SpaceX investment in Starship approaches $5 billion
WASHINGTON — SpaceX will have spent $5 billion or more on its Starship vehicle and launch infrastructure by the end of this year, according to court filings and comments by the company’s chief executive.
SpaceX filed a motion with federal district court in the District of Columbia May 19, asking to be added as a defendant in the lawsuit filed by several environmental and Native American groups against the Federal Aviation Administration May 1. That suit alleges the FAA improperly carried out an environmental review of SpaceX Starship launches from Boca Chica, Texas.
In the company’s filing, known as a motion to intervene, SpaceX argued that it was affected by the suit, which seeks to revoke the existing launch license the FAA issued for Starship/Super Heavy orbital launches from Boca Chica by claiming the FAA violated environmental law and regulations in the licensing process.
If the plaintiffs win the case, SpaceX stated, “the FAA’s decision could be set aside, and further licensing of the Starship/Super Heavy Program could be significantly delayed, causing severe injury to SpaceX’s business.”
To make that argument, the company included a statement from Bret Johnsen, chief financial officer at SpaceX. He said that, if the plaintiffs win, the company’s ability to generate revenue from Starship launches for both NASA and commercial customers “would be substantially delayed and jeopardized.”
He specifically noted that since a 2014 “record of decision” by the FAA, allowing SpaceX to develop launch facilities at Boca Chica (originally for the Falcon family of launch vehicles), “SpaceX has invested more than $3 billion into developing the Boca Chica launch facility and Starship/Super Heavy launch system.”
The statement did not break out the investment between the launch vehicle itself and infrastructure. SpaceX Chief Executive Elon Musk, in an April 29 online discussion on Twitter, the social media network he also owns, estimated that the company would spend about $2 billion on Starship this year.
“It’ll probably be a couple billion dollars this year, two billion dollars-ish, all in on Starship,” he said, adding that he did not expect to have to raise funding to finance that work. He also said in that conversation that he expected Starship to launch four to five more times this year and “would be surprised” if the company didn’t achieve orbit by the end of the year.
That schedule, though, depends on both the technical progress SpaceX makes in repairing the damaged launch pad and getting the next vehicle ready for flight — Musk is known for making aspirational schedules — as well as the outcome of the suit.
Johnsen, in his statement, outlined details of the consequences of any delay in launches caused by the suit. That includes nearly $1 billion in milestone payments on its NASA Human Landing System award linked to the first orbital launch and subsequent steps, which include demonstration of in-space propellant transfer, an uncrewed lunar landing and crewed landing. Neither the company nor SpaceX have previously outlined the schedule of milestone payments on its $2.9 billion award for Starship lander development for the Artemis 3 mission.
He also stated that SpaceX has invested billions into its Starlink satellite broadband constellation, and would be harmed if it cannot launch its larger “V2” satellites that require Starship. He said “hundreds of thousands of people” have placed deposits for service but are waiting until those larger satellites can be launched to have sufficient capacity to serve them.
On a smaller scale, he said that SpaceX offered Starship/Super Heavy to NASA’s Venture-Class Acquisition of Dedicated and Rideshare (VADR) contract for smallsat launches. The company estimated VADR to generate at least $10 million in annual revenue for the company, a small fraction of a single commercial Falcon 9 launch.
The SpaceX motion to intervene is one of the few updates since the suit was filed. The court set a July 1 deadline for a “responsive pleading” from the FAA.
HackCapital launches investment platform competitor to Odin and Vauban – TechCrunch
Much in the way that AngelList and CircleUp have helped U.S. startups with angel investing, HackCapital wants to do the same for Europe’s impact solution-focused startups.
Co-founders and industry angel investors, Arman Anatürk, Camille Bossel and Emilie Dellecker launched the Switzerland-based entity out of stealth Tuesday to join similar groups, like Vauban, Odin and Roundtable, in helping founders, fund managers and syndicates in the climate tech industry raise capital from their networks for their own raises.
HackCapital is the fundraising and financing arm of Hack Group, the creators of the food tech community FoodHack and HackSummit. It provides a way for startups, funds and syndicates to use the HackCapital platform to launch an investment vehicle and pool capital from multiple investors in their network into the funding round, said Anatürk, co-founder and CEO of HackCapital, via email.
HackCapital manages the legal and administrative services behind these pooling mechanisms via a fully digitized platform that makes issuing and investing easier and more affordable.
To date, over 30 funds and startups have used the infrastructure to roll up investors into their rounds, including Vienna-based Arkeon and Canada-based New School Foods, Anatürk said.
Where Anatürk said HackCapital is doing something different is that it is using a securitization structure, which centralizes the administration to bypass the needs of traditional special purchase vehicles, which limits the number of investors.
“HackCapital’s infrastructure is specifically designed for liquidity and secondaries,” Anatürk said. “We believe that the private markets will play a critical role in solving climate and health in the next decades, but the lack of liquidity is one of the main factors that prevents more capital flowing towards meaningful innovation and impact, especially in deep-tech fields, where the innovation cycles take longer than the typical 10 years fund return.”
Twitter may be worth one-third what Musk paid for it last fall as Fidelity marks down investment – ABC News
Twitter may now be worth one-third of what Elon Musk paid for the social media platform just seven months ago
Twitter may now be worth one-third of what Elon Musk paid for the social media platform just seven months ago.
Financial services company Fidelity has reduced the market value of its equity stake in Twitter for a third time, now putting it at $6.55 billion. That’s down from the nearly $20 billion Fidelity valued its stake at in October.
It is unclear how Fidelity came up with its valuation figures, but as a public company it’s required to provide investors with updates on its holdings. Because Twitter is a private company now called X Holdings Corp., information about its finances can’t be verified.
Musk took control of Twitter in October, after a protracted legal battle and months of uncertainty. The CEO of Tesla, who also owns SpaceX, bought Twitter for $44 billion.
The billionaire financed the purchase with funds including loans from a group of banks. Musk has said the $44 billion price tag for Twitter was too high but that the company had great potential.
By April Musk was telling the BBC that running Twitter has been “ quite painful ” but that the social media company is now roughly breaking even after he acquired it late last year. Musk predicted at the time that Twitter could become “cash flow positive” in the current quarter “if current trends continue.”
Paramount stock rises another 6% as investors cheer Loop Capital upgrade, new investment deal
Paramount Global (PARA) closed Tuesday’s trading session more than 6% higher after Loop Capital upgraded the stock late last week, suggesting financial pressures surrounding the company will force it to find a buyer.
Loop Capital upgraded shares to Hold from Sell but reiterated its price target of $14 a share with analyst Alan Gould telling investors, “We no longer believe the downside is that much greater than the upside.”
“While we still believe a turnaround of PARA will be a challenge, investors’ perception of the company could change with a motivated seller, clever bankers, and Berkshire’s purse strings,” he said.
“The bull case is that the financial pressure will force PARA to find a buyer and shareholders will achieve private market value. The bear case is that there are no buyers for the cable assets, the streaming business is a work-in-process, and Shari Redstone will not sell just the studio, the only asset that would have multiple highly interested buyers,” Gould added.
Shari Redstone currently serves as the non-executive chairwoman of Paramount Global, in addition to president of her family’s holding company, National Amusements (NAI), which controls the company through its class A shares.
Paramount closed Friday’s trading session up 6% after BDT Capital Partners, an affiliate of BDT & MSD Partners, funded a $125 million preferred equity investment in National Amusements.
The investment will help NAI pay down its revolving loan and recent term loan borrowings, according to a press release. Paramount has recently battled layoffs, business restructurings, and a dividend cut that sent the stock plummeting nearly 30%.
“Our expanded partnership with BDT & MSD reflects our strong belief in Paramount’s ability to deliver value to all shareholders,” Redstone said in the release.
“NAI has conviction in Paramount’s strategy and execution, and we remain committed to supporting Paramount as it takes the necessary steps to build on its success and capitalize on the strategic opportunities in our industry,” she continued.
Paramount has long been viewed as a potential acquisition target due to its small size relative to competitors. The company boasts a current market cap of about $10 billion, compared to Disney’s (DIS) $161 billion and Netflix’s (NFLX) $176 billion.
Paramount CEO Bob Bakish hinted more media M&A was on the horizon while speaking at a UBS media conference late last year.
“Consolidation has been the rule in business for a long time, certainly been the rule in media,” he said at the time. “So, it’s hard for me to bet on anything other than consolidation will happen in the future.”
In February, shortly following the announcement that Paramount would be folding Showtime into Paramount+, The Wall Street Journal revealed the company had turned down a more than $3 billion offer from executive David Nevins to buy Showtime.
Nevins’ proposal was one of many offers the company had received for Showtime over the past several years, the Journal said. The network, which is home to popular shows like “Billions” and “Yellowjackets,” was said to be a key driver in unlocking value for the media giant.
In addition to the Showtime offer, the company has tip-toed around recent reports of a potential sale of the company’s BET Media Group, which includes cable channels BET and VH1, after producer Tyler Perry and media mogul Byron Allen reportedly expressed interest in purchasing a majority stake.
Warren Buffett’s Berkshire Hathaway (BRK-B) boosted its stake in Paramount Global in the fourth quarter of 2022, purchasing an additional 2.4 million shares worth more than $40 million, according to a regulatory filing released on February 14, pushing its stake in the company north of 93 million shares.
Another Buffett connection lies in BDT & MSD Partners’ Chairman and Co-CEO Byron Trott — long known as a trusted advisor of Buffett.
“Paramount has an incredible legacy, underpinned by its industry-leading content and media assets. We believe strongly in the value creation opportunities ahead for the company and its shareholders,” Trott said in Friday’s release.
Still, not everyone is convinced a sale is on the horizon — at least not right away.
Wells Fargo analyst Steve Cahall suggested on Tuesday that Redstone’s “conviction” in Paramount’s strategy implies “a break up of the company is not likely anytime soon.”
Alexandra Canal is a Senior Reporter at Yahoo Finance. Follow her on Twitter @allie_canal, LinkedIn, and email her at firstname.lastname@example.org
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