SpaceX investor's thread

[bxr140]

I'd buy that ticket for $20-30k (each way) for the experience in a heartbeat.

Sure, and a good number of people will. But again, context here is not space tourism for the elite, it is Starship as PTP transport, explicitly with a descriptor of "massive" applied to the use case. What you're describing is very analogous to Concorde (incidentally a financial failure, but that's not the point here), where the elite few were willing to shell out a bunch of money for convenience, prestige, and the experience. If the price point of Starship PTP is limited to is rich people looking for elite level status and convince and the experience, its not going to be a major revenue stream.

Further diving into PTP travel, IMHO to be sustainable the price point for needs to come down to the point where companies are willing to trade the existing cost of business cabin travel with the convenience of PTP...and that's AFTER the safety record (and corollary insurance rates) have MANY years if not a decade or more to prove out.

Circling back to space tourism, there will never be a significant market for people willing to shell out $20k [in 2020 dollars] for a few min in space. Could that tourism price point be a profit center? Sure. Will that price point ever result in a massive revenue stream and, more to the point, represent a fundamental reason to invest?

No. Effing. Way.

 

[adiggs]

Sure, and a good number of people will. But again, context here is not space tourism for the elite, it is Starship as PTP transport, explicitly with a descriptor of "massive" applied to the use case. What you're describing is very analogous to Concorde (incidentally a financial failure, but that's not the point here), where the elite few were willing to shell out a bunch of money for convenience, prestige, and the experience. If the price point of Starship PTP is limited to is rich people looking for elite level status and convince and the experience, its not going to be a major revenue stream.

Further diving into PTP travel, IMHO to be sustainable the price point for needs to come down to the point where companies are willing to trade the existing cost of business cabin travel with the convenience of PTP...and that's AFTER the safety record (and corollary insurance rates) have MANY years if not a decade or more to prove out.

Circling back to space tourism, there will never be a significant market for people willing to shell out $20k [in 2020 dollars] for a few min in space. Could that tourism price point be a profit center? Sure. Will that price point ever result in a massive revenue stream and, more to the point, represent a fundamental reason to invest?

No. Effing. Way.

I'm in agreement that the space tourism industry isn't of sufficiently big volume by itself.

I think that within the pool of age 60+ folks that have retired and can reasonably expect their retirement portfolio to carry them through the remainder of life - I think there will be more than you think that will cough up the bucks for that experience, Especially if it gets down closer to what people would pay (per person) for a week or 2 of travel / vacation. Yeah, it doesn't give you the length of the experience.

If somebody had told me even a few years back that there was an outside chance of going into space myself, I wouldn't have believed them. Today, I'm confident that if the PTP stuff happens, then there will be a price for me where I won't care about the destination - round trip would be just fine . Thus my point - this is an adjunct support for the PTP volume.

And it's worth noting that PTP travel really needs to pay for itself relative to current air transport. I don't know where the break even will be between price and convenience (long and cheaper flight vs short and expensive flight) and it will clearly vary for each person. Finding that break even that brings a sufficiently large mass of current cross ocean travel to make the PTP travel a desired method of travel will be interesting.


And for what I want, that just makes it more likely that I will someday get to go visit at least low orbit (given that PTP travel ever gets off the ground). Heck - it might even be more likely that I would do some international travel (my one effort was sufficiently exhausting and painful that I'm only going to try again by flying business or first class).

 

[adiggs]

As would I. Way cheaper than what BO and Virgin Galactic will be offering. However, the Starship PTP trip may not allow passengers to unbuckle and float around due to the challenges of managing such a large number of people in microgravity and the fact that the main purpose of the trip is to get from A to B as quickly as possible.

This is the big deal - what do you actually get to do. One thought I have is that it might not matter. Bragging rights and the low gee experience even while strapped into one's seat might be enough.

 

[abasile]

Please detail the "massive new possibilities" enabled by Starship.

Today, such possibilities may largely be the stuff of science fiction, like reusable rockets ten years ago. However, a great deal of commercial potential lies along the critical path toward establishing self-sustaining colonies on Mars.

Space tourism is a bit of a dud, see: New Shepard, Virgin Galactic. There's an opportunity for sure; "massive" it is not.

The potential for space tourism goes well beyond brief, sub-orbital flights. Imagine constructing hotels and recreational venues in low Earth orbit. Stanley Kubrick envisioned some of that back in the 1960s, but a combination of low launch costs and automation could turn Scifi into reality. As costs drop, the addressable market grows exponentially.

Pleasure travel to the Moon will become an option, initially for the very wealthy and eventually for the upper middle class. Imagine the allure of traveling to a Moon base and spending time on the lunar surface, perhaps walking around craters or bouncing around in 1/6 g, with awe-inspiring views of the cosmos! Such experiences will be far beyond the most exotic vacations that terrestrial tour companies can offer today.

Factories in orbit are another possibility. Zero gravity (actually micro-gravity) manufacturing is likely to be of value for some applications.

Not least, there is the possibility of mining the Moon and asteroids. Constructing large structures in orbit or on the Moon will eventually become cheaper when the raw materials no longer need to be lifted from Earth.

All of this may seem like pie in the sky. However, Earth orbit and the Moon offer proving grounds for many of the technologies that will be needed on Mars. Under Elon Musk, SpaceX seems likely to pioneer whichever vertical markets are most likely to strengthen the company and/or help prepare for Mars. By the way, this is among the reasons I am not an investor in Virgin Galactic!

 

[mikevbf]

Even if we assume a pie-in-the-sky $1M cost/trip, with ~100 PAX that's ~$10k/PAX, which is more or less today's international first class. There's still a TON of work to do on that price point if "massive" is going to be part of the vernacular.

plug in 4 million first class passengers a year at an average of 10k per person long distance flight and I think you get 40B. Not bad.

 

[ecarfan]

Stanley Kubrick envisioned some of that back in the 1960s

Correction: Arthur C. Clarke, not Kubrick. Clarke wrote the book that became the movie, and while the book and the movie were developed somewhat concurrently, the ideas about what space travel would be like were almost certainly Clarke’s. I actually had the opportunity to speak to him directly — and to my astonishment — privately in 1995 in Singapore. 2001 is my all time favorite story/film.

 

[bxr140]

I think that within the pool of age 60+ folks that have retired and can reasonably expect their retirement portfolio to carry them through the remainder of life - I think there will be more than you think that will cough up the bucks for that experience, Especially if it gets down closer to what people would pay (per person) for a week or 2 of travel / vacation.

If we're talking tourism, yeah, could be--with the key there being the price point. (Its not $20k) But going back to the fundamental premise of investing in SpaceX because of Starship growth opportunities, growth as a result of tourism from the 60+ crowd YOLOing their IRA is probably not something on which a diligent investor would base a position.

And it's worth noting that PTP travel really needs to pay for itself relative to current air transport. I don't know where the break even will be between price and convenience (long and cheaper flight vs short and expensive flight) and it will clearly vary for each person. Finding that break even that brings a sufficiently large mass of current cross ocean travel to make the PTP travel a desired method of travel will be interesting.

Agree on all accounts, and this is why I actually put PTP travel as the best growth opportunity for Starship...but again that opportunity is WAY in the future. Assuming the regulatory/safety stuff can get squared, its a consumer dollars game as to what kind of premium a critical mass of people will tolerate for the convenience. But more than just offsetting what we know as air travel today, the opportunity is really in fundamentally changing change the way people view distance--similar to the step function in the 70's when the jumbo long haul routes started to open up, and then again in the past ~decade (since the recession) as a result of race-to-the-bottom ticket price free-for-all.

Anyway, for instance, today we have people weekly commuting via air, sometimes from state to state. Imagine that being continent to continent? Today a business trip from the US to Asia/Oceana is days--what if you could day trip from LA to Sydney for a meeting?

The potential for space tourism goes well beyond brief, sub-orbital flights!

Totally agree on all accounts. I am very on board with imagining a future with concepts like the ones you described. As a space production person I've opined here more than once over the years about the opportunity from manufacturing in space. But, broken recording again, we're not looking at revolutionary lift demand being placed on Starship anytime soon as a result of any of those niche-for-a-long-time concepts, and certainly not anything on which investor would base a decision.

Maybe we need a "wouldn't it be awesome" thread to differentiate from this SpaceX Investors thread.

 

[abasile]

Maybe we need a "wouldn't it be awesome" thread to differentiate from this SpaceX Investors thread.

As you are "a space production person", I don't find it surprising that your outlook on lift demand, and commercial activity in space in general, is conservative. I think you are trying to be very realistic, and I appreciate that.

However, Elon Musk is a "rule breaker"; he has created corporate cultures that innovate at breakneck speeds and cause massive disruption. Only within the last year or two did I begin to closely follow SpaceX, but I've been obsessively following EVs since 2010 and Tesla since 2012. Tesla's progress has been absolutely amazing, a fast-growing market for long range EVs has been created from scratch, and I don't see any reason not to expect similar "miracles" from SpaceX. I expect at least some of that "wouldn't it be awesome" stuff to indeed become very relevant to SpaceX investors. That being said, my time horizon is measured in decades.

 

[EVCollies]

plug in 4 million first class passengers a year at an average of 10k per person long distance flight and I think you get 40B. Not bad.

I think you will get some stretch first classers. I've never flown first class, even on long overnight flights, just not worth the money. But if I could take a 20 hour travel time down to 30 minutes, count me in.

 

[Xepa777]

I think you will get some stretch first classers. I've never flown first class, even on long overnight flights, just not worth the money. But if I could take a 20 hour travel time down to 30 minutes, count me in.

If I could get literally 30 seconds of weightless-ness where I can quickly unbuckle my seatbelt and take a selfie I'd do it as well, and I'm the most frugal guy you'll meet.

On another note, SpaceX said 700k people signed up to the beta. Not bad, though many were international. With word of mouth marketing for Starlink I'm very excited about these developments. SpaceX submits request to operate 5 million Starlink Terminals due to ‘extraordinary demand’

Great to see how easy it is to install as well. SpaceX in 1.5 years is going to be a household name. That's crazy. And that's BEFORE DearMoon.

 

[UnknownSoldier]

Hello fellow Earthlings.

If one has recently reached the point where they qualify as being an 'accredited investor', how can they go about trying to invest in SpaceX? I mean directly invested, not like buying Baron Partners Fund or whatever.

 

[Xepa777]

Hello fellow Earthlings.

If one has recently reached the point where they qualify as being an 'accredited investor', how can they go about trying to invest in SpaceX? I mean directly invested, not like buying Baron Partners Fund or whatever.

You can't, unless you are able to invest $10 million+ to get direct shares, then work with SpaceX directly for their next participating round. Even current/former SpaceX employees have a clause that SpaceX has first right to buy back shares if they decide to sell them in the future.

Companies at a certain # of investors must go public by law, so that's why SpaceX limits investors. And due to the nature of SpaceX, you also have to be a US citizen.

The only way around these rules to really invest in SpaceX is through a SPV/fund that owns 100% SpaceX shares. It's indirectly investing in SpaceX still, but you capture most of the gains that SpaceX gets over time (minus the fees). You can PM me for more details and I can make intros.

 

[mongo]

On another note, SpaceX said 700k people signed up to the beta. Not bad, though many were international.

Where did you get 'though many were international' regarding the 700k from?
From the article/ filing:

Despite the fact that SpaceX has yet to formally advertise this system’s services, nearly 700,000 individuals represented in all 50 states signed up over a matter of just days to register their interest in said services

The FCC only regulates the US portion of ground terminals and the second round of sign ups required a full address, allowing for localization.

 

[mikevbf]

A snippet from Ark Invests newsletter today:

"ARK’s research suggests that the annual addressable market for satellite-delivered internet will be $10 billion in the US and $36 billion globally, though it will face some roadblocks in the short term. Antenna costs, for example, will have to fall significantly before satellite-delivered internet will be able to scale."

What do people think?

 

[mikes_fsd]

A snippet from Ark Invests newsletter today:

"ARK’s research suggests that the annual addressable market for satellite-delivered internet will be $10 billion in the US and $36 billion globally, though it will face some roadblocks in the short term. Antenna costs, for example, will have to fall significantly before satellite-delivered internet will be able to scale."

What do people think?

I think there are more short term road blocks to profitability in addition to user terminal antennas.
For instance, to decrease latency for long hops, you need satellite interlinks. This also helps with reducing the need for more ground stations or allowing for failure at one ground station to still route traffic to another ground station that is out of sight of the originating statellite.

I am sure there are others road blocks, even if they are completely made up by competitors or gov't bureaucracy.

 

[bxr140]

As you are "a space production person", I don't find it surprising that your outlook on lift demand, and commercial activity in space in general, is conservative. I think you are trying to be very realistic, and I appreciate that.

You'll find my general outlook on space implementation very progressive (especially technology and production concepts... ), and my outlook on near and mid term lift demand and commercial activity in space as realistic. No conservatism here, ain't got time for that.

I expect at least some of that "wouldn't it be awesome" stuff to indeed become very relevant to SpaceX investors.

I think it comes back to: what stuff? I appreciate the optimism shown by folks in this thread on the success they want to see from Starship but it would be nice if that optimism was supported by a little bit of reason and logic.

 

[bxr140]

I think you will get some stretch first classers. I've never flown first class, even on long overnight flights, just not worth the money.

For many folks it is absolutely worth the money, and long haul premium cabins are a major profit center for the airline industry, both from direct revenue and indirect loyalty.

After private air travel, premium commercial travel is IMHO the only other realistic target audience for a Starship PTP...though again price point would still need a lot of work. How much more someone would be willing to pay for Starship PTP convenience over traditional business/first cabins is pretty hard to speculate on, but I'd wildly guess 'less than 2x', where 'x' is closer to business than first.

It would also be interesting to speculate on the actual convenience of Starship PTP. Can the Starship space(?)ports be as ubiquitous as airports? Or would they only be on the coasts, for over-water travel? Would delays mirror air travel, or would a rocket launch be more susceptible to weather? Would you have to stay strapped into your seat? (I'd guess yes). By that point in time we'll probably also have supersonic travel available and, while those fares would of course be higher than subsonic travel (and thus make a Starship PTP price point comparison more favorable), they also bring a convenience factor, [presumably still] an elite experience factor, and an overall experience that's basically just an enhanced and shorter version of what we're all conditioned to for long distance travel--all of which would be unfavorable for Starship.

I may have just convinced myself there's not a major growth opportunity for Starship PTP.

 

[Cosmacelf]

A snippet from Ark Invests newsletter today:

"ARK’s research suggests that the annual addressable market for satellite-delivered internet will be $10 billion in the US and $36 billion globally, though it will face some roadblocks in the short term. Antenna costs, for example, will have to fall significantly before satellite-delivered internet will be able to scale."

What do people think?

My suspicion is that SpaceX has the ability to charge more for good satellite based Internet than people realize and that will allow them to use more expensive terminals than people think they can afford.

 

[bxr140]

A snippet from Ark Invests newsletter today:

"ARK’s research suggests that the annual addressable market for satellite-delivered internet will be $10 billion in the US and $36 billion globally, though it will face some roadblocks in the short term. Antenna costs, for example, will have to fall significantly before satellite-delivered internet will be able to scale."

What do people think?

There are 8.4M households (according to hit #1 on The Googs) that get satellite internet in the US. At $100/month that's ~$10B, so the math checks out. Presumably the $36B is accurate as well. That's the good news. The bad news is, near as makes no difference, that's the cap for residential service. 8.4M households in the US. 30M globally (assuming equivalent price).

By the time Starlink's full constellation of ~4000 sats is up the GEO operators will have ~equivalent capacity over the US (maybe a little less than equivalent), and Amazon will likely have their initial constellation up as well. Assuming Telesat doesn't give up the LEO thing they'll be in the game too, and it sounds like OneWeb is still hanging on for dear life so we can't count out them trying to be competitive too. (IMHO Oneweb's US coverage gets absorbed by one of the GEO operators so they have a hybrid system with low latency...but that's another conversation...)

Also in that time terrestrial networks will be building up/out service to areas they've historically ignored, and also 5G will be pretty well rolled out. Both enhance the non-space solution...uhh...space...for many folks.

So the exercise is dividing up that $10B into pie slices for SpaceX, Amazon, Terrestrial, MNOs, Legacy GEOs, and whoever else wants to play like Telesat and OneWeb. The price wars will be mega. Starlink will definitely grow their market share over the next few years...until Amazon comes in and undercuts. Amazon will probably see value beyond revenue (= controlling more data) and as they've proven, they won't care much about operating on tight margins so everyone with a satellite is at risk there. Legacy hardline and MNOs not already merged will likely pair up with a buddy from the other side of the fence so they don't end up as competitors when the 5g space and legacy hardline space intersect.

Whatever happens, the end of this decade is going to look very different than the beginning. No question SpaceX will be the catalyst; what remains to be seen is how they'll fare in the end. They won't have a perpetual upper hand like the rocket side of the biz since there's not going to be significant cost or technology differentiators for Starlink from the competition, and given that a) Mars is the real goal of SpaceX and b) terrestrial technology will always have the upper hand over space technology, a first principals assessment of Starlink's future could see an agressive overgrowth through the middle of the decade and then a reduction into much more modest steady-state revenue stream through the end of the decade as competition levels the field.

There will basically be an equivalent exercise in the $36B space, with the added layer of needing to secure landing rights for foreign entities, and with an addressable user base that's likely going to shrink faster than in the US. Obviously places like China are going to be off limits, but one could imagine friendly first world countries like Canada, Australia, and France levying restrictions/taxes on American internet based on their own space interests too. One could also imagine the inevitable Chinese constellations servicing a large percentage of that world market...even more so with our current administration all but purposely trying to strengthen China's relationships with everyone else in the world...


Antennas for ground terminals are always going to be a bump in the road for NGSO service--while your GEO internet dish is basically the same thing as your DirecTV dish that just has to point that way, Starlink, Telesat LEO, Kuiper, etc all need to track individual sats as they strafe across the sky or they need to be 'dumb' fixed antennas that have much lower performance than a tracking gizmo...and really not that much less cost. Regardless, its hard to say how far down the cost can be pushed from the current ~$1k.

 

[Big Dog]

There are 8.4M households (according to hit #1 on The Googs) that get satellite internet in the US. At $100/month that's ~$10B, so the math checks out. Presumably the $36B is accurate as well. That's the good news. The bad news is, near as makes no difference, that's the cap for residential service. 8.4M households in the US. 30M globally (assuming equivalent price).

Disagree. There have to be thousands of households using cable internet that would readily switch to sat if the price was right. (Or am I misreading your point?)