Find Out the False Narrative of the Starship Explosion
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| By Jon Markman |
SpaceX, the rocket company owned by Elon Musk, just successfully launched the biggest rocket ever. The coverage of this event should be a lesson for tech investors.
Starship blasted off Saturday from Boca Chica, Texas. The two-stage rocket, which weighed 5,000 tons, was 30 feet in diameter and had an assembled height of 397 feet. Getting something this large to the edge of space is an amazing accomplishment.
The launch was lambasted in media coverage as a failure.
Of course, you already know where I’m headed with this. They are dead wrong …
Elon Musk has become a lightning rod for controversy.
He spent the first half of his career as an innovator being despised by factions on the political right for his views about climate change and sustainability.
Musk is now hated by the political left for his views on the so-called truth.
Debating what is the truth — or even Musk’s view of it — is not material. The key takeaway now is that Musk is not getting a fair assessment of his contributions as a tech innovator. These contributions are demonstrably immense and without parallel.
SpaceX, the rocket company Musk founded in March of 2002, is the undisputed leader in aerospace launches. The Austin, Texas-based company has revolutionized the launch of commercial and military satellites by reducing per kilogram costs 36 times, when compared to the Space Shuttle.
The big innovation is that SpaceX rockets are reusable.
The SpaceX booster rockets literally launch the first stage cargo carrier into space, then safely return to Earth where they typically land on a drone ship floating 300 miles off the coast of Florida or California. These launches, now at number 86 through Nov. 20, occur without incident.
Starship is similarly ambitious. The vessel consists of an enormous booster called Falcon Super Heavy with 27 Merlin rocket engines and a first stage carrier vehicle also equipped with rockets.
An incarnation of this spacecraft will eventually ferry humans to the moon for the NASA Artemis program. And Musk hopes that future Starships will carry cargo to Mars, someday leading to colonization.
The launch on Saturday was the second trial of the Starship concept. The goal of the test mission was to successfully launch the vessel, complete the first stage separation and an approximately 90-minute flight of the second stage … before landing the spacecraft in the Pacific Ocean, 300 miles off the coast of Hawaii.
At roughly 43 miles above Earth, the vessel successfully completed first stage separation. However, the second stage lost contact with ground control four minutes later. The vehicle was then intentionally destroyed as part of the SpaceX safety protocol.
The media coverage of this historic event was universally negative, focusing on the explosions and inability to complete the entire mission. Reuters reported that SpaceX failed minutes after launch.
This kind of media bias against Musk-owned businesses is rampant.
The Tesla Pendulum Has Moved Again
Tesla (TSLA) vehicles are constantly derided by journalists for their poor safety amid spotty reports of fires or failed full self-driving, or FSD, YouTube videos.
These assessments ignore the thousands of roadside fires annually reported for internal combustion engine vehicles … or that an FSD competitor does not exist in the legacy automotive world.
Also, since 2018, Teslas have ranked highest in crash test vehicle safety.
This is not to dismiss the idea that narratives play an important part in the price of stocks. This is undoubtedly true.
The early valuation of Tesla shares was about hype, future growth and fleets of autonomous robotaxis. The pendulum moved too far forward in favor of the optimists. The opposite is now occurring.
Tesla is building the most advanced, safest vehicles on the road. Its EV fleet is also becoming wildly cost competitive with internal combustion vehicles, as legacy automakers have no choice but to raise prices for cars and trucks in order to maintain profit margins.
At $240, Tesla shares trade at 62 times forward earnings, and eight times sales. These metrics may seem expensive relative to General Motors (GM) or Ford (F), but this is an apples to oranges comparison. Tesla is making better vehicles for lower prices.
Whether you personally get into shares at this current price is up to you. I like them here. But the real story behind all this is the opportunities that can come from false narratives.
At the very least, keep this one in mind.
All the best,
Jon D. Markman
P.S. There might not be a single larger false narrative than the one surrounding cryptocurrencies. In fact, breaking news is developing. Click here to see what Weiss Founder Dr. Martin Weiss has to say about it.
