alt Hacker News> Circular financing
Circular financing would require SpaceX to buy a similar quantity of stuff from Google. (Or invest in Google.) We have no evidence of that. Instead this looks like Google taking advantage of SpaceX’s desire to print revenue today versus a month from now.
(If the agreement is terminated with no exchange of goods, it might be market manipulation. But still not circular financing.)
Replies
sandeepkd • last Friday at 9:03 PM
> Alphabet has made a windfall from backing SpaceX. Musk’s company was worth $12 billion at the time of Google’s 2015 investment
How come its not a circular deal where google is investing little bit more money to make a whole lot more money
➕ show 1 reply
spikels • yesterday at 4:01 AM
Google is paying $12.00 per gpu-hour which costs SpaceX $1.50-$3.50.
Who's taking advantage of who?
It's circular since Google owns part of SpaceX. According to [1] they own 7% of SpaceX, so a $1.75T IPO would value their stake at $120B. The target IPO price is >90x revenue, so if Google increases SpaceX's revenue by $11B, SpaceX's valuation could increase by $990B to maintain the same multiple, which would increase the value of Google's stake by $69B.
1: https://finance.yahoo.com/markets/stocks/articles/alphabet-s...