All of these plans, however, will cost money to develop the technologies to implement and continue driving down the cost of doing business in space. To get that money, SpaceX has been working diligently to raise debt and equity financing for its business. Fortunately for mankind’s space ambitions, it looks like SpaceX is succeeding at this — and fortunately for investors, every time SpaceX approaches its financiers for more money, it reveals a little bit more about its business, its finances, and its valuation.
X marks the spot where we discover how much SpaceX’s treasure is worth. Image source: Getty Images.
A little bit of debt …
Case in point: In November, SpaceX secured a $250 million loan from “a select group of investors,” money it intends to use to continue development of its “Super Heavy” launch vehicle and “Starship” interplanetary rocketship. That was a nice chunk of change — there was just one problem.
SpaceX had apparently sought to raise three times as much cash — $750 million. At the time, it wasn’t entirely clear why SpaceX settled for the lower sum. (Wall Street banks were reportedly more than willing to ante up the entire $750 million Musk sought). But the reason for SpaceX’s decision to take on less debt soon became clear.
… and a whole bunch of equity
SpaceX would raise the rest of its sought-after $750 million with a stock offering. As The Wall Street Journalreported last month, SpaceX is in the final stages of selling $500 million worth of stock to its “existing [private] shareholders,” plus a new (also private) investor, Scottish money management firm Baillie Gifford & Co.
What we’ve learned about how much is SpaceX worth
So mission accomplished for SpaceX. But as good as this news is for SpaceX, it’s arguably even more important for investors who want to know how the market is valuing SpaceX today, on the off chance the company eventually files for an IPO. SpaceX revealed details on its business during the course of negotiations with its debt and equity counterparties.
As the Journal reports, SpaceX is selling $500 million worth of new shares to its private investors at “$186 a share.” For this math to work, SpaceX must be selling about 2.7 million shares. We also learn that this latest funding round is being conducted “at a $30.5 billion valuation.” From this fact, we can deduce that those 2.7 million shares represent a 1.6% interest in SpaceX. A little more elementary math and we can further determine that SpaceX will have roughly 165 million shares outstanding after completion of this equity issuance.
It never rains, but it pours
To the best of my knowledge, this is the first time SpaceX has ever revealed enough information about its capital structure to be able to pin an accurate share count, share price, and market capitalization on SpaceX stock — and the deluge of new data doesn’t end there.
From TheWall Street Journal‘s reporting, we also learned that in the 12 months ended Sept. 2018, SpaceX generated $2.5 million in revenue and earned interest, taxes, depreciation and amortization (EBITDA) of roughly $270 million. That works out to a 10.8% EBITDA margin that SpaceX is earning on its revenue.
This number, by the way, is remarkably close to the 13% EBITDA margin earned by Boeing, and the 13.5% margin earned by Lockheed Martin — SpaceX’s two biggest rivals in spaceflight — despite the fact that SpaceX charges much, much less for its rocket launches than its rivals. This suggests that SpaceX has the capability to turn GAAP-profitable essentially anytime it wants, simply by raising its prices a bit or, conversely, by lowering its costs — for example by launching reusable rockets more frequently.
In that regard, it’s worth pointing out that through mid-January 2019, SpaceX has launched 40 rockets in a row successfully, and has relanded and recovered for reuse 33 of those rockets’ first stages. To date, only a handful of these rockets have actually been reused — but the more of them that are, the more SpaceX’s profits should improve, and the more SpaceX stock should be worth.
SpaceX CEO Elon Musk’s announcement last week that the company would build as well as launch rockets in the Rio Grande Valley opens up new …
SpaceX CEO Elon Musk’s announcement last week that the company would build as well as launch rockets in the Rio Grande Valley opens up new opportunities for the region. With a little luck and a lot of planning and work, the Valley might be able to use this development to establish itself as a major aerospace center.
Through Twitter and a news release issued Wednesday, Musk announced that the manufacture of SpaceX’s Starship rocket is being moved from the Port of Los Angeles to South Texas. The announcement follows the recent successful assembly of a Starship prototype at the company’s launch facility at Boca Chica Beach.
Original plans were to develop and build the rockets in California, then launch them here. But the latest announcement states that the rocket’s size “makes them very difficult to transport.”
This development obviously creates new opportunities for the Valley. An assembly plant would be welcome in a region where unemployment exceeds the state and national average. It also would bring the area more skilled jobs, which are in short supply here.
Musk already has reached out to local educational institutions, including area high schools, about creating programs that will give students the kinds of skills that could help them secure jobs with SpaceX. An assembly plant would further expand such job opportunities.
Such opportunities already are growing; SpaceX originally suggested that the Boca Chica site might be a secondary facility, specializing in unmanned launches to deploy satellites or send supplies to the International Space Station. In recent years, however, announced plans have grown to include the launch of the company’s largest rockets, raising hopes that eventually, the Rio Grande Valley might provide a springboard for manned missions to Mars, one of Musk’s long-term goals.
And SpaceX isn’t the only game in town. United Launch Alliance, which builds the Atlas and Delta lines of rockets, already has an assembly plant in Harlingen.
But assembly is only one of the space-related career tracks that our schools and colleges can feed. Experts are needed to design both the rockets and their missions; intricate calculations are needed to plan successful missions, with launch timing and trajectories taking into account the Earth’s position relative to a rocket’s destination. Research determines many missions, telling the space teams where to send the rockets and why, and observation and tracking are constant throughout any mission.
Such high-tech work could be folded into the University of Texas Rio Grande Valley’s already strong engineering school.
UTRGV has one of the top gravitational wave astronomy programs in the country if not the world; the local program has been among the first in the world to detect colliding stars, and in 2015 it contributed research to the global Laser Interferometer Gravitational-Wave Observatory that helped detect gravitational waves from merging black holes — research for which it won the 2017 Nobel Prize in Physics.
Successful academic programs, coupled with an expanding aerospace industry, can help attract more space-related companies. If our local institutions are ready to partner with those companies and supply them with qualified workers, there’s no telling how high our opportunities could go.
Welcome to Edition 1.32 of the Rocket Report! As we get deeper into the new year, the launch business is starting to heat up, especially among the …
Welcome to Edition 1.32 of the Rocket Report! As we get deeper into the new year, the launch business is starting to heat up, especially among the smaller rockets. Companies are eyeing launch sites, securing launch contracts, and scrambling on development of their rockets. This is simply going to be a huge year for small-sat launchers, and we’re going to do our best to stay on top of everything.
As always, we welcome reader submissions, and if you don’t want to miss an issue, please subscribe using the box below (the form will not appear on AMP-enabled versions of the site). Each report will include information on small-, medium-, and heavy-lift rockets as well as a quick look ahead at the next three launches on the calendar.
Relativity Space to launch from historic Florida site. The company that aspires to 3D print almost the entirety of its rockets has reached an agreement with the US Air Force to launch from historic facilities at Cape Canaveral Air Force Station in Florida. Relativity Space said Thursday it has a multiyear contract to build and operate its own rocket launch facilities at Launch Complex 16, Ars reported.
Up to a 25-year lease … Under terms of the competitively awarded agreement, the site will officially be a “multiuser” facility for five years. However, if Relativity meets certain milestones and begins regularly launching rockets, it will be able to convert the agreement into a 20-year, exclusive right to use the launch site. “This was definitely our top choice, I would say by quite a bit,” Relativity co-founder Tim Ellis said. “We looked at every launch site in the United States.”
Iranian small-satellite launch fails. The third stage of an Iranian Simorgh rocket failed Tuesday, preventing the booster from putting the 90kg Payam satellite into orbit. Prior to the launch, Iran said it intended to send two nonmilitary satellites, Payam and Doosti, into orbit. The Payam, which means “message” in Farsi, was an imagery satellite that Iranian officials said would help with farming and other activities, the AP reports.
US concerned about launch program … US Secretary of State Mike Pompeo has alleged that Iran’s space program is serving as a precursor to the development of a missile capable of carrying a nuclear weapon to the mainland United States. Regardless, it is not clear how this failure will affect the country’s plans to launch the Doosti satellite. The Simorgh rocket used in Tuesday’s launch attempt is believed to have a capacity of about 350kg to low-Earth orbit. (submitted by Ken the Bin)
China firm scores smallsat launch win. Via the China Great Wall Industry Corporation, China’s new Long March 6 rocket has won a major commercial launch contract, with an agreement for up to six flights over two years to deploy 90 small remote-sensing satellites for Argentina-based Satellogic. The contract comes amid increased competition in the smallsat launch market, Ars notes.
Launch availability cited … Emiliano Kargieman, the founder and chief executive of Satellogic, said the company looked at a range of launch providers, including Rocket Lab and other emerging companies. “With all of the small-launch companies coming online, we will definitely consider them for future plans,” Kargieman said. “But for the rollout we need to do in the next 24 months, this relationship gives us the best option for meeting that goal.” China-based Tencent has helped raised money for Satellogic.
Virgin eyes Guam launch site with interest. Although no final agreements have been signed, senior Virgin Orbit executives say they are looking closely at flying Cosmic Girl missions from Guam as a base for their LauncherOne rocket. “We have looked around,” Richard DalBello, vice president of business development and government affairs for Virgin Orbit, told The Guam Daily Post. “There are other alternatives,” but “we believe that Guam is the best alternative.”
A few weeks at a time … The Virgin officials told the paper they envision flying the Cosmic Girl aircraft into the US territory for a period of four to eight weeks, during which the company would fly a series of missions. The Cosmic Girl would then return to the continental United States. The company and the Guam airport authority have been in talks for nearly a year, and the A.B. Won Pat Guam International Airport Authority still needs to obtain a spaceport license from the FAA. (submitted by BH)
SpaceX cuts workforce to get “leaner.” SpaceX will lay off up to 10 percent of its work force, the company said Friday evening. The company characterized the job cuts as “a strategic realignment” designed to ensure it is positioned to succeed for the long term, Ars reported. Although some reports said up to 850 people were terminated from a workforce of about 6,000, SpaceX said that the cuts were capped at 10 percent.
From development to operations … “To continue delivering for our customers and to succeed in developing interplanetary spacecraft and a global space-based Internet, SpaceX must become a leaner company,” a company official said. These cuts were not unexpected. SpaceX had grown rapidly, needing to engineer Falcon 9 various iterations, Dragon, Dragon 2, Falcon Heavy, Starlink, Starship, and more. Now it is done with development of a lot of those projects and no longer needs to build hundreds of Merlin engines or dozens of Falcon 9 cores a year. Same with Dragons. So SpaceX needs fewer people in production. When you hear about low-cost rockets and reuse, that means fewer people are needed.
Arianespace faces a challenging year. Amid increasing competition and a downturn in geostationary-satellite orders, Arianespace must find commercial customers for its new Ariane 6 rocket. “For Ariane 6, we aim at 14 launches [for the first model], so production has to start very soon for these, and this has to be ordered very rapidly,” Daniel Neuenschwander, ESA’s director of space transportation, said this week. Seven of those launches are meant to be commercial, SpaceNews reports.
Here to stay … “I’m always optimistic, but it’s extremely challenging,” Neuenschwander said. “We are probably facing the biggest challenge for the European space transportation sector since the last failure of Ariane 5, in 2002.” Regardless of the financial challenges, however, ESA officials reiterated that Europe will remain in the business of launching its own rockets. Overall, Arianespace is targeting 12 launches this year. (submitted by Ken the Bin and Unrulycow)
India targets midsummer for reusable second-stage test. “We are working on a reusable launch technology in order to recover the first and second stages of a rocket so that we can reuse them to cut cost and carry heavier payloads,” the chairman of India’s space organization, Kailasavadivoo Sivan, told Times of India. The first stage will land like SpaceX’s Falcon 9 rocket, but the second stage will be shaped like a miniature space shuttle, gliding back to Earth and landing on a runway.
A helicopter test … Sometime in June or July, the Indian official said, a helicopter will drop a mock-up of the second-stage shuttle from a “considerable height” to determine its ability to glide back to Earth. An additional test from orbit would be conducted at a later date. This is an interesting approach to rocket reusability, so we’ll look forward to this test with interest.
SpaceFund rates the “reality” of launch companies. A new effort led by some new space pioneers has published a rating system for the credibility of launch providers. In its own words, “The SpaceFund Reality rating is an effort to provide critical, intelligent, and non-biased information about the status of the growing space industry and to make as much of this data available to the public as possible.”
An interesting start … Companies are rated on a scale from 9 (hello SpaceX, United Launch Alliance, and others) to 0 (mostly un-funded startups you’ve probably never heard of). The SpaceFund “should not be used as the sole basis of any business, investment, or partnership decision.” It is not clear how this effort will handle conflicts of interest, but we do appreciate the effort to bring some clarity to this diverse and rapidly changing launch industry. Although some will certainly quibble with the ratings, it strikes us as a reasonable first stab at a moving target.
Test stand for SLS rocket “Green Run” almost complete. Activation of the B-2 test stand at Stennis Space Center in Mississippi for the “Green Run” test campaign of the first Space Launch System Core Stage is almost complete. NASA and its contractor workforce are moving into practice and simulations of the upcoming tests while finishing up remaining tasks, NASASpaceFlight.com reports.
Test may occur in about a year … The B-2 test stand has been previously used for Saturn, Shuttle, and Delta 4 stage tests. During the “Green Run” test, the entire SLS core stage will be fired to simulate a launch of the vehicle and ascent into space. It is one of the major milestones in preparing the SLS rocket for launch. NASA has yet to set a date for the test, which could occur at the end of 2019 or early 2020. (submitted by Ken the Bin)
ULA sets new date for Delta IV Heavy flight. After multiple delays, United Launch Alliance said this week that “everything is progressing” toward the Delta IV Heavy launch carrying the NROL-71 mission for the National Reconnaissance Office. The mission is set to lift off on a Delta IV Heavy rocket on Saturday, January 19, from Space Launch Complex-6 at Vandenberg Air Force Base in California.
Ready to go? … Launch time is 11:05am local, Pacific Time. Weather currently is 60 percent go. This is an important mission for ULA, which was originally scheduled to be launched in September before being scrubbed for various technical and weather reasons, including a hydrogen leak, in December. Watching a Delta IV Heavy launch is always good value.
Vulcan rocket design “nearly fully mature.” United Launch Alliance will conduct the final design review for its new flagship Vulcan rocket within months, it said on Wednesday, Reuters reports. “The design is nearly fully mature,” ULA systems test engineer Dane Drefke said during a tour of Space Launch Complex 41 at Cape Canaveral Air Force Station in Florida. The final design review is a critical step toward reaching Vulcan’s first flight in early 2021.
Job cuts done now … According to the report, ULA has started cutting and building hardware, and it has begun structural and pressure testing at its Decatur, Alabama, factory. Engineers were also modifying the Florida launchpad and tower to accommodate Vulcan. ULA does not envision more job cuts and has been adding engineers in Florida and elsewhere. “We are now optimal-sized,” Drefke said, adding that ULA will be hiring more engineers as it moves into production. (submitted by BH)
Next three launches
Jan. 19: Delta IV Heavy | NROL-71 | Vandenberg Air Force Base, Calif. | 19:05 UTC
Jan. 21: Long March 11 | Jilin-1 (imaging satellites) | Jiuquan, China | TBD
Jan. 24: PSLV | Microsat-R mission | Sriharikota, India | 18:08 UTC
The company has received more than $45 million in venture capital backing from Y Combinator, Mark Cuban, Playground Global and Social Capital, …
The details: Relativity Space aims to begin launching payloads into low-Earth orbit as soon as 2020 from launch pad LC-16 at Cape Canaveral, the site of Titan rocket launches in the past along with Gemini and Apollo mission activities.
In an interview with Axios, Relativity Space co-founder and CEO Tim Ellis said the company already has over $1 billion in booked launches and that its rocket, Terran 1, will be capable of launching payloads of up to about 2,700 pounds.
Ellis said each launch will cost customers about $10 million.
“We can serve all of those small satellite customers that maybe don’t fill up our entire satellite … while also capturing the larger satellite market,” Ellis told Axios.
The company has received more than $45 million in venture capital backing from Y Combinator, Mark Cuban, Playground Global and Social Capital, among others. Its management includes former SpaceX, Virgin Galactic and Blue Origin leaders.
What to watch: While SpaceX views reusability as the key to lowering the cost of access to space, Relativity Space is betting on simplifying rocket manufacturing by using 3-D printing. This minimizes parts and cuts manufacturing time, while allowing for flexibility in changing rocket designs, Ellis told Axios.
“We are going to see the future happen with this approach,” Ellis said. His company aims to hold its first launch in 2020.
Relativity Space has its main manufacturing facility in Los Angeles, with a 20-year exclusive use agreement with NASA’s Stennis Space Center in Mississippi.
Yes, but: Relativity Space has yet to launch its rocket into space, let alone successfully carry payloads, putting it years behind the other companies operating at Cape Canaveral. It remains to be seen whether this venture-backed space company can make major gains via automated manufacturing — although the Air Force seems to think so.
While Elon Musk-led aerospace company SpaceX currently has the biggest section of this pie, the numbers might soon change. Especially if the …
The Indian Space Research Organisation (ISRO) will be carrying out tests in June and July this year to conduct an advanced version of the reusable launch technology.
By 2024, reports suggest the global market for rocket launches is expected to reach the $7 billion mark. While Elon Musk-led aerospace company SpaceX currently has the biggest section of this pie, the numbers might soon change. Especially if the Indian Space Research Organisation (ISRO) is able to achieve the goals it has set for itself.
ISRO, deemed as India’s apex space agency, has taken an ambitious task upon itself, laying out plans to apply the reusable launch technology (RLT) in the second stage of a rocket launch. For the uninitiated, this technique of launching basically corresponds to the use of the first and second stages of a rocket multiple times. Not only does this allow the space tech company to save money, but will also cut down the time taken for building a rocket each time.
SpaceX has for long been a proponent of the reusable launch technology (RLT), using which the company has not only grown since its inception in 2009, but has also emerged as a dominant player in this sector. At the moment, Musk’s company commands around 50 percent of the market share – an impressive feat that ISRO is now trying to emulate.
Speaking about the plans to utilise reusable launch technology (RLT), ISRO Chairman K Sivan said, “The first rocket stage will be recovered on a vertical landing spot in the sea like SpaceX has been doing it with its Falcon rocket. However, recovering the second stage is not simple.”
“We are developing a winged body like a space shuttle. This shuttle will be attached as a second stage in a rocket. It will carry the top portion of the rocket comprising a satellite or spacecraft to space. Once it injects the satellite in its orbit, the shuttle will glide back to the earth and land on an airstrip like an aircraft,” he added.
The Indian space agency will be carrying out tests in June and July this year to conduct an advanced version of the technology.