Comment by swalsh
16 days ago
Imagine the East India Trading company advertising the TAM of the new emerging markets in the early 1600's. I bet the numbers compared to the old world would be enormous, and equally unbelievable.
IF, and yeah it's a gigantic really big IF... the future plays out the way people are envisioning it. It's future shock. Astroid mining, gigafabs, star ships launching hourly making space exploration cheap, satellite intelligence, physical AI. The world is going to be a completely different place IF SpaceX and the AI labs are successful. That TAM might be real. It's a literal moonshot, the stuff they're talking about sounds SciFi, but that's why the valuations sound SciFi.
That said, I would not invest anything into SpaceX that I wouldn't be willing to lose, and i personally would not invest until the lockups are free. Moonshots aren't in my risk profile.
This is such terrible history. Please Google things before making analogies.
The East India Companies (Dutch and English) didn't invent or discover the spice trade. They were created to leverage private capital to wrest control of the trade from the Iberian Union, an entity both Company's sovereigns were at war with.
The "TAM of the emerging markets" had already emerged both because of the Silk Route from Pax Mongolica and in the 1500s from the Portuguese Empire's Cartaz trade license monopolies enforced by their naval posts (feitorias) throughout Asia.
The TAM was incredibly apparent, Anglo-Dutch privateering during the war had seized multiple cargo laden ships along with trade route information.
I feel like you are intentially misrepresenting his comment to flex your history knowledge. English privateers captured the Madre de Deus. When they brought it to port, the cargo was worth roughly half the entire national treasury of England at the time. I think that is pretty equivelent to space mining, no?
We've been mining platnium and aluminum for all of humanity, so we know they exist, "The TAM was incredibly apparent". We know there are astroids worth 1 quadrillion dollars. So, if SpaceX has a 1% chance to capture that, thus the valuation.
Good lord.
a) If a single Portuguese treasure ship was laden with cargo of such magnitude, exactly how do you propose this is characterized as a TAM "discovered" by the East India companies?
b) Forget the asteroid, undersea mineral nodes are a total of 250 trillion tons worldwide, with an expected value of 233T USD. This is right here on Earth. Yet no country or company considers these minerals as a TAM, because the P/NAV makes this a net negative. This is the same reason any capex for Texas Shale oil will dry up if WTI falls below 60 for a period of time. No matter how many quintillions worth of oil are left in the shale reserves, if it costs more to extract than it will return, it isn't done. Arbitrary valuations mean nothing if they aren't economically viable.
c) Back to history. "Half the English crown treasury" sounds impressive, but the actual value was an estimated 500k pound sterling, upper bound 200M GBP in today's money. Quite a bit far away from 1 quadrillion. The English Treasury famously passed on a debt of 400k pound sterling to James 1 after the Spanish war, a contributing factor to a crisis between Crown and Parliament relations that eventually helped lead to the English Civil War. Suffice to say, a wartime treasury isn't very large.
Humour me for a bit. Let's assume we need to Hohmann transfer 1 quadrillion worth of minerals (30M metric tons) from a location in the asteroid belt to Earth. The DV necessary is 5000m/s, leading to a total energy calculation of 7.5 x 1e16 J. This is 78M tons of hydrolox fuel. 780k launches assuming 100 tons per launch (Starship). Are you honestly telling me that SpaceX is justified in adding asteroid mining returns to its TAM (1 quadrillion) because you believe it's economically viable to make 780,000 (lower bound) separate launches of fuel payloads from Earth to this asteroid? If ISRU is your claimed solution, then where is the Madre De Deus of this ISRU demonstration?
1 reply →
Let’s do a thought experiment. let’s say you find and can mine an asteroid full of rare earth minerals worth a quadrillion dollars, and you then flood the market with your yield. is this asteroid’s yield still worth a quadrillion dollars?
2 replies →
> We know there are astroids worth 1 quadrillion dollars.
> So, if SpaceX has a 1% chance to capture that, thus the valuation.
Surely 100% chance at capturing 1% of the Veblen Good asteroid is worth incredibly way more than 1% chance at capturing 100% of it.
The TAM that spacex quotes has nothing to do with Space. It is all AI. As in grok. This is a joke, and people that believe it are just providing exit liquidity.
Its not grok at all, their business is renting compute ie. infrastructure. If they have any hope of success its renting out space base compute.