SpaceX Plans To Resume Launches In November (reuters.com)

An anonymous reader quotes a report from Reuters: SpaceX is aiming to resume flights in November following a launch pad fire that destroyed a Falcon 9 rocket and an Israeli communications satellite it was due to lift into orbit, the company's president said on Tuesday. The space services company suspended Falcon 9 flights while it investigates why the rocket burst into flames on Sept 1 as it was being fueled for a routine prelaunch test at Cape Canaveral Air Force Station in Florida. "We're anticipating being down for about three months, getting back to flight in the November timeframe," Gwynne Shotwell, president of Elon Musk's space company, said at a satellite industry conference in Paris. SpaceX previously said a nearly-completed second launch site in Florida, located at NASA's Kennedy Space Center (KSC), would be finished in November. The pad was last used to launch NASA's space shuttles five years ago.

Comments

Sabotage?

[Anonymous Coward]

There was a bang right before the explosion. What are the chances the rocket was shot at?

Re:Sabotage?

[Anonymous Coward]

Zero.

Re:Sabotage?

[ShanghaiBill]

There was a bang right before the explosion. What are the chances the rocket was shot at?

A bullet from a sniper rifle typically travels in excess of 1000 m/s, or about 3 times the speed of sound. So the "bang" would have come after the explosion.

Re:Sabotage?

[Anonymous Coward]

That depends on the relative position of the rocket, the gun and the camera. If the gun is close to the camera the bang would come first.

Re:Sabotage?

[Anonymous Coward]

That depends, if the sniper was less than 1/3rd the distance you are from the rocket, you'd hear the bang first.

Re:Sabotage?

[Anonymous Coward]

On top of what the other posters said, that would depend on how the explosion itself unfurls: were the rocket made of TNT, yes. But it's made of kerosene and liquid oxygen. It takes a while for enough of that stuff to escape and to create enough heat, to finally end in an all-out explosion.

Re:Sabotage?

[Anonymous Coward]

That would explain the grassy knoll near the pad!

Re:Sabotage?

[Feral Nerd]

Zero.

You seem awfully sure about that, there are .50 cal sniper rifles in civilian hands that can shoot through a window at 2500 meters.

Re:Sabotage?

[Feral Nerd]

There was a bang right before the explosion. What are the chances the rocket was shot at?

A bullet from a sniper rifle typically travels in excess of 1000 m/s, or about 3 times the speed of sound. So the "bang" would have come after the explosion.

There would have been two 'bangs' perceived by people at the site of the rocket, the sound of the bullet smacking into the rocket followed by the report of the rifle which could have been over two kilometres away if he was firing a .50 cal. Against a target the size of that rocket and with a fair idea of what the wind is like along the path of the bullet a good sniper could have made a 2000 m shot, possibly even a longer one. However, At 2000 m there is no guarantee the muzzle report would have been noticed at the site of the rocket, especially if the shooter made efforts to suppress the muzzle report. Having said all of this I think a sniper is the least likely suspect... Occam's razor...

Re:Sabotage?

[Anonymous Coward]

What about the nearby book depository?

Re:Sabotage?

[Anonymous Coward]

What about the nearby AMAZON book depository?

Now I smell a rat! :)

Re:Sabotage?

[Rei]

LOX makes everything shock sensitive. Including aluminum itself.

That said, no, I think it's a silly theory.

Re:Sabotage?

[Vitus Wagner]

Evil green Martians shot a small rock from the big gun mounted in the throat of great Maunt Pavonis volcano. They want to stop Earthmen from coming to Mars and distributing smallpox-infected blankets.

Re:Sabotage?

[Geoffrey.landis]

There would have been two 'bangs' perceived by people at the site of the rocket,

There were no people at the site of there rocket.

But in any case, no, a rifle bullet wouldn't make a rocket explode. You slashdotters watch too many Hollywood action movies. It might poke a hole in a tank and make propellant gush out, but that wasn't the failure.

Without more details on exactly what happened, it's a little impossible to attribute it to sabotage. What we know is that the site of the explosion wasn't where we would have expected a problem to start, but that's non-informative, since if they expected a failure, they would have fixed that problem; any failure is going to have something unexpected about it.

Re:Sabotage?

[gman003]

Not zero, but not far from it. I'd say a 1:1000 chance, and that's probably an overestimate.

Re:Sabotage?

[Anonymous Coward]

I assume the "bang" the parent is pointing to is the impact of the bullet with the rocket not the "bang" from the gun firing. While I wouldn't rule sabotage out (Israeli satellite, new launch provider muscling in on defense contractor money, random nut, etc) its not exactly a cause I'd jump to without some reasonable evidence. Rockets are big complicated things loaded with fuel and oxygen, historically they haven't needed sabotage to make them spontaneously disassemble.

Re:Sabotage?

[Feral Nerd]

There would have been two 'bangs' perceived by people at the site of the rocket, ... Having said all of this I think a sniper is the least likely suspect... Occam's razor...

There were no people at the site of there rocket.

But in any case, no, a rifle bullet wouldn't make a rocket explode. You slashdotters watch too many Hollywood action movies. It might poke a hole in a tank and make propellant gush out, but that wasn't the failure.

Without more details on exactly what happened, it's a little impossible to attribute it to sabotage. What we know is that the site of the explosion wasn't where we would have expected a problem to start, but that's non-informative, since if they expected a failure, they would have fixed that problem; any failure is going to have something unexpected about it.

Don't quote me out of context, I did say that a sniper was the least likely suspect and then proceeded to invoke Occam's razor. What more do you want?

Re:Sabotage?

[taiwanjohn]

It's certainly possible, but... cui bono? Blue Origin? Boeing?

I don't think 2.5km is far enough to get past the exclusion zone, but a good sniper could probably sneak within range. Of course, you'd need an incendiary round to be sure of a kill shot, but I would think a bullet would leave some sort of tell-tale signature in the wreckage that would survive the explosion. (OTOH, if you could find a way to do the job without leaving such a signature, that could really mind-fuck SpaceX engineers for years to come.)

Re:Sabotage?

[Geoffrey.landis]

The quoted line was the part to which my statement "There were no people at the site of there rocket" was directly a response.
(If I had editing capability, that would have been "the" rocket).

The remainder of my post was commentary on the thread, not specifically on your post to the thread.

First they have to find the cause

[Anonymous Coward]

SpaceX hasn't found the cause of the explosion. Otherwise they wouldn't call the public for footage of the explosion. Until then return to flight date is a wild guess.

One of the better founded speculations is that SpaceX built the telemetry bunker too near to the launchpad or too weak and they lost too much telemetry.

Re: First they have to find the cause

[Anonymous Coward]

Some accidents are almost impossible to find the root cause. They're not going to stay grounded indefinitely if they never figure it out.

Re: First they have to find the cause

[Rei]

The NASA spaceflight forum is up to about 136 *pages* of people debating theories on the subject. A lof of the more recent comments have focused on a particularity that only applies to SpaceX and not any other rocket in the world: their densified / superchilled LOX. The only other rockets to have ever used any sort of densified LOX have been the NK-33 variants, all of which have very short, very poor test/flight records - and their LOX wasn't as densified as SpaceX's. A unique risk of densified LOX is air liquefaction; it's colder than the boiling point of both oxygen and nitrogen - and nitrogen tends to boiloff first, or not form at all if the surface in contact with air isn't as cold as the densified LOX itself. You can see LOX forming straight from air by pouring liquid nitrogen into an uninsulated, thin-walled metal container (aka, a rocket) and letting it sit; droplets form on the side and slowly drip off.

Like is common with non-densified LOX, SpaceX has no insulation on its stages, apart from any frosts that form. And frosts do not form a rigid layer, nor are they a comparable insulation to foam. There is one type of propellant that has long faced challenges with air liquefaction: liquid hydrogen. And liquid hydrogen tanks are always insulated. In part it's to avoid the air liquefaction from drawing heat out of the hydrogen, but it's also in part for safety and to prevent liquid air from collecting in vents, in the interstage, etc and adding weight.

If there's LOX outside the tanks, that's a serious potential hazard. If there were leaked fuel vapours (for example, hydrazine from the payload, RP-1 from the stage, etc), or if it collected on top of an organic material on the strongback, or even with Falcon's paint itself, that's a major potential hazard for a serious, rapid deflagration.

Some of the other theories are internal. LOX contamination is a common one. Tank contamination is another. Another is failure of the COPV (the helium pressurant container). Another is a common bulkhead failure. I'm sure these things will all be debated endlessly until the actual investigation results come out.

It's neat to see the lengths people go to through to try to get data without access to the official investigation data. For example, they've brought in a seismologist who's been going over results from seismic stations in the area, looking at the S and P waves and what they could correspond to. Lots of people have been working on processing the video in different ways to try to bring out details. I myself am trying to get ahold of the raw video footage; I suspect it may have been interlaced as well as having a rolling shutter, but have been deinterlaced in all of the subsequent processing. If so, it may be possible to bring out a whole extra frame, plus limited details at sub-millisecond accuracy.

All just idle work of course; the real work is going on at SpaceX.

Re:First they have to find the cause

[Mr D from 63]

What is scary is if Musk has already decided they will resume so quickly even if they have not determined the cause. With his own admission that they are struggling, I find it hard to believe they can conclude a proper root cause analysis so soon. I have performed much simpler root cause analysis on failures that we had pretty good idea what the cause was, and just to go through the process of properly validating and making sure nothing was missed took a good month. What Space-X is facing is much more difficult.

If they were to resume quickly without knowing the cause, another failure could be devastating to the company. I think he is just being his usual overly optimistic self on the timeline, and trying to tell investors what they want to hear.

Re: First they have to find the cause

[Applehu Akbar]

Parent is correct here. Before SpaceX can return to flight, it has to have at least a working hypothesis on the cause of the explosion. Otherwise, k customer will trust it.

Re:First they have to find the cause

[Anonymous Coward]

SpaceX was too one of the companies which NASA did contract to fly astronauts to the ISS and now this is in major peril. ULA has not had a launch failure in almost 15 years but now Tesla has had 2 in just over a year, and 3 in the last several years. NASA will NOT accept the answer, "well we don't know why it blew up... but let's just go try it again!"

The tactical mistake Musk has made is thinking that people care more about launch cost than about getting their payload successfully to orbit. They don't. If you have a hyperexpensive multi-hundred million sat as most of them are you will happily pay an extra few tens of millions for ULA-like reliability rather than cheap out and end up on a launcher like Falcon with a 5% chance of desrtoying your payload. If you are flying humans you will NOT accept such a poor reliability.

It is a serious miscalculation and it will have to be seen if they can change their corporate culture to value reliability and safety of the customer's payload over fancy stunts like landing rockets feet first. Customers do not care about that. They care about getting payload safely into orbit. You have to nail the basics FIRST, then you can do fancy stunts with your rockets.

Re:First they have to find the cause

[Geoffrey.landis]

What is scary is if Musk has already decided they will resume so quickly even if they have not determined the cause.

Everything SpaceX does is always attributed to Musk. The actual article attributes the quote to Gwynne Shotwell, president of SpaceX.

She was speaking at a conference. Somebody asked when they'd be likely to start flying again, and she gave a best guess. This is not a firm commitment to fly whether or not they have found and fixed the problem, it's just a best guess about how long the process will take.

My personal best guess is that a failure review for a non-manned system takes about six months (after their June 2015 failure launches resumed in December, for example) so I think she is a little optimistic, but she probably would prefer to err on the side of optimism.

Re: First they have to find the cause

[Anonymous Coward]

Surely SpaceX would have considered the air liquidization problem at the design stage?
*looks at space shuttle history* ok as you were

Re:First they have to find the cause

[Rei]

but now Tesla has had 2 in just over a year,

Huh?

The tactical mistake Musk has made is thinking that people care more about launch cost than about getting their payload successfully to orbit.

In many cases that is correct. AMOS-6 happened not to be one of those, but....

If you have a hyperexpensive multi-hundred million sat as most of them are you will happily pay an extra few tens of millions for ULA-like reliability rather than cheap out and end up on a launcher like Falcon with a 5% chance of desrtoying your payload.

Failure probabilities don't work that way. Every rocket family, and every individual model, tends to get safer as time goes along as problems are remedied and fixed. The cost for innovating (needed to bring costs down) is that you have to start over on that curve. But the more you launch, the more potential problems you fix and the lower the odds of a future failure. There's always a high degree of randomness, of course, but in general you find a problem, you fix the problem, and the rocket is a safer vehicle for it.

Do recall how terrible the Atlas and Delta families used to be in terms of reliability. Things blew up, they learned, and were remedied. Heck, in terms of families, Falcon 9 is almost like a whole family rather than a single rocket thusfar... some of the changes, like switching to densified LOX, are pretty dramatic changes. They're trying to evolve and optimize it very, very quickly. But of course, that faces the learning curve reset problems above.

(Also, on that note, I think it's a bit premature to talk about the spotless record of the Delta-IV heavy, given that it's only ever had 9 launches, vs. Falcon 9's 29 (if you count AMOS-6... which if you're going to count it in the failure category, you should count it toward the total as well).

Some aspects of the Falcon design were designed to speed up the learning curve - and seem to have worked. Namely, the engines seem to have become quite reliable; part of the reason for going with so many engines was not just so that you can keep going after an engine failure, but also so that you're mass producing the engines and going through ten per flight; you're going to retire the risk a lot faster when using something in such large numbers. On the other hand, there's only two stages/pairs of tanks per flight, two COPVs, etc, so the learning curve is going to be - and has been - slower. . Falcon Heavy will help speed it up, of course, since there's four separate cores, all built similarly.

For a totally new (and frequently evolved) branch, Falcon 9's reliability is quite high; there are mature systems in use today with reliability records no better. But everyone wants you to approach 100%. At some point, SpaceX is going to have to stop with working on the "development branch" and offer up a "stable release" - that is, get the same identical cores with a long safe launch record, and stop changing them. And I'm sure they know that. But they seem to have a higher priority that they want to get to first: evolving their rockets to the point where they feel they can change the world. Not just "cheaper than everyone else", but "immensely cheaper than everyone else".

It's a tall order. But I fully sympathize with it.

On the upside from a stability perspective, there's really not much more need for evolution on the F9 production side, now that they're regularly landing cores. Getting multi-mission reliability, however, that's going to be a new challenge.

Re: First they have to find the cause

[Rei]

I don't doubt that someone brought it up.
I also don't doubt that someone said something to the effect of, "That won't be a problem because of ((reason that now looks debatable))"

Re:First they have to find the cause

[Anonymous Coward]

As with most aerospace (Rocket, Airliner, Fighter Jet, etc) investigations there is quite often a suspected cause pretty early on in the investigation. However it takes time sifting through the evidence to establish that suspected cause as the only reasonable one. And SpaceX is well known for playing their cards pretty close to their chest, as well as not letting over-planning/design to bog them down (one of the reasons why NASA/Lockheed/Boeing have been so slow to advance/adapt). They didn't wait until they had a "perfect" landing system before even trying, they progressively added the software/hardware they thought necessary to achieving a landing to each successive rocket knowing failure WAS an option. Quite quickly doing what many in the launch industry thought impossible (or at least impractical), landing an orbital launch vehicle first stage on land AND at sea. I suspect they have a pretty good idea what caused it, and are already implementing fixes. They just want to have all of the evidence they can before they fill out the paperwork on the investigation that will most likely be scrutinized with an election microscope by virtually everyone hoping to corner the launch market (Boeing/Lockheed, Orbital ATK, Blue Origin, etc). Being excessively risk adverse (lengthy investigations, extreme design reviews, etc) is part of the reason why space access hasn't advanced much in the last 40 years, in fact to a degree its going backwards (SLS, basically a semi-modern Apollo 5 rocket). While some more precautions are warranted when they begin launching humans when launching cargo (often at prices half that of other launch providers) its more than appropriate to dabble as long as your customers know the risks.

Re:First they have to find the cause

[legRoom]

Some aspects of the Falcon design were designed to speed up the learning curve - and seem to have worked. Namely, the engines seem to have become quite reliable; part of the reason for going with so many engines was not just so that you can keep going after an engine failure, but also so that you're mass producing the engines and going through ten per flight; you're going to retire the risk a lot faster when using something in such large numbers. On the other hand, there's only two stages/pairs of tanks per flight, two COPVs, etc, so the learning curve is going to be - and has been - slower. . Falcon Heavy will help speed it up, of course, since there's four separate cores, all built similarly.

Full reusability is going to slow down that build rate a ton, though. Unless SpaceX can secure a much larger number of orders, they're in danger of losing much of the benefit of their mass production scheme in the near future.

Of course, it's not just a problem for SpaceX: the current glut of launch systems puts every provider at risk in this area - especially those pursuing reusability (SpaceX, Blue Origin, ULA, Airbus, ?). Either the launch market is about to experience massive growth, or there's a bubble about to pop...

Re:First they have to find the cause

[dpilot]

The November date is really a soonest-possible date, I suspect. In early discussion after the incident, I saw it mentioned that Pad 40 will likely be out of commission for a year, and that the next option would be Pad 39A, which is supposed to be ready in November.

I suspect the hope is that by the time the pad is ready they will understand the failure and have taken remedial action. I doubt they'd be permitted to launch anything without some sort of root cause and remedy.

Re:First they have to find the cause

[dpilot]

Looking at google images, The Apollo 5 looks basically like a Saturn Ib launcher. Was it ever used for anything other than Apollo 5 and Apollo 7?

Re:First they have to find the cause

[Anonymous Coward]

One of the ways they can find out the cause is to do another run but include more sensors and cameras to live stream. Especially around the refueling area and inside the rocket itself. When it happens again they will be better able to figure out WTF happened.

Re: First they have to find the cause

[ShaunC]

Comments like this are the reason I still read Slashdot every day.

Re:First they have to find the cause

[Rei]

Full reusability is going to slow down that build rate a ton, though.

Not necessarily. Contrary to your statement that there's a "glut of launch systems", there's actually a serious shortage right now in launch vehicle production. There are far more companies with payloads than launch providers can manage for now. Additionally:

  * The cheaper launch prices get, the higher that number will get.
  * Not all first stages will be recovered
  * None of the second stages will be recovered
  * Even recovered launch stages don't have an infinite life, they're only targeted for a few dozen launches
  * You have to ramp up inventory no matter what as the market grows.
  * Falcon Heavy has four large cores

And so on. There still will be ample need for production. Reusability will mainly just keep SpaceX from having to expand their production too greatly, if they can make it reliable and affordable.

Re: First they have to find the cause

[UnderCoverPenguin]

*looks at space shuttle history*

Actually, they did. That's why the shuttle's external tank was coated with foam insulation (the orange stuff you could see).

Unfortunately for the crew of the Columbia, not enough was done about the problem. (True, it was ice. So really it was "air solidization" (water vapor being a component of air).)

Re:First they have to find the cause

[legRoom]

Not necessarily.

I mean that it will slow down a ton relative to what would be required to launch the same payloads using only expendables. (Hopefully this is not a controversial statement.) I myself already raised the possibility that demand might increase in response to the lower launch price for reusable rockets.

Consider what reusability is going to do to Merlin engine production:

None of the second stages will be recovered

The second stage only needs one engine, so the fact that a new one is needed for every launch doesn't help that much to keep production rates up.

Not all first stages will be recovered

Based on present-day launch manifests, SpaceX should eventually be able to achieve nearly 100% first stage recovery - assuming that Falcon Heavy works, including core reuse. There are very few payloads launched each year which could not go up on a Falcon Heavy, even to GTO and with the performance penalty of recovering all three boosters.

Even recovered launch stages don't have an infinite life, they're only targeted for a few dozen launches

I will estimate the service life of a first stage at about ten launches (since accidents of some sort will probably destroy most before they actually wear out). That means that SpaceX will only need between one and three new engines for each flight, depending on whether most launches are Falcon 9, or Falcon Heavy. Added together with the one new engine needed for each second stage, we have a requirement of two to four new engines per flight - compared to at least ten today.

This implies that SpaceX will need to approximately triple its launch rate to justify the current engine production rate long-term. In each of the past three years, SpaceX launched about six missions. As the United States and Europe only made a total of 29 orbital launches in 2015, tripling SpaceX's rate would either require a massive expansion of the market, or for SpaceX to single-handedly capture about 60% of the market - leaving little for the other four major western launch providers to fight over.

All things considered, I stand by my original judgement: either the launch market is about to grow very quickly (in terms of annual up-mass, at least), or the industry is pouring a lot of money down the drain on excess capacity.

Re:First they have to find the cause

[DerekLyons]

The Apollo 5 looks basically like a Saturn Ib launcher. Was it ever used for anything other than Apollo 5 and Apollo 7?

Three unmanned CSM tests, one unmanned LM test, Apollo 7, all three Skylab flights, plus Apollo-Soyuz.

Re:First they have to find the cause

[Rei]

Here, I'll put it quite simply: airplanes are vastly more reusable than Falcons are designed to be. Boeing still does quite good business.

You're assuming a market similar to SpaceX's current market where they launch 6-9 rockets a year. I - and they - are looking forward to a market where they're launching hundreds per year. I'll repeat: Reusability will mainly just keep SpaceX from having to expand their production too greatly, if they can make it reliable and affordable.

Re:First they have to find the cause

[dpilot]

Thanks, though I did quickly get to that information once I decided to look.

Re:First they have to find the cause

[legRoom]

You're assuming a market similar to SpaceX's current market...

No, I'm not. The first and last sentences of my comment both explicitly acknowledge that the market could change dramatically.

You are the one who is "assuming" things by asserting not just that it could expand enough to support reusability, but that it actually will. My point is simply that it's going to cost the launch industry dearly IF that turns out to be the wrong bet.

I have not offered an opinion as to whether it is or isn't the right bet; I'm just pointing out the consequences if you're wrong...

Anyone remember the UFO?

[AlphaBro]

Hopefully this one doesn't get taken out by a drone. https://www.youtube.com/watch?...

Re:Anyone remember the UFO?

[Anonymous Coward]

You don't watch to many launch videos do you. Many birds in that area. That is a bird. Duhhh....

Ouch I think i bit my tongue; biting that Troll.

Re:Anyone remember the UFO?

[Anonymous Coward]

It doesn't look like a bird. It could be an orb or a rod.

cause of explosion was found.

[Gravis Zero]

It turns out, the Falcon 9 rocket sneezed at a very inopportune time. ;)

...launch pad fire that destroyed a Falcon 9...

[mschaffer]

Cause and effect? The video looks like the explosion of the Falcon 9 caused the fire on the launch pad---not the other way around.
Of course, I am sure only the sharp shooters and alien visitors know what the real cause and effect relation was and they aren't saying much.

Re:...launch pad fire that destroyed a Falcon 9...

[Anonymous Coward]

Not quite true. The first frame of the explosion shows the fireball around the second stage, not the Falcon 9 itself. Still a SpaceX construction, but it's definitely not the launcher at fault.

Re:...launch pad fire that destroyed a Falcon 9...

[Rei]

I think it's too soon to say that. In the video we have a frame that looks just fine, then a flame with the whole area whited out. True, the flash is centered on the right-hand side, around where the rocket meets the strongback. But that doesn't mean that's actually where it started. Or that the strongback/fuel system was to blame. Or even that the source of the blast wasn't right in the center of the stage, with the stage just happening to breakout on the strongback side first.

Too early to say. We'll find out in the end.

Re:...launch pad fire that destroyed a Falcon 9...

[Anonymous Coward]

Ok, then. What was burning on the launchpad? I would bet that if the launchpad were not there the Falcon 9 would still have exploded.

high-stakes Angry Birds?

[mschaffer]

Some of the birds from Angry Birds are fairly orb shaped.

Re:high-stakes Angry Birds?

[michelcolman]

Well, in that case I'm pretty sure they were awarded three stars for that shot!

Scrambling for video

[Anonymous Coward]

Agreed. They shouldn't speculate about resumption of flights without finding root cause. That is what the Russians do. It only invites the next failure. I find it amusing that SpaceX is scrambling for video of the event. The space shuttle used to have 100s cameras covering all areas of the shuttle and fueling system. Can you imagine if NASA lost a shuttle in the manner that SpaceX lost the F9?

Re:Scrambling for video

[Anonymous Coward]

I wouldn't be quite so quick to dismiss the Russians Space program when "the greatest nation on Earth" has to pay them for rides to the ISS. Its a different method from the aerospace programs in the US where everything is designed to the last detail before the first launch, but it does allow for rapid improvements/corrections of designs.

Quick! Someone get Bruce Schneier!

[denzacar]

https://en.wikipedia.org/wiki/...

Musk needs the cash

[Anonymous Coward]

If he doesn't get some cash flow from SpaceX soon all three of his companies will go down in flames

Re:Musk needs the cash

[Rei]

Nothing about that relates to "going down in flames". It means to having to do capital financing rounds - stakeholders giving up part of their equity in the company for money. There are few analysts who would argue that Tesla or SpaceX could not raise money by selling equity; they're both very valuable companies. Large companies trying to achieve rapid expansion are almost fundamentally required to do this, usually several times. It's a hit for stakeholders, but one that they expect to be worthwhile in the end, as a smaller stake of a much larger company is more valuable (aka, would you rather have a 100% stake in "Jimmy's computer shop" or 10% stake in IBM?).

That said, SolarCity has always been the odd one out, and I do agree that the buyout comes across more as a bailout.

Re:Musk needs the cash

[Anonymous Coward]

The whole idea Musk has pushed behind owning Tesla is that you are "getting in early" to the next big thing, before everyone else. If they have to raise a ton more money you are not "getting in early" because everyone else can still get in later, at a lower price. Tesla is by every metric known to man (except optimism) overvalued. As investors realize they will need to keep feeding the losses, equity raises will not go as well. This becomes a "circle of death" for a company, where each successive equity raise makes the shares worth less, making the next equity raise harder, until no equity can be raised without giving away the entire company.

Since Tesla is not GAAP or Cash Flow positive and needs to raise equity and has no path to profitability. A huge portion, all or more than the "profit" of the first 400,000 model 3 cars has already been recieved by Tesla. So now Tesla has to deliver 400,000 cars before it can start earning a profit, if the model 3 is even profitable.

Plus Musk has cross collateralized his 3 companies (Debt on his SpaceX shares to fund Tesla, Debt on his Tesla shares to fund Solar City) I think it is a more likely scenario than not that Musk will have huge problems if SpaceX doesn't work. SpaceX was the last thing Musk had to fund the whole pyramid scheme, after the 400 million in Model 3 preorder cash.

Re:Musk needs the cash

[Anonymous Coward]

I think Musk's worse mistake is the high capital cost of his gigafactory. By going big out of the gate, he is creating great exposure to risk. He won't be able to show any ROI that covers the cost of money, and that will make it easier for competitors to undercut his battery prices. Failure of the gigafactory to deliver cheap enough batteries early will also be an emotional issue for investors. For Asian competitors, it will be a gigglefactory.

Chevy has already shown it can re-tool a factory to produce the Bolt for much less than it cost Telsa to gear up for Model 3 production. While Chevy will show margins the cover the cost of money, Tesla will likely be paying for capital just to stay in the game. Big car companies have no problems watching first movers take the hit.

Re:Musk needs the cash

[tomhath]

There are few analysts who would argue that Tesla or SpaceX could not raise money by selling equity; they're both very valuable companies.

The analyst in the linked article disagrees. He's selling Tesla and SolarCity short because he thinks they're way overpriced. If the bubble bursts the option of selling equity to raise the cash they need becomes much more difficult. Think it can't happen? Look at what happened to Enron and Theranos.

Re:Musk needs the cash

[Anonymous Coward]

Yeah. GM, VW, honda, toyota, etc. will all be able to attach an electric motor and a battery to any platform they build today for very little investment. They will be able to undercut Tesla easily because their facilities are already up and running, they already have trained employees, they know a lot more about building cars, they aren't in Cali, they can share design, admin, supplies, bulk ordering, overhead etc. with ICE production.

Tesla is allowed to live right now because it doesn't affect the bug guys... but just wait.

Re:Musk needs the cash

[Anonymous Coward]

Tesla has 30% short interest on float. That is huge for a company with their market cap. The shorts are usually right, from my experience.

Wait... what?

[Anonymous Coward]

They don't know what happened, but they have a schedule for fixing it?

Haha. Captcha is "predict".