First "breakeven cash flow" does not equal profit. But that's just Musk, as the CEO (and thus accountable for financial statements he makes to the SEC), cannot actually say profit.
More generally, never believe any kind of financial engineer when they say this. It's bullshit. Guaranteed. Why? Simple: if it was true, they would never tell you. They would take a shovel and put their own money in, they would charge large banks to let them put their money in (yes, seriously). They'd literally charge other rich people money to let them put their money in ... You would hear about it 20 years after the fact in an interview done after retirement, and only then.
Specifically, what's wrong here Starlink pays for it's own launches in stock (they pay by issuing stock to SpaceX). If you think about it, that's creating money out of nothing:
SpaceX holds Starlink debt, and counts that as assets (as a positive amount)
Starlink issues and "succesfully" sells shares to SpaceX, and counts that as income (as a positive amount)
So you see what's happening here: these are two positive numbers, but ... obviously have to sum to zero! After all if I buy an ice cream from you for 5$ the change in my assets and the change in your assets has to sum to zero (-5$ for me, +5$ for you = 0$ for both of us together). Not for SpaceX and Starlink. SpaceX gives rocket launches to Starlink and the sum of both their assets is billions!
If you look at actual cash flow, Starlink's last quarter was 4.4B operating income, minus 2.4B depreciation and amortization, minus 4.17B capital expenditures. How do you calculate the company worth? Easy capital expenditures are zero (because they "convert" capital to goods, which can be resold, except of course they can't really).
So for "total assets" on the financial statements that's 4.4B - 2.4B PLUS 4.17B per year.
For actual cash or resources, it's obviously 4.4B - 2.4B - 4.17B or MINUS 2 billion per year.
Which one is true depends on whether SpaceX can succesfully sell Starlink's shares at the internal valuation they're using. Obviously the safe accounting value is the one with the minus sign. Or to put it differently: Starlink has "increased in value" by 2 billion, so investors (for now SpaceX) need to give it 2 billion to continue operating.
First "breakeven cash flow" does not equal profit. But that's just Musk, as the CEO (and thus accountable for financial statements he makes to the SEC), cannot actually say profit.
More generally, never believe any kind of financial engineer when they say this. It's bullshit. Guaranteed. Why? Simple: if it was true, they would never tell you. They would take a shovel and put their own money in, they would charge large banks to let them put their money in (yes, seriously). They'd literally charge other rich people money to let them put their money in ... You would hear about it 20 years after the fact in an interview done after retirement, and only then.
Specifically, what's wrong here Starlink pays for it's own launches in stock (they pay by issuing stock to SpaceX). If you think about it, that's creating money out of nothing:
SpaceX holds Starlink debt, and counts that as assets (as a positive amount)
Starlink issues and "succesfully" sells shares to SpaceX, and counts that as income (as a positive amount)
So you see what's happening here: these are two positive numbers, but ... obviously have to sum to zero! After all if I buy an ice cream from you for 5$ the change in my assets and the change in your assets has to sum to zero (-5$ for me, +5$ for you = 0$ for both of us together). Not for SpaceX and Starlink. SpaceX gives rocket launches to Starlink and the sum of both their assets is billions!
If you look at actual cash flow, Starlink's last quarter was 4.4B operating income, minus 2.4B depreciation and amortization, minus 4.17B capital expenditures. How do you calculate the company worth? Easy capital expenditures are zero (because they "convert" capital to goods, which can be resold, except of course they can't really).
So for "total assets" on the financial statements that's 4.4B - 2.4B PLUS 4.17B per year.
For actual cash or resources, it's obviously 4.4B - 2.4B - 4.17B or MINUS 2 billion per year.
Which one is true depends on whether SpaceX can succesfully sell Starlink's shares at the internal valuation they're using. Obviously the safe accounting value is the one with the minus sign. Or to put it differently: Starlink has "increased in value" by 2 billion, so investors (for now SpaceX) need to give it 2 billion to continue operating.