Comment by tristanj
6 months ago
I'm a SpaceX investor, and from reading the comments here, I think most people here are missing why SpaceX has an outrageously high valuation.
SpaceX's valuation only makes sense if you buy into their mission of creating a civilization on Mars, and that the Space Exploration Technologies Corporation is the vehicle that creates this future. If SpaceX achieves this, it would be the most valuable company ever created. It would be worth $10s of trillions.
I personally believe SpaceX has a 70% chance of achieving its Mars ambitions. So I find the current $1.75 trillion valuation very logical, if not a little underpriced.
If you believe there's a SpaceX won't achieve these ambitions, which I'd assume most people in this thread belong to, then you'd assign a <1% chance of this happening. Then you'd value the company based on it's financials, at a more realistic $200B. You'd explain the 8x valuation gap though a mixture of financial engineering and Elon grifting, both of which I agree are happening.
The current $1.75 trillion valuation comes from the ratio of people in camp A to camp B.
> SpaceX's valuation only makes sense if
It’s funny, I hear the exact same phrasing used when justifying Tesla’s valuation. “It only makes sense if…” … if you ignore what the actual, physical business does today, and picture it doing something entirely different, beyond its current capabilities (robotaxis, androids, etc)
The difference with this pie-in-the-sky ambition (Mars Colony) is that I don’t even understand how it would be profitable if achieved. What do you get from a Mars colony? What on earth (no pun intended) could you extract from it that would command that amount of value? This isn’t like colonization of the americas, where there was a trove of readily available natural resources to extract and sell back to the mainland markets - nothing is going to get shipped back from Mars any time soon. A Mars colony could only be supported through significant public investment - so is the valuation justified via the expectation that SpaceX will be the primary vehicle for public investment in Mars exploration, or through the centuries-long payback period of founding a self-sustaining civilization? Or both?
Uh, how exactly would SpaceX make money from a Mars colony?
Getting goods and people over there, I guess..
My belief is that Mars will be colonized for ideological reasons, not for profit. A Mars colony won't be profitable. But it will be colonized, mostly for prestige, and also because of overcrowding & pollution, which will become bigger issues in the coming decades.
But why? We’ve not colonised either of the poles of our own planet in any real way out of a sense of prestige. Heck there’s huge areas in Canada and Russia uninhabited and these are all a dream to live in compared to Mars.
Turns out the real overpopulation is in places people want to live.
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The ecological cost of moving the amount of people to even put a tiny dent in the earth's population would kill more and adjust the number that way than the actual moving would.
But why did you invest on those grounds? Is profit not your goal here?
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I say it will not be colonized based on problems of cosmic radiation, not because of lack of ambition or funds.
That's the same as saying SpaceX will be worth 200 billion USD at a $1.75 trillion IPO.
You have to pick one side, not both.
I believe there's a 0% chance SpaceX will achieve any of this, at least in my lifetime.
I however also believe that enough people will be lining up to buy whatever fantasy Musk sells (look at the Tesla stock as a shining example).
So I think SpaceX is still going to be a great investment if you can manage to get it at or below IPO price.
A civilization on Mars would not create value. It would be a money incinerator. Mars is a shithole with nothing to offer humanity economically or in quality of life. Quite the opposite, in fact.
250 years ago, you could make this exact argument about the British colonization of Australia, and it would be entirely correct. The early colony was a pure fiscal drain on Britain with almost no return.
Yet today it's the 13th largest economy on earth.
Think on a longer time scale.
The difference is that Australia is on earth... where we all live.
In fact, Australia already had people living on it.
We also have a lot of easily accessible resources via agriculture and mining, things Mars does not have. And even if it did having mining potential, the cost of returning the goods to Earth would be wild.
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>Think on a longer time scale.
On a longer timescale would it only be spaceX on Mars?
Australia was built by forced and indentured labour.
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So you’re investing with a 250y time horizon? Do you even expect profits from your investment? Or is it purely ideological?
Jamestown was a total failure, too.
"I personally believe SpaceX has a 70% chance of achieving its Mars ambitions."
When will that be? There are so many unsolved problems with Mars that creating a civilization on Mars will probably be decades or centuries away. Creating an autonomous station on Antarctica or the moon is child's play compared to Mars. And we are far away from that too.
The ocean floor is more habitable than Mars.
The asteroid belt likely contains more easily-obtained rare metals that also don’t have to escape Mars’ terminal velocity.
Reading a comment like the grandparent’s while we’re surrounded by many tangible crises on earth is sickening. Especially many of them manufactured by the same man who the grandparent comment seems to deify (DOGE AIDS funding).
Anyway, I find myself feeling contempt for the people in this industry pretty often.
Human problems are generally unsolvable, no matter how much money is spent on them.
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In the 2040s. The upcoming wave of robotics will push the cost of goods down enormously low, robotics + need for compute + cheap goods will cause a huge increase in demand for raw resources; mining on earth will not be able to keep pace & environmentalists will get generally upset about environmental destruction caused by resource extraction.
People's attention will shift to obtaining resources from outer space, which leads to more demand for space exploration, and then space manufacturing to avoid polluting earth. Then the general sentiment towards a lunar/Mars colony will trend towards positive, and people will desire to run away from political problems on Earth. So significant investment towards building a Mars colony will happen then.
The technical problems with a Mars colony are not insurmountable, it's completely possible to build a colony with 2026 technology, just the cost is too high. Better technology (robots) and innovations (i.e. upgraded Starship) will push the cost down.
We are in the 2020s and the wave of AI has mostly raised the cost of energy and silicon chips without meaningfully increasing productivity.
> Creating an autonomous station on Antarctica or the moon is child's play compared to Mars.
That's because it's unnecessary. It's cheaper to just ship supplies in.
A Mars base isn’t exactly necessary either. My point was that we should have such a base for quite a while before we send people to Mars where sending supplies or rescue will take months. There are so many things that can go wrong and the people there will have to deal with these problems on their own without external help.
And how is a colony on mars necessary?
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If SpaceX is on track to achieve those goals, then why does it need special treatment to be included in fund indexes earlier than it would otherwise be?
And having a colony on Mars will be profitable because of...?
Was the British colonization and funding of Canada, New Zealand, and Australia profitable? All three colonies were not profitable for decades after their formation.
Yet looking back, colonialism was probably the most profitable venture ever undertaken. All three of them ended up becoming key allies and instrumental trading partners.
Think on a longer time scale.
I'm pretty sure that Britain actually had pretty specific goals of profitability from the get-go.
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Building those colonies involved a lot of slavery and forced or indentured labour.
All of those places had valuable resources for extraction. That was the whole basis for their colonization. The whole basis of colonialism, itself.
Mars has a lot of rocks.
We don’t even know if humans can survive effectively in Mar’s gravity. This effort is still deep in science fiction land.
The "most valuable company" ever created when talking about a future around 2030-40 is a mindset pre-singularity. Sounds like a caveman back then saying that in 500 years, if their group keeps growing, they will be able to control a whole continent, and have more access to good quality rock for pointy daggers, completely ignoring the fact the world will change in ways they can't fathom at the time.
How does a mars colony justify such a valuation? You have a gap in your explanation, that’s taken for granted, but why?
is there an article or document covering the value proposition and realistic timeline of Mars colonization available to read somewhere ? i certainly think it's good for humanity to do it but as a casual observer i imagine it will cost a lot of money over the next ~20 years as opposed to making any.
I don't know one off the top of my head, I learned most of my information about space and SpaceX from youtube, mainly from Scott Manley and Noise In Space.
This video gives an overview https://www.youtube.com/watch?v=G3hPH_bc0Ww but it strongly underrepresents the role of robotics.
"If everything goes perfectly according to plan over the next 30 years and they don't literally kill anyone through an accident it has huge value."
I wish I had the guts to just lie to investors with a bald face. I personally think Musk is an underachiver.
that's a fake quote and not at all related to anything I wrote.
It's not a fake quote. It's an extreme distillation of the apparent core of your argument. It's how it appears to me. It's related to what you wrote in that someone read it and came away with that conclusion.
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70% is way too high.
Good to know. So if you're in the majority and figured out Musk is full of shit, don't invest.
Not a good metric imo. The majority of people have no interest in, and have no idea what's happening at SpaceX or in the space industry in general. Any predictions they have are based on vibes, not evidence.
I wouldn't follow the majority for advice. They're not aware of what's happening. Take Starlink V3 direct-to-cell as an example, I believe less than 5% of the general public even knows what this is (even after a massive marketing campaign), and even fewer understand how it works.
Issue is, Musk is making pretty much every one invest by forcing indexes to bend the rules and include SpaceX into their ranks thus forcing index funds to buy at the early public valuation of SpaceX.
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Elaborate?