Dear readers,
Welcome to Quartz’s newsletter on the economic possibilities of the extraterrestrial sphere. Please forward widely, and let me know what you think. This week: SPAC checks and rain checks.
Space Biz will be on hiatus for two weeks while I dig into some longer-term projects. See you in April!
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When this newsletter began in 2019, none of the recently founded space companies we follow offered equity for sale to the public. Today, any investor can put their money into at least eleven firms making rockets, launching satellites, and even flying people to the edge of space.
They have proven to be… not a great investment thus far. If you’ve been following along, you know that many space start-ups seized on the raging bull market and went public through mergers with firms known as special purpose acquisition companies, or SPACs. Virgin Galactic led the charge, and others soon followed.
A key thing to know about SPACs is they typically start off with a benchmark price of $10. When the merger goes through, investors in the acquisition company can trade their shares for $10 each, in lieu of owning the new company. As of now, none of the main players have traded above $10 in months. Here’s a league table:
It’s not exactly their fault: The broader market has suffered a correction, with the S&P 500 index falling 3.5% in the last six months, but every company above has offered worse performance. It seems the pandemic-era excitement over flashy meme stocks with exciting stories has passed or at least subsided.
Now, the companies will have to stand out on their own performance. Some, like Satellogic, with the highest stock price, have a built-in runway: It is building a satellite constellation expected to be finished by 2025. Some are running out of runway: Virgin Galactic, the oldest, has missed forecasts steadily for the last two years as it tries to get its space tourism operation running regularly.
Other companies valuations will hinge on hardware performance: How will AST Space Mobile’s first mobile-phone-linking satellite perform when it is launched into orbit later this summer? Or, yesterday, rocket-maker Astra finally managed to deploy its first customer spacecraft into orbit and win a little bump in its share price.
Firms that have already proven out their capabilities, meanwhile, have to show they can turn their products into profits. Rocket Lab, the highest valued and arguably most mature firm, must show a steady launch business while also pushing to create its next-generation launch vehicle and expand into satellite production. Virgin Orbit needs to hit a regular cadence of satellites heading to orbit on its air-launched rockets. Earth-observation firms Planet, Spire, and BlackSky are all seeking to expand the market for the data they gather in orbit.
Other companies are more idiosyncratic. Redwire aims to be a conglomerate, beginning life as a private-equity play that acquired a handful of small space suppliers with the aim of providing the picks and shovels required in the gold rush to orbit. The space-tug firm Momentus was forced to start from scratch after the departure of its founding CEO led to admissions about the failure of an on-orbit test.
This is likely to be a tough year for many of these firms, with financial conditions expected to tighten and supply chain problems remaining thorny. That also makes it the perfect environment to see which companies can rise to the occasion when the hype cycle is past.
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Imagery interlude
Just a hint of leg… this is NASA’s Crawler 2, a massive vehicle designed to transport the 98 m tall Space Launch System rocket from its assembly building, just over three miles to the launch pad.
NASA officials plan on doing this rollout today ahead of a launch pad dress rehearsal, and it should be quite a sight, with coverage on NASA TV expected to start at 5pm ET. If all goes according to plan, the SLS will launch an uncrewed Orion space capsule to orbit around the Moon sometime this summer.
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What do a wooden toe and a brain implant have in common? After centuries of use in assisting the differently abled, prosthetics of the future are increasingly focused on boosting the able-bodied. Would you go for a bionic organ, at-home exoskeleton, or computer brain implant? Learn more about the potential—and potential pitfalls—of the next era of human upgrades with this week’s episode of the Quartz Obsession podcast.
Listen on: Apple Podcasts | Spotify | Google | Stitcher
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Your pal,
Tim
This was issue 127 of our newsletter. Hope your week is out of this world! Please send your space investing strategies, status updates on the Raptor and the BE-4, tips, and informed opinions to tim@qz.com.