers into orbit, creating a colony on the moon and getting humans to Mars. These are expensive and unproven endeavors that may take years and billions of dollars to achieve.
Oh my god. When a journalist writes like any of this is remotely plausible within “years” and “billions” of dollars it really downplays the near impossibility of these events happening.
Genuinely: regulation. Every other benefit is conceptual at best. If SpaceX controls the entire heavy launch market _and_ they control data-centers in space, then absolutely no one on earth is in a position to control or regulate such a data-center except SpaceX themselves.
I'm not arguing that it's a good idea, but that is the idea.
It's a convenient way to merge AI and spacetech, two hot topics to the retared investor class that rules our world. The reality and feasibility of it doesn't matter.
[All: please don't post unsubstantive comments to HN. You don't have to like $Company or $Person, but when the banned accounts are posting more thoughtfully than the rest, that's... bad.]
because its not accurate. they're milking the market. not dumping on the market.
they're only (sic) going for 75 billion. with an evaluation in the trillion mark.
This is just more speculative investment. you'll see this again in another year or so with a bigger evaluation on it... it's how the modern economy now "works".
maybe it's the histrionics? Thse personalities are inevitably inflating their own balloons in order to cash out, but that doesn't mean the reality is these companies are worthless. The downvotes come from comments like "OpenAI is trying to dump their garbage". At best that's a silly thing to say. We can argue "fair market value" but it's not zero.
What is the fair market value of an AI company that loses >$10B/year? Of course they have assets that could be stripped and sold for profit but public creditors come last. It's also going to be no where near their private valuation.
On one hand I do take some enjoyment of suckers being fleeced. But on other hand I know who this all will benefit so I really can't do that.
As whole I find that valuation just insane, but seemingly if you only offer tiny enough slice with enough hype it might bump prices to something that really make no sense at all...
The suckers being fleeced are every pension fund in the world. They're demanding the S&P includes them faster to force ETF owners to buy in before the price tanks.
For most people their talent and expertise does not involve investing. That's why pensions and 401ks exist and why S&P/nasdaq have rules to protect the public.
You may wish it were not so, you may find it inelegant and infuriating and unfair, but it is a fact that retail investors nearly all underperform the market over a long enough time horizon. Maybe you are built different but for most of us it is very rational to take the market return for “free”.
Do understand, though, that market return will struggle to achieve 9% for the coming decades. A 9% annualised return would put the US stock market at 50% of world GDP in 10 years (edit: 20) and something like 90% of world GDP in 30 years (edit: 50 years). Cost of goods, and your customer's money, both have to come out of global GDP too.
(The current value of around 25% of global GDP doesn't even include the 1.75 trillion SpaceX which alone would be another almost 1%...)
ETF expense ratios are small but still mean retail will underperform anyway. It's an unfortunate situation all around.
Why are they being fleeced? If people didn't want to buy SpaceX they could buy some other ETF that doesn't include it. If there's enough of a demand I'm sure ETFs will be offered which include all the big indexed stocks except SpaceX.
Yes Americans will definitely move their 401k over this /s
Its fleecing because it basically takes everybody's money and gives it to support musk's money loser xai. SpaceX net profit 8 billion per year (previous years much less) and Xai was net losing 1.5 billion per quarter.
Unless you literally have nothing, YOU are one of the millions being fleeced. Pensions & retirement funds, any index fund that comes remotely close to technology, any equity you own in a venture in tech, any industry that via very short linkages is connected. Good luck avoiding this.
You only get "fleeced" if the stock crashes. If it's that terrible of a stock then the price will be low. As far as SpaceX goes, I think there are far riskier companies with little prospect of doing well.
They are only selling a small % of the shares in the IPO and subsequent weeks.
With a tiny float the price will almost certainly go up as a limited number of enthusiastic investors buy in. The plan is to then line up the lockup expirations so they sell into the index re-balance, a ton of new non-discretionary demand to match the new supply.
1.) All the image generation models will do that, xAI is just the one that caught flak for it
2.) SpaceX made $16B in profit last year, despite its enormous R&D costs and is on track for $20B this year, despite the losses from AI. People still wise to invest in Google despite their AI business still being a huge loss
> 1.) All the image generation models will do that, xAI is just the one that caught flak for it
Perhaps. But that's a huge undersell. "just the one that caught flak"? No. The one with nearly zero guardrails. Where users could trivially create underage porn, bestiality, etc., using prompts that you could put into any other AI and just say "does this image generation prompt seem likely to create legally problematic content?"
Not that I approve of that, but when image generation was hot and new, the insane amount of refusals I got from the major ones for apparently no reason, exacerabated by the general slowness, quotas and inherent trial and error workflow has completely soured me on them.
4 different levels to unpack: Literal IPO question, Epstein cover-up (gov. won't just do it), aliens (X-Files) cover-up, and finally the Elon-Epstein connection (email files thread to host him at SpaceX).
Parent commenter is making a joke about the fact that, in the title "SpaceX Files to Go Public", the word "Files" could be read as either a noun or a verb.
1. Elon is a genius, a real world Tony Stark.
2. How dare you! You're just jealous!
3. Ok, regardless, he's done more to advance EVe and space travel than anyone else alive.
4. Oh God, he's going to cripple US development of EVs and rockets, isn't he?
5. Eh, Mars was never happening in my lifetime anyway.
If you're not getting downvoted at least some of the time on HN you're doing something wrong. I've caught plenty of downvotes myself for arguing that Mars was never going to happen and is just a recruiting tactic for SpaceX to hire idealistic young engineers and pay them sub-market wages because the dream of Mars is part of their compensation.
All the hardware they've actually invested in, including Starship, is in fact foremost for launching satellites into Earth orbit. Starship in particular is optimized for this.
Self-driving is a thing. Full self-driving, commonly known as "level 5 autonomy", has been claimed for over a decade. These claims have been made so many times it has a dedicated Wikipedia page!
But those levels are kind of bullshit. If a car is autonomously driving but needs an attentive driver in the seat for legal reasons you're stuck at what, level 2? Even if you never actually need to override/intervene?
Teslas running the latest hardware (manufactured 2023+) and software are actually nearly there, IMO. I used it for two months and never needed to intervene. It's not perfect yet but I believe it actually drives better than most people now.
However, the millions of Teslas on the road with older hardware are absolutely useless in comparison where you will need to intervene a lot. The latest FSD software only works on the latest hardware so these older cars are stuck on either old FSD versions (which are proven to be bad) or get slimmed down versions to fit lower specs (which we know wont be as good). It's unsafe and they really should disable it for all of the older vehicles and issue refunds for people who paid for FSD.
Correct me if I'm wrong, but I remember stage 1 being maybe 2011. There were plenty of Musk critics back then, as there are now, but they seemed to have been completely wrong on pretty much everything. I remember people saying he was a charlatan whose technology would never work and even if it did it would never get mainstream market penetration. I feel like you would have smugly chuckled if anyone told you the following things that are true:
1.) Tesla cars will be ubiquitous on American roads
2.) The best selling model of car globally would be a Tesla
3.) Most cars would be made in the US, yet still be price competitive with foreign competition
4.) SpaceX rockets would be re-used multiple times per week
5.) SpaceX's launch business is highly profitable despite lowering prices to less than 10% of what they used to be
6.) SpaceX launches more mass to orbit than the rest of the world combined
1. Tesla has sold ~2.5-3M cars since 2017 in the US. There’s more than 200M cars on the road in the country. Ford has sold more F series trucks in the last 4 years than Teslas have been sold ever.
2. The only reason Model Y is the best selling car in the world is because 3/4 of the sales come from the US and Tesla only sells one model of SUV. Other brands sell many different variants and multiple models in the same category across the world.
3. Teslas are not at all competitive in other markets. BYD is eating their lunch.
4-6. Yes, but the global market for space launches is projected to barely touch $30B by 2030. Global competition for this market is only getting fiercer with multiple US startups, India, China and more recently France.
Now let’s talk about the failures.
1. Nueralink
2. FSD
3. Roadster
4. Cybertruck
5. Hyperloop
6. $2T in Doge cuts
7. Robotaxi
8. Starship
9. Tesla Semi
10. 4680 battery
11. Boring company tunnels
12. Bots that were going to disappear on Twitter
The list is very long when you actually include all the data points.
Tesla was founded by different guys, Musk just forced them out.
SpaceX is indeed very cool, but not because of Musk. He just put his name on everything that might have been cool, even if dumb (remember Hyperloop? I always wondered on what grounds PR teams associated Hyperloop with Musk, as the idea was very old, and he didn't give it any money -- what relation he even had?)
I've heard from SpaceX insiders that they don't like the guy very much. SpaceXers do cool stuff, and then Mr. Musk comes in and makes everyone believe it's he himself done all that.
Elon will announce roborockets that pick you up and fly you to Mars in under 12 hours while you hypersleep in the ExaShip. Production starts definitely next year.
I mean for some reason this was downvoted, and your answer is sarcastic, but my question was genuine. As far as I can tell, SpaceX's business model is doing government contracts, and selling space internet, and they had serious cashflow issues before, I mean building Starship has brought them close to bankruptcy multiple times.
They would need a very good story to sell to investors.
With $1.75t valuation & ~$16b in revenues, that's just over 100* revenues. SpaceX recently announced $8b in EBITDA, but I don't think it's a healthy metric for such a hardware-heavy business. Or, like Charlie Munger calls it, BS earnings.
Even if you give SpaceX the benefit of the doubt and assume they'll eventually settle at the profit rates Apple, Google, etc. have (~25%, check it), it'll be $4b in annual profits holding up $1.8t in market cap or roughly 450 PE ratio.
And that's if we give them the same great odds for profitability as America's most successful and profitable firms.
In summary, in the short-term the stock might very likely shoot up to $3t, but in the long-term, it doesn't look very healthy.
Tesla valuation is about to crater and take most of Musk wealth with it so he needs the over valuation of SpaceX before the other rocket competitors can show that they can replicate what SpaceX is doing at cheaper prices.
You don't count R&D as an expense per GAAP, so...
They have claimed $8B in EBITDA, also leaving out the amortization of R&D costs.
Those aren't audited numbers, as far as I know.
*they actually use "Adjusted EBITDA" which is even more nonstandard and means they define the accounting however they want!
90% of the valuation is about Golden Dome
I'd always wanted to view affairs from a different lens, though I often feel the people who think everything revolves around bond rates or inflation numbers can miss the social picture of why things happen.
The most-powerful ones for individuals are the micreconomic mechanisms. Understanding how leverage, tranching and moving risk (and reward) across stakeholders and time, work, for instance. The necessary mechanisms and tradeoffs one must make, as well as the ones one should.
If you're looking for a formal model, it's the balance sheet. But not the accountant's. The financier's. Sources and uses, and uses and sources. Payments in, payments out. How do they balance over time; how do they change exposures to different layers of economic and legal control.
The primitives of these models are transactions and people. When you look through them, they're defining human wants and ambitions, faults and fears, patience and mortality.
Maybe some decent revenue offering sat to cell for the traditional carriers.
I suppose "data centers in space" is the current answer but again, I'm suspicious about its feasibility.
Barring that, until we have another "killer app" besides Starlink, like a giant orbital space station or a moonbase, I'm curious whether there is enough demand.
We used to value businesses by their current returns, usually dividends paid to shareholders. And we treated any statements about their future plans as interesting but not something anyone should trust.
Now we value stocks on what their price will do in the near future, because the primary return to shareholders is an increase in share price, effectively speculation rather than dividends as the method of returning value to shareholders. So we're incentivising companies to be constantly pushing their share price up (rather than paying decent dividends), which does bad things to both the company and the economy as a whole.
It's not how the system was intended to work and we find ourselves on a treadmill of constant growth that is killing everything good.
So of course we price businesses based on the expected long term value of the shares, as best as we can guess it. But the fact that a company degrades in value as it "overgrows", and engorges itself to become an entity that can't innovate or do anything efficiently in itself goes into the price too. It's not as if a place like IBM doens't want to grow: We just know they won't.
As for speculation rather than dividends, I suspect the real medium why this happens isn't just need for infinite growth: Again, as growth expectations slow down, price moderates: See Paypal vs Stripe. The issue is mroe of a principal-agent situation, as it's very difficult for the median shareholder to, say, force Zuck to stop spending money on the metaverse. And it's not just at the top level: We have a lot of incentives in organizations for people to push for more hires, even when there's very little value to be had. Anyone with a long career can see how much less tense a growing company is that one that has decided its headcount is stuck for a long time, or possibly shrinking.
Principal Agent problems are just much more annoying to put a blame on, because instead of being able to blame some exec all on their own, we get to look at ourselves too, and how what is good for us differs so much from what is good for employers too. The blame is spread thinly, and the behaviors that would lead to more efficient companies are also worse for workers. Then it's suddenly people easier to like, and we don't like where "try to be profitable at the most optimal size" takes us.
Investing in future prospects encourages companies to plan for the future, rather than extract what they can from the present. The stock price is a big motivation for execs, so they can only invest in R&D if the market understands why it makes sense to spend money now in expectation of future profits.
Only boring stable companies that have no growth like Coca-Cola make sense only valuing without further growth.
The post I was replying to was saying that SpaceX had no growth and therefore little value. That's a mindset that sees companies as speculative assets that are only valuable if their price is set to change in a way that a speculative profit can be made.
SpaceX is making money and doing well, the business fundamentals are working out, and it is valuable because of that. If it turns into a boring, stable, company then that's a good thing - it's less likely to spend $10B of shareholder funds chasing some sci-fi pipe dream (instead of, say, spending $1B testing its assumptions first) in the hope of continuing to be valued as a "high-growth" stock.
The problem with SpaceX is that its valuation is almost entirely driven by its expected future growth. For 2025 SpaceX reported EBITDA of USD 7.5 billion. Other mature aerospace companies (Lockheed, Northman, Airbus, Boeing etc.) are currently valued as ~19x EBITDA (i.e., Market Cap / EBITDA is ~19x). But SpaceX is being valued at 166x EBITDA (USD 1.25 trillion market cap / USD 7.5 billion EBITDA).
What drives this difference in valuation? The answer is quite simple, investors expect the EBITDA to grow and quite rapidly. EBITDA could grow via higher margins (EBITDA margins is EBITDA / Revenue, and for SpaceX it is already a decent 50%), but even at 100% EBITDA margin (i.e., zero operating cost) its valuation multiple would b 83x EBITDA. So the only way to justify SpaceX valuation is if its revenue grows and gorws rapidly.
A quick back of the envelop calculation would shows that investors expect SpaceX revenue to grow at minimum of 65-70% annually for the next 5 years. If the revenue grows at less than that the investors are unlikely to earn a good return on their investment.
Data centers in orbit certainly seem like a pipe dream, but SpaceX certainly has the technology it needs to put them there, and that's a huge competitive advantage (like it was for Starlink) if they do turn out to be feasible.
Starlink Mobile supplements this, it's simply cheaper for mobile providers to partner with them than do their own buildout. Currently only 5% of the earth's surface is covered by cellular signals. Starlink will push that up to 85+%, and is backward compatible with existing cellphones.
In a nutshell: they're serving a market that has less money to spend using more expensive tech than the current industry leaders. Maybe I'm wrong but it doesn't scream "massive profit".
Container ships, military vessels, even fishing expeditions could enjoy an internet connection and cell service.
I think SpaceX is an incredible company but at this valuation I’d expect it to have something as pervasive as the iPhone or Nvidia chips. It seems to have only small niches.
SpaceX has the lion's share of the world's launch market, if you include Starlink.
https://x.com/FutureJurvetson/status/2038811249232732275
Frequent flyers choose their airlines for a lot of reasons - which airline has the most direct flights from their city, who has the best frequent flyer program, etc. The latency of the Internet is seldom a factor or the difference between 10Mbps and 50Mbps.
Non frequent flyers just buy the cheapest flights. The major three airlines make money off of business travelers, business and first class flights and credit cards.
I'd be interested to find out exactly where this cost exists. I would expect the majority of the cost (especially in rural/mountainous areas) to be more with power and backhaul, rather than the physical radio gear. Because it's rural, you should be able to easily just use coverage bands (ie 850 MHz or 900 MHz) with relatively high transmission power. This would easily be able to cover 300 km2.
Because of the higher transmission power, and the fact that the tower would be in the middle of nowhere, wouldn't the OPEX be higher, with smaller numbers for CAPEX?
Cell towers aren't very expensive on an ongoing basis, but every few years you're rolling out the next big technology (we went from analog to 1x to 3g to LTE while I was there) and it's a headache.
The question is not if its a good business, the question if its a 2 trillion $ business, and if you only cover the 95% of earth without coverage. That more like a couple 100 billion $ business at best.
Starlink mobile is for rural areas, and the other 90% of the planet that's not well served by traditional terrestrial networks.
And 40% of earth's population live in rural areas, so there is a large market for this kind of service.
You're talking about the wrong product.
I am talking about Starlink mobile, their direct-to-cellphone mobile data offering, not Starlink internet...
Don't get me wrong, that fucking great business, but its not 'replacing terrestrial ISP' level great.
Did they? I don't really remember that tbh.
They were off by 100 million.
Even until the 90s some telcos believed that cell usage would never eclipse landlines which would remain the base of their business. It sounds ridiculous today because cell numbers outnumber landlines almost ten to one and have been dominant for over two decades.
Rural areas were the last areas to join the mobile networks.
This is just a practical thing though; why would you build a tower for a community of 900 people when there are still gaps in the major metropolitan areas? It can't all happen simultaneously regardless of how badly we wish it could.
TAM: How big is the market for high speed internet that can pay $1200+/year and isn't already well-served by comcast/at&t/etc? And of course, this is all with finite spectrum too. So you can't serve the major cities.
No doubt there exist buyers. But rural Montana doesn't have that many households. Add that 5 year replacement cycle and Musk's Trump alignment that has Europe building their own for security reasons.
These are US telecoms, the satellites blanket the entire Earth at all times. Lower ARPU, but still. Also, it seems like they're swallowing a large percentage of flight/cruise/military internet. And direct-to-cell data coverage of the entire Earth.
> They also have the most advanced internet infrastructure in the world and are poised to replace legacy ISPs and even mobile carriers in the coming decade.
That's quite the claim. I believe Starlink is a great business, the largest sat business for a long while to come (unlike space datacenter) but even if you are, very, very bullish on it, its not enough to justify the price.
You basically need to believe that:
- Launch market to 10x and grow faster then it ever has for decades
- Starlink goes from already being amazing systematically crushing terrestrial competition.
- xAi wins the AI race (this is almost absurdly optimistic)
- AI data-center becoming a insanely thing (also absurdly optimistic)
And even then this is hard to justify. And I certaintly don't believe 3. or 4. And 1 is a stretch. And while I believe in Starlink continued growth, terrestrial infrastructure still has lots of advantages for cities, where most people actually live.
https://youtu.be/8rS3fTbC7TE?is=TGpEdM2Y7sknP-cW
The sad reality I'm coming to realize is that there is very little real and quality analysis, critical but with open eyes on the future. Most of it is just pandering to crowds. The war in Iran is the latest example - you have one side saying Iran is almost done, and the other that they're winning. Who's right? Doesn't matter, being correct is not the point.
I'm convinced we're in some kind of propaganda machine right now.
Rafah comment says it all haha.
The IPO will go great, because the company will float a fairly small issuance. The big shareholders will not immediately sell. They will hold on and maybe even buy to support the price.
Then, after 15 days, it will enter the indexes and everyone's 401k will start auto-buying this stock.
You might say this is an obvious flaw in how the indexes work if they start immediately accept a brand new IPOed stock with limited float. You'd be right, which is why they won't list for a year.
At least they wouldn't until Elon got them to change their rules: https://www.bloomberg.com/news/articles/2026-03-30/nasdaq-cl...
Nevermind SpaceX, which at least have some importance for US defense industry, but xAI ? We will be investing in Elon's private venture, at the price that he himself set and which is at least 2 orders of magnitude too high...
It’s being extensively talked about and debated. It hasn’t entered the mainstream discourse because it’s too technical.
It needs to enter the inbox of a grand jury docket.
(actually, 46,565.74 right now)
Gotta be accurate. Just saying 50,000 implies her incoherent rant was even a little bit based in reality.
https://youtu.be/WK12_IkAj2s?t=94
US social security on the other hand is exactly as you describe pension systems in "socialist europe". Money taken from current workers and invested in state debt.
https://www.mercer.com/en-au/about/newsroom/mercer-cfa-insti...
But then you'd also be basically betting against the entire tech sector, and really the entire US economy and against the value add of AI. That kind of bet is much more difficult to swallow.
I am confident some companies will make bank with AI. I am also confident xAI is not one of those.
It's as if you said "if you don't think Lycos is a good business you don't think search engines can work in general".
This is only further demonstrated by their excellent leverage of Gemini. Google continues to succeed at being Google.
No, I’m no Google fan, but it’s revisionist history to say they didn’t have the best search engine.
The problem was that yahoo killed it. They shut down its crawler and it started going stale.
Plus they didn't have as good a solution to index spam as Google's pagerank.
It was basically a story of product developing a lead, getting sold for a quick buck, then the acquirer shuts down innovation and tries to milk it, with bad timing because google was chomping at its heels.
I'm not trying to rewrite history either, but this makes me wonder how deeply the Google lore really affected some people.
I'm in my late 30s, so fair enough. I was there, but not really "there" to see what happened. My understanding and memory was that there was good word-of-mouth in the 90s because it was marginally better. By around 2000, the media was strongly pushing this narrative about Google being this great technological triumph with their PageRank algorithm. This coincided with AdWords being rolled out, dotcom hype, and people generally taking SEO more seriously while Google was best positioned to take advantage.
Now, I'm not saying I know much but I'd be very surprised to hear that nobody else ever thought about setting up a scheme with Markov chains to measure "link juice". That seems like low-hanging fruit for just about any students excited about the topic, but again what do I know. To me, the Google story was always more of a business success than anything else. They got so much praise and so effectively leveraged their nerd cred that people optimized for their results and it all snowballed from there.
This time around with LLMs, they can't claim to have the best. The space is way too volatile. What they can say is everyone uses it because everyone eventually searches on Google, if not by default. Google just has to be good enough and the easiest to use.
Then Google hit. Materially every person who used it stopped using their previous favorite search engine within 1-2 uses. It spread like wildfire. It was fast, accurate, and the results weren't cluttered (aka lightweight, aka friendly for people on dialup). Some competitors at the time were showing display ads on search results pages.
Google did not have to advertise that I can recall. It was like one day, search was like the auto market : lots of makes, types, etc. The next day it was all Google. It happened really fast in my recollection.
And to your point -- as far as I can recall, the big competitors simply did not try to clone Google. They kept their cluttered pages and did not optimize performance. Excite pivoted to home Internet via a merger with @Home.
A couple of close analogs you may have seen up close. AWS for having a lane virtually to themselves for a long time. Azure & Google & IBM etc. didn't really even suit up until AWS was entrenched reminds me of Yahoo! etc. sticking to their portal strategy well past its sell-by. ChatGPT for the speed of adoption. Google was like a combination of these two.
The word of mouth was real. I was working in tech at the time, and had Google recommended to me by a mate. I tried it, and it rocked. This would be about 1996, I guess, somewhen around then.
Every techie converted to Google, and we converted our friends and family. Sure they got media coverage, but remember at that time journos had very little clue about tech and relied on their techie friends and family for tips about what was going on. And, obviously, the internet was the big story at the time. I would absolutely not be surprised if it turned out that Google paid nothing for media coverage and were fighting off journos clamouring for interviews.
As far as I'm aware, PageRank was a completely unique innovation that no-one else had done or tried before. There may have been imitators, but they never got the traction that Google did.
By 2000, and AdWords and all the rest, Google was already the dominant search engine, at least with tech folks. SEO was just beginning around this time, because of that dominance.
And yeah, Gemini is an also-ran, despite all the money and tech expertise Google have thrown at it. It'll be interesting to see if they cancel it, like they have other products that have not done as well in the market (G+ being the classic case). Same for Meta (and, well, Meta).
The internet had just blown up. CompSci programs at major universities were still teaching Fortran and COBOL. Linux had its very first release in 1991 I think (when the initial Google folks were in high school), people knew what BSD stood for back then, web protocols were not horribly dissimilar to the Wild West, and don’t even get me started on web standards.
In addition to all of that, they actually fixed search. There was this golden era where searching worked. The other responses you’ve had so far are much more enlightening than mine, I’m spent. I didn’t meant to come off as an ass, it’s interesting to hear your perspective on this.
Surely you're going to buy long Put options with that confidence, right?
And if the thesis of "it's going to look good for the first 15 days" holds, you can indeed be very profitable by e.g. buying ATM puts. (The problem being that markets don't like sticking to time tables just to accommodate your investment thesis ;)
So yes, you'll be able to take a bearish position fairly shortly after the IPO.
The company is irrelevant. The focus should be on the money making scheme
Hasn't the surprising lack of value add been discussed with increasing frequency?
Politically, it differs quite a bit from other models.[0] It's right leaning, although it's closer neutral than other models, defining what neutral is a challenge though.
[0]: https://arxiv.org/abs/2603.23841
I don't think calling defining neutral a 'challenge' does the question justice - neutral will always be context-dependent, and what may be in the center of the Overton window of one society may be unpopular or even highly illegal in a different society.
twitter data is 70%+ bots (probably more than that now)
Maybe that shows up as being more right leaning than the competition.
see: democratic people's republic of korea, the chinese communist party, american first
SpaceX are widely reported to be planning to raise $75Billion in new capital. It may seem small a % for the valuation target. However that is about 3 times previous highest raise of $29B when Saudi Aramco went public few years back. The market simply may not be that deep[1]
There is a good chance this one becomes the Wework of this decade. The valuation, amount being raised, cooling interests in AI, and middle eastern capital changing priorities, interest rate outlook for the rest of the decade. These are all strong head winds to overcome even when not raising the largest ever amount in an IPO.
That is not say that it is destined to fail, Elon is excellent salesman of vision when fundamentals are weak, There is no better proof than Tesla P/E .
It is by no means clear this would be successful or not. The valuation, funds being raised, future growth potential are all not based on just SpaceX core businesses which would have been an easy sell.
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[1] i.e. it could be still under-subscribed even if everyone buys into the vision, growth projections, is comfortable with valuation gets fully onboard including retail.
Even in this best case scenario SpaceX would have to sell at the lower end of the target range or go even lower and still end up being short matter what, because there could simply be not enough money in the market.
SpaceX has dramatically lowered the cost of launching things into space. They are still the leader here. They can put a kg into orbit cheaper than anyone, even heavily subsidized state operations (EU and China).
Their order book continues to be full. Every single launch vehicle they roll off the line was pre-sold years ago, including its re-use flights.
I agree that Elon is their biggest potential problem and a big risk but their launch business is sound and wildly successful. If you believe access to space will be a growing segment of the economy in the future it isn't exactly a bad investment.
I remember all the people putting Tesla down when they IPO'd. I bought $4k of stock (all I could afford at that time). Sold $100k of it a few years ago, still have the other half worth near $220k. Their numbers at IPO time were garbage and it wasn't clear they would even survive. Then they started shipping hundreds of thousands then a million cars.
YMMV, consider all sides and make your own judgement. Just be careful about trusting the anti-SpaceX case. Even if everyone is technically correct about them it can still be a huge miss not to invest! The future is not static and if they can put the raised capital to productive use the IPO could end up being a fantastic deal. And FWIW I also agree the largest immediate risk is they are over-valued. Only time will tell on that front.
The problem is launch market is not worth 1.5+ trillion though, you need much more than just starlink and all the satellites today to justify that .
You and other early investors who had the opportunity to get in early may come of well in this and it was a good bet then.
However it is hard to see why rest of us should get in at $1.5T, the downside risks are far more than upside potential at this price .
It seems logical that there could/will be far more demand for launch if the price were lower. Prices are quite extreme currently, a standard 3U cubesat (loaf of bread size) is $300k and that's just for orbit.
There could be lots of startups that want to try robotic space mining but launch costs just make that mostly impossible currently so there are only a select few. It's like valuing the Dutch East India company based on the trade volumes in 1603. Of course people are not going to be buying much pepper or nutmeg if it costs them weeks of labor, but build lots of reusable ships, and with each voyage, more people can afford your pepper and nutmeg until it's a common household item.
discounted future cash flows is discounted by risk. There is a lot of risk on growing future revenue is the point.
>seems logical that there could/will be far more demand for launch if the price were lower.
This thesis hasn't played out much in the 10 years since Falcon landed in first 2015.
The non Starlink component of revenue has not massively grown beyond what size the market in 2015 to today. SpaceX isn't lowering launch price to induce demand beyond out being the cheapest just by enough, they would be going lower if cost was the only barrier for more revenue.
It not that businesses aren't possible there at lower launch prices. Starlink is testament that it is.
The problem is that rest of the world is not able to innovate fast enough to take advantage of it even after 10 years. The industry struggles with things like manufacturing satellites at scale or raising money for it, or executing on innovation etc.
What that means for SpaceX is that even if launch costs are cheaper than now, the launch market simply may not grow quick enough for the valuation number to make sense. They would need to enter a lot of new markets directly and be their own launch customer beyond Starlink. This comes with its own set of execution, regulatory and other risks. The data-center[1] in space play is an attempt to do this.
Either DC play or something else, they will need to find and sustain a large business to grow, maybe they will, maybe not.
It is not very clear now and that is a lot of risk so any future cash flow projection has to be discounted heavily.
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[1] I am not qualified to comment on the technical feasibility, however to analyze the company finances that is not needed, it is just one more risk factor, depending on how you feel you can assign 0 or 1 or anything in between.
In 2024 66% of their launches were for Starlink. So it’s not quite correct to suggest there’s a vibrant external market for their product, a lot of it is sort of self dealing.
There is a very large demand for launch services. SpaceX balances launching customers and launching Starlink. It's not like they give every launch slot to customers and then launches Starlink whenever there's an opening they couldn't fill.
It's not like they're subsidizing some experimental internal project. Starlink is the majority of their profits and growing fast.
These people and their endeavors are thoroughly, irredeemably corrupt. It’s nice you got a taste, but their impact on society has been calamitous, and will take decades to recover (if at all).
It's very different from WeWork which was basically just subletting office space with beer taps. At least SpaceX had done significant stuff with the rockets and Starlink.
My comment was that it is possible that by trying/becoming public SpaceX also will go through that same process once their numbers become available.
Wow that was a polite way to say that
So you've got a full year to wait on that index fund, assuming they don't cave.
They have instituted rules and gone back on them eventually (most notably for several years they had a "no going public with different classes of voting shares designed to allow control forever, if IPO is after today" rule that they eventually dropped) but they are generally pretty good about following rules.
I looked into it, but there are gotchas with wash sale rules and taxes. You really need $500k-$1M to avoid tracking errors. End of the day, the overhead seemed more problematic than the problem, so I ended up increasing my global allocation instead.
https://www.axios.com/2026/02/20/ai-goldman-sachs-stocks-ind...
It won’t exclude from regular indexes, but it will exclude from the direct indexing. I’ve been using it to exclude NVDA ever since it peaked (or at least reached the peak valuation I’m comfortable with)
Wealthfront’s portfolio minimum used to be $100k, but I think they have a new direct indexing product with a $5k minimum.
The market simply doesn’t have enough people actively investing because it rewards mass stupidity over generating meaningful returns.
https://companiesmarketcap.com
Can you provide an example of any of the businesses on that are on that list due to "mass stupidity"? They all seem to operate factories, employ many highly qualified people, and make a material difference in many or even most people's lives around the world.
Meanwhile, SNAP has returned -14.98% per year to its shareholders since it IPO'd (Jun 3 2017), and at an $8.27B market cap, it makes up a negligible portion of any broad market index fund, so not sure how SNAP's shareholders have been rewarded by mass stupidity, especially given that the founders still own half of the business. They would have been far better off liquidating their shares and investing in SP500.
https://dqydj.com/stock-return-calculator/?ticker=SNAP
The investment thesis for Tesla is absurd. They built the market cap on hype and it got big enough that it remains a force. It’s a flailing company, kept afloat by bullshit.
The bigger issue is the death of small cap. Massive venture, sovereign wealth and PE funds don’t need the public market capital anymore, so they harvest the vslue and spit out the company late in the value cycle.
Snap, cool as it is, is a social media loser. The investors cashed out their shares to the public, who took the loss.
Maybe, or maybe they are one of the few businesses people want to bet on to be able to create new streams of revenue. Intel used to be big, and now it isn’t. It being big didn’t help stop its demise.
> The investors cashed out their shares to the public, who took the loss.
They didn’t. The biggest investors, the founders, still have almost 50% of the shares. Also, SNAP peaked at $131B in September 2021, 2 years after SNAP went public at $27B.
Would you have written then that “The investors cashed out their shares to the public, who took the loss”?
Of course not. Because index fund investors did not cause it to go to $131B, and they didn’t cause it to go to $6B.
> so they harvest the vslue and spit out the company late in the value cycle.
So SNAP executives IPO’d at $27B, and over the next 4 years, the market cap increased to $131B, which anyone in the public could have benefited from.
Yet now you are saying SNAP execs are wrong for selling their equity over time?
It doesn’t seem like there is any winning here for SNAP’s executives, even though they gave the public the ability to quadruple their money in 4 years. What more can you ask for?
I spent many words explaining that the list of businesses at the top are basically at the top of their game, worldwide.
For general investors if this is going to eventually happen, the earlier the indexes buy in the better. Otherwise more sophisticated investors will buy ahead of the indexes and grab the profit.
Edit: wait, but QQQ is float adjusted?
What are the biggest not-float-adjusted index funds?
If the index fund is tracking some proxy that is float weighted, isn't that what matters? At least when it comes to people's money.
“Industry professionals, including asset managers and institutional passive portfolio managers, were mostly supportive of the Fast Entry proposal and proposed timing,” Nasdaq said in the statement.
15 days vs 90 days isn't some huge shift nor is it inherently some "flaw." These changes have been asked for long before Elon entered the White House.
- buy shortly after the IPO, ideally less than 15 days
- and sell less than 6 months later when lockups would end and insiders are set to cash out?
There are ways to gain exposure to a single stock without directly purchasing shares, options and swaps being the most common. Owning the actual shares makes things easy for the fund operators, but there are other ways.
blind purchases are not going to happen. people assume passive indexing is brainless, but it isnt.
You will be an investor in spacex and xai which it bought.
Fun fact, Xai net loss 6 billion dollars per year and SpaceX net profit 8 billion on a good year (https://www.reuters.com/technology/musks-xai-posts-net-quart... https://www.globalbankingandfinance.com/spacex-registers-tak...)
If you remember xai, it's that company currently being sued for the undressing kids feature (https://www.theverge.com/ai-artificial-intelligence/895639/x... https://en.wikipedia.org/wiki/Grok_sexual_deepfake_scandal) in its flagship product. By the way the feature is still enabled apparently
Is there something about why spacex wants to go public ? if not then this is definitely about xai... to hide unprofitability and offload it on general public ASAP.
This is not a given.
Many people have many different kinds of investments inside a 401k. Your 401k can own a rental property. Or gold. Or, in a more mundane scenario, the Russell 2000.
If it weren't for the glacial pace of plan administrators and plan holding companies there would be an opportunity for a fund provider to offer "S&P500exSpaceX". It's just another index, after all ...
If you own a NASDAQ fund or total US stock market fund, you will have exposure to SpaceX.
This place discusses SpaceX technical things all the time. But SpaceX is not a research lab. It's a company. That does business. And is going public. Taking a little time off from arguing about thrust and payload to talk about their business paratices, lobbying and late-stage capitalism is not only appropriate here...
Look around you. This may be called "Hacker News," but it is run by and for the benefit of a business, YCombinator. Speaking bluntly, if you come here only to talk tech, you're only getting half of the HN value proposition. The value of HN is that it mixes business with pleasure, so to speak. Many people here will either work for a tech business or found one. You can find technical discussions everywhere. Business discussions tailored for tech? That's actually very, very valuable.
Smells like great fiduciary responsibility!
It could be a good thing as it is very diversified but it can also open the whole thing up to a lot of risk factors.
So SpaceX will be listed and soon on the index. He learned how getting into S&P500 index was a rocket ship for Tesla. So he bent the rules for SpaceX.
So when the market crashes. It’s gonna be fast because of a couple of tech companies.
Let’s see if OpenAI has enough clout and billions to bribe SEC to bend rules for them.
Every year US becomes more of a Banana republic.
The real question is what comes first: viable commercial large scale infrastructure in space that might create new demand for SpaceX launches, or the competition?
SpaceX is pitching their own orbital data centres as a ready to go source of demand for lots and lots of Starship launches, but the unit economics of those vs boring old ground-based server racks and solar farms look dubious even before one considers just how convenient a justification it is rolling Elon's loss making businesses into the IPO.
You don't do that without pre-planning or being very very good at what you do, but most of the competition (including those that will fail) is targeting that. They don't need to scale as big or as fast as SpaceX to deliver enough comms satellites to orbit to kill any hopes of Starlink becoming a permanent low-latency connectivity monopolist. Plus of course most competitors in the connectivity space are able to spend a fraction of their overall hardware budget launching on SpaceX...
Without even going into the numbers, terrestrial data centers have significant cost advantages. They don't have to spend $$$$$$$ to get to orbit. They can upgrade and/or fix components easily (likely safe to assume a hypothetical orbital DC would plan to never replace anything). They don't have to pay for the full capex of their power generation facilities. Lower-latency Internet. Heat dissipation is a (possibly unsolved?) problem. For every input cost to a data center, moving it to orbit massively increases that cost.
From a pure engineering standpoint: orbital data centers are not optimized to solve any common problem faced by data center operators or users. Permitting can get difficult in parts of the US, but at least permitting is a solved problem.
A GB300 costs about 70k, a rack is 72 of them.
The cost to launch is less than 2% overhead. Its is extremely feasible.
But let's say they need to stay in the US. Are DC operators offering to buy down utility capex costs so that existing residents don't see a spike in rates? If not, obviously that is going to create opposition as nobody wants their utility bills to rise rapidly. It would probably be cheaper & easier to e.g. write a check to Southern Company to prevent rate hikes directly tied to their DC than to put a DC in space.
The math also barely pencils? IF Starship hits its $100/kg, getting a single rack of servers to orbit will cost ~$100k. A 500MW data center might have ~5k racks, so ~$500m to orbit. SpaceX estimates $100/kg - $300/kg so it could be $1.5B - $2B just to put the racks in orbit, plus the cost of the servers, plus the cost of the actual orbital data center itself, plus the cost of getting the orbital data center to orbit. That's getting into the "hand every resident a check for $100k in exchange for their county approving the permit" territory.
And it’s not that simple, building out power generation is very constrained, the interconnection queue is years long in many places, and the current backlog for new natural gas turbines is multiple years right now. Fixing the permitting isn’t impossible with some political will, but energy permitting reform is something that’s been bandied around for years in Congress and hasn’t made it across the finish line. EPRA almost made it at the end of last Congress but that session ended before it did. Hopefully it makes it this time, everyone should contact their congresspeople and ask them to support energy permitting reform.
https://www.aravolta.com/blog/datacenters-in-space
As it stands, most if not all institutional and journalistic research around this topic I would consider compromised because they’re in some way or another financially interested in this becoming the next big thing. Aravolta included. That’s why most articles will counter each hard constraint with a handful of hopeful speculations.
As for pure scientific analysis, like the Scott Manley one, they tend to entertain themselves too much with the physics and mathematics and forget the economics behind it all.
Take Google’s own paper (https://arxiv.org/pdf/2511.19468) that estimates that launch costs, just to roughly match data center energy costs on earth, would need to reach 200USD/kg, which requires a 10 fold cost reduction relative to the current launch costs of Falcon 9. And that is to launch a _disposable_ server into orbit, that will disintegrate after a few years and likely have hardware failures well before that.
And these servers are not anything like a “data center”, and they won’t run the applications that we are already scrambling to find demand in earth. No, these would theoretically run some ultra-niche, highly experimental workloads maybe for NASA or the military. That alone can’t possibly justify the investment, at least not for the retail investor that actually expects a positive ROI. Nevertheless the tech elite and their pet journalists are more than happy to sell this fantasy to the average people.
Hell, I’m still waiting for Project Natick to materialize, Microsoft’s data center on the ocean, which makes far, far more sense than data centers on frigging space. Still they didn’t manage to make that one work in any meaningful sense.
Idk, building in the ocean seems a lot harder to me than space. Salt water is ridiculously corrosive, extreme pressure, etc. And one of the main justifications for this is massively increasing the output of solar and making it consistently output its nameplate capacity, which space is great for, and ocean is terrible for. The only benefit for that one I can see is some power savings on cooling, and a whole boatload of drawbacks, whereas we might not be able to keep up with demand with terrestrial power. So I can totally see why they never bothered to complete their subsea datacenter.
They’re definitely not aiming to put niche applications up, they want to run models by the bucketful.
I don’t see how the economics make it impossible? To be clear, I’m not saying that it’s something that’s going to end up happening, I have no idea if it will, but I don’t see how it’s structurally impossible, and I can see some things to commend it if token usage volumes grow like I think they will.
Meta has increasingly ephemeral digital mindshare and no AI play. SpaceX has a near monopoly on access to the rest of the galaxy.
If anything this just proves that the Overview Effect (traveling to space changes you) is just BS, Bezos and the others never changed.
This is Patrick Boyle, he's not AI generated? Why did you feel like the speaker is AI generated?
The community noticed he rarely blinks and he ran with the gag and edited all of them out.
SpaceX's valuation only makes sense if you buy into their mission of creating a civilization on Mars, and that the Space Exploration Technologies Corporation is the vehicle that creates this future. If SpaceX achieves this, it would be the most valuable company ever created. It would be worth $10s of trillions.
I personally believe SpaceX has a 70% chance of achieving its Mars ambitions. So I find the current $1.75 trillion valuation very logical, if not a little underpriced.
If you believe there's a SpaceX won't achieve these ambitions, which I'd assume most people in this thread belong to, then you'd assign a <1% chance of this happening. Then you'd value the company based on it's financials, at a more realistic $200B. You'd explain the 8x valuation gap though a mixture of financial engineering and Elon grifting, both of which I agree are happening.
The current $1.75 trillion valuation comes from the ratio of people in camp A to camp B.
It’s funny, I hear the exact same phrasing used when justifying Tesla’s valuation. “It only makes sense if…” … if you ignore what the actual, physical business does today, and picture it doing something entirely different, beyond its current capabilities (robotaxis, androids, etc)
The difference with this pie-in-the-sky ambition (Mars Colony) is that I don’t even understand how it would be profitable if achieved. What do you get from a Mars colony? What on earth (no pun intended) could you extract from it that would command that amount of value? This isn’t like colonization of the americas, where there was a trove of readily available natural resources to extract and sell back to the mainland markets - nothing is going to get shipped back from Mars any time soon. A Mars colony could only be supported through significant public investment - so is the valuation justified via the expectation that SpaceX will be the primary vehicle for public investment in Mars exploration, or through the centuries-long payback period of founding a self-sustaining civilization? Or both?
Turns out the real overpopulation is in places people want to live.
I think most people don't realize how inherently unstable our society is, and how quickly civilization can devolve.
Nuclear war is a huge issue. We've had three conflicts this decade that could have led to a nuclear war. All of which are still unresolved.
I'm kicking myself for engaging with this at all, but that's poor reasoning if you're worried about nuclear war. The risk of MAD forces a detente, if there were a (perceived) hedge against it, that increases the likelihood of MAD happening.
If nuclear war happens, Mars colonies depend on expensive, technical supply chains on Earth that will be destroyed.
We take for granted a whole damn planet where water falls from the sky, food and fuel come out of the ground and there's abundant amount of replenishing atmospheric O2 available for ubiquitous reaction and combustion.
Without resupply from a nuked Earth, you're left with the fact that food, manufacturing, construction, etc all depend on, at the very least, atmospheric oxygen, and Mars will never hold a meaningful atmosphere. Without atmospheric oxygen, and thus combustion, when it comes to supply chains required for existing anywhere, you aren't building infrastructure, you aren't growing food without nutrient supplies, and you aren't manufacturing sustainably, efficiently, or at all.
And that ignores that Martian dust and soil is toxic[1] to life, which requires even more resources to mitigate, remove, keep out/off of people and living things, and even more resources to treat and maintain the soil if you ever want to use it to grow food.
Earth is the one shot people have, and a nuked Earth is infinitely more habitable than Mars. Even the bottom of the ocean is more habitable than Mars. It just does not make sense as a backup option to Earth. And if Mars is a pipe dream, life isn't leaving this solar system and surviving independently as anything resembling humans.
[1] https://en.wikipedia.org/wiki/Martian_regolith#Toxicity
I however also believe that enough people will be lining up to buy whatever fantasy Musk sells (look at the Tesla stock as a shining example).
So I think SpaceX is still going to be a great investment if you can manage to get it at or below IPO price.
When will that be? There are so many unsolved problems with Mars that creating a civilization on Mars will probably be decades or centuries away. Creating an autonomous station on Antarctica or the moon is child's play compared to Mars. And we are far away from that too.
The asteroid belt likely contains more easily-obtained rare metals that also don’t have to escape Mars’ terminal velocity.
Reading a comment like the grandparent’s while we’re surrounded by many tangible crises on earth is sickening. Especially many of them manufactured by the same man who the grandparent comment seems to deify (DOGE AIDS funding).
Anyway, I find myself feeling contempt for the people in this industry pretty often.
That's because it's unnecessary. It's cheaper to just ship supplies in.
People's attention will shift to obtaining resources from outer space, which leads to more demand for space exploration, and then space manufacturing to avoid polluting earth. Then the general sentiment towards a lunar/Mars colony will trend towards positive, and people will desire to run away from political problems on Earth. So significant investment towards building a Mars colony will happen then.
The technical problems with a Mars colony are not insurmountable, it's completely possible to build a colony with 2026 technology, just the cost is too high. Better technology (robots) and innovations (i.e. upgraded Starship) will push the cost down.
Yet today it's the 13th largest economy on earth.
Think on a longer time scale.
In fact, Australia already had people living on it.
On a longer timescale would it only be spaceX on Mars?
This video gives an overview https://www.youtube.com/watch?v=G3hPH_bc0Ww but it strongly underrepresents the role of robotics.
Yet looking back, colonialism was probably the most profitable venture ever undertaken. All three of them ended up becoming key allies and instrumental trading partners.
Think on a longer time scale.
I wouldn't follow the majority for advice. They're not aware of what's happening. Take Starlink V3 direct-to-cell as an example, I believe less than 5% of the general public even knows what this is (even after a massive marketing campaign), and even fewer understand how it works.
I wish I had the guts to just lie to investors with a bald face. I personally think Musk is an underachiver.
you can respond with actual substantiative points, but don't make stuff up.
I get and appreciate that sentiment. Musk currently has a controlling interest in SpaceX. Do you expect that to change after the IPO? Thanks!
/not a finance or investment expert just my observations and feelings
Investors have been doing this since SpaceX first raised outside funding. American capital markets are not that risk averse.
But of course we also know that Musk-run public companies are immune to normal dynamics of worrying about next quarter's returns (or even worrying about the CEO publicly torching his brand equity) so the very last thing I'd imagine happening is SpaceX becoming risk averse and profitability focused
Fidelity has been an investor since 2014. The only new money flows will be index and retail; everyone else has had access for years.
The risks they care about will be more "Starlink growth slows" or "orbital datacentre has horrible operating economics" than "Starship launch anomaly" though, and I agree it'll make zero difference to how SpaceX operates both because Elon isn't afraid to tank valuations and because retail loves him unconditionally. And the bull case for SpaceX is still stronger than the bull case for Tesla which happily trades at valuations north of $1b.
They will save Elons shitty AI investment by making the public bag holders.
A big part of how SpaceX did what they did is that they weren't beholden to institutional pressures. They could afford to take major risks. This may change when a pool of investors who don't care about space and just want the line to go up end up being stakeholders.
It's still obscenely overpriced.
edit: to nxm -- the blah blah was about it being a default response, not to trivialize your comment.
I'm a little disappointed now.
But the auto inclusion in Fortune 500 is basically cheating.
Just saying there are some decent risks, and pricing it at 1.75T IPO seems risky enough. I would not take that gamble.
Starlink already accounts for these (e.g. https://www.theregister.com/2025/11/18/starlinks_method_of_d... ), and in any case they are put in orbit so that they eventually fall back to earth in case control is lost.
Sounds like lots of demand for new launches from the military-industrial complex.
> imagine if Russia gets vindictive and starts destroying these satellites
Space is big. It’s almost always cheaper to individually target satellites than to try and blanket orbits. And with Starship vs ASAT, the cheap drones are the satellites. Russia would bankrupt itself trying to sink Starlink and Starshield.
(They would also set a precedent that would let the U.S. deny China a LEO constellation.)
The problem is that even one satellite could start the Kessler syndrome due to how many are currently in orbit, and the numbers are expected to keep increasing rapidly - everyone wants their "sovereign" Starlink now that it has been shown to be feasible and performant.
No, it can’t. Not in LEO. Militaries have searched for these one-shot solutions; there is no known orbital system for which it works. (In LEO.)
The only fuck-you orbits are in GEO.
And to most everything else
> In the United States, SpaceX accounts for five of every six launches into space, according to Georgetown University’s Center for Security and Emerging Technology.
That's why.
Donald Trump Jr., who already profited from groq, is invested via 1789 capital:
https://www.reuters.com/investigations/trump-linked-venture-...
Not to mention that the PayPal mafia is now playing ball with respect to Epstein (Tracey was on all-in downplaying the whole thing), so Musk himself will be in good graces again.
Oh my god. When a journalist writes like any of this is remotely plausible within “years” and “billions” of dollars it really downplays the near impossibility of these events happening.
I'm not arguing that it's a good idea, but that is the idea.
still seems like a daft idea all in all, or a very distant one at least.
[All: please don't post unsubstantive comments to HN. You don't have to like $Company or $Person, but when the banned accounts are posting more thoughtfully than the rest, that's... bad.]
they're only (sic) going for 75 billion. with an evaluation in the trillion mark.
This is just more speculative investment. you'll see this again in another year or so with a bigger evaluation on it... it's how the modern economy now "works".
As whole I find that valuation just insane, but seemingly if you only offer tiny enough slice with enough hype it might bump prices to something that really make no sense at all...
I, for one, much prefer to earn a 9% return without expending any effort or thought at all.
(The current value of around 25% of global GDP doesn't even include the 1.75 trillion SpaceX which alone would be another almost 1%...)
ETF expense ratios are small but still mean retail will underperform anyway. It's an unfortunate situation all around.
Its fleecing because it basically takes everybody's money and gives it to support musk's money loser xai. SpaceX net profit 8 billion per year (previous years much less) and Xai was net losing 1.5 billion per quarter.
With a tiny float the price will almost certainly go up as a limited number of enthusiastic investors buy in. The plan is to then line up the lockup expirations so they sell into the index re-balance, a ton of new non-discretionary demand to match the new supply.
It's manipulation.
Sorry, "xAI, a wholly owned subsidiary of SpaceX".
2.) SpaceX made $16B in profit last year, despite its enormous R&D costs and is on track for $20B this year, despite the losses from AI. People still wise to invest in Google despite their AI business still being a huge loss
Perhaps. But that's a huge undersell. "just the one that caught flak"? No. The one with nearly zero guardrails. Where users could trivially create underage porn, bestiality, etc., using prompts that you could put into any other AI and just say "does this image generation prompt seem likely to create legally problematic content?"
No, Captain Free Speech said fuck it, let's roll.
reads headline again
Oh. Probably all the money burnt in AI training and data centers.
4 different levels to unpack: Literal IPO question, Epstein cover-up (gov. won't just do it), aliens (X-Files) cover-up, and finally the Elon-Epstein connection (email files thread to host him at SpaceX).
Maybe something to consider before investing in any of his companies.
But as soon as they IPO, that's a signal to head for the exit before it all collapses again.
All the hardware they've actually invested in, including Starship, is in fact foremost for launching satellites into Earth orbit. Starship in particular is optimized for this.
Tesla got away with this deceptive advertising and scammed [0] their customers believing their vehicles would soon reach full self driving autonomy.
The only ones defending this are likely the ones that still haven't realized that they got scammed by Elon. Sorry that happened to you.
[0] https://www.reuters.com/legal/tesla-must-face-californias-fa...
https://en.wikipedia.org/wiki/List_of_predictions_for_autono...
Teslas running the latest hardware (manufactured 2023+) and software are actually nearly there, IMO. I used it for two months and never needed to intervene. It's not perfect yet but I believe it actually drives better than most people now.
However, the millions of Teslas on the road with older hardware are absolutely useless in comparison where you will need to intervene a lot. The latest FSD software only works on the latest hardware so these older cars are stuck on either old FSD versions (which are proven to be bad) or get slimmed down versions to fit lower specs (which we know wont be as good). It's unsafe and they really should disable it for all of the older vehicles and issue refunds for people who paid for FSD.
1.) Tesla cars will be ubiquitous on American roads
2.) The best selling model of car globally would be a Tesla
3.) Most cars would be made in the US, yet still be price competitive with foreign competition
4.) SpaceX rockets would be re-used multiple times per week
5.) SpaceX's launch business is highly profitable despite lowering prices to less than 10% of what they used to be
6.) SpaceX launches more mass to orbit than the rest of the world combined
2. The only reason Model Y is the best selling car in the world is because 3/4 of the sales come from the US and Tesla only sells one model of SUV. Other brands sell many different variants and multiple models in the same category across the world.
3. Teslas are not at all competitive in other markets. BYD is eating their lunch.
4-6. Yes, but the global market for space launches is projected to barely touch $30B by 2030. Global competition for this market is only getting fiercer with multiple US startups, India, China and more recently France.
Now let’s talk about the failures.
1. Nueralink 2. FSD 3. Roadster 4. Cybertruck 5. Hyperloop 6. $2T in Doge cuts 7. Robotaxi 8. Starship 9. Tesla Semi 10. 4680 battery 11. Boring company tunnels 12. Bots that were going to disappear on Twitter
The list is very long when you actually include all the data points.
Cybertruck shipped and is commonly seen all over my city, so "failed" seems to be incorrect.
Starship...works? Again, the space is hard.
The tunnels...are dug?
I'm not a Musk fanboy but you're just making a bad case.
Globally, 50-55% of all Teslas sold are manufactured in China, and a further ~10% in Europe. Only around 35-40% of Teslas are made in the US.
Tesla was founded by different guys, Musk just forced them out.
SpaceX is indeed very cool, but not because of Musk. He just put his name on everything that might have been cool, even if dumb (remember Hyperloop? I always wondered on what grounds PR teams associated Hyperloop with Musk, as the idea was very old, and he didn't give it any money -- what relation he even had?)
I've heard from SpaceX insiders that they don't like the guy very much. SpaceXers do cool stuff, and then Mr. Musk comes in and makes everyone believe it's he himself done all that.
Or probably I'm just allergic to narcissism.
idgaf about the company. sure they proved the space and moved the space forward just like Tesla did with electric cars but why did it have to be Elon?
They would need a very good story to sell to investors.
Even if you give SpaceX the benefit of the doubt and assume they'll eventually settle at the profit rates Apple, Google, etc. have (~25%, check it), it'll be $4b in annual profits holding up $1.8t in market cap or roughly 450 PE ratio.
And that's if we give them the same great odds for profitability as America's most successful and profitable firms.
In summary, in the short-term the stock might very likely shoot up to $3t, but in the long-term, it doesn't look very healthy.