Charlie StrossJun 23

RE: https://mastodon.social/@blogdiva/116800702398076972

I remember this happening A LOT in 2020: overvalued prices at IPO followed by a brisk tumble and no recovery ever.

SpaceX has a viable rocket business (Kesseler syndrome permitting) but in no way was the IPO price justified and those shares are never going to recover this side of 2050.

Show threadarrbee6d ago
@cstross
Starlink is the only part of the business that makes a profit, the rockets make a loss even after all the government subsidies (maybe they should charge Starlink more) and the AI part makes a huge loss which outweighs all the others combined, and will probably continue that way.
IIRC the IPO prospectus stated that the overall business did not make a profit and may never do so.
Show threadCharlie Stross6d ago

@rogerb Where do you get "the rockets make a loss"? Book cost of an F9 launch is about $70M but they're reusable and internal billing for a Starlink flight is $12M! That doesn't sound remotely like it's making a loss on commercial flights …

The real problem for the rockets is that SpaceX already stitched up 80% of the global commercial launch market. And that Musk tied an AI boat anchor to the biz in order to big up the market cap before a largely fraudulent IPO.

Show threadarrbee
@cstross
Every analysis I've seen of the SpaceX group before the IPO states that Starlink is the only part that is profitable and that "space launch" makes a loss (albeit nothing like as much as AI).
Commercial launches are only part of the space launch business, and as I say we dont know what they charge Starlink.
Jun 24 at 10:58amWeb
Show threadCharlie Stross6d ago
@rogerb Profitability, in business terms, is something you pay tax on. So businesses in industries with room for growth try to plough it all back into growth by investing. Usually they can flip a switch and show a profit within a quarter *if* they need to, to propitiate the investors. See also the history of Amazon.