Comment by projektfu
6 months ago
$16B is the top line gross revenue number.
You don't count R&D as an expense per GAAP, so...
They have claimed $8B in EBITDA, also leaving out the amortization of R&D costs.
Those aren't audited numbers, as far as I know.
That article claiming $8b profit is indeed mislabeling EBITDA as profit. EBITDA removes any recurring replenishment costs, the cost of building the satellite, launching the satellite, the user equipment manufacturing and returns, all ground infrastructure build and replacement, all employee stock compensation (not counted!), no advertising costs (and they've actually had to do a lot of that lately to scrounge customers that are remote enough that their network isn't too congested to serve), no taxes are counted (though they get out of that because they have no profit!). Not to mention payments servicing all their debt and Starship development.
*they actually use "Adjusted EBITDA" which is even more nonstandard and means they define the accounting however they want!
>> *they actually use "Adjusted EBITDA" which is even more nonstandard and means they define the accounting however they want!
Enron would be proud...Theranos-level Transparency...
Right the commercial side never added up
90% of the valuation is about Golden Dome
Audited financials would be released with the S-1. But it's very unlikely that they are not audited given the amount of money they have raised.
No related to this conversation, but I just started reading some books on finance and I actually know what most of those terms mean now! Lol
Good for you! It’s fun when you realize it’s a constructed language that also tends towards precision. While accounting is not my favorite, financial models as a whole are incredibly powerful reasoning tools. On par, for me, with engineering or physics based first-principles reasoning.
Which financial models best describe reality in your opinion?
I'd always wanted to view affairs from a different lens, though I often feel the people who think everything revolves around bond rates or inflation numbers can miss the social picture of why things happen.
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Nicely done! When I started moving up from being an individual contributor to corporate management years ago, the brass would casually say things like "P&L" or "EDITDA" and I had no idea what they meant. I read textbooks, took online classes, and it was a big deal when I finally could lead a conversation related to our finances.
It's such common language in business that I didn't even realize I was writing so much jargon. I hope you inspired some people to look up the terms. It's really not that hard to understand.... Even CEOs can do it.
With the way I've seen some companies run, I'm not so sure CEOs can lol.
It's been interesting so far. The tough part for me is a the literature is all wrapped in "make your company more successful and profitable", and to be honest I couldn't give a shit about it that. I'm doing this for me, and because (especially on the age of AI) understanding this stuff is more important than ever.
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Any recommendations ?
I'm just stating out on this, so I haven't gotten through everything I want to read yet.
Right now I'm reading Financial Intelligence by Karen Berman and and Joe Knight. There's different versions, but I choose the one "for managers". So far it's done a good job making the material understandable for someone who doesn't have a degree in finance. This the one that's more relevant to the post and will help you start understanding how companies operate at a financial level.
For personal finance I have read
I Will Teach You To Be Rich by Ramit Sethi and A Random Walk Down Wallstreet by Burton G. Malkiel. The first sounds "click-batey" but that's because "I will teach you the boring effective way to manage you're finances" doesn't sell. The latter gets more into the weeds on investing. Bother are great (though Random Walk has been edited many times and the beginning of the book has become bloated, so I'd recommend skimming it a bit since it's just history on epic financial crashes).
I'm planning to read:
7 Powers — Hamilton Helmer
Good Strategy/Bad Strategy — Richard Rumelt
The Outsiders — William N. Thorndike Jr.
The Intelligent Investor — Benjamin Graham
The Psychology of Money — Morgan Housel
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I have a bachelor from a school of business and I have no clue.
What did you read that worked?
I'm going to copy/paste a reply I left for another commentor, so I don't have to retype everything lol
I'm just stating out on this, so I haven't gotten through everything I want to read yet. Right now I'm reading Financial Intelligence by Karen Berman and and Joe Knight. There's different versions, but I choose the one "for managers". So far it's done a good job making the material understandable for someone who doesn't have a degree in finance. This the one that's more relevant to the post and will help you start understanding how companies operate at a financial level.
For personal finance I have read
I Will Teach You To Be Rich by Ramit Sethi and A Random Walk Down Wallstreet by Burton G. Malkiel. The first sounds "click-batey" but that's because "I will teach you the boring effective way to manage you're finances" doesn't sell. The latter gets more into the weeds on investing. Bother are great (though Random Walk has been edited many times and the beginning of the book has become bloated, so I'd recommend skimming it a bit since it's just history on epic financial crashes).
I'm planning to read:
7 Powers — Hamilton Helmer
Good Strategy/Bad Strategy — Richard Rumelt
The Outsiders — William N. Thorndike Jr.
The Intelligent Investor — Benjamin Graham
The Psychology of Money — Morgan Housel
The Art of Deception.
You do not need to study anything else. You can even be very successful in every stages of your life with it.
Arn't R&D costs expensed as incurred under GAAP?
Software for sale or lease is treated specially. It may be expensed or it may be capitalized.
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Care to share more about?
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https://knowyourmeme.com/memes/source-i-made-it-up
Good to know.