SpaceX continues to mark new milestones as a private company, and that has spurred investors’ appetites for publicly traded space stocks, which have multiplied rapidly in recent years.
The proliferation of new space stocks has come as SPACs have taken over. Special purpose acquisition companies also known as “blank check companies” offer a way for private companies to go public without an IPO. Instead of selling stock, the private enterprise merges with a shell company that’s already public. SPACs have become popular after years of being shunned by the financial community.
Astra Space went public on July 1 via Holicity (HOL), Momentus went public via Stable Road Capital (SRAC) and Vector Acquisition (VACQ) took Rocket Lab public in August in a deal that values the space company at $4.1 billion. Redwire Space (RDW) is merged with Genesis Park (GNPK) to go public in September. Satellite imaging company Planet (PL) went public via SPAC on Dec. 8.
“After a wave of recent space de-SPACings, investors are now turning their focus toward execution, profitability and return on investment,” Morgan Stanely analysts wrote in a note dated Dec. 8. “The challenge facing investors is separating wheat from chaff and identifying companies that have not only discriminating technology, but also sustainable business models.”
Meanwhile, in the legacy space industry, Boeing (BA) is building its own space taxis as well as the most powerful rocket ever. NASA also is working with other established space stocks like Lockheed Martin (LMT) along with upstart space companies to return astronauts to the moon and Mars.
Here’s a look at key publicly traded space stocks as of Dec. 25:
Space Stocks ETFs
One option investors have is investing in an ETF. Procure Space ETF (UFO), a space-related exchange traded fund, launched back in April 2019. The fund includes holdings in space stocks like Boeing, Maxar (MAXR), Iridium Communications (IRDM), Intelsat (I) and Airbus (EADSY).
Cathie Wood’s Ark Investment Management launched the ARK Space Exploration ETF (ARKX) earlier this year. The space-focused ETF includes Boeing and Amazon (AMZN). But it has exited its stake in Virgin Galactic.
On Oct. 28, 2019, Virgin Galactic stock became the first publicly traded commercial space tourism company after a reverse merger with Social Capital Hedosophia Holdings.
The company, which counts Boeing as an investor, successfully conducted its first fully crewed flight on July 11, sending founder Richard Branson into space. The flight not only means the company’s billionaire founder beat Blue Origin’s Jeff Bezos to space, but it’s also crucial to the start of commercial service in 2022.
But the Federal Aviation Administration grounded the company’s space plane in September and opened a probe into the flight for veering off its projected flight path during descent. The FAA lifted the grounding on Sept. 29. On Oct. 14, the space company announced it would delay the start of commercial flights until the fourth quarter of 2022.
In addition to space tourism, Wall Street has noted Virgin Galactic’s potential in hypersonic intercontinental travel.
In August 2020, Virgin Galactic signed a memorandum of understanding with Rolls-Royce to collaborate in designing and developing engine propulsion technology for Mach 3 commercial aircraft. Virgin Galactic entered into a Space Act Agreement with NASA in May to work on developing a sustainable high-Mach supersonic vehicle. The U.S. space agency has been working on high-Mach flight with its Supersonic X-59 test plane built by Lockheed.
One of the original space stocks, Boeing built the first stage of the Saturn V rocket that helped propel Apollo 11 astronauts to the moon in 1969. Now it’s building the Space Launch System rocket at the same facility as the Saturn V rocket in New Orleans.
The SLS is designed to be the most powerful rocket ever, taking astronauts and probes into deep space. But delays and costs overruns have plagued the NASA rocket. In January, NASA cut short a test of the core stage but was able to successfully complete the key hot fire test for the full duration in March. The rocket keeps facing delays due to Covid-19 and won’t fly until 2022.
Boeing also developed the Starliner capsule to ferry astronauts to and from the ISS. But the capsule failed to reach the correct orbit during the test flight in December 2019 and a potentially “catastrophic” software issue was discovered. Boeing planned to redo the test flight on July 30 but the launch has been delayed until 2022 as the company looks for the cause of a technical issue that emerged.
In October, NASA moved astronauts from a Starliner mission to a SpaceX Crew Dragon mission amid the delays.
Boeing also builds satellites and manages the ISS for NASA.
Lockheed also has a long history as one of the top space stocks. It built the solid propellant launch escape motor and the pitch control motor for the Apollo 11 spacecraft.
Now Lockheed is developing the deep-space Orion spacecraft for the SLS rocket to carry astronauts into deep space, including to lunar orbit.
Lockheed also makes satellites and space probes for NASA. More recently, Lockheed built components for the Mars Perseverance rover, which landed in February, and the Mars InSight lander, which landed in November 2018.
In addition, its joint venture with Boeing, United Launch Alliance, makes rockets that provide launch services.
In December 2020, Lockheed announced it would buy engine maker Aerojet Rocketdyne in an estimated $4.4 billion deal to boost its hypersonic weapons and space capabilities.
Aerojet’s engines were used in the Apollo 11 mission and were on the Space Shuttle. The company is also providing the engines for Boeing’s SLS rocket, ULA’s Vulcan rocket upper stage and Northrop’s OmegA rocket third stage.
Northrop Grumman (NOC) expanded its scope as one of the leading space stocks after it bought rocket maker Orbital ATK in 2018.
The company is working on the OmegA heavy-lift rocket and received Air Force funding last year to help end the U.S. reliance on Russian engines used in the Atlas 5 rocket by ULA.
Northrop makes satellites as well and is developing the James Webb Space Telescope for NASA. But the deep-space telescope is behind schedule with Covid-19 further dragging on timing. NASA expects the telescope to launch on Dec. 25.
Northrop and Lockheed teamed up with Blue Origin on a lunar lander program for NASA. But they lost out to SpaceX.
Smaller space stocks are leaving their mark on the new space race too. Maxar will build the first components of NASA’s Lunar Gateway space station.
It also builds communication and Earth observations satellites as well as robotic systems for use in space.
In addition, Maxar provides access to satellite imagery and map data.
Investors’ hopes for SpaceX have made it one of the most valuable pre-IPO companies in the world. An insider share sale in early October put its worth at $100 billion, according to a CNBC report. But Musk has no plans for it to go public…yet.
An IPO of the SpaceX Starlink satellite business reportedly could be in the works, perhaps in the next several years. SpaceX has launched more than 1,700 Starlink satellites for delivering space-based broadband connections, and beta testing is ongoing. In May, the company said more than 500,000 people have ordered or made a deposit for service.
SpaceX’s Falcon 9 rocket routinely carries payloads into space for NASA, the Pentagon as well as other governments and companies, while its Falcon Heavy has launched commercial and government payloads.
SpaceX is now sending astronauts to the space station on regular trips via the Crew Dragon capsule. SpaceX is also developing the Starship for deep-space missions and space tourism.
In April, NASA awarded SpaceX $2.9 billion to further develop the Starship to land astronauts on the moon. Blue Origin and Dynetics have filed protests. In May, SpaceX launched and landed an uncrewed prototype safely, after prior high-altitude flights ended in explosions.
Jeff Bezos’ Blue Origin is developing the New Glenn and New Shepard rockets as well as engines and the Blue Moon lunar lander. In addition to carrying payloads, Blue Origin also plans to take tourists into space and is developing its own constellation of satellites for internet service.
Bezos and his brother flew on New Shepard’s first crewed flight on July 20. Blue Origin said that it has nearly $100 million in commercial sales for flights on its rocket. Two more commercial flights are expected this year. Star Trek actor William Shatner flew on Blue Origin’s successful Oct. 13 mission. At 90, he became the oldest person in space.
Bezos said he’s not sure how many flights will happen in 2022 but that “demand is very, very high.”
Follow Gillian Rich on Twitter @IBD_GRich for space news and more.
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