But a human Mars settlement is more than just hardware. The lives of people will be at stake, and serious thought needs to be given to the safety of the first human settlers. Musk admitted that the first colonists would have to be prepared to die, but killing people either on the way to Mars or once they get there will defeat the entire purpose of creating a colony in the first place. SpaceX may consider itself just a transportation company, but if it wants to get in the business of transporting humans, the company needs to reassure the public it can get them to a destination in one piece.Read more "The biggest lingering questions about SpaceX’s Mars colonization plans"
Every minute that SpaceX must spend figuring out why its rockets are blowing up, instead of launching them, is time the company is not collecting revenue, not earning profits, and not making progress toward Elon Musk’s goal of amassing enough money to finance a manned mission to Mars. So long as SpaceX is kept busy figuring out the SpaceXplosion phenomenon, there can be no relaunch of a “used rocket,” and no test launch of the company’s new Falcon Heavy rocket, either.
Meanwhile, SpaceX’s website continues to describe the company as “profitable and cash-flow positive” — even after two explosions and a combined seven months of inactivity over the past 15 months. The longer SpaceX remains grounded, though, the more questionable those claims will become.Read more "How Long Will It Take SpaceX to Return to Space?"
The recent explosion of a SpaceX rocket should raise concerns about going with the lowest bidder on sensitive national security launch contracts, the chief of the United Launch Alliance wrote in a letter to top Pentagon officials this month.
Tory Bruno, ULA’s chief executive, urged the Air Force to postpone the deadline for bids, saying it should take time to explore the impact of SpaceX’s rocket failure while also taking into account both companies’ experience and past performance.
The Pentagon should have particular reservations, Bruno wrote, given that SpaceX has now had two of its Falcon 9 rockets blow up, which he said “serve as a reminder of the complexity and hazards intrinsic to space launch services.”
“This strategy defies both law and logic and puts hundreds of millions of taxpayer dollars and Warfighter mission needs unnecessarily at risk,” he wrote.
The letter is the latest salvo in one of Washington’s most contentious contractor feuds, one that has pitted a pair of the world’s most powerful defense contractors against a brash billionaire looking to shake up a calcified market by offering launches far more cheaply. And it’s the most glaring example yet of a competitor going after SpaceX for its pair of explosions.Read more "Pointing at SpaceX explosion, ULA says Pentagon contracts shouldn’t just go to lowest bidder"
SolarCity’s fate now lies squarely in the hands of Tesla Motors and its shareholders.
A 45-day window in which SolarCity could consider other offers beyond Tesla’s $2.3 billion merger bid closed on Wednesday night, and no other investor or company put a proposal on the table.
That wasn’t entirely surprising. After all, 15 potential buyers or investors looked at SolarCity earlier this summer, while the solar energy company was hammering out the terms of Tesla’s merger offer and trying to see if anyone else would top the electric vehicle maker’s bid.
Now the big question is whether Tesla’s shareholders buy into CEO Elon Musk’s vision for creating a renewable energy juggernaut that combines electric vehicles with solar energy and battery storage.
Shareholders from both companies still have to vote on the proposed merger. The date of the votes haven’t been set, but it could be as early as October.
Most analysts think the deal will go through. They say many Tesla investors support Musk’s renewable energy vision and are likely to go along with his strategy.
They also tend to downplay the concerns that arose from the regulatory filing about the cash crunch that both companies are facing. Tesla needs to pay $422 million to some of its bond holders by the end of the month, and both companies need to raise billions in new funding to finance their ambitious plans.
The news recently has been better on the financing front. Tesla, which had $3.25 billion in cash on its books at the end of June, reached an agreement this month to borrow up to $300 million from Deutsche Bank to fund its vehicle leasing program.
SolarCity earlier this week raised $305 million in a deal with five institutional investors and an investment fund advised by George Soros.
That fundraising will cover only a portion of the companies’ financing needs, but it shows that their ability to raise funds remains viable.
Still, the worries persist on Wall Street. Since the deal was finalized on Aug. 1, Tesla’s stock is down by 13 percent. SolarCity shares have tumbled by 34 percent.
As a result, a deal that was worth $2.6 billion when it was announced now is worth about $350 million less.
In the deal, SolarCity shareholders will receive Tesla stock worth $22.59 at today’s prices. But because of the liquidity concerns and uncertainty over shareholder approval, SolarCity’s shares are trading at $17.50 – a steep 23 percent discount to the value the Tesla offer places on the shares.
Normally, the discount would be just a few percentage points.
One of the more skeptical analysts following the deal, Gordon Johnson of investment firm Axiom, pegs the odds of the merger passing at 50-50. Johnson, who has a sell rating on SolarCity’s stock and thinks it could fall as low as $7, said Tesla “failed to consider whether another solar company was a better fit,” and noted that none of the three potential suitors who had more extensive contact with SolarCity were willing to make a counter offer, according to a regulatory filing by the companies late last month.
“With a number of solar vendors available currently, at arguably depressed prices … Tesla failed to consider if any other solar companies offered more favorable synergies,” Johnson said in a research note.
Musk, who owns more than 20 percent of the stock in both companies and is SolarCity’s chairman, has argued that no company is a better fit for Tesla than SolarCity. With a commanding market share in the rooftop residential market, Musk has said that SolarCity, run by his cousin, Lyndon Rive, offers the best opportunity to link Tesla’s battery storage capabilities with a leading solar energy installer.
Some analysts wonder if Musk is taking on too much at one time.
“We see a lot more that can go wrong than can go right,” said Jeffrey Osborne, an analyst at Cowen & Co. “The company, while fundamentally well positioned for the long term, has a material amount of execution risk over the next 12 to 18 months.”
Tesla is developing its Model 3 sedan, which will sell for as little as $35,000 and will be its most affordable model, by far. As it moves to ramp up production of the Model 3, Tesla also is opening its battery gigafactory in Nevada.
SolarCity, for its part, is pushing to open its solar panel factory in South Buffalo, which will be the biggest in the Western Hemisphere, with production scheduled to start by the end of June as the company rolls out a new solar roofing product.
“The SolarCity acquisition only adds an additional layer of complexity at a crucial time when the company should be focused on the gigafactory ramp and Model 3 launch,” Osborne said. “We see the potential for delays in the introduction of the Model 3, ramp of the Gigafactory and integration of SolarCity, leading to increased cash burn levels.”
Cash is such a concern because neither Tesla nor SolarCity is profitable, although Musk, in a memo to employees this month obtained by Bloomberg News, urged them to cut costs and deliver “every car we possibly can” to push the vehicle maker closer toward generating more cash than it uses. Hitting that milestone would put Tesla in “a far better position to convince potential investors to bet on us.”
Together, the two companies will have about $5 billion in debt between them. And because neither one has a positive cash flow, they will have to raise billions in new capital to meet their ambitious plans, from opening the battery gigafactory and the Buffalo solar panel factory, to ramping up production of the Model 3.
The big question now, though, is how much interest Tesla shareholders have in approving the deal.Read more "Musk’s vision at stake in Tesla shareholders’ vote on SolarCity merger"
The Senior Senator from Arizona, Republican John McCain, is being investigated by an inspector general for the Department of Defense for inappropriate activities in promoting Elon Musk’s SpaceX over United Launch Alliance (ULA). Having had a long term political relationship with Musk, McCain supported the Congressional ban on the purchase or use of Russian-made RD-180 rocket engines, used by ULA. The Arizona senator used the Russian origin of the rockets as the basis for opposing them, while never raising issue with the other 99.6 percent of about $27 billion in goods imported from Russia.
SpaceX and ULA are the only two companies qualified to bid on the space launch contracts with the U.S. government, and quite conveniently, McCain pushed to ban the Russian-made RD-180 rockets to take ULA out of the bidding process, and by default have the contracts granted to SpaceX. McCain declared it a “big win for competition” when SpaceX won the contracts, but yet in reality he had helped them become the new sole providers of the launch services instead of ULA. Elon Musk’s investments in donating to Sen. McCain and the McCain Institute paid off handsomely in the form of billions in space launch contracts.
McCain has consistently supported SpaceX and Musk’s other companies, while SpaceX has supported legislation proposed by McCain. McCain’s S. 1376 bill titled National Defense Authorization Act for Fiscal Year 2016, received the support of SpaceX, who paid the lobbying firm Squire, Patton and Boggs $90,000 to seek passage of the bill. Congress later passed a different version of legislation, S. 1356, that carried the same title. According to lobbying reports from theCenter For Responsive Politics, In 2015, SpaceX sent $350,000 on lobbying, in part, for legislation that Sen. McCain voted for, includingH.R. 1735, H.R. 2685, H.R. 719, S. 1356, And H.R. 2262. Sen. McCain has received a $5000 donation from SpaceX, while the McCain Institute has received donations from SpaceX and far-left political activist George Soros.
Musk is a “top business leader” according to Sen. McCain, and the senator invited him to speak at the Sedona Forum hosted by the McCain Institute. McCain tweeted about how it was “good to visit with” Musk at his Senate office in Washington D.C. McCain has consistently supported and praised Musk and the three companies he has built with more than $4.9 billion in government subsidies and billions more in contracts awarded from state governments as well the federal government.
While the companies have received about $4.9 billion in government funding, Musk’s enterprises have recently lost more than $3.5 billionin value. This loss in stock value was calculated at about half the value of Musk’s ownership in three companies. Despite the growing financial challenges the companies face, Sen. McCain has remained firmly in support of Musk and his business ventures.
McCain prefers SpaceX to win the government’s launch contracts, but their recent failure record compares quite unfavorably to the stellar launch record of ULA. Along with the spectacular failure of it’s unmanned CRS-7 rocket, which exploded last year, SpaceX also suffered its third disaster earlier this year when it failed to land its Falcon 9 rocket on a drone ship in the sea.
ULA offers the better products, but Sen. McCain is so blindly loyal to Elon Musk that he is attempting to exert his influence for force government launch contracts to be awarded to SpaceX instead. Clearly McCain is bought and paid for by Musk, and is putting his crony relationship with the founder of SpaceX above the public’s interest in having the space launch contracts awarded to the company most suited to winning the contracts. McCain is the best senator Elon Musk can buy.Read more "JOHN MCCAIN: THE BEST SENATOR TAXPAYER-SUBSIDIZED ELON MUSK CAN BUY"
The impulse seems to be mainly driven by raw cultural aesthetics: a worship of individuals like Musk and Bezos as nimble innovators disrupting sclerotic government. All of which ignores both the dark side of unbound private sector visionaries and the practical reality that the government could attract exciting and innovative talent if, again, it was just willing to pay for it.
The biggest reason human beings have to go into space remains frivolous and impractical in the best and most glorious way: Because it’s there.
Shoving that reasoning into a private sector framework is always going to be an odd fit.
The explosion investigation and launchpad repair seem sure to scuttle SpaceX’s aggressive launch plans this year. The company had hoped for as many as 18 rocket launches this year. It has had eight so far; last week’s would have made nine. Over all, SpaceX has had 27 successful launches of Falcon 9 rockets.
The Florida accident is also rippling through the insurance market. Insuring the risk of getting a satellite into space comes in two stages. The preflight insurance is intended to mainly cover the risk of damage to the rocket and satellite on their way to the launchpad. Premiums are a fraction of a percent.Read more "The SpaceX explosion’s echoing impact"