SpaceX corporate fundraising rounds

[philw1776]

An IPO would be very surprising to me based on the multiple statements by Musk that
a: He didn't want to take SpaceX public due to the increased pressure on public companies for profit NOW and that he only wants investors that would be in it for the long haul.
b: He regrets taking Tesla public.
c: He wants to maintain voting control at SpaceX.  Not being a finance guy I don't know how much more he can sell of SpaceX percentage wise and still keep control.

He owns in the very low fifties percent.  Can't sell substantially more and keep control.
You go public to raise $ and/or cash out.  Instead, he's raising money by selling vanity spaceflight (Dear Moon) and taking loans.
The SEC would eat him alive for investing in Mars flights were SpaceX public.
Agree that given the awful Tesla experience with short sellers and SEC mandates about BOD control, he'll never go public with SpaceX.

He could go public with other efforts like Starlink but given the Tesla experience I'm guessing no.  I think a Starlink spinoff could attract substantial private money.

[su27k]

The IPO rumor has appeared repeatedly in the past and got squashed every time, I don't think we need to take it seriously, see https://forum.nasaspaceflight.com/index.php?topic=42858.0 for example.

[speedevil]

He owns in the very low fifties percent.  Can't sell substantially more and keep control.

From the recent FCC filings on Starlink.

and has voting control of 78.7%

He can keep control in most circumstances if he can just vote >50%, he does not have to own >50%.

However, various legal shenanigans can convert non-voting into voting, if the CEO is doing things that are 'clearly' bad for the business.
Unless all the stockholders are really onboard with Mars, going much below 50% ownership, even if he can vote >50% adds possible risks.

[edkyle99]

Elon Musk's SpaceX Cuts Loan Deal by $500 Million
https://www.bloomberg.com/news/articles/2018-11-19/elon-musk-s-spacex-is-said-to-cut-loan-deal-by-500-million

The most important paragraph in this article in the last one.  It tells us that SpaceX is actually losing money.

""Disclosures to potential lenders showed the company had positive earnings before interest, taxes, depreciation and amortization of around $270 million for the twelve months through September, people with knowledge of the matter have said earlier. But that�s because it included amounts that customers had prepaid and because it excluded costs related to non-core research and development. Without those adjustments, earnings for the period were negative, the people said.""

 - Ed Kyle

[RonM]

Elon Musk's SpaceX Cuts Loan Deal by $500 Million
https://www.bloomberg.com/news/articles/2018-11-19/elon-musk-s-spacex-is-said-to-cut-loan-deal-by-500-million

The most important paragraph in this article in the last one.  It tells us that SpaceX is actually losing money.

""Disclosures to potential lenders showed the company had positive earnings before interest, taxes, depreciation and amortization of around $270 million for the twelve months through September, people with knowledge of the matter have said earlier. But that�s because it included amounts that customers had prepaid and because it excluded costs related to non-core research and development. Without those adjustments, earnings for the period were negative, the people said.""

 - Ed Kyle

R&D is a great use of earnings. The company gets work done for future products, then shows negative earnings to avoid taxes.

[speedevil]

The most important paragraph in this article in the last one.  It tells us that SpaceX is actually losing money

- 1:16.

We have about a hundred missions on the manifest, and that represents a value of about twelve billion dollars

[Bubbinski]

Would this news about SpaceX�s reduced fundraising be related to Elon�s recent BFR/BFS tweets about �radical change� for the design? (If there�s a funding issue maybe BFR is downsized?).

[Coastal Ron]

Elon Musk's SpaceX Cuts Loan Deal by $500 Million
https://www.bloomberg.com/news/articles/2018-11-19/elon-musk-s-spacex-is-said-to-cut-loan-deal-by-500-million

The most important paragraph in this article in the last one.  It tells us that SpaceX is actually losing money.

Two things:

1. Companies borrow money when terms are favorable, and it's likely that is the situation here.

2. The history of Tesla has shown that Elon Musk is OK with spending more than he is making when new products are being developed. See this graphic from this recent article:



This happens at large companies too within divisions, but we don't freak out about it - and we shouldn't here either. Once the R&D phase ramps down then revenue from Falcon 9/H launches will exceed spending again.

[DigitalMan]

I don't expect SpaceX to produce profits except perhaps for short periods.

if they are making money they will always be pouring it into R&D for the goal of making life interplanetary.

Once they have reached that goal for the sake of argument and have nothing new to build () I would expect they would drive down prices.

[envy887]

Elon Musk's SpaceX Cuts Loan Deal by $500 Million
https://www.bloomberg.com/news/articles/2018-11-19/elon-musk-s-spacex-is-said-to-cut-loan-deal-by-500-million

The most important paragraph in this article in the last one.  It tells us that SpaceX is actually losing money.

""Disclosures to potential lenders showed the company had positive earnings before interest, taxes, depreciation and amortization of around $270 million for the twelve months through September, people with knowledge of the matter have said earlier. But that�s because it included amounts that customers had prepaid and because it excluded costs related to non-core research and development. Without those adjustments, earnings for the period were negative, the people said.""

 - Ed Kyle

They aren't "losing" money. That would mean they can't operate their revenue-generating businesses at a profit, which they do.

They are spending money on "non-core R&D", that is, areas that don't currently generate profit, i.e. BFR and Starlink.

[AndersofOz]

The most important paragraph in this article in the last one.  It tells us that SpaceX is actually losing money.

That's not actually what the article says.  It would be more accurate to state that unnamed sources, who were unwilling or unable to substantiate their claims, have asserted that SpaceX is losing money.  No evidence was provided to support these assertions.

[meekGee]

Elon Musk's SpaceX Cuts Loan Deal by $500 Million
https://www.bloomberg.com/news/articles/2018-11-19/elon-musk-s-spacex-is-said-to-cut-loan-deal-by-500-million

The most important paragraph in this article in the last one.  It tells us that SpaceX is actually losing money.

""Disclosures to potential lenders showed the company had positive earnings before interest, taxes, depreciation and amortization of around $270 million for the twelve months through September, people with knowledge of the matter have said earlier. But that�s because it included amounts that customers had prepaid and because it excluded costs related to non-core research and development. Without those adjustments, earnings for the period were negative, the people said.""

 - Ed Kyle

No it does not. It says that the company is MAKING money, and is then chosing to invest this money, plus more that it has at hand, in R&D.

Why is investing in R&D rub so many people the wrong way? This is Tesla all over again.  Look at all the "cash savvy" dead-companies-walking out there, that focus on near-term profit and do R&D only when they have to...

Is that your choice model for corporate stewardship?

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ABCD: Always Be Counting Down

[zodiacchris]

Don�t mind him, it�s just Ed 🙄

[woods170]

Elon Musk's SpaceX Cuts Loan Deal by $500 Million
https://www.bloomberg.com/news/articles/2018-11-19/elon-musk-s-spacex-is-said-to-cut-loan-deal-by-500-million

The most important paragraph in this article in the last one.  It tells us that SpaceX is actually losing money.

""Disclosures to potential lenders showed the company had positive earnings before interest, taxes, depreciation and amortization of around $270 million for the twelve months through September, people with knowledge of the matter have said earlier. But that�s because it included amounts that customers had prepaid and because it excluded costs related to non-core research and development. Without those adjustments, earnings for the period were negative, the people said.""

 - Ed Kyle

Emphasis mine.

In other words: rumours.
Rumours about SpaceX supposedly losing money have been going round since the day the company was founded, back in 2002.

For a company that is supposedly losing money since 2002 they have been around for a surprisingly long time.

[Star One]

Don�t mind him, it�s just Ed

That�s no more fair than stating there are no short supply of Space X boosters on here who put a positive spin on everything.

[meekGee]

Don�t mind him, it�s just Ed

That�s no more fair than stating there are no short supply of Space X boosters on here who put a positive spin on everything.

The history of SpaceX to date aligns very well, and sometimes exceeds, the optimistic outlooks...

To literally get excited over a hasty and wrong interpretation of a rumor that erroneously concludes that SpaceX is losing money is just bad form.



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ABCD: Always Be Counting Down

[Tulse]

I do find it a bit worrisome that SpaceX can publicly announce it is looking for $750 million in loans, and then a few days later say "Ah, never mind, we'll take half a billion less."  That sort of internal volatility doesn't suggest robust long-term planning.

[docmordrid]

I do find it a bit worrisome that SpaceX can publicly announce it is looking for $750 million in loans, and then a few days later say "Ah, never mind, we'll take half a billion less."  That sort of internal volatility doesn't suggest robust long-term planning.

Or, it means they recently iterated to a  design which doesn't require the Falcon 9 upper stage tests and is cheaper to build. Therefore, they don't need the other $500m

[programmerdan]

Definitely confusing for prospective investors but from the company's point of view, the less debt the better, generally.

Without their balance sheet it's hard to know what would drive each consideration, and the paucity of the "leaks" concerning the ongoing negotiations around this debt raise makes any speculation tenuous at best.

But hey, this is an internet forum, so my money's on either (1) significant cost savings due to a massive "duh" moment while considering what they need to build Starship/SuperHeavy or (2) more customers, willing to make significant liquid deposits on actual flights, instead of debt.

[groknull]

I do find it a bit worrisome that SpaceX can publicly announce it is looking for $750 million in loans, and then a few days later say "Ah, never mind, we'll take half a billion less."  That sort of internal volatility doesn't suggest robust long-term planning.

Actually the other way around.

Underfunding is a chronic problem for medium to high risk projects (I deal with startups).  If a company does a debt raise, then comes back later asking for more, then the implication is that the company didn't fully understand the time and resources required to create a viable product for the target market.

Conversely, initially asking for a lot, then later reducing the amount indicates that the company was cautious about the possible risks and did resource estimation to match.  As risk is bought down (via research, design refinement, simulation and testing), the estimated resource requirement bounds narrow.  The company can then choose to have a larger than needed pile of money on hand, or reduce the debt offer.