Musk's Remarks Don't Mean SpaceX Cut Its Starship Launches

Dow Jones
10/02

SpaceX CEO Elon Musk created a kerfuffle earlier this week at a White House luncheon when he talked about Starship, his rocket company's giant rocket.

SpaceX, he said, was targeting one to two Starship launches a week in the coming year.

Here's the rub: Musk said something different on SpaceX's second-quarter earnings conference call in August: "Probably a year from now, we will be doing at least one [Starship] flight a day, possibly more."

The two comments, taken together, led to claims that SpaceX had cut guidance by 80% to 90%. One or two flights a day is about 550 flights, versus one or two a week, which is about 80 flights.)

"This seems (very) material," wrote GLJ Research analyst Gordon Johnson on Thursday.

SpaceX didn't respond to Barron's request for clarification.

But there isn't anything extraordinary about Musk's remarks. SpaceX didn't cut guidance. Investors just need to understand Musk-speak.

For starters, Musk didn't say that Starship would launch daily on Jan. 1. "Probably" and "possibly" aren't official financial guidance.

Anyone interested in SpaceX needs to understand that he makes aspirational comments quite often.

Musk has talked about truly self-driving cars since 2016, told investors Tesla could make 20 million EVs by the end of this decade, said Tesla would be worth more than Apple and Saudi Aramco combined in 2o22, and, just days ago, said Starship was only two to three years away from "hourly launches."

These are goals-notguidance.

For an example of guidance and what happens when management changes guidance quickly, look at Honeywell Aerospace.

Before being spun off from Honeywell Technologies, Honeywell Aerospace played host to an analyst event where it gave 2026 sales growth and operating profit guidance-with numbers and ranges. In August, weeks after giving the initial guidance, management reduced the numbers. The stock dropped more than 23%.

That didn't happen to SpaceX stock after Musk's comments at the White House, following the August conference call.

Coming into Friday trading, shares were down less than $1, or 0.4%, for the week. SpaceX stock was up $1.09, or 0.7%, at $149.16 in premarket trading on Friday, while the S&P 500 and Dow Jones Industrial Average futures were up 0.5% and 0.6%, respectively.

The reaction shows that the market knows what's going on.

The one time Musk's mouth got him in trouble was his 2018 "funding secured" tweet. He said he was considering taking Tesla private and had wrapped up financing for the deal. That led to some consequences, including an SEC fine.

Musk has his own way of talking. Being fluent in Musk-speak goes a long way. And if those who aren't should learn it. And realize that it's a very bad idea to trade his aspirational comments.

 

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