
Elon Musk’s SpaceX Is Raising Money at a Valuation Approaching $10B - spountzy
http://techcrunch.com/2014/08/19/spacex/
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Igglyboo
Does anyone think it's crazy that a glorified messaging app is valued at $16B
and that SpaceX, a company that puts things into orbit and literally does
rocket science, is only $10B?

I'm sure WhatsApp is an outlier because I see it brought up all the time when
the topic of valuation arises but it still seems like SpaceX should be worth a
lot more to me.

~~~
a1a
I'd say (without much knowledge of SpaceX's financials) that it probably
shouldn't be valued any higher. I'd argue it's fallacious to compare with
WhatsApp because it's obviously overvalued.

Adding some perspective:

Ferrari enterprise value: $6.03bn

Heineken enterprise value: $11.857bn

American Airlines enterprise value: $10.666bn

KFC enterprise value: $19.492bn

Audi enterprise value: $17.731bn

Clean water for the entire planet: $10bn

Top 50 college football programs: $15bn

World's music industry: $16bn

Mozambique's GDP: $18.9bn

Sources:

[http://www.thedrum.com/news/2014/02/20/19-brands-facebook-
co...](http://www.thedrum.com/news/2014/02/20/19-brands-facebook-could-have-
bought-19bn-instead-whatsapp)

[http://list25.com/25-things-facebook-could-buy-
with-19-billi...](http://list25.com/25-things-facebook-could-buy-
with-19-billion-instead-of-whatsapp/)

[http://www.telegraph.co.uk/technology/facebook/10652397/Face...](http://www.telegraph.co.uk/technology/facebook/10652397/Facebook-
buys-WhatsApp-but-what-could-it-have-spent-the-money-on-instead.html)

~~~
jacquesm
I get most of those except for the college football programs.

But I _do_ see why for others there is value there, bread, beer and
entertainment (or, as it was in the old days, bread & circuses) have been able
to capture very large audiences for millennia. (And the Music Industry and
Heineken are reprentatives of the same category.)

~~~
igravious
It is my opinion that it is generally fallacious to compare Market Cap with
GDP.

Why?

Cuz GDP is a measure of economic output (throughput, generally _per annum_ )
whereas Market Cap is a measure of worth at a _moment in time_. The units
don't match up but since they are frequently omitted we get unlike things
being compared.

What do you reckon?

~~~
roymurdock
Agreed - GDP is a historical record of a year's worth of activity. Therefore
GDP more accurately corresponds to a company's net revenue - a net of what the
country produced/consumed/spent/imported/exported/invested over a year.

Market cap takes future earnings and total value into account. There is no
such calculation for countries, but a country's "Market Cap" (potential)
should, in most cases, be higher than its "Net Revenues.

~~~
exelius
There is such a metric - it's called national wealth [1] and it functions much
like market cap on a national level. The mechanisms are different as countries
can't be "valued" because they can't be bought and as such have no market
price. Regardless, economic health is taken into account because the
underlying asset values ARE calculated based on market price. National wealth
is largely seen as an indicator of ability to pay off debt because it provides
a tax base.

As an example, the national wealth of the US in 2014 was $81.8 trillion, while
our GDP in 2013 was $15 trillion. So your intuition is correct; GDP is a
horrible way to value a country. Though in practice, GDP tends not to vary a
lot in mature economies (i.e. inflation tends to stay roughly the same year to
year), so you can do a relatively simple NPV calculation on the GDP to
approximate the national wealth.

[1]
[http://en.wikipedia.org/wiki/National_wealth](http://en.wikipedia.org/wiki/National_wealth)

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mrfusion
Will Elon maintain a controlling interest? I'd imagine going to Mars won't be
very profitable, how does that goal jibe with being a for profit company with
large investors?

~~~
martythemaniak
The story so far has been that SpaceX will go public to raise the money to get
to Mars. Theoretically it jibes well because there'll have to be a ton of
launches to get there and establish a self-sustaining colony.

What hasn't been talked about much (probably because it's a decade or two away
and thus quite speculative) has been the economics of colonization. Yes, money
can be raised for an expedition perhaps with public/international/crowdfunding
assistance, but then what? What profit or economics will drive colonization?
Would the chance of establishing their own new country be enough? How do you
convince ~100k people to pay 500k each to go there?

~~~
danielweber
_What profit or economics will drive colonization?_

Consumption goods, not investment goods.

 _How do you convince ~100k people to pay 500k each to go there?_

Back of the envelope Drake-like equation:

• Minimum wealth of richest 1% of Americans: $8.4 million

• Of those, 1% are in good enough mental and physical health to go

• Of those, 1% actually _want_ to go.

That's 30,000 people. Obviously those numbers are seat-of-my-pants. Maybe only
1-in-a-thousand of people capable of making the trip want to go.

 _EDIT_ Tomp is right, my math was wrong.

~~~
tomp
That's more like 300 people.

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habosa
We live in a strange time when a company that has successfully flown useful
cargo into space on their own hardware has a valuation around 50% of the most
popular messaging app.

~~~
krschultz
Or to put it another way, we live in a relatively normal time, when a product
used by a double digit percentage of every living human on the planet is worth
more than a high capital expense gov't contractor.

I love space, I love SpaceX in particular. That doesn't mean I think this
valuation is out of whack. Facebook and Whatsapp have literally unprecedented
reach. It's easy to hand wave off as 'just a messaging app', or 'just a social
network', but we're talking about brands that achieved the global reach of
Coca Cola in under 10 years. That's nothing to sneeze at.

Meanwhile, SpaceX is making something roughly as technically difficult as
stuff Boeing, Lockheed, General Dynamics are all doing. Should those companies
be worth more?

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ChuckMcM
Sigh, in this new world of multiple series I don't think I'll get a chance to
invest at all "early" in this company but I would if I could :-). One of those
companies that I really like the product. So I continue to wait for their IPO
if they decide to go that route.

~~~
seanflyon
SpaceX won't IPO until Musk is convinced that investors would not back out of
his plans to go to Mars.

[https://twitter.com/elonmusk/status/342566837852200960](https://twitter.com/elonmusk/status/342566837852200960)

~~~
toomuchtodo
Could he not just remain a majority shareholder, thereby preventing a shift in
direction?

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marktangotango
I think of Spacex being more like the rail roads in the 1800's. Elon is
building the infrastructure so that when launch costs do come down, there will
be an explosion of off Earth economic activity. And Spacex will be there with
the tickets.

Colonizing Mars may be a driver and talking point now, but will be minor in
the long run. Asteroid mining, orbital habitats, Moon resorts (with flying
domes ala Heinlein), Comet water chasing, it's all open. Mars' role may be
huge, it's sooo much easier to get to orbit from Mars than it is from Earth.

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driverdan
> SpaceX has raised $245.5 million in private backing

Looks like SpaceX's total funding is $400-500 million (private + Musk + VCs
and excluding income). It's astounding what they've accomplished with such a
relatively small amount of money compared to NASA's budget.

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mrfusion
Can individual accredited investors buy into SpaceX? Anyone know?

~~~
fleitz
Why would they not?

I doubt SpaceX would care whether the entity was a corp or an individual, but
if you have enough money to invest in SpaceX why are you holding it personally
instead of via a holding company, etc?

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seanflyon
I don't think small (only a few million dollars) investors can invest in
SpaceX. They are not publicly traded, so any investment must be specifically
negotiated.

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ellisonf9
Elon Musk is probably one of those most ambitious entrepreneurs of our time.
SpaceX and Tesla are both incredibly profound ventures.

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k3liutZu
Perspective: half of WhatsApp

Edit: eh, third!

