2020: The Year The Space Market Will Take Off
Stock Market Analysis

2020: The Year The Space Market Will Take Off

The new space race has left the realm of shady government organizations and jumped into the arena of public corporate boardrooms, looking set to take off this year. 

60 years into the space race and the way we leave earth has changed remarkably. There was a time when only big nations like the U.S. and Russia were participating in the sector by building and deploying satellites through government-owned entities like NASA. With the improvement of technology and talent, new private companies have emerged and taken over the part where satellites are built and launched.

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The satellite industry currently dominates the global space industry. The business model is where companies like SpaceX, Lockheed (NYSE: LMT) and Boeing (NYSE: BA) launch satellites for global communication giants like SES (NASDAQ: SAS) and Orbcomm (NASDAQ: ORBC) and transport cargo to the international space station. Launches have traditionally cost millions of dollars to simply take off and have experienced a high level of failure, leading to a very high operating expenditure for the launch companies. Nonetheless, Apple (NASDAQ: AAPL) is reportedly looking to get into the new space race.

Source : Bloomberg

Other players like Rocketlab, Relativity, Firefly & Virgin Orbit are into the small/medium satellite launch business. There are roughly a hundred players in this sector, most of which are fuelled by venture capitalists in Silicon Valley. The industry has massively benefitted from the rise of SmallSats, CubeSats & NanoSats which can be built for as low as $10,000. Players like Rocketlab and Virgin Orbit have a big backlog of customers, but industry experts say that it is hard to survive for players who aren’t able to provide safe launches to their customers.

Through its cheaper prices, SpaceX quickly took over bigger players like Lockheed Martin, Boeing & Northman Grumman (NYSE: NOC) who are involved in sending heavy cargo to the international space station. Blue Origin, backed by the world’s richest man and Amazon (NASDAQ: AMZN) CEO Jeff Bezos, launched a rocket booster first in 2015, but SpaceX took it to the next level with its Falcon 9 vertical landing. This has significantly brought down costs for launch companies and revolutionized the satellite industry.

The U.S. has been successfully building and deploying satellites through its wide range of launch companies, but when it comes to sending people into space, it still has to rely on Russian technology. But, the continuous improvements & investments in the U.S. technology has led the industry to evolve into a new sub-segment called “Space Tourism”. The three largest players, SpaceX, Blue Origin & Virgin Galactic (NYSE: SPCE), have made plans to send people into outer orbit or to another planet like Mars for exploration.

SpaceX won a $2.6 billion NASA contract for a commercial crew after it announced its Dragon capsule, which is much larger than the traditional capsule. In August 2018, SpaceX signed its first passenger for a planned tourist flight around the moon in 2023. Virgin Galactic, which recently went public with a $2.3 billion valuation, plans to take its customers to the exosphere. The company will charge a whopping $250,000 to each customer. Its initial craft will carry five people, which is worth $820,000 after running costs, per flight. 600 customers have already signed up into 2022.

Source : Financial Times

Jeff Bezos’ Blue Origin has successfully completed its test launches this year with its New Shepard rocket. It is designed to take a crew of six to the edge of space to experience a few minutes of weightlessness. The pricing would be somewhere around $200,000. There are a few other players like Orion, Axiom Space, Zero2Infinity, etc which also participate in the space tourism industry, each with a different kind of experience and offering.


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Shivam Gupta
Shivam Gupta
Shivam is a contributing writer to MyWallSt. Shivam’s favorite stock is Xilinx because he believes that it brings something groundbreaking to the very competitive semiconductor industry.