Starlink has achieved breakeven cash flow(twitter.com) |
Starlink has achieved breakeven cash flow(twitter.com) |
Starlink is life changing for a lot of people. You would not believe how many different communities ISP market has been shaken up by Starlink. Many people went from high latency metered internet measured in kilobits to 100Mbps at 30ms. I've seen this both in the US and outside the US. Not mention previously unthinkable things like living on a sailboat and working remotely.
The biggest issue at this point is cost. It's mostly a premium product for high income people. I hope access gets cheaper as they scale. I think in general having a globally connected planet with high speed internet is going to make the world better (once we overcome the negative side effects of things like social media addiction)
Being cash flow positive is an extremely important milestone for a startup, but no, it doesn’t indicate profitability.
> While Musk said in October that Starlink was losing money, Shotwell offered a more upbeat assessment. “This year Starlink will make money,” she said, noting that the company’s Falcon launch vehicle and Dragon spacecraft, and other unspecified work, already makes money.
> “We actually had a cashflow positive quarter last year, excluding launch. This year, they’re paying for their own launches, and they will still make money,” she said.
> She said cash flow from operations pays for development, supplemented as needed by outside investment. Tackling both Starlink and the Starship launch vehicle at the same time, she argued, drives that need for outside investment.
> “If we had done Starlink and then Starship, or Starship and then Starlink, we probably could have funded them through customer contracts and revenue from Falcon and Dragon. But you do both of them at the same time it’s a lot of money every year.”
Combining this with today’s statement I think we can answer your questions:
> Breakeven including launch costs?
Yes - cash flow breakeven for the Starlink business unit which includes it’s launch costs.
> Breakeven on only satellite operation costs? Breakeven when you exclude all satellite and ground infrastructure costs? Breakeven when you exclude all costs except Elon’s ego stroking expenses?
No to all these alternatives. But why the dumb ad hominem?
[1] https://spacenews.com/shotwell-ukraine-weaponized-starlink-i...
Each launch burns about 120 tons of kerosene for about 360 tons of CO2.
If we take this Nature study as accurate, a ton of CO2 has a societal cost of about $185. If we add that all up, it's $70k per launch? Let's round up to $100k per launch.
Multiplied by launch count, that's only a few million dollars. They're still at breakeven when you include it.
This is not the same as some fiscal year net income calculation.
Edit: fixed
Cash flow positive tells you they're not going to go broke, at least until they need more capital expenses (5 years...), which is a milestone, sure.
But profit is a better measure of a business's value as a going concern. What happens in 5 years when they can finance with interest rates at 5% and they have competition? I don't know... If they were profitable and could give returns investors needed, that would tell you they can survive.
According to Wikipedia design started in 2015, which means it's taken them more than 8 years to get to cash-flow break even. This is why you need billions of dollars to get started. And that doesn't include the fact that they had to build a rocket company to launch their birds.
Looks like they picked the right 60 engineers.
They presumably also had to build all the ground stations and infrastructure to manage all those devices...unless they're using AWS Ground Control, which would be hilarious.
Surely you're aware that this sort of comment is exactly what sparks and fans the flames of said flame wars?
I’d have denied that request too.
Please make sure you communicate the facts correctly when spreading this meme.
More generally though: why do people love spreading false narratives? It’s ok not to like tech billionaires but I don’t get why they go around lying about stuff. There are plenty of legitimate criticisms of Elon Musk without making stuff up.
Exactly this.
Someday I would like to understand how we got here as a society.
BUT I am really rooting for SpaceX and Starlink. Honestly I hope the shiny toy that is X/Twitter keeps his attention for a while and he leaves those orgs to run as they have been.
According to SpaceX their satellites last 5 years. That means Starlink must make, at minimum, $8B/year to maintain the constellation.
`$8B/yr / ($200/mo * 12 mo) = 3.33 Million users`
3.3 million users paying $200/mo in order to break even. The starshield contract probably covers a good amount, too.
Falcon 9 costs 67 million for external customers, for internal use the cost will likely be lower. Let's say 50. 50 * 118 gives us a HIGH estimate of 5.6 billion, but i'd expect it to be much closer to 3-4 b.
Satellites are relatively cheap. Total cost below 10b, certainly not 40b
Additionally, $200/m is not price competitive compared to traditional ISPs in most of the world, $20-50 is more typical for many areas, less in Africa/Asia. Yes Starlink has a USP over traditional services, but that USP won't benefit users who are already well served by traditional ISPs, so to expand outside the remote market they will need to drop prices to compete.
The maths could easily end up being $12bn/year / ($30/mo * 12m) = 33.3 million users. Is that a reasonable goal? That's a lot of paying users. That's a 4% market share in Europe and the US where there are highly developed telcos with decades of experience in this. That's a hard one, particular to achieve it in the near term (~5 years or one replacement cycle).
I'll buy some shares if Starlink go IPO. this break even cash flow might bring the IPO one step closer.
https://www.nasdaq.com/articles/spacex-wins-a-$70-million-sp...
Starlink is going to start making obscene amounts of money
Those who control the data flow, access, search etc. control surveillance and the minds of the masses which is why funding is often seen from the sec state.
Especially relevant because Starlink has been causing numerous near-collisions over the past few years.
This is incorrect. Cash flow is cash flow. Net income smooths capital expenditures. Cash flow does not. What that means is if you have a ten-year capital asset, year 0 cash flow will suck while year 1 will be exaggerated. (Starlink is currently in year 0 as it’s building out its constellation. Presumably, capex will fall when it’s in maintenance.)
They're cashflow breakeven and could run net income negative over the next five years as a subscription market grab with the capex amortization over the 5 years.
It is possible they could become incredibly profitable when the capex investment in 5 years is much less than the initial capex.
Equipment costed $5 or $1/yr. Replacement equipment could cost $2.50 or $0.50/yr.
I see this plenty with business capex for on-prem/datacenters. What costed $5M over 5 years on a refresh replacement for 1:1 replacement is usually more than half the cost.
It is unclear if, as bad as many terrestrial ISPs are, Starlink has a TAM big enough. It's going to be slower and less reliable than terrestrial wireless, and expanding terrestrial wireless coverage is going to be cheaper for a very large percentage of potential customers. Starlink is not competitive with terrestrial fiber.
If that's the case, why has it taken until SpaceX for there to be viable Internet service to many of the rural areas they service? People are replacing 3Mbit DSL links, or even dial up (yes, in 2023, dial-up) service with starlink. terrestrial fiber beats Starlink handily, except where it hasn't been run. Which, even many urban areas still don't have gigabit fiber Internet service available, never mind when suburban or rural areas will get it (if ever). The other part of the addressable market is airplanes and boats/ships, and remote bases like McMurdo in Antarctica. Not sure how you're proposing we run fiber Internet to them.
I'm also seeing more commercial entities looking at it simply as a backup.
Personally, I hope it’s true. Starlink is good for the world.
> have probably been positively impacted by him
Well, every time my Model 3's wipers go batshit insane, I get a little irritated with his decision to forego a known good solution that the rest of the world has been using for decades. Not feeling positively impacted at that moment ;-)
Why do people always talk about needing to meet a guy to have an opinion on them? I haven’t met Dick Cheney either
For better or worse is up to the individual opinion, but its not really weird to have a strong view on a polarising figure, especially one with the influence of musk.
You can love him because rockets, EVs, and enormous satellite constellations are pretty cool, but you'd be a fool to trust him.
It doesn’t require strong opinions about Musk to understand the value in taking what he says with skepticism.
Musk's record is quite clear at this point: https://webcache.googleusercontent.com/search?q=cache:https:...
And no, it is not about predictions of this being done by that year alone.
Why would people most probably been positively impacted by him? He seems to constantly have knee-jerk reactions to things happening around him, and his companies seems to frequently have issues with overworking employees.
I'll never take anything he says at face value because anything that's ever come out of his mouth is posturing.
I'm frankly tired of billionaire windbags like him. I have no idea how someone could be a fan of his.
1. His only software contribution at PayPal was torn out and discarded 2. After his software at paypal was rejected he was fired by the board at paypal.
It is not that he does not have business skills to market. It is that he presents himself as someone that does quality engineering..which in fact is somewhat false.
It wasn't good for Ukraine when Musk pulled the plug on them.
More significantly, both NASA and the Space Force receive SpaceX financial statements because they require reassurance that all their vendors are viable ongoing concerns.
IOW, if this is a lie, then he could lose his 2 biggest customers. And I wouldn't be surprised if lying to the Space Force is an actual crime.
https://slate.com/technology/2023/10/x-linda-yaccarino-debt-...
The rub, of course, is that most of the cost for something like Starlink is designing, building, and launching the satellites, which shows up in investing cashflows.
Put differently, if the company was actually generating more cash than it consumes on all levels, start the IPO right now and SpaceX will be a $1tn+ company (instead of a $100bn+ company that people expect will one day generate cash and then be a $1tn+ company).
I've heard a few of them, like concerns about AI which I don't think are unreasonable but I'm curious about what other projections he's had that are unreasonable?
One of the major problems in Ukraine’s case is they depended on the private sector _without a contract_ leaving them up to the pro bono will of the owner.
Elon has a nose for picking feckless, evil, competitors: People hate car dealers. People hate their ISP. Elon absolutely saw these opportunities.
https://www.theregister.com/2022/11/14/musk_twitter_rpc_spat...
They already have shareholders? And as you point out, if the founder really wanted to, he could have self-funded most of SpaceX (instead of buying X for example).
He's a public company CEO already - he has no qualms about taking SpaceX public.
It was a reorg with elaborate branding impacts, not a from-scratch creation.
Musk's SpaceX is the only reason Ukraine has been able to maintain its Internet infrastructure throughout the war. It would have been a communications disaster otherwise, particularly for all non-military (NATO would have done its best to provide patch-work communications for the military).
https://www.nytimes.com/2023/09/08/world/europe/elon-musk-uk...
> Elon Musk foiled an attack on Russia’s Black Sea fleet last year
> Mykhailo Podolyak, a top adviser to President Volodymyr Zelensky, accused Mr. Musk of enabling Russian aggression. Because of Mr. Musk’s decision, “civilians, children are being killed,” he wrote on X on Thursday. “This is the price of a cocktail of ignorance and big ego.”
> a SpaceX executive said that Starlink had taken steps to curtail Ukraine’s use of the technology to control drones, infuriating Ukrainian officials.
It was never turned on in the first place.
[KB] There have been no problems since it's been turned on over Crimea.
https://www.thedrive.com/the-war-zone/exclusive-interview-wi...
Not an attorney, not your attorney, speak with one for estate planning purposes. Hope this helps!
Can you share a link that documents him saying this? Every statement I've heard is something to the effect of "to preserve a space for free speech." If you can't produce evidence, you're assuming intent. That's your bias, and it isn't rooted in reality.
> Why do people always talk about needing to meet a guy to have an opinion on them?
I think its more a question of the degree to which people care. Dick Cheney was integral in launching wars that spent trillions and killed millions. Compare that to Musk who is probably more responsible than any other single person for reviving both the electrification of transport and the reviving of space exploration. All via companies that you're perfectly able to completely ignore. Meanwhile, Cheney used public treasure to mire the U.S. in foreverwars. Do these two people seem even remotely equivalent to you? Do both seem worthy of your very strong opinions?
His actions speak louder than words: https://www.theverge.com/2023/2/14/23600358/elon-musk-tweets...
Are Dick Cheney and Elon Musk equally as evil? No. It’s an analogy.
As with everything Elon does, one should wait and see because he has had decent success turning things that seemed stupid money pits at the time (i.e. electric cars and rockets) into legitimate companies disrupting what was thought to be entrenched markets. Also, to my knowledge he has never pulled share structure Bullshit in his companies which makes it possible for his shareholders to fire him if enough don't like what he is doing, something I can't say about the other big tech CEOs, and something that deserves respect in its own right regardless of your opinions of anything else the guy has done.
Musk is not in favor of free speech, he is in favor of allowing speech he likes to get a free pass while limiting the speech of people and groups he disagrees with. The left does not like what he is doing because they disagree with which speech he is allowing and which speech he is blocking. What I have seen lately is users reporting trouble for accounts which support Palestine (which are not making any posts which violate twitter rules). And of course Musk is supportive of accounts which primarily exist to harass trans people, which is justifiably upsetting for people who just want trans people to be able to exist without harassment. But it's not about "free speech" it's about who gets to control the speech. The "free speech" line is just a convenient narrative.
https://nypost.com/2022/12/02/twitter-invented-a-reason-to-h...
https://reason.com/2023/01/02/under-government-pressure-twit...
He's accelerated the switch to electric cars.
He's made transport to space a lot cheaper, saving a lot of taxpayer's money.
Gwynne gets all the credit for SpaceX IMO. Elon gets credit for letting her succeed.
It was nice of her to have the idea, pursue that idea through financial hell across many years, bankroll the start of the business top to bottom, use all of her connections to get it outside funded, and sustain it financially personally to the direct threat of personal bankruptcy.
Good thing she did all that and gets all the credit.
Everyone loves the Teslas and hates the Edisons, but the world does need Edisons.
Remember the Tesla deathwatch blog?
Which, in today's industry and world might have been too early as we still haven't figured out if mining all that lithium is better for the world or not, right now.
> He's made transport to space a lot cheaper, saving a lot of taxpayer's money.
Yeah, for ~4% of the world's taxpayers. We'll still see if SpaceX is a net-win for humanity, too early to tell.
There's not evidence for that. In fact, by being willing to lose so much money on each car Tesla likely discouraged the broader industry from investing in electric cars for many years. Tesla may have, in fact, made the switch to electric cars slower than it otherwise would have been.
I agree with you. I don’t think it’s worth working that hard for someone else. No one will remember someone who works for Musk. They won’t earn more than they could somewhere else. To each their own, though. I worked incredibly hard on much stupider things in my past.
So actual rule violating accounts are purportedly being protected, while left leaning accounts which do not violate rules are being manipulated behind the scenes, if the reports are to be believed.
Again I recognize that I have not provided sources and I don't expect you to just take me at my word, but I wanted to correct what you think I am saying. I am not just concerned with uncomfortable speech, but outright harassment and the apparent suppression of certain left leaning accounts. That is why I say it is about controlling the narrative.
EDIT: Did a couple of quick searches. Banning journalists for being critical of Musk/Twitter isn't very free speech oriented!
December 2022
https://www.pbs.org/newshour/nation/journalists-who-wrote-ab...
April 2023
https://www.vanityfair.com/news/2023/04/elon-musk-twitter-st...
Developing reusable rockets was thought to be impossible and there was no hope for lowering the cost to orbit on the horizon _at all_ by anyone in the world, country or company. Rocket technology developed by governments is laughably bad compared to what SpaceX has built. Now, Starship promises to lower the cost to orbit to an incredibly low number and open up access to space to normal people. This is not a pie in the sky plan, the rocket is literally sitting on the pad in south Texas, waiting for bureaucratic rubber stamping so that it can launch.
I am not white knighting, I don't care about the personal foibles of the man running the thing, I am cheering on science, technology, and the progress of the human species.
To my knowledge, he has never lied about the present financial state of his companies. That gives him credibility in a way e.g. Yaccarino bullshitting about what fraction of Twitter’s advertisers have returned does not.
https://www.cnn.com/2023/02/03/cars/musk-tesla-tweet-lawsuit...
The end result is left out every time the "court finds" articles are linked. The jury found the opposite, which is what actually matters.
I've been reading about low-orbit satellite since at least the late 1990s when it must have been Slashdot articles then. There have been several plans, but the one whose name I remember was Iridium. I believe it became operational, but only ever managed to be used for voice telephony. It's been bankrupted and bought by other companies since then.
This is an absurdly difficult market to break into, and everyone has failed to one degree or another, with the degrees of failure all clustering around the really extreme end of that spectrum. This is ignoring any technological challenge (of which there are apparently more than a few).
He is claiming to have done a (business) thing that has been demonstrated to be nearly impossible. A thing which, if he hasn't done it and is merely lying about, we might not know for months or years.
It is perfectly reasonable to be skeptical of this, and no one owes him the benefit of doubt on this issue or any other. It is perfectly reasonable to remain skeptical even if you do not believe the man a liar. It is an extraordinary claim, and requires extraordinary evidence.
Capital Raise
4,281 days since Elon Musk said Tesla will never need to raise capital again. (2/12/2012)
"Tesla does not need to ever raise another funding round." Elon Musk, quoted by John Voelcker in Green Car Reports
4,052 days since Elon Musk raised $195.7M in common stock. (9/28/2012)
3,822 days since Elon Musk raised $313M in common stock. (5/16/2013) 3,822 days since Elon Musk raised $600M in convertible notes. (5/16/2013)
[...]
1,157 days since Elon Musk raised $5B in common stock. (9/1/2020)
1,059 days since Elon Musk raised $5B in common stock. (12/8/2020)
There are few such men, and arguably fewer who have the enthusiastic haters that Musk does.
I understand criticism. However, a (multiple) path of innovation is always going to be riddled with mistakes and failures. Within this context, the specific enthusiasm for hating Musk, by some, seems petty to others.
Edit: Lol, bring on the downvotes, it only serves to prove my point.
No, white knighting is accusing skeptics of being emotional haters who just don't appreciate all the good that Musk brings to the world. Accusing them of being short sellers, etc. Jumping to the defense of someone who is more than capable of defending himself.
The problem with bringing up those other tech CEOs vs. actually defending Musk is it starts looking like whataboutism.
I personally think there's enough hate for tech CEOs to go around and we don't need to ration it out.
He's not saying "look over at that other CEO".
Even still, it's not whataboutism to put things in perspective as you may see that you're blowing one thing out of proportion due to bias if those same values are being violated by another entity but you are okay with it because of the entity itself.
It's always a good exercise to check for contradictions in your values.
The facts are not in dispute here. He tweeted "funding secured" and funding was not secured. He announced intentions to take it private at a given price, which did not happen.
He misrepresented the financial state of his company.
Luckily the jury had sense that the tweet was harmless in the end.
The judge ignored his stake in SpaceX he could have leveraged and mainly the Saudi Arabia firm that he was in talks with in taking Tesla private would not testify and then said the exact opposite:
https://www.theverge.com/2022/4/25/23040961/elon-musk-saudi-...
https://www.aljazeera.com/economy/2023/1/23/musk-on-trial-sa...
So in the end it's do you believe Elon or the Saudis?
The judge sided with the Saudis.
Do you agree with that logic or do you trust the courts over your peers?
(ie. what "metric" would you use "for what constitutes truth"?)
Under that logic, maybe Musk is just another African American being persecuted by the US government.
We're all waiting on the edge of our seats to know what your ideal judicial system is.
Btw you've never had jury duty? Did you vote in a mob form? I sure hope not. I haven't.
No jury I've been on has functioned that way. Have you acted that way?
If you don't support a system of a jury of your peers determining your guilt, what do you support?
Have you served on an American jury?