SpaceX: changing the world via cheap satellites

Beginnings

SpaceX started in 2002 with the aim of providing affordable space transportation services that will get humans off the planet and into space. At the end of 2019, SpaceX is leading the industry in cumulative launches, the most of any company in history. In addition to the Falcon 9 rocket, the company has two Dragon capsules that are currently serving ISS, with plans for five more under contract with NASA, six more under development, and more to follow. SpaceX has also developed a series of other spacecrafts which includes; the Falcon Heavy rocket, a communications satellite, and a crewed  Dragon 2 capsule. In December 2019, SpaceX completed its 77th consecutive Falcon 9 launch.

Flacon 9 Launch – TimelaplsePhoto: SpaceX

SpaceX recently successfully launched an upgraded version of their Falcon 9 rocket carrying 60 satellites. For years, the Russian Proton-M rocket has been more reliable than the Falcon 9, yet still considerably more expensive. SpaceX is also preparing a NASA mission that will launch dozens of satellites.

60 Starlink satellite stack Photo: SpaceX

The premise of SpaceX

The premise of spaceX is to demonstrate that private companies can not only launch vehicles and develop facilities required to support human missions to Mars, but also demonstrate reliability to a degree and at a price that makes private space missions feasible. The Falcon Heavy, used by SpaceX, would also have to be able to make several space station resupply runs, and it also has to be able to recover its Falcon 9 stages after flights to check its systems. If these requirements can be met, the Evolved Expendable Launch Vehicle (EELV) and International Space Station (ISS) sponsored programs could not only carry out a number of NASA-sponsored cargo missions, but could also be asked to carry out privately-sponsored manned missions to Mars.

SpaceX Falcon 9 boosters landing Photo: SpaceX

Into the age Low Cost Internet Satellite Network

Many members of the public believe SpaceX is just another company that is reliant on government contracts and finding in order to keep afloat and deliver profit. This mindset will be challenged in the near future as SpaceX is launching a low cost internet satellite network that will offer high-speed internet to consumers as well as Internet access to businesses. The network is called Starlink. This new initiative, which is the company’s largest commercial mission to date, is helping SpaceX pave the way for commercial satellites capable of providing services beyond Earth’s orbit, and will help SpaceX provide more reliable services to the public and businesses around the world.

In order to build this network; SpaceX is planning to launch 1,584 satellites. The company already started launching satellites in May 2019 and they are expected to complete up to 38 launches in 2020. This low cost internet satellite network will help businesses and governments around the world provide their citizens with “reliable, high speed” internet access. This will also boost internet speeds to those in low-income areas that are not currently covered by internet service providers.

Starlink Constellation visualization – Photo: Universe Today

Valuation

SpaceX is privately held. The company was valued at US$12 billion in 2015. However, now in 2020 the company is valued at US$52 billion, largely due to the launch of starlink.  This is a staggering jump, but not unusual for a private company that is not exposed to public market screturny and pressures. Especially with the premise of competing with every internet service provider (ISP) on the planet.  

On the other hand, Virgin Galactic (SPCE) is the closest publicly traded company that you can compare to SpaceX, in terms of being non-governmental and providing services exclusive to space (in contrast to ULA: BoeingLockheed Martin) . Virgin Galactic is valuated at US$2.51billion

Sir Richard Branson rings the bell at the New York Stock Exchange on Monday to mark Virgin Galactic’s trading debut Photo: AFP/Getty

Blue Origin is another company worth mentioning here as it is a non-governmental company focusing on reusable rockets and creating a global satellite internet service. However, this is not a public company (it is owned by Amazon’s Jeff Bezos). 

Blue Origin founder Jeff Bezos (left) hopes to start launching the New Glenn rocket in 2021 Photo: BLUE ORIGIN

Hidden Opportunities

Everything that matters to “space” matters to SpaceX as well and most of the things that matter to Elon Musk doesn’t matter to many of his critics.

A few hidden opportunities with SpaceX’s plans that may not be accessible to the public are  the use of the Starlink internet service for long distance High Frequency Trading (HFT). Electromagnetic waves travel faster in space than air or cables, so if Starlink is able to beat the speeds that current HFT trading requires they would hit a gold mine. Another opportunity for SpaceX is monopolizing transport to Mars. SpaceX superior space transport system (if demonstrated) could be the only cheap, reliable, and efficient way for nations to launch Mars missions. This would eventually go beyond purely science based space missions to space mining.

Electromagnetic waves travel faster in space than air or cables

Mike Hassaballa

To conclude, the path to profitability and sustainability for SpaceX is not very clear, but the opportunities and company’s success outweighs any worries about the risks involved.

If you have any questions about this article, or would like to discuss more, learn more, or obtain more analysis, please contact me at https://mhassaballa.com/contact-me/

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