
SpaceX Is Now One of the World’s Most Valuable Privately Held Companies - iloveluce
https://www.nytimes.com/2017/07/27/technology/spacex-is-now-one-of-the-worlds-most-valuable-privately-held-companies.html
======
loeg
> 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.

~~~
BlackjackCF
Maybe not right now, but I wouldn't ever underestimate Bezos.

Musk and Bezos are both people I wouldn't bet against, but they're so
drastically different in their styles. Musk is flashy, but gets shit done.
Bezos knows how to get shit done quietly... and suddenly he's dominated and
bought everything around you.

~~~
EduardoBautista
Amazon has a load of terrible products. Even their store is getting worse and
worse. The fire phone was a complete flop. Amazon cloud drive and music are
not at all at the same level as their competitors. Google Home is looking as
though it's going to surpass the Echo.

Amazon is successful because they are fine with taking losses, only just
recently making a small amount of profit compared to their scale.

~~~
narrator
Amazon can fail a lot because money for private companies is a lot more
expensive and harder to get than for public companies. Musk is playing on hard
mode because he wants to retain control.

~~~
Consultant32452
Musk claims he won't take SpaceX public because public investors have short
attention spans and would require profit/return too soon. Because he wants
goals set out further than the next quarter, he has kept the company in the
hands of like minded investors.

That may just be bloviating on his part, but it does seem at least sensible on
the surface.

~~~
digi_owl
Dell voiced something similar when he took his namesake company private after
years of being publicly traded.

~~~
amiga-workbench
And it appears the quality of their consumer products rose dramatically
afterwards.

------
skinnymuch
Forbes 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
Whence 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
People 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.

~~~
supercon
This is of course all speculatory, but I think for many of us the things that
sets him apart from the "money-focused" crowd are his goals and how outspoken
he is about them. He wants to get people to Mars, which as a business venture
will not turn a profit in his lifetime. I'm not saying he is altruistic but
rather that he might be more of the 'fame and glory' type, wanting to leave a
larger mark than a big digit in some future Wikipedia bio.

~~~
unityByFreedom
Yeah. It's speculatory, for sure.

> he might be more of the 'fame and glory' type, wanting to leave a larger
> mark than a big digit in some future Wikipedia bio

Saying things like going to Mars could still benefit him business-wise,
whether he actually takes on that mission or not. It attracts people who
believe he is at the cutting edge.

> for many of us the things that sets him apart from the "money-focused" crowd
> are his goals and how outspoken he is about them

I don't know if Musk plans to be outspoken or not. It seems to be an effective
business strategy in itself.

So, I take it all with a grain of salt.

------
strictnein
I 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
Yeah 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
This 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
The [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
History has demonstrated again and again that tax breaks are not an effective
economic stimulus.

------
dbosch
"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
This 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
Sure.

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
I agree, I'm not against it at all. SpaceX is definitely improving the ROI of
NASA, and I love it.

------
yellow_postit
As much as I'd love to invest I'm glad they're avoiding the short term outlook
being publicly traded would demand.

~~~
joshuas
Does 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.

~~~
overcast
Being publicly traded means you become slave to shareholders. Their profit is
ALL that matters.

~~~
gozur88
Well, yes. That's the entire point of a corporation.

~~~
joshuas
You're only a slave to voting shares. We're about to watch this play out with
Snap.

~~~
gozur88
Yes, because the people with voting shares _gave you money_ in the hopes they
would make something from their investment.

------
gaius
It 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
Comparing 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.

------
Overtonwindow
The best thing Mr. Musk can do, in my humble opinion, is to never, ever take
SpaceX public.

~~~
gogopuppygogo
Why 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
> _Don 't the people working for SpaceX deserve to have liquidity?_

There is a robust secondary market for SpaceX stock.

~~~
ericd
What is the most active secondary market for it?

~~~
JumpCrisscross
> _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
I'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)

------
protomyth
Shouldn’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
Revenue != valuation

(but you might still be correct!)

~~~
protomyth
I 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-
va...](http://blogs.reuters.com/breakingviews/2011/01/20/cargill-valuation-
validates-wall-st-rules-of-thumb/)

~~~
erikb
It'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.

------
Inconel
In somewhat related news:

[https://www.axios.com/founders-fund-partner-leaves-to-
launch...](https://www.axios.com/founders-fund-partner-leaves-to-launch-
spacex-focused-fund-2466277199.html)

------
martinmusio7
Thinking 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.

------
NumberCruncher
And what about Basecamp with its 100 billion valuation?

~~~
colordrops
really? is that a joke?

~~~
icebraining
Yes 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-...](https://m.signalvnoise.com/press-release-basecamp-valuation-
tops-100-billion-after-bold-vc-investment-c221d8f86ad7)

------
omarforgotpwd
In what world is SpaceX valued at $20B while Uber is valued at $69B?

~~~
burkaman
$20B is right around NASA's budget. At least society is consistent in valuing
space exploration.

~~~
tertius
Budget, as in expenditure per year no market value.

~~~
jdavis703
The 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
What 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.

------
mxschumacher
No 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-
go...](https://en.wikipedia.org/wiki/List_of_largest_private_non-
governmental_companies_by_revenue)

------
fnord123
So 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".

------
Animats
Space-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.

~~~
nickik
They don't need Brownsville, they need both the Florida pads up and running.
Brownsville will add even more, but the Florida pads are more important.

~~~
ridgeguy
Vandenberg on the west coast is also important to them. It's the only US polar
orbit launch site.

------
JumpCrisscross
Excellent news, even if the round is peculiarly undersized. First time I've
seen them be so coy with the identity of the investor, too.

~~~
phkahler
>> 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
The coming disaster is Falcon Heavy.

They will need about 3-4 years before it is flying reliably.

------
skinnymuch
It'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.

------
martinmusio7
Bezos is coming .. already $1B a year from Amazon stock. And Amazon is more
successful every year. I am very curious how things will go.

~~~
kilroy123
It'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.

------
RikNieu
Is it just me or does it seem absurd that a company like Snap would have a
comparable market valuation to SpaceX...

------
miheermunjal
as an engineer doing non-hardware engineering, it is always satisfying to
watch SpaceX succeed from afar.

------
cli
Is a private company's value akin to a public one's market capitalization? How
is this determined?

~~~
erikb
In 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.

------
supernumerary
Gradatim Ferociter baby

------
bitxbitxbitcoin
No surprise there.

------
_pmf_
Privately held, taxpayer funded, like most of Musk's endeavors.

~~~
sumedh
Well, you are free to start your own company in the space or electric car
industries.

