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 is going public via Holicity (HOL), Momentus is going public via Stable Road Capital (SRAC) and Vector Acquisition (VACQ) will take Rocket Lab public in a deal that values the space company at $4.1 billion. Redwire Space is merging with Genesis Park (GNPK) to go public.
Virgin Galactic (SPCE), the first SPAC-backed space company, is close to starting commercial space tourism service. Sister company Virgin Orbit is considering a public stock listing via a blank-check merger.
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:
Space Stocks ETFs
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).
Now a new space-focused ETF is on the way. After the success of the Ark Innovation ETF (ARKK), which features Elon Musk’s Tesla (TSLA) as its top holding, Cathie Wood’s Ark Investment Management is looking to start the ARK Space Exploration ETF (ARKX), according to a filing with the Securities and Exchange Commission in January.
The ETF will focus on stocks that are “leading, enabling or benefiting from technologically enabled products and/or services that occur beyond the surface of the Earth,” according to the filing.
The final portfolio could contain 40 to 55 names, but the filing didn’t specify which space stocks would be in the ETF, but Richard Branson’s space tourism company Virgin Galactic is a likely candidate.
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, reported a per-share loss of 31 cents in Q4, matching forecasts, down from a 37 cents per share loss in the year-ago quarter. Revenue stayed at zero.
Following an aborted test flight in December, Virgin Galactic pushed back an expected February flight attempt to May. Meanwhile, SpaceShipThree will undergo its own flight test program. Then in the fall, SpaceShipTwo, the WhiteKnightTwo mothership, and SpaceShipThree will undergo maintenance or improvement. That will result in a roughly four-month period of no flight activity.
Virgin Galactic now sees its first commercial flight in early 2022.
In addition to space tourism, Wall Street is bullish on Virgin Galactic’s potential in hypersonic intercontinental travel.
In August, 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.
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 plans to redo the uncrewed test flight no earlier than late April.
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, 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) greatly 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 as early as Oct. 31.
Northrop and Lockheed are teamed up with Blue Origin on a lunar lander program for NASA.
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.
Maxar was also among the 11 space companies NASA selected to start studies on building components for a lunar lander. Aerojet, Jeff Bezos’ Blue Origin, Boeing, Lockheed, Elon Musk’s SpaceX and Northrop were among the others.
Investors’ hopes for SpaceX have made it one of the most valuable pre-IPO companies in the world. 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. There are more than 1,000 Starlink satellites in orbit and SpaceX has already started beta testing.
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.
And alongside Boeing, SpaceX is making the Crew Dragon capsule for service to the space station. On Aug. 2, 2020, SpaceX successfully returned two astronauts to earth after launching them into space May 30, completing the first such trip by a private company. In November, SpaceX launched the first operational crewed mission — Crew-1 — to the ISS. The Crew-2 mission is set for the spring.
SpaceX is also developing the Starship for deep-space missions and space tourism. So far Starship has reached a fiery end in the last three landing attempts following high-altitude launches. SN10 exploded several minutes after landing. The Federal Aviation Administration is investigating the SN9 launch.
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.
Blue Origin completed a test flight of its new crew capsule in January, a key step needed before it can launch its first crewed mission. After the successful launch, company representatives said they were “very, very close” to flying humans.
In April 2020, a Blue Origin team, which includes Lockheed and Northrop, received $579 million from NASA for the development of a lunar lander system. SpaceX was awarded $135 million for a lunar lander system. A third NASA contract for $253 million went to a team led by Dynetics, which was acquired by Leidos (LDOS) in early 2020.
Follow Gillian Rich on Twitter @IBD_GRich for space news and more.
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