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SpaceX Is Now One of the World’s Most Valuable Privately Held Companies
- yellow_postit 9y agoAs much as I'd love to invest I'm glad they're avoiding the short term outlook being publicly traded would demand.
- joshuas 9y agoDoes being publicly traded necessarily mean you focus on the short term nowadays? We've got companies like Snap who issue non voting shares. I imagine SpaceX could offer common shares that have no voting rights, accept all future dilution and require you punch yourself in the head on Tuesdays and they'd still have a pretty decent offering.
- jmtulloss 9y agoYour stock price still gets beat up if you don't meet earnings, which means you can't raise capital as efficiently (or even fairly) if you need to in the future.
- joshuas 9y agoI didn't say you could run a dumpster fire forever, just that you don't have to worry about your short term stock price because shareholders can't do anything about it (vote a new board in and vote you out) You'd make sure your ducks were in a row before any offerings of course.
- xadhominemx 9y agoAnd your employees are underpaid.
- overcast 9y agoBeing publicly traded means you become slave to shareholders. Their profit is ALL that matters.
- gozur88 9y agoWell, yes. That's the entire point of a corporation.
- joshuas 9y agoYou're only a slave to voting shares. We're about to watch this play out with Snap.
- dancole 9y ago"The idea that all of the world should be measured in dollars to stockholders is actually a relatively new idea. It used to be that we thought that businesses had their purpose. Your purpose was to be making newspapers or fountain pens or whatever. And now we act as though the only purpose of a business was to enrich the people who trade it on Wall Street… Of course you’ve got to have profit, of course you’ve got to support your ownership. But that’s not why we’re doing it. We’re doing it because publishing a newspaper is a crucial thing to be doing." ~Andy Barnes Companies use to be temporary, created for the public good (like building bridges) and did not exist to make a profit.
- gozur88 9y agoBeing publicly traded never necessarily meant you focus on short term. If that were actually true you'd never have seen Intel shelling out $15bn for a fab, or Westinghouse designing nuclear reactors.
- InclinedPlane 9y agoBad example. One of those companies went bankrupt recently.
- gozur88 9y agoI realize that, but it doesn't make it a bad example. Certainly the shareholders were taking the long view when they allowed such a massive R&D program to go forward. The fact that it didn't work out is neither here nor there.
- mtgx 9y agoSo then only the bad companies do it, right? I just want that to be clear.
- gozur88 9y agoI'm not sure how you got that from what I wrote. Is Intel a bad company?
- JumpCrisscross 9y agoExcellent news, even if the round is peculiarly undersized. First time I've seen them be so coy with the identity of the investor, too.
- speg 9y agoSo.. Apple?
- jedc 9y agoBased on most of the big funding rounds happening these days, I just assumed it was SoftBank.
- phkahler 9y ago>> Excellent news, even if the round is peculiarly undersized. Yeah it smells like an attempt to increase their valuation, which this accomplishes. If they IPO those investors from a while back can cash out, but I wouldn't sell SpaceX at this point if I was able to own it. Unless there is some potential disaster we don't know about.
- fooker 9y agoThe coming disaster is Falcon Heavy. They will need about 3-4 years before it is flying reliably.
- loeg 9y ago> Mr. Musk faces competition from another billionaire. Blue Origin, a rocket company founded by Jeff Bezos, the chief executive of Amazon, aims to send tourists and supplies into space. Is that line even close to true? Last I heard Blue Origin was years away from revenue and far behind SpaceX in terms of capability and manufacturing.
- gozur88 9y agoI think it would be far more correct to say "Mr. Musk faces potential competition from another billionaire." Though ULA is buying engines from BO.
- le-mark 9y agoThe BE-4 is an impressive engine [1], at 550,000 lbs of thrust it's about 1/3 of a Saturn F1[2], and it's stage combustion lox/methane. Blue Origin is building some impressive hardware. What's interesting to me is the dichotomy between Musk and Bezos vision for humanity in the Solar System. Musk is Mars focused almost exclusively. Bezos has talked about space habitats (O'neil cylinders for example [3]) as how he thinks things will play out. Certainly room for both. Bezos isn't playing, he's going all in, selling $1 billion of shares a year to fund Blue Origin [4]. One way to look at this situation is Musk and Bezos competing to be king of transportation infrastructure for the Solar System. High stakes indeed. [1] https://en.wikipedia.org/wiki/BE-4 https://en.wikipedia.org/wiki/BE-4 [2] https://en.wikipedia.org/wiki/Rocketdyne_F-1 https://en.wikipedia.org/wiki/Rocketdyne_F-1 [3] https://en.wikipedia.org/wiki/O%27Neill_cylinder https://en.wikipedia.org/wiki/O%27Neill_cylinder [4] http://www.cnbc.com/2017/04/06/bezos-is-selling-amazon-stock-to-fund-rocket-venture.html http://www.cnbc.com/2017/04/06/bezos-is-selling-amazon-stock...
- phkahler 9y ago>> Bezos isn't playing, he's going all in, selling $1 billion of shares a year to fund Blue Origin [4]. One way to look at this situation is Musk and Bezos competing to be king of transportation infrastructure for the Solar System. High stakes indeed. I used to wonder what could happen if the guys with billions decided to do something interesting with all their money. This is some of the most interesting stuff I've ever seen. Some guys buy sports teams, some buy hookers, some just fucking blow me away with their ambition.
- omarforgotpwd 9y agoIn what world is SpaceX valued at $20B while Uber is valued at $69B?
- emersonrsantos 9y agoWorld of demand, automobile industry was just the same 100 years ago.
- burkaman 9y ago$20B is right around NASA's budget. At least society is consistent in valuing space exploration.
- tertius 9y agoBudget, as in expenditure per year no market value.
- jdavis703 9y agoThe budget is what the general voting public values NASA at for a given year, while the market cap of a firm is what the last sucker to buy a stock thinks it's valued at.
- omarforgotpwd 9y agoWhat the last buyer was willing to pay AND what the owners were not willing to sell for. What is the price America would be willing to sell NASA for? That's the market value.
- tertius 9y agoBudget is basically equivalent to revenue. Public (government) to private. Value of NASA is quite a bit more than their yearly expenditure.
- kijin 9y agoA world where valuation is roughly proportional to the number of rounds of investment you went through. If you already have a solid path to profitability, you don't need to court investors as often as a hemorrhaging company does.
- Inconel 9y agoIn somewhat related news: https://www.axios.com/founders-fund-partner-leaves-to-launch-spacex-focused-fund-2466277199.html https://www.axios.com/founders-fund-partner-leaves-to-launch...
- cli 9y agoIs a private company's value akin to a public one's market capitalization? How is this determined?
- jameshart 9y agoIn the sense that it is a number that is taken to represent how much money someone would have to spend to buy it, but is only loosely correlated to the amount of money you would have to spend if you actually tried to buy it, yes.
- seanlinehan 9y agoIt's different in that publicly traded company market caps are usually based on the value of common stock. The valuation touted in headlines for private companies is usually the implied value of a new, privileged block of stock. The common stock is not valued at the same amount. But, only IPO all those special classes of stock convert to common stock. So in the success case, yes, valuation and market cap are eventually consistent.
- erikb 9y agoIn startup investments like this one the media basically make a simple factor of the percentage an investor gains and the price he's paying for it. There is no value to that number besides nice newspaper titles. Real evaluation is the same as for any other company, however in a private company you have less data to go with, the data can't be relied upon as much (since the source is mostly the company itself), and all of these risks get increased by the company being relatively new and not profitable yet. In exchange for the risk investors hope to gain similar growth of company value after they purchased their shares. Therefore most investors mostly look for factors that show huge growth chances, instead of looking at traditional health factors.
- protomyth 9y agoShouldn’t the title include some qualifier like “tech company”, because there are private companies like Cargill out there that have yearly revenue above $20 billion.
- bhalperin 9y agoRevenue != valuation (but you might still be correct!)
- deleted 9y ago[deleted]
- protomyth 9y agoI think it’s likely that a company with revenue in a year equal to another company’s total valuation might have a pretty high chance of having a higher valuation. In 2011, Cargill was estimated to be worth $55 billion http://blogs.reuters.com/breakingviews/2011/01/20/cargill-valuation-validates-wall-st-rules-of-thumb/ http://blogs.reuters.com/breakingviews/2011/01/20/cargill-va...
- erikb 9y agoIt's actually possible that your revenue is higher than your evaluation, because evaluation is mostly based on how much profit people think you will make in the future. It's true though that companies with big revenue often also have big inventory, and considering both usually yield an evaluation higher than the revenue.
- owens99 9y agoHuawei is private and did about the same revenue as Google last year.
- bitxbitxbitcoin 9y agoNo surprise there.
- Overtonwindow 9y agoThe best thing Mr. Musk can do, in my humble opinion, is to never, ever take SpaceX public.
- gogopuppygogo 9y agoWhy not do a limited IPO that ensures he retains control. Don't the people working for SpaceX deserve to have liquidity? Isn't it fair for the general public to have the ability to profit off of his epic feats?
- JumpCrisscross 9y ago> Don't the people working for SpaceX deserve to have liquidity? There is a robust secondary market for SpaceX stock.
- ericd 9y agoWhat is the most active secondary market for it?
- JumpCrisscross 9y ago> What is the most active secondary market for [SpaceX stock]? The secondary markets for private securities trade "over the counter" [1]. There is thus no singular "market" which could be said to be the most active. (If you're looking for a more-actionable response, feel free to pop up your email.) [1] https://en.wikipedia.org/wiki/Over-the-counter_(finance) https://en.wikipedia.org/wiki/Over-the-counter_(finance)
- ericd 9y agoI'd love some more actionable info :-) eriaac at gmail. Thanks! (And I was curious whether there was anything like SecondMarket/EquityZen/etc where they're frequently traded in a more standardized fashion)
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- dbosch 9y ago"World's most valuable privately held companies". Sounds weird, no? What about Vitol (https://en.wikipedia.org/wiki/Vitol https://en.wikipedia.org/wiki/Vitol), Saudi Aramco, Koch Industries (https://en.wikipedia.org/wiki/Koch_Industries https://en.wikipedia.org/wiki/Koch_Industries) ... etc ?
- microcolonel 9y agoThis is what you call a fluff piece. HN and the broader computer technology industry is sycophantic for Elon Musk, and will ignore that all of his companies would be dead in the water if it weren't for the questionable appropriation of government funds, at least if they spent and marketed the way that they do. The products are great, but the money comes out of everyone's pockets. You're all paying for some guy's Model S.
- sien 9y agoSure. However, in space launch it's not like Lockheed Martin and Arianne didn't do the same. The difference with SpaceX is that for once a government got value for money on an Aerospace deal.
- microcolonel 9y agoI agree, I'm not against it at all. SpaceX is definitely improving the ROI of NASA, and I love it.
- nugga 9y agoThe old/print media likes to flaunt misleading headlines where Musks seems to be getting billion dollar subsidies from state and federal government but they're more like hit pieces if anything. http://www.cnbc.com/video/2015/06/01/musk-article-on-subsidies-misleading-deceptive.html http://www.cnbc.com/video/2015/06/01/musk-article-on-subsidi...
- perilunar 9y ago> You're all paying for some guy's Model S We're also paying for all the wars in the middle east that keep the oil flowing.
- strictnein 9y agoI mean, SpaceX is great and all, but it's no Cargill or even in the same league as Cargill or other similar companies like Koch (which is #2 in the US): https://en.wikipedia.org/wiki/Cargill https://en.wikipedia.org/wiki/Cargill Revenue: US$109.6 billion (2017)[1] Net income: US$2.835 billion (2017)[1] Total assets: US$55.8 billion 25% of all United States grain exports 22% of the US domestic meat market
- elif 9y agoYeah I found the valuation mildly depressing for similar contexts.. considering the total value of spaceX is less than half of the proposed ~increase~ to annual US military expenditure this year. We could afford 2 fully-blown spaceX per year just by maintaining our present disproportionately large military rather than expanding it by roughly a Great Britain this year.
- passivepinetree 9y agoThis can't be stressed enough. The military does a lot of R&D spending, but it's nowhere near as beneficial to the U.S. or the world than if we encouraged more space programs with that money. It's unbelievably depressing to me that we could be leading civilization into a multi planetary age but choose not to.
- sol_remmy 9y agoThe [space program] does a lot of R&D spending, but it's nowhere near as beneficial to the U.S. or the world than if we encouraged reduction in taxes so [private consumers and businesses] can instead spend that money.
- cloudwalking 9y agoHistory has demonstrated again and again that tax breaks are not an effective economic stimulus.
- prostoalex 9y ago
- skinnymuch 9y agoForbes seems to have always been wrong about Musk's net worth unless I'm missing how it works. By my estimations, now he should be worth around $23B. $11B from Tesla. $11.5B from SpaceX. Obviously they haven't updated for this news yet, but they still won't be at $23B. Regardless, going from having invested all is PayPal money by 08 and in dire straits to being $20B+ 9 years later is awesome. And depending on what narrative you believe, money to this degree isn't what he cares about anyway. Kudos to Elon, SpaceX, and everyone working there.
- gpawl 9y agoWhence this myth that Musk doesn't love money, just because he makes his money making cool tech? http://variety.com/gallery/elon-musk-buys-fifth-bel-air-home/ http://variety.com/gallery/elon-musk-buys-fifth-bel-air-home... http://www.businessinsider.com/elon-musk-mclaren-f1-hypercar- http://www.businessinsider.com/elon-musk-mclaren-f1-hypercar... wrecked-it-2015-6
- unityByFreedom 9y agoPeople feel practical businessmen are money-focused. They think folks who appear to "risk it all" are altruistic. Musk doesn't project the image of being practical. He claims to have almost gone broke when investing in Tesla/SpaceX, and now makes super-optimistic predictions: fully self driving cars in a year, and AGI in 2030-2040. To some, this sets him apart from the "money-focused" crowd. Yet, you can think of ways his actions benefit him. By predicting things earlier than most researchers, he can appear to have some knowledge they don't, thus attracting more young (cheaper) AI talent, and a public following whose understanding of machine learning is understandably limited. It's unfortunate because those who research machine learning remember the last AI craze of the 80s and the ensuing AI winter. The same thing happened. Over-hyped technology couldn't meet the wild expectations of the general public. These expectations had been stoked by entrepreneurs who thought (or lied) that they could create AGI. For example, Thinking Machines Corp. Nobody is 100% altruistic. When we mistakenly afford someone that quality, we elevate them to god-like status where they can do no wrong. It's a tough position for practical machine learning researchers. There are a lot of advances that will be made in the next few years. I hope more people will try out machine learning to get their own understanding of its power and limitations. Getting all your information on a subject from sensationalized news or recent products isn't as educational as studying/using the subject yourself.
- skinnymuch 9y agoIt's surprising how little money was taken in this round. You'd have expected something closer to $1B. I'm sure $350M will help enough and it has been over 2 years since the last funding. So maybe it's fine. They can keep raise again soon if need be. Especially with Bezos pumping $1B into Blue Origin a year.
- NumberCruncher 9y agoAnd what about Basecamp with its 100 billion valuation?
- colordrops 9y agoreally? is that a joke?
- icebraining 9y agoYes and no. It's clearly satire, but who can claim it's not a real valuation? Basecamp is now a $100 billion dollar company, according to a group of investors who have agreed to purchase 0.000000001% of the company in exchange for $1. https://m.signalvnoise.com/press-release-basecamp-valuation-tops-100-billion-after-bold-vc-investment-c221d8f86ad7 https://m.signalvnoise.com/press-release-basecamp-valuation-...
- Animats 9y agoSpace-X is, at long last, getting their launch rate up. 9 Falcon-9 launches so far this year. For a while, they had commercial customers canceling because they were way behind on their launch schedule. It's quantity of successful launches that makes money in that business. Not much is happening at the Brownsville TX site, where Space-X still hasn't done much more than pile up dirt and wait for it to settle. They're building on beach sand. They really need that site so they can have more pad time.
- gaius 9y agoIt makes me sad that SpaceX, a company that actually invents and makes stuff, is mentioned alongside Uber whose only product is evading taxes and regulations
- onebyzero2506 9y agoComparing SpaceX with Uber is like comparing apples to oranges.SpaceX may be inventing stuff but Uber solves a common problem for everyone around the world. I don't need to think twice about going from point A to point B without much hassle. And coming to the invention part, I believe rocket science is as much difficult as serving million requests concurrently and consistently without affecting user experience anywhere in the process. If Uber's product is evading taxes and regulations, then Google's products are just trying to make you click on some random ads. As a fellow hacker, you know what hard problems i am trying to talk about and we should respect that. I agree uber has some problems internally but they don't deserve to be disrespected.
- deleted 9y ago[deleted]
- sumedh 9y agoI don't think that is a fair comparison, Uber has revolutionized the transport industry. It has direct impact on you and me right now. Space X does not have such a direct impact for the rest of us.
- RikNieu 9y agoIs it just me or does it seem absurd that a company like Snap would have a comparable market valuation to SpaceX...
- _pmf_ 9y agoPrivately held, taxpayer funded, like most of Musk's endeavors.
- sumedh 9y agoWell, you are free to start your own company in the space or electric car industries.
- mxschumacher 9y agoNo it is not. One of the most valuable private startups maybe. Here's the top 15: https://en.wikipedia.org/wiki/List_of_largest_private_non-governmental_companies_by_revenue https://en.wikipedia.org/wiki/List_of_largest_private_non-go...
- fnord123 9y agoSo what are the most valuable private companies? Ikea, Bloomberg, Dell, Koch, Cargill, Bechtel, most of the big 5 accountancy firms... I'm not so sure SpaceX is "one of the world's most valuable privately held companies".
- supernumerary 9y agoGradatim Ferociter baby
- miheermunjal 9y agoas an engineer doing non-hardware engineering, it is always satisfying to watch SpaceX succeed from afar.
- martinmusio7 9y agoBezos is coming .. already $1B a year from Amazon stock. And Amazon is more successful every year. I am very curious how things will go.
- justadeveloper2 9y agoThe liberal backlash against Amazon is also coming. I have nothing against Musk in particular except that every one of his companies runs off of government largesse one way or another--SpaceX is pretty cool, though, I give him that. We shouldn't succumb to cults of personality.
- kilroy123 9y agoIt'll be interesting to watch if they can quickly catch up to SpaceX. If he really does sink 1 billion a year into the company they certainly should be able to. I'm all for more competition driving down costs.
- martinmusio7 9y agoThinking about it a bit more, I don't believe that Blue Origin and SpaceX are competitors. In a sense yes, but they will not fight for customers. I believe there is very much demand for their services.