For years now, Elon Musk’s space start-up, SpaceX, has been one of the most exciting space companies out there. While still a private company, much like Jeff Bezos’ Blue Origins, investors have been incredibly eager to see if SpaceX will ever go public or not. While Musk has teased this in the past, it seems there’s a big chance that might not ever happen. In fact, it seems like SpaceX could be at risk of going out of business altogether.
Those who follow the company closely know that SpaceX rockets have been having some engine troubles recently. However, no one knew that things were this bad. In particular, the SpaceX Raptor engine is currently facing production issues that are slowing down scheduled flights.
Instead of being a slight hiccup, it turns out that this is a bigger problem than originally anticipated. In an email over the Thanksgiving weekend, Elon Musk told employees that the company could go bankrupt if the issue isn’t solved soon.
“The Raptor production crisis is much worse than it seemed a few weeks ago. As we have dug into the issues…they have unfortunately turned out to be far more severe than was first reported. We face genuine risk of bankruptcy if we cannot achieve a Starship flight rate of at least once every two weeks next year.” Musk added quite alarmingly that “Unless you have critical family matters or cannot physically return…we will need all hands on deck to recover from what is, quite frankly, a disaster.”
While SpaceX’s falcon rockets are still operational, they remain largely small-time, lacking the volume or mass needed to launch the larger V2 Satellites. The Falcon rocket also isn’t reusable, where the newer Starship rocket is. Additionally, the smaller V1 satellites are supposedly a financial struggle for the company, whereas a lot more money is coming in from the V2s.
To make things worse, SpaceX is scheduled to start increasing production dramatically, which will further hurt its cash burn rate. Otherwise, these rocket engines are going to be the bottleneck that strangles the budding space company.
Prior to this announcement, many investors were eagerly anticipating the possibility of a SpaceX IPO. The company had earlier received a valuation of over $100 billion, with Musk even alluding to the possibility of maybe going public. While doing so would certainly help the company’s financial situation, many think that Musk would prefer keeping SpaceX private for a while longer, especially given the drama he’s had with Tesla shareholders after going public.
SpaceX also received some notoriety earlier this year when one of the company’s top executives, vice president of propulsion Will Heltsley, left the company due to a lack of project progress. Other notable departures include vice president of launch operations Lee Rosen and senior director of mission operations Rick Lim.
The situation seems somewhat dire. However, SpaceX fans argue that Musk had similar challenges back when Tesla was still in its infancy, with many expecting the company to quickly go out of business due to its staggering cash burn rate. Time will tell whether SpaceX will be spared that fate or not.
