
SpaceX Sells 10% Stake to Google, Fidelity for $1B - hodgesmr
http://www.bloomberg.com/news/2015-01-20/musk-s-spacex-sells-10-stake-to-google-fidelity-for-1-billion.html?hootPostID=e032d9a22131660ad2c3ecfaa1639a46
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mtrpcic
This is very exciting. While Google might have strayed from their original
"Don't be evil" mantra a little bit, I couldn't think of a better partner for
SpaceX to work with on this. Not only does Google have the drive and deep
pockets, they've got the incentive. If this works out as well as everyone is
hoping, not only will it upset the internet industry, I can see this having
benefits for the telco/cell carrier industry as well. With cheap, fast
internet available worldwide, nobody is going to pay $30 for a 2GB cap on
their mobile phones.

~~~
Florin_Andrei
> _While Google might have strayed from their original "Don't be evil" mantra
> a little bit_

I don't know. I'm getting more and more the impression that Page is cut from
the same cloth like Elon Musk. Both seem to be balls-to-the-walls visionaries
who accept nothing less than the utmost limits of what's possible - and then
aim a bit higher than that.

I'm starting to think that, for Page, "evil" means "anything less than the
greatest possible good for the largest number of people, over a very long
term".

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wavefunction
This seems quite charitable in every way. I don't know if it's just that I'm
an Elon fanboi but I don't see the comparison.

Sure, Page has accomplished quite a bit, but I find it hard to compare to Elon
Musk's track record in founding multiple cutting-edge firms in several wildly
different domains. Perhaps I assign too much to the production of physical
goods and not enough to software but that is a bias I must admit.

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andrewfong
I think GP is referring to a number of "moon shots" at Google that aren't
(strictly) software like self-driving cars, drone delivery, and longevity
treatments.

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apaprocki
I find it fascinating that through the business lens, Google is competing with
Facebook to sell more _ads_ by going into _low earth orbit_. We didn't get
flying cars like they promised in the Jetsons, but that sounds pretty
futuristic.

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YokoZar
This is a bit like claiming that Google is investing in radical medical
technology because people will watch more ads over their newly extended
lifespans.

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lumpypua
And if the financial incentives lined up and they actually did extend
lifespans, would that be a bad thing?

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gaius
So let me get this straight... SpaceX is worth half of WhatsApp? Does anyone
else feel like they're living in Bizarro-world?

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krschultz
No. WhatsApp is used by billions of people daily. SpaceX is a really good
government contractor.

What % of AT&T's market cap ($175B) is its SMS business? What % of Lockheed
Martin's market cap ($65B) is its space business? Think about the incumbents
WhatsApp & SpaceX are trying to dislodge. Generally speaking the ones WhatsApp
(now Facebook) are larger by market cap than the ones SpaceX is targeting.
That reflects the fact that something everyone uses a little bit every day is
generally worth more than something used by very few people, intensely.

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wuliwong
Whatsapp isn't used by billions of people everyday. Their install base was
like 700 million?
[http://en.wikipedia.org/wiki/List_of_virtual_communities_wit...](http://en.wikipedia.org/wiki/List_of_virtual_communities_with_more_than_100_million_active_users)

Even if each one of them was paying the $1 annual fee, that's still less than
a billion dollars in revenue.

Also, often valuations are based on the number of employees. SpaceX has 3,000
plus billions of dollars in capital equipment. Whatsapp had 55 I believe and
basically zero dollars in capital equipment.

I think that there is more to this deal than "Google gets 10% for $1 billion".
There is no way SpaceX is only worth $10 billion.

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ojbyrne
You've probably put your finger on exactly why Whatsapp is 2x SpaceX - 55
employees and zero capital equipment. Grow it by 10 and it all goes straight
to the bottom line.

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undrwatr
And nothing that explodes.

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bronz
Before anyone mentions that Satellites can only deliver inferior internet
service, previous threads have taught us that with _low earth orbit_
satellites latency is not a problem.

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foobarqux
Satcom data rates and reliability are definitely going to be inferior to fixed
lines and I assume terrestrial wireless.

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krschultz
But crappy sat network is better than no network. If I can build a log cabin
1000 miles from anywhere and access HN, or log into HN from my sailboat
offshore, I will finally be able to never be productive from anywhere.

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deeviant
Yeah it should open out a whole new segment to consumer markets.

Free(but very slow) ad supported internet _every where on earth_.

Connection to the cloud for a million different kind of Internet-Of-Things
class devices. I think this is pretty big as these devices consume very little
data, but generally have issues getting connectively at all in some the more
remote areas these things tend to get deployed. Think ocean current mappers,
artic ice melting detectors, or a multitude of geo-sensors that would love to
have a connection in extremely remote areas.

Satellite-based emergency beacon in every phone?

Slow but usable internet for remote villages. Pushing news, weather, education
materials. Perhaps combined with solar power One Laptop Per Child class
devices.

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ergzay
He's already stated that it won't be free and that the consumer base stations
(using phased array antennas) will run from $100 to $300.

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deeviant
Free is subjective. They won't be free, but Google could subsidize stations
and add ads.

IoT companies can create through own hardware and pay bulk rates.

Cellphone companies certainly have the option to get on the boat too, if the
hardware necessary to communicate to satellites is small enough to go in a
smart phone, as have the option to make an emergency call(or most likely
SMS/Email) nearly anywhere in the world is a pretty killer feature.

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sillysaurus3
Does that mean 100% of SpaceX is currently worth $10B? Isn't that surprisingly
low?

I know nothing about these sorts of things, so sorry if that's a stupid
question.

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simonh
Google must think Spacex is worth more than $10bn or they probably wouldn't
invest in it. Right now SpaceX stock is not publicly traded so we have no idea
how much it would be worth if it were priced to market.

A lot of people are comparing this to Whatsapp. But Whatsapp wasn't publicly
traded either. All we can say is that Mark Zuckerberg thought Whatsapp was
worth at least $20bn to him and 10% of Spacex is worth at least $1bn to
Google. How much they might be worth to other people is unknown.

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ihsw
Traveling to Mars will now require a Google+ account.

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maaaats
And if something break down while there, it is no way to get support.

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sandstrom
There is this fairly sparse press-release on the SpaceX website:

    
    
        Space Exploration Technologies (SpaceX) has raised a billion dollars in a 
        financing round with two new investors, Google and Fidelity. 
        They join existing investors Founders Fund, Draper Fisher Jurvetson, 
        Valor Equity Partners and Capricorn. Google and Fidelity will collectively 
        own just under 10% of the company.  
        
        SpaceX designs, manufactures, and launches the world's most advanced 
        rockets and spacecraft. This funding will be used to support continued 
        innovation in the areas of space transport, reusability, and satellite 
        manufacturing.
    

[http://www.spacex.com/press/2015/01/20/financing-
round](http://www.spacex.com/press/2015/01/20/financing-round)

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BigChiefSmokem
At $10B, SpaceX is beyond undervalued.

Think about it this way, if they truly are the first company to start laying
claim to mineral deposits (or provide service to whatever govt does lay claim)
on asteroids, satellites like the Moon, and other planets the amount of value
in this company - even over the upcoming centuries - is going to be greater
than the East India Company, General Electric, or Apple ever where.

Now that's an investment well worth leaving to our kids.

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aetherson
No, "laying claim" to mineral deposits not on Earth is valueless. Even if, in
a rather fanciful world, said claim was in some way legally enforceable.

"Having technology able to recover said deposits and deliver them to an area
of meaningful economic activity without costing several multiples of the value
(or, more realistically, several thousand multiples of the value) of the
minerals in question" would certainly justify a very high valuation for
SpaceX. But they do not have such technology, and it is far from clear that
they are on the path to having that technology anytime soon.

And nothing has much present value today based on its prospective value in
centuries. In 100 years, we could be superintelligent nanotech swarms. Or
extinct. Or anything in between. Only a fool would place much certainty on the
value of a mineral deposit that far out.

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beambot
I imagine it would be difficult for earth-based entities to enforce
jurisdiction in far space. If you already have possession of an asteroid, it
doesn't seem like there's much terrestrial governments could do shy of import
tariffs. And whomever holds to material has one massive advantage in terms of
MAD: they're sitting high up in the gravity well.

Certainly SpaceX has an air of "tool builders" about them -- they'll build the
shovels and pick axes of the space economy. As evidenced by their current
economic successes, they're banking on the evolution of the industry -- not a
quantum leap 100 years hence.

A great (related) scifi novel: The Moon is a Harsh Mistress by Heinlein

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jacquesm
Google's next internet broadband distribution project: Leon.

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james33
I feel like in the long run this could be one of Google's best investments to
date.

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ourmandave
Maybe SpaceX can use the Google Barges for landing platforms?

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walru
Once, long ago, I thought Google would have bought Radio Shack and installed
wireless network hubs in all ~5000 of them to bring internet to the masses. I
guess this is a subsequent option.

That said, on the verge of bankruptcy, Radio Shack currently only has a Market
Cap of 25MM.

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elberto34
but the debt...market cap is meaningless in these situations

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walru
You know, I was going to add a bit about the debt, but I knew this comment was
off topic enough/

I couldn't advocate an actual purchase now, but at one point it seemed
interesting. I just wasn't thinking big enough.

