Author Topic: Rocket Lab (VACQ / RKLB) - Finally a decent space company that we can invest in?  (Read 934 times)

Herbert Derp

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As someone who has been following the space industry for years, I was super excited when Rocket Lab announced that they are going public on March 1st. Since SpaceX has vowed not to become a public company anytime soon, this leaves us with very limited opportunities to invest in rocket companies.

Unlike most space companies, Rocket Lab has been launching rockets into orbit for the last three years, and has successfully launched sixteen rockets and 97 satellites into orbit. In comparison, most other well-known rocket companies such as Virgin Galactic and Blue Origin still haven't launched anything into orbit. Even Virgin Orbit has only launched a single rocket into orbit as of January 2021. In other words, Rocket Lab has a multi-year lead over the competition.

Rocket Lab plans to go public in Q2 2021 with a valuation of $4.1B. In comparison, another publicly-traded space company, Virgin Galactic, is currently valued at $7.16B despite still not commercializing anything after 17 years of R&D and launching nothing into orbit. Even when it is ready, Virgin Galactic's SpaceShipTwo spaceplane will be incapable of reaching orbit. In comparison, Rocket Lab has been flying commercial flights into orbit for three years.

Furthermore, Rocket Lab also builds spacecraft and satellites. Their Photon spacecraft will send probes to the moon in 2021 and Venus in 2023.

Also, Rocket Lab is run by Peter Beck, an engineer-CEO who reminds me a lot of Elon Musk. He is obsessed with building rockets and has been building things since graduating from high school. So, definitely someone who knows his stuff, unlike say, Robert Bigelow of Bigelow Aerospace. This is exactly the kind of person that I want to run an innovative space company.

Rocket Lab has achieved various awesome innovations, such as getting their 3D-printed, electric powered rocket engine into production on commercial flights. They have also recovered their first booster from space, and aim to start reusing their boosters in the near future. This will give them a cost advantage over competitors such as Virgin Orbit who currently do not recover and reuse their rockets.

Finally, Rocket Lab is aiming big with their next rocket, Neutron, which will be similar to SpaceX's Falcon 9. They aim to have their first launch in 2024. It is designed to launch satellite mega constellations and even humans into orbit, and should be capable of economically launching 98 percent of all planned satellites from now until 2029.

The space industry will soon be worth over a trillion dollars, and with their vertically integrated portfolio of launch and spacecraft products, Rocket Lab seems to be one of the front runners for capturing a piece of this pie.

The ticker symbol is currently VACQ, which will change to RKLB when Rocket Lab completes their SPAC merger in Q2 2021.

Definitely an interesting opportunity, given Rocket Lab's proven track record and multi-year lead over the competition. Plus, investment options in the space industry are currently very limited, and lots of investors will be throwing lots of money at a very small group of companies. Just look at Virgin Galactic's stock price for evidence of this behavior! Furthermore, ARK Invest will soon launch a new space-focused fund called ARKX which will funnel even more money into these companies.

Here is a list of catalysts which I believe can drive the Rocket Lab share price higher over the next 12 months:
1. Massive investor interest in the space industry
2. Launch of 100th satellite into orbit
3. Moon mission
4. Further progress towards Electron booster recovery and reuse
5. Announcement of location for Neutron rocket factory
6. Launch of ARKX Space Exploration ETF
7. Free publicity for space industry from SpaceX

Any thoughts?

More news articles:

https://www.marketwatch.com/story/spacex-is-a-pioneer-a-similar-company-you-can-actually-invest-in-is-rocket-lab-11614957894

https://www.space.com/rocket-lab-neutron-peter-beck-interview

https://www.technologyreview.com/2021/03/02/1020212/rocket-lab-could-be-spacexs-biggest-rival-neutron-falcon-9/

Official investor presentation:

https://www.rocketlabusa.com/assets/Rocket-Lab-Investor-Presentation.pdf

Promo video:

https://www.youtube.com/watch?v=agqxJw5ISdk
« Last Edit: April 19, 2021, 07:04:32 PM by Herbert Derp »

SparkyPeanut

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Re: Rocket Lab - Finally a decent space company that we can invest in?
« Reply #1 on: March 09, 2021, 08:47:45 PM »
Great post. Rocket Labs is a great company & I plan to get some shares but I spent more than I intended on HOL which is the Astra SPAC (averaging down)!

How do you feel about Astra?! 

Herbert Derp

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Re: Rocket Lab - Finally a decent space company that we can invest in?
« Reply #2 on: March 09, 2021, 08:59:39 PM »
Astra looks like a very similar company to Rocket Lab, but seems to suffer from the same problem as most of the space companies in that they have yet to commercialize anything nor launch anything to orbit. Correct me if I'm wrong! They have the same big ideas and big plans as Rocket Lab, but without the proven track record. Launching stuff into space is really hard, and I'm looking for solid proof that a company can execute before I invest.

Here is a good video about Astra vs Rocket Lab:
https://www.youtube.com/watch?v=plGGzpYD6oQ
« Last Edit: March 09, 2021, 10:09:16 PM by Herbert Derp »

SparkyPeanut

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In case you haven't seen this -

https://www.nasa.gov/press-release/nasa-awards-launch-service-contract-for-tropics-mission-to-study-storm-processes

Feb 26, 2021
CONTRACT RELEASE C21-003
NASA Awards Launch Service Contract for TROPICS Mission to Study Storm Processes
NASA has selected Astra Space Inc. to provide a launch service for the agency’s Time-Resolved Observations of Precipitation Structure and Storm Intensity with a Constellation of SmallSats (TROPICS) mission. The TROPICS mission consists of a constellation of six CubeSats and will increase the scientific community’s understanding of storm processes.

Herbert Derp

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Another video on Astra vs Rocket Lab:
https://www.youtube.com/watch?v=X-SmtAPi-EQ

ice_beard

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Someone needs to explain to me what is the profit strategy for these space companies.

I understand satellite launching, but really how big of a market is that? 
Please don't say space tourism because I cannot imagine the capital needed to produce a "viable" option will be able to ever be profitable.  Mining?  Mining is difficult on earth.  That seems like something that will not be happening within my lifetime.  I think it's great that space exploration is happening outside of government programs like NASA but this really feels like a frothy sector.

I really don't understand the space.  Pun not intended. 

Michael in ABQ

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Someone needs to explain to me what is the profit strategy for these space companies.

I understand satellite launching, but really how big of a market is that? 
Please don't say space tourism because I cannot imagine the capital needed to produce a "viable" option will be able to ever be profitable.  Mining?  Mining is difficult on earth.  That seems like something that will not be happening within my lifetime.  I think it's great that space exploration is happening outside of government programs like NASA but this really feels like a frothy sector.

I really don't understand the space.  Pun not intended.

The internet wasn't profitable until the infrastructure was in place. Google, Facebook, etc. couldn't exist without it and would have been unimaginable 30-40 years ago. 30-40 years from now what might be possible with relatively cheap access to space? We can venture some guesses, but it may be something like the next Google that we could barely conceive of. The two richest people on Earth are in the space industry. I predict the first trillionaire is going to make their fortune in space. A single small asteroid can contain the equivalent of multiple years of metal production on Earth. Tons of precious metals plus more basic elements like iron and nickel. There's also energy production - setup a solar satellite in space that's multiple times more efficient and could be many times larger than a field of solar panels here, then beam the energy down to Earth via microwaves. Communications, manufacturing in microgravity that can't be accomplished on Earth, remote sensing, etc. The list goes on and on.

Herbert Derp

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Someone needs to explain to me what is the profit strategy for these space companies.

I understand satellite launching, but really how big of a market is that? 
Please don't say space tourism because I cannot imagine the capital needed to produce a "viable" option will be able to ever be profitable.  Mining?  Mining is difficult on earth.  That seems like something that will not be happening within my lifetime.  I think it's great that space exploration is happening outside of government programs like NASA but this really feels like a frothy sector.

I really don't understand the space.  Pun not intended.

Some articles that you might find interesting:

https://www.msn.com/en-us/money/topstocks/the-big-3-stocks-to-buy-for-the-emergence-of-the-dollar2-trillion-space-economy/ar-BB1cU79K

https://www.cnbc.com/2019/11/09/how-to-invest-in-space-companies-complete-guide-to-rockets-satellites-and-more.html

https://www.investopedia.com/how-musk-s-spacex-could-become-aerospace-giant-worth-usd120-billion-4770741

https://www.space.com/30213-asteroid-mining-planetary-resources-2025.html

Herbert Derp

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« Last Edit: April 10, 2021, 07:40:54 PM by Herbert Derp »

BicycleB

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Here are some talks / interviews with the CEO if you are interesting in understanding his mindset and plans for the company:

Small rockets are the next space revolution | Peter Beck

A conversation with Rocket Lab founder and CEO Peter Beck

A conversation with Rocket Lab's Peter Beck on recovering Electron

I like this pick!

I've been following the sector idly from a couple of other directions, simply because it intrigues me. I wasn't thinking about investment because I don't normally invest in individual stocks. But now I'm tempted! Thanks for posting this thread.

ETA: And I placed a small order to purchase. Will update after it resolves. A new adventure begins.

ETA 4/11: In at about $11/share. Roughly 2% of financial assets fwiw.
« Last Edit: April 11, 2021, 07:31:24 AM by BicycleB »

Herbert Derp

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Good luck BicycleB!

Some recent news.

Rocket Lab successfully launched their 19th Electron rocket and 100th satellite to orbit! This includes a test of their Photon spacecraft which will go to the moon on a later mission. The mission was livestreamed and included an interview with Peter Beck about Neutron.

More business is coming in--Rocket Lab just signed a contract to launch eight more satellites for BlackSky in 2021.

Rocket Lab has given an update on their plans for booster reusability. They plan to recover the booster from their next launch in May 2021 as they work on improving their heat shield. This booster will not be caught by a helicopter and instead will land in the ocean. They plan at least one more ocean splashdown test and design iteration before they start helicopter catching.

Finally, Rocket Lab has become able to build a new Electron booster in just 26 days. Last November, Peter Beck said Rocket Lab was building Electron boosters in under 30 days, and the goal is to get production to a rate of one rocket every 18 days. The Electron rocket was apparently designed to be the "world’s most manufacturable launch vehicle". Meanwhile, Neutron is supposed to be the "most reusable launch vehicle", more details on the Neutron design should be announced soon.

Links:

https://www.nasaspaceflight.com/2021/03/rocket-lab-photon-pathfinder/

https://spacenews.com/blacksky-strikes-deal-with-rocket-lab-to-launch-eight-more-satellites-in-2021/

https://www.cnbc.com/2021/04/08/rocket-lab-may-launch-booster-recovery-aiming-for-spacex-reusability.html

https://techcrunch.com/2021/04/08/rocket-lab-to-recover-the-booster-from-its-next-electron-launch-as-it-pursue-reusability/

https://mobile.twitter.com/RocketLab/status/1377450285816184835
« Last Edit: April 10, 2021, 11:47:11 PM by Herbert Derp »

alcon835

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I plan to dive deep into all of their documents since there is a little time before the merger and things are currently dropping. This is definitely the kind of long-term play I like and the price seems pretty bonkers low.

My question is, what happens to VACQ after the merger? It just straight convers over 1:1? Also, what is the likelihood that they finish the SPAC acquisition and then start adding shares? 40M shares seems really, really low to me. If I buy in with only 40M shares, dilution seems like a really high likelihood over the next several years as they build up their technology and business. How likely is their valuation going to keep up with the inevitable dilution? And do you think they'll be able to start earning meaningful revenues in the next 5 years?

Again, this stuff may all be answered in the documents I have tabbed to read through, but they leave me questioning if I should invest or not and if so, how much. I don't want to buy in and then immediately be heavily diluted.

lutorm

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Unlike most space companies, Rocket Lab has been launching rockets into orbit for the last three years...
You somehow forgot the companies that actually launch real rockets in your list there: SpaceX, ULA, Arianespace, Roscosmos.

You can certainly invest in ULA, through Lockheed-Martin and Boeing. I dunno about Arianespace, but I can't imagine they're not public. SpaceX and Roscosmos is a bit harder...

Herbert Derp

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You somehow forgot the companies that actually launch real rockets in your list there: SpaceX, ULA, Arianespace, Roscosmos.

You can certainly invest in ULA, through Lockheed-Martin and Boeing. I dunno about Arianespace, but I can't imagine they're not public. SpaceX and Roscosmos is a bit harder...

Yeah, SpaceX is the obvious leader here but they have vowed not to become a public company for many years. Of the other companies you mentioned, I think the only one worth investing in is Lockheed Martin, and space technology is just a small part of what they do. All of those companies besides SpaceX are "old space", which means they are slow and inefficient and have the wrong mindset in general for sustainably getting humans into space.

Old space players like ULA, Arianespace, and Roscosmos are very far behind in terms of technology and still can't match the performance of the Falcon 9 over five years after Falcon 9 first landed successfully back on Earth. This is despite their rockets being direct competitors to the Falcon 9. They are being left behind and seem to lack the means or the resolve to bring their technology into the 21st century.

Five years after the first Falcon 9 landed, ULA and Arianespace have not even came up with a plan to build a reusable rocket. Roscosmos has, but their rocket won't be ready until 2026. To old space, reusable rockets are still "impossible". I believe that Rocket Lab can beat all of the old space players to the reusable rocket market with their next generation Neutron rocket which will be on par with the Falcon 9. Just based on the fact that Rocket Lab has a plan to build a reusable rocket, they are in a similar place to Roscosmos and ahead of ULA and Arianespace.

Here is some additional reading to understand what old space is and why I am not interested in investing in it.

https://wanderingalpha.com/new-space-vs-old-space

https://spacenews.com/op-ed-old-space-meets-new-space/
« Last Edit: April 21, 2021, 05:09:11 PM by Herbert Derp »

lutorm

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Here is some additional reading to understand what old space is and why I am not interested in investing in it.

You don't have to convince me to not invest in old space. However, I'm curious what you think the competitive advantage rocket labs holds over SpaceX? It seems to me that unless RocketLabs (or Relativity, or ABL, for that matter) has a big-ass ace up their sleeve, there's no way they'll beat SpaceX unless the latter screw up big time. But then again, I'm partial...

Herbert Derp

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Oh, there's no way Rocket Lab or anyone else is beating SpaceX. SpaceX has a massive lead on everyone. But I don't think that SpaceX will have a monopoly on space. They aren't even competing in the small rocket launch business where Rocket Lab has been focusing their efforts. The outer space market is going to be huge, and there's plenty of room for multiple players.

One example of this room is that over the next decade, various companies will be launching their own fleets of internet satellites to compete with Starlink. These satellites are only designed to last a few years and will need to be continuously replaced. The companies involved won't want to fund their competition, this is why Amazon won't pay SpaceX to launch their internet satellites, even though SpaceX can launch them for cheaper. Same for OneWeb, they won't pay SpaceX to launch their satellites either. Since Blue Origin is closely associated with Amazon, they will face the same problem. This is a great opportunity for Rocket Lab and Neutron!
« Last Edit: April 21, 2021, 05:10:40 PM by Herbert Derp »

Herbert Derp

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Another awesome interview with Peter Beck just got posted on YouTube! I can't wait to hear more about Neutron!

A chat with Rocket Lab's CEO Peter Beck about Neutron, Electron recovery and Rocket Lab's future!