On Thursday morning, March 14, SpaceX conducted the third test flight of its combination Starship reusable spaceship and Super Heavy booster. And you've got to hand it to SpaceX: It really knows how to put on a show.

Launching out of Boca Chica, Texas at 9:25 a.m. ET atop 33 gouts of rocket flame, Starship and Super Heavy quickly reached orbital velocity and -- this is important for a spaceship -- did not blow up.

Less than three minutes after liftoff, Starship separated from Super Heavy with the former continuing to orbit the Earth preparatory to a sea landing, and the latter boosting back to... also attempt a sea landing.

That's where things started to go wrong for this space company.

What Starship didn't do, and what it did

Neither Starship nor Super Heavy managed to land in the water as expected.

Although neither half of the megarocket was expected to survive landing, they were supposed to touch down in the water with more finesse than they actually accomplished. In the case of Super Heavy, at least some of its engines failed to reignite in time to slow it down, and it impacted in the ocean at very high speed. Forty-odd minutes later, Starship proper seemed to begin tumbling, and burned up on reentry rather than surviving intact until it fell into the drink.

And that's OK.

Actually, it's more than OK. SpaceX's third Starship test flight accomplished a lot that it was supposed to, including:

  • Lasting six times longer than the previous test flight.
  • Achieving orbit.
  • Demonstrating payload door opening and closing in space.
  • And conducting a test of fuel transfer between tanks in space (a procedure that will be needed later when Starships are used to refuel other Starships in orbit).

All of this sets up SpaceX well to make further progress as it conducts a planned six more test flights over the course of this year (FAA permitting, of course).

Mission accomplished?

But I'd argue that even before these later test flights succeed, SpaceX's Starship is already a phenomenal success, and already arguably the most economical space rocket on Earth. Yes, that's even before the company works out all the bugs to make Starship fully reusable.

Consider:

As Elon Musk pointed out on Thursday, Starship is already the single largest object ever to be launched into space all in one go.

Starship and Super Heavy, combined, are rated to lift 250 metric tons to orbit in a single, "expendable" launch -- so long as they don't try to land again. Compare this to Starship's nearest competitor, the Space Launch System jointly built by Boeing, Lockheed Martin, Northrop Grumman, and L3Harris. SLS can only launch 95 tons to orbit, meaning Starship already outclasses SLS (as an expendable rocket) by a factor of more than 2.5 times.

And now here's the kicker:

According to NASA's own Office of Inspector General, it costs the U.S. government a minimum of $2.2 billion to build and launch each SLS rocket. But as we learned from the Payload Research report published earlier this year, SpaceX's total cost to build and launch a Starship and Super Heavy booster is just $90 million.

Let me repeat that: Starship can launch 2.5 times SLS's payload for 4% of SLS's price. And it can do that already today, before SpaceX works the bugs out and makes Starship reusable.

What this means to investors

The next several test flights should confirm this, but already I believe SpaceX has a winner in Starship. Why?

Un-reusable, one single Starship can launch a space station to orbit to replace the International Space Station, fulfilling its contract with Starlab.

Un-reusable, one single Starship can put 250 tons of cargo into orbit -- equivalent to 25% of all cargo put into orbit by every country in the world in 2022.

And un-reusable, and at a total cost of about $1 billion (half the cost of an SLS mission), SpaceX could launch one Starship to orbit, and 10 more Starships to refuel that first Starship, and send the first Starship to the moon for less than half the cost of an SLS mission.

No other space rocket on Earth can accomplish any of these things. But SpaceX Starship can. And if SpaceX wants to, it can begin doing all of these things -- and collecting revenue and earning profits from doing so -- even as it continues its work to make Starship fully reusable. And all I can say about that is ...

I really wish SpaceX would get around to holding an IPO.