SpaceX is preparing to try again to launch its huge Starship rocket as soon as Friday, assuming weather issues don’t delay the flight.
Tesla
and SpaceX CEO Elon Musk tweeted Monday the permits should be in place and Wednesday the FAA issued a license for one launch.
It matters both for SpaceX and for Tesla (ticker: TSLA), but not in the ways investors in the electric-vehicle company would suspect.
Not everyone in the Brownsville, Texas, region where SpaceX will launch its behemoth might agree the flight is a good thing. The first flight blew up spectacularly in April, strewing pieces of the Starship and launchpad about the landscape.
That a launch vehicle exploded, and SpaceX, appropriately, had to deal with related issues—cleanup, lawsuits, and potential restitution, not to mention the continuing cost of complying with government oversight— doesn’t matter much for the company in the grand scheme of things. Those costs likely add up to an amount in the tens of millions of dollars.
SpaceX is worth some $150 billion and is expected to generate some $8 billion in 2023 sales. It has shown over and over that trying, failing, re-engineering, and trying again is the best way to develop space technologies.
SpaceX didn’t respond to a request for comment about its financials or cleanup efforts.
That the side issues don’t matter is the lesson for Tesla investors. The company and its investors have faced a lot of things not typical for public companies, including Securities and Exchange Commission lawsuits, controversial tweets, large stock sales from its CEO, and more.
Most of those things just don’t matter to Tesla stock in the long run. One of the more famous incidents, a tweet by Musk saying he had funding secured to take Tesla private, shook up the stock and created a commotion on Wall Street, but the only tangible result for the EV maker was additional oversight and a small fine.
Investors need to develop the skill of categorizing issues according to whether they are truly important, or only matter a little, for the stock. Not all things that matter for society or for Musk personally, matter to Tesla stock.
Failing to ask and answer the question “Does this matter for the stock?” can result in needless selling when share-price moves get scary.
The launch for SpaceX certainly matters to Musk’s space company because Starship can carry a lot of stuff into orbit. The vehicle is designed to be fully reusable, which can reduce the cost of reaching space, extending SpaceX’s lead over other launch providers.
“SpaceX’s breakthrough technology of reusable rockets is key to Starlink’s success since the company can send satellites into low-Earth orbit much more affordably than one-use rockets,” wrote DataTrek co-founder Jessica Rabe in a Wednesday report. “Prior satellite internet constellation companies failed because this service is too expensive to build out without reusable rockets.”
Starlink, SpaceX’s space-based Wi-Fi service, ended 2022 with about a million subscribers. SpaceX’s lower costs are part of why it can charge affordable rates.
Lower costs are often at the heart of what allows disruptive technologies to succeed. That’s another lesson for investors.
Investors might also want to pay attention to Starship testing because Elon Musk has hinted in the past he would raise money in a Starlink, not a SpaceX, IPO when the Wi-Fi business was profitable. It achieved cash flow break-even results recently, according to Musk. More satellites and more subscribers would mean profit for Starlink and start the IPO clock ticking.
Write to Al Root at [email protected]
Read the full article here
