Elon Musk says SpaceX facing 'risk of bankruptcy' in leaked email

Daniel Sims

Posts: 224   +10
Staff
In brief: Over the weekend, SpaceX CEO Elon Musk internally outlined a critical situation regarding engine production for its rockets. Production issues seem to be putting its Starship project and Starlink satellite internet service in jeopardy, and Musk admits the possibility of bankruptcy if these problems aren't solved.

According to a Thanksgiving companywide email leaked to CNBC and Space Explored this week, the crisis with the production of Raptor engines is worse than Musk had earlier realized. The SpaceX exec ended up canceling his planned Thanksgiving break, requesting all hands on deck to fix what he calls "a disaster."

The problem seems to concern whether SpaceX can get engine production on track to support the satellite launches necessary for its Starlink internet service. SpaceX developed the Raptor engines to power its "Starship" rockets. The company aims to use Starship for a 2023 lunar mission and eventually to send humans to Mars. However, its short-term goal is to use Starship to launch the satellites for Starlink.

Musk explains in the email that SpaceX is ramping up the production of terminals Starlink customers will use to access the internet. SpaceX's plans to build millions of units per year will suck up "massive capital" and will be useless unless the company can get enough satellites in orbit.

"What it comes down to is that we face a genuine risk of bankruptcy if we can't achieve a Starship flight rate of at least once every two weeks next year," Musk wrote.

Last week, CNBC reported that two SpaceX vice presidents in charge of rocket production had left. Sources said lack of progress led to SpaceX Vice President of Propulsion Will Heltsley's removal from Raptor development. SpaceX Vice President of Mission and Launch Operations Lee Rosen also left in November, as did Senior Director of Mission and Launch Operations Ricky Lim. All three had been with the company for years.

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Dimitriid

Posts: 1,507   +2,956
If there was only some kind of smug Billionaire that had enough on his personal finance to just keep funding the venture, but nope: It's too bad for Space X that they're not under the direct control of one of the most incomprehensibly rich persons in history to rescue the project I guess it will die...Or beg for tax payers money in the from of government grants.
 

Austinturner

Posts: 332   +421
If there was only some kind of smug Billionaire that had enough on his personal finance to just keep funding the venture, but nope: It's too bad for Space X that they're not under the direct control of one of the most incomprehensibly rich persons in history to rescue the project I guess it will die...Or beg for tax payers money in the from of government grants.
That doesn’t make much sense because almost all his net worth is ownership in spaceX and Tesla, if SpaceX is worthless, much of his wealth is simply gone and if he was to borrow against his tesla stake and it didn’t work out he’d lose control of Tesla and the other chunk of his net worth. Its not like he has 500B sitting in an S&P500 etf or cash.
 

Gameredic

Posts: 17   +7
That doesn’t make much sense because almost all his net worth is ownership in spaceX and Tesla, if SpaceX is worthless, much of his wealth is simply gone and if he was to borrow against his tesla stake and it didn’t work out he’d lose control of Tesla and the other chunk of his net worth. Its not like he has 500B sitting in an S&P500 etf or cash.
Yeah IKR.
Much of Elon's wealth is theoretical and not actually real. If he were to attempt to actually get that much money, then much of it would be gone due to a loss in demand in the value of the stocks that are the reason why he's rich in the first place.
 

Karlos95

Posts: 224   +153
That doesn’t make much sense because almost all his net worth is ownership in spaceX and Tesla, if SpaceX is worthless, much of his wealth is simply gone and if he was to borrow against his tesla stake and it didn’t work out he’d lose control of Tesla and the other chunk of his net worth. Its not like he has 500B sitting in an S&P500 etf or cash.
Why I find it funny when they say, these people need to be heavily taxed. On what? Their stock in a company.. give me a break.

Now if someone was genuinely bringing millions of cash a year in income, then definitely, tax them to hell. But these do gooders who don't understand how stocks (or assets for that matter) work need to get a grip on reality.
 

Dimitriid

Posts: 1,507   +2,956
Much of Elon's wealth is theoretical and not actually real.
That's a good start, but keep going: why is it "not real"? Because it's just potential for others to buy the stock? What do you think almost all of money is?
Why do you suddenly have the USD fluctuate up and down vs other strong currencies like the Euro? You'd rather deal in direct goods? Well those fluctuate even more if you look at the price of commodities like oil, so it's not that.

There is no intrinsic value: No form of wealth is actually real. What's real is the willingness to enforce property rights and who those are given to.

For example we commonly understand that very rich people rarely have consequences for their actions because their wealth translates into being able to mount impenetrable defense in court right?

But if that doesn't do it well, there's the legalization of bribes which Americans call "Lobbying" now: don't need to spend your money in court if you just spend it on politicians that write the laws that say that what you do is completely legal, hell you might even be entitled to a tax refund for what you do.

If you think about all of these things then you should understand what being a Billionaire means: It means that you personally can do all of these things and more, it means the law does not apply to you, the rules do not apply to you if you don't want them to, you can do whatever you want simply because almost nobody can stop you.

That's what money ultimately means and that's why Billionaires like Musk seem so preocuppied with the thing they supposedly have the most: money doesn't means anything if you don't actively enforce it by for example, demanding your employees work even more, for even less money, by you justifying firing most of them because you're "heading for bankruptcy" and there's no other way to save company A while company B continues to dominate and be among the most valuable in the world but oh, too bad you don't work for B right, you work for A so...We need to let you go, nothing personal we're just broke.

This entire thing is mostly an act to try to accumulate even more wealth and resources like I said, very likely from the government in the form of grants because hey we all want to go to Mars right? But the rich man is telling us it cannot happen because it's not "profitable" enough so we've gotta give him more of our money somehow, right?
 

Austinturner

Posts: 332   +421
Why I find it funny when they say, these people need to be heavily taxed. On what? Their stock in a company.. give me a break.

Now if someone was genuinely bringing millions of cash a year in income, then definitely, tax them to hell. But these do gooders who don't understand how stocks (or assets for that matter) work need to get a grip on reality.
Yes, but also I don’t think things are without issues, the tax system in many countries (like Australia) does have some advantages for primarily wealthy people who make their money via capital gains rather than income, I think capital gains should be taxed the same as income.

For Musk I don’t think he should pay taxes on unrealised capital gains, but at some point when he sells or when he dies and those shares leave his posession, the government should get its tax percentage.
 

seeprime

Posts: 642   +830
It's Musk's job as CEO to run the company properly. Apparently, he hasn't paid too much attention to his Starship engine production. That's on him. This whining must be solely to get workers to give him free overtime.
 

ypsylon

Posts: 435   +376
It's easier to smoke weed on TV/internet than to run a company...

Musk is treated as some kind of technology oracle or something while for the most part he is just charlatan very adept at draining somebody else funds for his own gain. I don't say he is completely inept technologically, but he always was very shrewd at exploiting other people ideas without his own funds and when things get tough, he'll bail in a blink of the eye.

It's obvious that Musk is a narcissist like any sociopath. To have all of major directors of departments fired when blame lays squarely on the owner tells everything you need to know about company and its owner.
 

lufkin

Posts: 7   +12
If you've been following Elon and see how he has been manipulating crypto I would not be surprised at all if he purposely leaked the email himself. Space X stock goes down. He acquires more. next minute voila engine issue has rectified itself and prices rise again
 

Austinturner

Posts: 332   +421
If you've been following Elon and see how he has been manipulating crypto I would not be surprised at all if he purposely leaked the email himself. Space X stock goes down. He acquires more. next minute voila engine issue has rectified itself and prices rise again
SpaceX is a private company, there is no publicly listed stock to acquire, do you mean sink the valuation of his privately held company? Why?
 
If you've been following Elon and see how he has been manipulating crypto I would not be surprised at all if he purposely leaked the email himself. Space X stock goes down. He acquires more. next minute voila engine issue has rectified itself and prices rise again

That makes no sense at all.

SpaceX isn't a publically listed company, it's entirely private. It isn't bound by the vagaries of the stock market. Most of its shares will be held by a few entities, not mass-subscriptions like typical listed companies. And the sort of entities who invest in private companies aren't the type buy/sell that stock in knee-jerk reactions.
 

wiyosaya

Posts: 6,944   +5,457
Every bubble has its pin.

I have to wonder why SpaceX needs to develop a new engine. SpaceX has royalty-free access to all of NASAs patents.
 

sickb0y

Posts: 17   +20
Not a problem Elon dork can ask the government for a couple of more hundred million out of his annual government subsidies, after all he is the walking definition of welfare queen.
 

mcclurken

Posts: 7   +32
TechSpot Elite
...
This entire thing is mostly an act to try to accumulate even more wealth and resources like I said, very likely from the government in the form of grants because hey we all want to go to Mars right? But the rich man is telling us it cannot happen because it's not "profitable" enough so we've gotta give him more of our money somehow, right?
Slow down there, Comrade! I want to see Tech-Bro-Turned-Bond-Villian Elon stroking a hairless cat in his new underground lair on Mars. You would be advised not to get in the way.

-May the Schwartz be with you and Elon.
 

mcclurken

Posts: 7   +32
TechSpot Elite
Every bubble has its pin.

I have to wonder why SpaceX needs to develop a new engine. SpaceX has royalty-free access to all of NASAs patents.
The Raptor engine uses methane and LOX which can be made from material available on Mars. In-situ resource utilization is the plan, eventually. The engine also has superior throttle performance to their existing engines, greater overall performance and improved reusability. Being able to throttle down without shutting off is important for landing in a gravitational situation different from Earth. It's better suited to the tasks envisioned for it versus sending relatively smaller payloads to Low Earth Orbit. But to your point, the RS-25 engines from the Space Shuttle are fantastic and that's why NASA is using them again on the new SLS rocket. But those engines, as good as they are, were built with different constraints and goals.
 

Karlos95

Posts: 224   +153
Yes, but also I don’t think things are without issues, the tax system in many countries (like Australia) does have some advantages for primarily wealthy people who make their money via capital gains rather than income, I think capital gains should be taxed the same as income.

For Musk I don’t think he should pay taxes on unrealised capital gains, but at some point when he sells or when he dies and those shares leave his posession, the government should get its tax percentage.
To a degree, I do like the system. But it would be much better if the pollies weren't over-paid and had actual qualifications for the industry/department they control. (or ridiculously corrupt, but that's another topic)

Then I wouldn't feel so bad about the crazy tax percentages. I think 30% would be a better top bracket for CGT instead of 50 - 100% of CGT going towards your income.

For example, say I make a measly $60k a year, it's fine if I make say $20k in an investment that year, tax barely changes, but if I make say $100k, now im in the 3rd largest tax bracket for a 1 off payment I may never be able to earn again, they should have some leeway for people earning less as a constant rather than making 1 fat sum of money. If they make it consistently then they go up the brackets. That would help the small earners get ahead... But I guess that's why the system is like that, they need the small earners landing on their position of the monopoly board, otherwise they'd be sitting on free parking or their own position the whole time and they weren't earn money for doing nothing...
 

Uncle Al

Posts: 8,468   +7,282
I would hate to see SpaceX fail but I'm very leary about anything like this coming from Musk ... he's gamed the market before and this could be just another attempt to push down the stock price so he can swoop right in but buy up a bunch of artificially depressed stock. Of course he got slapped pretty good for doing that a few years back; maybe he thinks the Fed has a short memory? LOL
 

captaincranky

Posts: 17,995   +6,810
I see a limited run of genuine exploding, exorbitantly priced, Starship models, in the near future. (To allow Musk to continue "saving the future for us", of course).
 

ChrisH1

Posts: 179   +87
I would hate to see SpaceX fail but I'm very leary about anything like this coming from Musk ... he's gamed the market before and this could be just another attempt to push down the stock price so he can swoop right in but buy up a bunch of artificially depressed stock. Of course he got slapped pretty good for doing that a few years back; maybe he thinks the Fed has a short memory? LOL

SpaceX Is a privately owned company. Not listed on the stock exchange. As commented several times already. There is no stock price to push down or artificially depress.