What is prompting SpaceX to IPO all of the sudden?
I'm personally convinced that this is Musk trying to get out of debt from his Twitter purchase.
What is prompting SpaceX to IPO all of the sudden?
I'm personally convinced that this is Musk trying to get out of debt from his Twitter purchase.
That is a part of it.
Think of it like security backed bonds, if you bundle a lot of dud businesses into a single business that is doing ok then as an aggregate it looks fine. So bundling Twitter and xAi into SpaceX covers up that. This is why I suspect they will eventually merge Tesla into SpaceX as it is on the decline now.
The problem is that with the current cash on hand and large loans coming due, they only have a 6 month runway. Thus the IPO to get other peoples money to hopefully fund themselves until solvent.
All IPO's are essentially that, people invest in your business, the business uses their money to achieve more, and if it all works out then future profits can eventually be paid back to investors.
> people invest in your business, the business uses their money to achieve more
that was what normally would happen. However, in the last few decades of IPO, it's become common to have two classes of shares - one being the controlling shares that founders hold on to (with 10x the voting rights), and a 2nd class of ordinary (common!) shares with 1x vote per share.
This means the founders (and early investors perhaps) don't give up any controlling stake of a company at all when the IPO while only selling common shares. Doing this means they get to control the company's operations and financial moves, without shareholder oversight, but obtain all of the shareholder investment cash.
You could argue this can lead to better management, as the founders are more likely to care about the company than professional managers that typically would be hired to manage a public company. I say that is only an argument of luck of the draw, rather than a good argument against the above share and voting right splitting.
Look at facebook/meta - would that company be as invested in things like the metaverse, etc, if zuckerberg weren't in a controlling position?
These two classes of shares were only introduced in the 1990s.
"Get out of debt" is funny because his whole shtick is always being in debt. But yes, his creditors are probably asking to be paid out so he needs to milk SpaceX. Luckily, he can take the company public with a tiny float so that index inclusion drives the share price through the roof, allowing him to borrow against considerably greater assets.
> What is prompting SpaceX to IPO all of the sudden?
i've wondered the same thing. I honestly think it's going to hurt SpaceX rather than benefit so there must be a reason other than furthering the mission. SpaceX beholden to the market seriously constrains them in my opinion. For a group already tasked with an unbelievably difficult mission, having to please Wall St. seems like a PITA distraction.
That already happened with the merger of X with XAI and then the merger of Xai and SpaceX.
But the reason is because SpaceX is trying to tool up for orbital datacenters. They're building a bunch of solar cell manufacturing plants and Starship launch pads.
Or at least they are selling the idea of orbital data centers since the technology for orbital data centers does not exist yet or in the short term.
It’s literally just a satellite with GPUs on it. SpaceX already has about 100MW of satellites in orbit. They’re making an upgraded version of these satellites, V3, designed for launch on Starship. Making a bigger versions of those with larger radiators (because of the duty cycle) and putting them in sun-synch is all that is required, if it can be done cheaply enough. And Starship, if it works, should be cheap enough as its propellant cost would be less than the fuel cost of using airliners to do transpacific air freight.
It didn't already happen. As you pointed out, people who funded the purchase of Twitter hold SpaceX shares, and this IPO is how they get their money back.
It did. After the merger with SpaceX, the Xai debt got renegotiated at a very low rate.
Orbital datacenters is just an excuse of a reason to merge the two companies when there’s nothing else tying them together. They won’t actually happen.
SpaceX will run out of things to profitably launch with Starship once they launch Starlink V3 (a few hundred launches per year), and orbital datacenters provides effectively unlimited launch demand. Like Starlink was for Falcon 9, orbital datacenters are a way to fully leverage the insane launch cost advantage and launch capacity that Starship brings to the table.
I see your point. All this launch capacity is coming online but, once Starlink is built out, who is going to buy it? Surely Starlink maintenance isn't big enough [edit: maybe it is, it's hard to get my head around the number of sats]
The datacenters in space thing just doesn't make sense to me. Datacenters get their value from scale which is why they're so freaking massive here on earth. I just don't see any datacenter in space being big enough (unless built over multiple lifetimes) to use let alone profitable/desireable. What am i missing?