Flaw 3: Lasers will not save Starlink...
SpaceX's proposed solution to all of these problems is its magical Gen2 Starlink satellites. But just like magic does not exist, neither do these satellites. In tech slang, they are "unobtainium."
Here's why: Starlink's Gen2 satellites promise to use lasers to bring the Internet to mid-ocean jets and cruise ships. Unfortunately, using lasers to move data from satellite to satellite is just a research-stage technology.
In other words, it's technically possible to shoot a laser from one satellite to another, but not routinely. It's so hard because both satellites have to be perfectly aligned – because they are a long way apart.
The cost of missing the target is that all the data you want to deliver gets lost and you have to resend it. More to the point, the longer you keep satellites aligned, the more fuel you use up to reposition them.
Since fuel is one limiting factor in how long a satellite lives, the more fuel it burns, the shorter its life. You also have to power the laser, which takes more solar panels and more batteries during the night.
This means your satellite is larger (and more expensive) – so you can pack in fewer of them per launch.
There's another fatal flaw...
Imagine a Starlink customer is in a jet and tries to download an e-mail in the middle of the ocean.
All this data has to reach the shore to hit the Internet. Then new data has to return to the starting user. Thus, the magic Gen 2 satellites must do their own work, plus carry many other satellites' data, TWICE.
So, even more magic is needed... We can't describe exactly how this works, as it's unbuilt and unproven. Chances are, Gen 2 also gets a technology upgrade... so, like an LTE (4.5G) cell phone tower in space. We could also see much larger antennas – so maybe they can each act like 10 cell towers, for 10,000 users.
But that's all just sales pitches and rumors at this point.
Here's where this matters to investors...
Allegedly, the new Gen 2 satellites are up to 10 times the size of the original Starlink satellite stacks. Since launch weight is limited, you can only put up a tenth as many satellites per space launch.
If you launch 10 times more rockets to increase your throughput by a factor of 10, you haven't dropped your costs. And even if lasers (or a simple radio) help over the oceans, cities are a mess. That's because each Gen 2 satellite can only take up or beam down data to the limit of its own antennas.
Again, think of New York City. At least 25 million live within 50 miles of it. Birmingham, Alabama, is the 100th-largest U.S. city, with 212,000 people. But metro Birmingham has 850,000.
Within 100 miles of Birmingham, at least a million people could want SpaceX's bandwidth. Each current Starlink satellite has only a thousandth of that capacity – and Gen 2 will have a hundredth.
In other words, "unobtainium."
SpaceX wants more U.S. subscribers, but it cannot possibly serve them...
That's why every other satellite firm leaves land-based Internet to wireless phones and to fiber optics. Then they put truly massive 10,000-pound satellites over the ocean to cover 100,000 users at once.
That's also why fiber has won the battle for rural broadband, and Starlink lost. So SpaceX's gig is up. There are better satellite firms out there already. I've recommended a few in
Stansberry Venture Technology, including one we closed for triple-digit gains last month.
In December, I also recommended subscribers buy shares of a major aerospace and defense company that sold billions worth of satellites in the third quarter of 2022. Shares of this business remain below my recommended buy-up-to price.
If you're interested in learning more about this and the other opportunities I recommend in
Venture Technology and how to start a subscription,
click here.
In sum, beware of the SpaceX IPO if or when it happens...
Rather than admit Starlink will never bring steady positive revenue to SpaceX, Elon will simply IPO it. The buzz will be enormous. The hype might even be profitable for Musk and private investors – generating the cash Musk needs to sustain his floundering social media business without having to sell more of his Tesla shares. But it won't last.
Later, he can blame investors for not paying the costs needed for a perishable, disconnected space network. In sum, he'll blame you for believing him about SpaceX, as he makes $50 billion to cover his Twitter loss.
Doesn't that sound fun? If not, then don't buy SpaceX when Musk offers you everything – like shares going "to the moon" – because of its Starlink systems. Because, on the contrary, it offers you nothing. Beware.
New 52-week highs (as of 1/18/23): Novo Nordisk (NVO).
In today's mailbag, feedback on yesterday's
Digest and Elon Musk's takeover of Twitter... As always, send your comments and questions to [
feedback@stansberryresearch.com](mailto:
feedback@stansberryresearch.com).
"Musk bought an ultra-liberal enclave that was on a mission to permanently silence half the country's population, not based on dangerous or violent speech but based on political affiliation. Best case he reinvents it to be unbiased. Worst case he burns it to the ground. Either way, I say good for him!" – Paid-up subscriber Tim P.
"Musk made it clear before he bought Twitter that he did not care about the economic side of the deal. It's all about freedom of speech with him. He'll tell you that he understands there should be rules regarding what can be posted on Twitter, but he also insists that the rules should apply fairly to all...
"Yes, he fired many and perhaps too many of Twitter's employees, but in the process he has exposed enough shenanigans at Twitter to make that half of America that was censored feel vindicated. Hopefully, and that is a BIG hope, Congress will change the law and impose adequate accountability on all platforms. If they do, the $44 billion Musk spent on Twitter will pale in comparison to what our government spends to accomplish nothing except more wars." – Paid-up subscriber Luis A.
"Dave, While I agree with your financial insights on Twitter and Tesla (I never bought or tried to short either), but I think it is somewhat hypocritical to comment negatively about Musk's lack of content moderation on Twitter without criticism of the former Twitter board who had banned or shadow banned conservative or anti vax speech (they did not yell fire in the theatre). Musk freed social media and paid a big price to do so. He is more courageous than most of us!" – Paid-up subscriber Larry N.
Good investing,
Dave Lashmet
Seattle, Washington
January 19, 2023
Apologies for the inconsistent formatting.
nitter.privacydev.net
www.jpl.nasa.gov
folksonomy.co
