The Money Mustache Community
Learning, Sharing, and Teaching => Investor Alley => Topic started by: Herbert Derp on March 09, 2021, 08:39:43 PM
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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 (https://www.investopedia.com/articles/markets/121515/will-elon-musks-spacex-go-public.asp) 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 (https://en.wikipedia.org/wiki/List_of_Electron_launches). 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 (http://www.msn.com/en-xl/money/tech-and-science/virgin-orbit-launches-10-satellites-to-orbit-in-landmark-test-flight/ar-BB1cQwMi) 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 (https://www.cnbc.com/2021/03/01/rocket-lab-going-public-via-spac-with-neutron-rocket-expansion.html). In comparison, another publicly-traded space company, Virgin Galactic, is currently valued at $7.16B (https://www.google.com/search?q=spce) 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 (https://en.wikipedia.org/wiki/SpaceShipTwo) will be incapable of reaching orbit. In comparison, Rocket Lab has been flying commercial flights into orbit for three years (https://www.popularmechanics.com/space/rockets/a25006862/rocket-lab-first-commercial-launch/).
Furthermore, Rocket Lab also builds spacecraft and satellites (https://www.rocketlabusa.com/satellites/). Their Photon spacecraft will send probes to the moon in 2021 (https://www.space.com/rocket-lab-launching-nasa-moon-cubesat-2021.html) and Venus in 2023 (https://www.space.com/rocket-lab-venus-life-hunting-mission.html).
Also, Rocket Lab is run by Peter Beck (https://www.stuff.co.nz/business/industries/93375532/national-portrait-peter-beck--space-pioneer), 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 (https://www.youtube.com/watch?v=DDZXNvPh5EE) into production (https://www.forbes.com/sites/elizabethhowell1/2019/07/09/rocket-lab-completes-100th-3d-printed-rocket-engine/?sh=6d2ec46b51c7) on commercial flights. They have also recovered their first booster from space (https://www.space.com/rocket-lab-booster-recovery-success-for-reusability), 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 (https://www.rocketlabusa.com/rockets/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 (https://www.engadget.com/rocket-lab-plans-reusable-rocket-eight-ton-payload-143703619.html).
The space industry will soon be worth over a trillion dollars (https://www.cnbc.com/2020/10/02/why-the-space-industry-may-triple-to-1point4-trillion-by-2030.html), 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 (https://www.google.com/search?q=vacq), which will change to RKLB when Rocket Lab completes their SPAC merger in Q2 2021 (https://www.cnbc.com/2021/03/01/rocket-lab-going-public-via-spac-with-neutron-rocket-expansion.html).
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 (https://www.cnbc.com/2021/01/13/cathie-woods-ark-invest-plans-space-exploration-etf-arkx.html) 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 (https://www.stuff.co.nz/business/124193815/rocket-lab-to-launch-100th-satellite-on-photon-rocket-ahead-of-moon-mission)
3. Moon mission (https://techcrunch.com/2020/02/14/rocket-lab-will-launch-a-satellite-to-the-moon-for-nasa-to-prepare-for-the-lunar-gateway/)
4. Further progress towards Electron booster recovery and reuse (https://www.space.com/rocket-lab-booster-recovery-success-for-reusability)
5. Announcement of location for Neutron rocket factory (https://www.msn.com/en-us/news/technology/rocket-lab-unveils-plans-for-new-rocket-to-launch-from-nasa-wallops-new-factory/ar-BB1e9aRK)
6. Launch of ARKX Space Exploration ETF (https://www.cnbc.com/2021/01/13/cathie-woods-ark-invest-plans-space-exploration-etf-arkx.html)
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
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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?!
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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
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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.
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Another video on Astra vs Rocket Lab:
https://www.youtube.com/watch?v=X-SmtAPi-EQ
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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.
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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.
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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
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Here are some talks / interviews with the CEO if you are interested in understanding his mindset and plans for the company:
Small rockets are the next space revolution | Peter Beck (https://www.youtube.com/watch?v=DhnBn_c9f8Q)
A conversation with Rocket Lab founder and CEO Peter Beck (https://www.youtube.com/watch?v=Nj9BncsgvuQ)
A conversation with Rocket Lab's Peter Beck on recovering Electron (https://www.youtube.com/watch?v=CUfOnwSLWxY)
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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 (https://www.youtube.com/watch?v=DhnBn_c9f8Q)
A conversation with Rocket Lab founder and CEO Peter Beck (https://www.youtube.com/watch?v=Nj9BncsgvuQ)
A conversation with Rocket Lab's Peter Beck on recovering Electron (https://www.youtube.com/watch?v=CUfOnwSLWxY)
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.
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Good luck BicycleB!
Some recent news.
Rocket Lab successfully launched (https://www.nasaspaceflight.com/2021/03/rocket-lab-photon-pathfinder/) 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 (https://youtu.be/u5wmrGriVX0?t=2519).
More business is coming in--Rocket Lab just signed a contract (https://spacenews.com/blacksky-strikes-deal-with-rocket-lab-to-launch-eight-more-satellites-in-2021/) to launch eight more satellites for BlackSky in 2021.
Rocket Lab has given an update (https://www.cnbc.com/2021/04/08/rocket-lab-may-launch-booster-recovery-aiming-for-spacex-reusability.html) 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 (https://mobile.twitter.com/RocketLab/status/1377450285816184835). 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
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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.
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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...
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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 (https://www.investopedia.com/articles/markets/121515/will-elon-musks-spacex-go-public.asp) 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 (https://arstechnica.com/science/2020/10/russian-space-corporation-unveils-planned-amur-rocket-and-it-looks-familiar/), 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/
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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...
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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 (https://arstechnica.com/science/2021/04/amazons-first-internet-satellites-will-not-launch-on-blue-origin-rockets/), even though SpaceX can launch them for cheaper. Same for OneWeb, they won't pay SpaceX to launch their satellites either (https://www.oneweb.world/launches). Since Blue Origin is closely associated with Amazon, they will face the same problem. This is a great opportunity for Rocket Lab and Neutron!
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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! (https://youtu.be/aXoXDp3j850)
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Unfortunately, Rocket Lab's last mission was a failure (https://www.nzherald.co.nz/business/one-of-our-toughest-days-rocket-lab-suffers-third-mission-failure/BY4CYVIDSNDDJPP6ZBW7B6VVAI/). This is the second time in a year that the second stage of the rocket failed (https://arstechnica.com/science/2021/05/rocket-lab-reviewing-data-after-its-second-electron-failure-in-a-year/). Interesting, because it seems that most companies seem to have problems with the first stage, not the second stage which is smaller and much simpler.
The good news is that Rocket Lab was able to recover (https://techcrunch.com/2021/05/17/rocket-lab-recovered-the-first-stage-from-its-failed-may-15-launch-a-silver-lining-for-its-reusability-program/) the first stage as planned, and their progress towards first stage reusability has not been impacted. The bad news is that this failure damages Rocket Lab's reputation and makes customers less likely to choose them over the various competitor rocket companies.
If you are interested in learning about the competition, here's an in-depth video (https://www.youtube.com/watch?v=A5Sfw58jApo).
Personally, I still believe that Rocket Lab is ahead of most of the competition and remain an investor.
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Not a great outcome, but not unexpected to happen from time-to-time as the industry figures these things out. I'm curious what kind of repayments, if any, Rocket Labs will need to do as recompense in the contract.
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Rocket Lab operates in NZ, and has just been fined nearly $100000 for their failure to follow employment law. Just as a side note.
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Rocket Lab operates in NZ, and has just been fined nearly $100000 for their failure to follow employment law. Just as a side note.
I found this article on it: https://www.rnz.co.nz/news/national/443628/rocket-lab-ordered-to-pay-100-000-for-employee-s-unjustified-dismissal
Seems like they are still working through things? The end of the article makes it sound like Rocket Labs is disputing the fine still.
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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.
And don't forget Paul Allen's estate too. But here's my question. The Internet revolutionized everything and created countless millionaires. But Google wasn't the first search engine by a long shot. Altavista, Excite, Magellan, Yahoo! and many more. Being first in the space was not nearly good enough.
Similar story for airlines and airplane manufacturers. There were dozens and dozens of each at one time, now those numbers have been reduced to a small number of players. Of the existing major airlines, only Southwest and Alaska have not gone bankrupt, and it was close thing for Alaska. The other remaining majors have all declared bankruptcy at least once, some multiple times. Big players like Pan Am, Eastern, and TWA don't even exist anymore.
You get my point. Just being early isn't enough, and being a major player isn't enough either. I'm not saying don't invest, I'm saying along with the huge potential upside is huge potential downside so plan accordingly.
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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.
And don't forget Paul Allen's estate too. But here's my question. The Internet revolutionized everything and created countless millionaires. But Google wasn't the first search engine by a long shot. Altavista, Excite, Magellan, Yahoo! and many more. Being first in the space was not nearly good enough.
Sure, but Yahoo IPOed in 1996 and their stock eventually climbed from $33 to $475 over four years. Later it was acquired by Verizon. If that's what happens to my VACQ I'd be fine.
https://en.wikipedia.org/wiki/Timeline_of_Yahoo!
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Might be interesting to put a small amount on them. They do seem to be adult about the enterprise, and understand they are not making website or an app.
What was your issues with bigelow? They have hardware attached to the ISS, granted they laid everyone off last year... Always got the feeling that they had a good concept and were right about it but just to early to the game.
Having worked in the industry I have not heard good things about Boeing or Lockheed, both from there government customers and when working in parallel with them.
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My issue with Bigelow Aerospace is that their founder and president (Robert Bigelow) has a background in budget hotels and real estate development, not engineering or aerospace. He's also into stuff like pseudoscience and UFO conspiracy theories. I don't think he has the right mindset to run a successful aerospace company. Go on Glassdoor and read about their company culture.
In other news, Rocket Lab is going to Mars (https://www.cnbc.com/2021/06/15/rocket-lab-wins-nasa-contract-for-mars-escapade-spacecraft.html)! This is great news for their spacecraft business!
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Another oft-hyped New Space company worth comparing to Rocket Lab is Momentus (https://momentus.space/). Momentus is focusing on the spacecraft and space services business and is developing three different spacecraft (https://momentus.space/services/) which can move customer payloads around in space.
Momentus still hasn't made it to space, and they recently announced that all of their missions have been delayed until 2022 (https://www.cnbc.com/2021/05/24/spac-stable-road-shares-drop-after-momentus-says-it-wont-fly-in-2021.html) due to political issues. Space is hard!
As we know, Rocket Lab also has spacecraft and space services as part of their business plan. You might say that Momentus' business plan is a subset of Rocket Lab's business plan. Although Momentus' Vigoride (https://en.wikipedia.org/wiki/Vigoride) spacecraft has yet to make it into space, Rocket Lab has already launched their similar Photon (https://en.wikipedia.org/wiki/Rocket_Lab_Photon) spacecraft into space three times where it was able to successfully complete various missions! Photon will be going to the Moon (https://www.rocketlabusa.com/missions/lunar/) this year, and they already have missions booked for Venus (https://www.space.com/rocket-lab-venus-life-hunting-mission.html) and Mars (https://www.msn.com/en-us/news/technology/rocket-lab-wins-nasa-contract-for-mars-spacecraft-as-interplanetary-missions-become-less-costly/ar-AAL3GrV). Rocket Lab is more than just rockets!
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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 (https://www.investopedia.com/articles/markets/121515/will-elon-musks-spacex-go-public.asp) 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 (https://arstechnica.com/science/2020/10/russian-space-corporation-unveils-planned-amur-rocket-and-it-looks-familiar/), 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/
The first link for me didn’t work. The second link was interesting to me first because it mentioned Skybox and being sold to Google. I spent my career in Old Space and had some collègues and friends who left to go to Skybox when we were all working in Palo Alto and the environs. It was a great deal for them when Google bought them out because they got the best of both worlds: working in space (so damn cool!) and all the perks of working for Google that aerospace companies can’t match.
The article was written in 2015 so it didn’t I close the part where Google shut down the whole space venture so the Skybox team scattered and had to find new jobs within Google or go to another company if they wanted to stay in the space industry.
The article also mentioned Iridium. I worked for a company that made the first set of iridium satellites. The article leaves out the part where the company went bankrupt and was bought for pennies on the dollar by investors. They made money but the original investors who put up all the money the build and launch the original constellation didn’t.
I can’t speak objectively since I haven’t worked for New Space but I have friends who do. I’ve heard stories of overwork and lower pay and tough working conditions. One friend has been a contractor over and over before finally landing a full time permanent position with a New Space company.
I’d love to see new space and old space and everything in between succeed because it is just so damn cool. When pushing the edge of technology there is a time where the investment doesn’t produce returns or you don’t know when and if it will. We have benefited greatly from space but sometimes it took a long time and was in ways the original engineers didn’t envision (the velcro on my toddler’s shoes, for example).
I struggled against the bureaucracy and slowness in Old Space and constantly argued for improvement and change. I’ll admit though that while I saw plenty that was just inefficient there is also a very justified reason for being slow to change. Space is hard and unforgiving and expensive in ways that most terrestrial-based industries can’t understand. Medical devices and the auto industry gets close but even then you have chances to fix errors. Aside from the space station and Hubble, if you screw up in space then you just lit a fire of hundreds of millions of dollars with nothing to show for it. That breeds conservatism. I’ve seen a hundred-million dollar mission fail because of a faulty $50 electronic component like something you’d buy at Radio Shack.
I’m not sure if I have a conclusion. I find new space interesting and I hope they succeed. But I wouldn’t be surprised at all if it takes longer than expected and the path is littered with the bodies of more dead companies along the way than other industries.
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@yseette9, thanks for the personal comment. Very informative!
I go back and forth about the few hundred shares I bought. For now the stock value has been sitting like a bump on a log while it seems like the rest of the market is, well, a rocket. Pretty exciting to feel "invested" in missions to Mars and Venus, though. :)
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As much as I love to see Rocket Lab succeed, any company that goes public via a SPAC is instantly removed from my list of companies to invest in.
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On the topic of Rocket Lab competitors, check out Relativity Space (https://www.cnbc.com/2021/05/25/relativity-space-disruptor-50.html). They just announced that they are building a fully reusable, fully 3D printed mini-Starship the size of a Falcon 9 that is planned to launch in 2024:
https://www.cnbc.com/2021/06/08/relativity-space-raises-650-million-for-3d-printed-spacex-competitor.html
That being said, Relativity Space has yet to launch anything into space, so take that 2024 timeline with a grain of salt. Looks like Rocket Lab's upcoming Neutron rocket is getting some more competition! I think we are going to see how valuable Rocket Lab's years of experience with space launches are as they enter competition with more of these younger and inexperienced companies.
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I'm trying to figure out the new Low Earth Orbit (LEO) satellite communications companies. Starlink, OneWeb etc.
The field is littered with the dead, Iridium (pre-bankrupcy), Teledesic (with Bill Gates as funder) etc.
The more recent consensus is "well, it could work this time if...."
https://www.rcrwireless.com/20210319/analyst-angle/the-business-case-for-leo-satellite-constellations-walking-a-tightrope-to-success-analyst-angle
https://www.rcrwireless.com/20200311/analyst-angle/threat-opportunity-leo-satellites-analyst-angle#prettyPhoto
https://www.washingtonpost.com/business/why-low-earth-orbit-satellites-are-the-new-space-race/2020/07/10/51ef1ff8-c2bb-11ea-8908-68a2b9eae9e0_story.html
https://www.mckinsey.com/industries/aerospace-and-defense/our-insights/large-leo-satellite-constellations-will-it-be-different-this-time
https://www.slideshare.net/nahid786khan/teledesic
https://www.bbc.com/news/business-55807150
It doesn't seem like a _compelling_ set of business cases. Especially for the consumer market.
Comments?
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Starlink actually offers good performance, so customers will be happy to pay for it, plus they have the lowest cost satellites, and the lowest cost launch platform.
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I'm trying to figure out the new Low Earth Orbit (LEO) satellite communications companies. Starlink, OneWeb etc.
The field is littered with the dead, Iridium (pre-bankrupcy), Teledesic (with Bill Gates as funder) etc.
The more recent consensus is "well, it could work this time if...."
It doesn't seem like a _compelling_ set of business cases. Especially for the consumer market.
Comments?
Starlink is different because they are putting much more of their satellites at a much lower orbit than the competition. Lower orbit means much better performance, since the satellites are closer. However, there is a significant drawback to putting them close, which is that the coverage of the satellites becomes much smaller. This means that you need to have much more satellites in orbit to achieve the same coverage as a constellation in higher orbit. Imagine shining a giant flashlight from a satellite down onto the Earth below: if the satellite is close, the "coverage cone" of light will only cover a teeny tiny circle of coverage on the Earth, but if it is far, the cone will cover a big huge circle on Earth. Because of this, it has been financially infeasible for any satellite internet company to launch a fleet of satellites into low Earth orbit due to the high number of satellites needed--the teeny tiny coverage cone of each satellite means you need tons of them. That is, until SpaceX came along with its reusable rockets and started being able to launch satellites for a fraction of the cost of the competition.
For example, Gogo Inflight Internet (https://en.wikipedia.org/wiki/Gogo_Inflight_Internet) (the internet you get on airplanes) uses a fleet of about 70 satellites (https://en.wikipedia.org/wiki/SES_S.A.) in Geostationary orbit (GEO) and medium Earth orbit (MEO). Because these satellites are so high up, Gogo can cover a large surface area on Earth with only these 70 satellites.
In comparison, Starlink plans to operate a fleet of up to 42,000 satellites in low Earth orbit (LEO). Due to the high number of satellites and how close they are to the ground, the bandwidth (number of connections and volume of data) and latency (response time) of the network is far superior to Gogo's network. In comparison, Gogo can only connect to a small number of customers due to the tiny size of its fleet of satellites, and the performance is much worse due to the limited bandwidth of the small constellation as well as the vast distance from the surface of the Earth.
Ultimately, what this means is that due to how many Starlink satellites there are and how close they are to Earth, Starlink will have much better performance and be able to serve far more customers than any of the competition. Furthermore, only SpaceX has rockets which are economical enough to launch such a huge constellation into orbit. SpaceX already charges much less than the competition to launch stuff into orbit, but their true costs are even lower. SpaceX just has no reason to lower prices that low, since they are already the lowest. But for the purposes of launching its own satellites, SpaceX is able to fund its own launches for much less than any other company, even if that other company purchased launches from SpaceX. That's the value of SpaceX and Starlink being vertically integrated within the same company, since Starlink can utilize much lower "private" launch costs.
Given all of this, it is easy to see why so many predecessors to Starlink have gone bankrupt. Their launch costs were simply too high, and the performance of their networks were too poor to attract enough customers to pay for the high launch costs. SpaceX hopes to hit a "sweet spot", where the high performance of their network is able to attract a large amount of customers, and between all the paying customers plus their far lower launch costs, they will be able to afford to launch a network of 40,000 satellites without going bankrupt.
So, TL;DR is:
Starlink
* More satellites (like, tons more)
* Very low orbits (very low LEO)
* High bandwith (more connections, more data transferred)
* Low latency (faster response time)
* Lower launch costs due to vertical integration with SpaceX, can afford to launch 40,000+ satellites into low Earth orbit
* Can support more customers, more revenue
Other satellite constellations
* Less satellites (less than 100, compared to Starlink's planned 40,000+)
* Much higher orbits (MEO and GEO)
* Low bandwith (less connections, less data transferred)
* High latency (slower response time)
* Higher launch costs due to having to buy 3rd party rocket launches on the public market, cannot afford to launch 40,000+ satellites into low Earth orbit
* Can support less customers, less revenue
A few other interesting takeaways are due to the extreme low orbits of Starlink, the satellites will naturally slow down by brushing with the Earth's upper atmosphere and fall back to Earth in only a few years. This means much less problems with Kessler syndrome (https://en.wikipedia.org/wiki/Kessler_syndrome), since if the satellites collide and explode, the debris will be gone in just a few years. In comparison, satellite debris in just slightly higher orbits than Starlink can take decades to centuries to fall back to Earth (https://www.nasa.gov/news/debris_faq.html). This also means that fleets of satellites like Starlink will require constant rocket launches to continuously replenish the satellites as they fall back to Earth every few years. In other words, between the huge amount of satellites and continual replenishment of said satellites, it will be a big business for launch providers like SpaceX and Rocket Lab.
So I hope this explains why Starlink is so special and important, and why companies like Blue Origin and Rocket Lab are rushing to build rockets which are economically capable of launching large satellite constellations into orbit.
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@Herbert Derp , thanks for the extensive reply.
Yep, I get that Starlink is _far_ more likely to get it right than prior attempts, but I'm still not _compelled_ by the better numbers.
The "Cost calculations for large LEO constellations" side bar of the mckinsey.com link talks about launch costs and a Starlink estimate of $10 billion for both spacecraft and launch.
10 billion / (5year contract*12month/year*$100/month current pricing) =1.6 million customers, so that's not that bad.
I guess I'm ruining my argument :-) I need to make assumptions that support the argument better.
That doesn't include ground stations to link to the rest of the internet, the pizza box antennas (1 per customer), replacement satellite costs, etc etc.
I'm not convinced for the low latency benefit.
I once played a flight simulator over the emerging internet at 2400 baud, admittedly not well (between my skills and the lag at 2400 baud).
If you are a High Frequency Trader, then sure. Flash Boys by Michael Lewis notes the extreme effort that went into a fiber connection for low latency. The big money can afford that, so maybe there are enough dollars to fund a few billion, and then everybody else has to keep up.
Disclosure: I'm a mini-fanboy of SpaceX, so I hope all goes well.
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So, TL;DR is:
Starlink
* More satellites (like, tons more)
* Very low orbits (very low LEO)
* High bandwith (more connections, more data transferred)
* Low latency (faster response time)
* Lower launch costs due to vertical integration with SpaceX, can afford to launch 40,000+ satellites into low Earth orbit
* Can support more customers, more revenue
Other satellite constellations
* Less satellites (less than 100, compared to Starlink's planned 40,000+)
* Much higher orbits (MEO and GEO)
* Low bandwith (less connections, less data transferred)
* High latency (slower response time)
* Higher launch costs due to having to buy 3rd party rocket launches on the public market, cannot afford to launch 40,000+ satellites into low Earth orbit
* Can support less customers, less revenue
This used to be true, it might not be true for much longer:
Lower earth orbit is getting crowded with broadband satellite constellations: Amazon.com Inc.’s Project Kuiper aims to put out 3,200 satellites, Britain’s OneWeb about 700 and Telesat of Canada around 300. Russia and China are working on their own, potentially massive, constellations.
An EU official said that owning a constellation that can beam broadband internet to Earth is a strategic priority for the bloc. It is expected to publish a road map for a public-private partnership to create a broadband satellite fleet worth around €6 billion, equivalent to $7.19 billion, by the end of the year.
WSJ: Elon Musk’s Satellite Internet Project Is Too Risky, Rivals Say (https://www.wsj.com/articles/elon-musks-satellite-internet-project-is-too-risky-rivals-say-11618827368)
Or am I missing something?
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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.
The biggest apparent problem for Neutron is that it's likely to be competing against a Starship which will have ~3 years of iteration and improvement if Neutron launches on time. Neutron is a Falcon 9 competitor, without the history of success. Starship is aiming to be significantly cheaper per launch than Falcon 9, with a much larger payload.
That said, I'd pick Rocket Lab against most of the rest of the competition.
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I'm not convinced for the low latency benefit.
I once played a flight simulator over the emerging internet at 2400 baud, admittedly not well (between my skills and the lag at 2400 baud).
If you are a High Frequency Trader, then sure. Flash Boys by Michael Lewis notes the extreme effort that went into a fiber connection for low latency. The big money can afford that, so maybe there are enough dollars to fund a few billion, and then everybody else has to keep up.
Low latency is really important to anyone who plays multiplayer games on the Internet. Games like Halo or Call of Duty become almost impossible to play once your ping goes above 200 ms. Ideally, you want a ping of about 50-100 ms, which Starlink can deliver. This gives Starlink an important edge against the competition.
Yep, I get that Starlink is _far_ more likely to get it right than prior attempts, but I'm still not _compelled_ by the better numbers.
The "Cost calculations for large LEO constellations" side bar of the mckinsey.com link talks about launch costs and a Starlink estimate of $10 billion for both spacecraft and launch.
10 billion / (5year contract*12month/year*$100/month current pricing) =1.6 million customers, so that's not that bad.
I guess I'm ruining my argument :-) I need to make assumptions that support the argument better.
That doesn't include ground stations to link to the rest of the internet, the pizza box antennas (1 per customer), replacement satellite costs, etc etc.
This used to be true, it might not be true for much longer:
Lower earth orbit is getting crowded with broadband satellite constellations: Amazon.com Inc.’s Project Kuiper aims to put out 3,200 satellites, Britain’s OneWeb about 700 and Telesat of Canada around 300. Russia and China are working on their own, potentially massive, constellations.
An EU official said that owning a constellation that can beam broadband internet to Earth is a strategic priority for the bloc. It is expected to publish a road map for a public-private partnership to create a broadband satellite fleet worth around €6 billion, equivalent to $7.19 billion, by the end of the year.
WSJ: Elon Musk’s Satellite Internet Project Is Too Risky, Rivals Say (https://www.wsj.com/articles/elon-musks-satellite-internet-project-is-too-risky-rivals-say-11618827368)
Or am I missing something?
Nobody is going to be able to launch a true competitor to Starlink until they have access to cheap, reusable rockets like the Falcon 9 (https://en.wikipedia.org/wiki/Falcon_9), Starship (https://en.wikipedia.org/wiki/SpaceX_Starship), New Glenn (https://en.wikipedia.org/wiki/New_Glenn), Neutron (https://en.wikipedia.org/wiki/Rocket_Lab_Neutron), Terran R (https://en.wikipedia.org/wiki/Relativity_Space#Terran_R), or Amur (https://en.wikipedia.org/wiki/Amur_(launch_vehicle)). Without such a rocket, launch costs are simply too high to build a satellite constellation on that scale. Aside from the Falcon 9 and Starship which are both SpaceX rockets, none of these competitor rockets will be operational until 2024-2026. Well, maybe if we're lucky we might see the New Glenn operational by 2023, but I'm not holding my breath.
In comparison, Starlink has had paying customers since November 2020 and by 2025 will be operating a fleet of thousands of satellites with hundreds of thousands to millions of customers (https://www.nasdaq.com/articles/musk-sees-starlink-winning-500000-customers-in-next-12-months-2021-06-29). By then, they will be launching Starlink on Starship which is far cheaper than Falcon 9 (https://everydayastronaut.com/definitive-guide-to-starship/#costs). They will have had over half a decade to refine their satellite and user terminal technology, cutting costs (https://arstechnica.com/information-technology/2021/06/musk-aims-to-cut-starlink-user-terminal-price-from-500-to-as-low-as-250/) by achieving economies of scale in huge factories (https://www.cnbc.com/2021/03/02/spacex-building-starlink-manufacturing-factory-in-austin-texas.html), and perfecting advanced technology such as satellite to satellite laser link data transfer (https://arstechnica.com/information-technology/2021/01/spacex-adds-laser-links-to-starlink-satellites-to-serve-earths-polar-areas/).
You might think, why wouldn't the competition launch their constellations on Falcon 9 or Starship? This is unlikely for a variety of reasons, including:
1. Buying launches on Falcon 9 or Starship is directly funding Starlink, the competition. Feeding your competitor is a bad idea.
2. SpaceX won't want to launch competitors either, and would rather book up their rockets for their own use or purposes that they aren't in competition with.
3. In order to launch on SpaceX rockets, competitors would have to give SpaceX access to their satellites, which means showing their "secret sauce" to their direct competitor, leaving them vulnerable to SpaceX copying their proprietary technology. Big no-no.
SpaceX is so far ahead that it is almost laughable. Competitors will be desperate for a "neutral" Falcon 9 / Starship alternative which isn't part of SpaceX / Starlink. "Neutral"--haha, get it? Good thing that Neutron is on the way!
I’d give Neutron a decent lead against most of the non-SpaceX competitors. With Electron, Rocket Lab has already gained significant expertise in terms of precision guidance during booster reentry (without grid fins!) and heat shield technologies, both of which are critical for developing a reusable rocket like Neutron. You can’t say the same for Relativity Space, Astra, Virgin Orbit, the Russians, the Europeans, the Japanese, or even the Chinese. They all have yet to achieve the feats that Rocket Lab has accomplished with Electron and bring a booster back from space intact. The reentry technology which Rocket Lab has developed for the Electron will be reused for the Neutron. The competition may take a year or two just to develop their own booster reentry systems.
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3. In order to launch on SpaceX rockets, competitors would have to give SpaceX access to their satellites, which means showing their "secret sauce" to their direct competitor, leaving them vulnerable to SpaceX copying their proprietary technology. Big no-no.
While I was watching a OneWeb launch (OneWeb 5), a promo piece from OneWeb made a big deal of their assembly-line factory and how that would help drive OneWeb's costs down.
For those of you unfamiliar with satellites, up to this point, they've been hand-built, one-offs, even with common designs, as satellites have been precious singular resources.
Assembly-line factories are a new thing in this industry.
OneWeb is a British government/Indian private company owned entity.
The satellites are built in Florida, USA.
They are launched by Arianespace (French), and for the OneWeb 5 launch, launched on a Soyuz 2.1b (basically a Sputnik first stage from 1957) from Vostochny Cosmodrome, Russia in eastern Russia, near the border with China.
If that didn't make your head spin with complexity, I don't know what will. These are the hoops the competitors to SpaceX have to jump through.
We will see if SpaceX's vertical integration (in a corporate sense, not the rocket stacking sense) will win out.
The launch itself was at night into a low (500ft) cloud deck, but they did have on-rocket views that were pretty cool.
One of my FIRE hobbies is watching rocket launches. I hadn't seen a launch from Vostochny before, so I can check that one off.
https://everydayastronaut.com/oneweb-5-soyuz-2-1b-fregat/
The official replay link is available which is mostly a OneWeb commercial but does give an explanation of LEO constellations general and explains some orbital insertion of the 36 satellites.
everydayastronaut.com has pre-launch previews and a list of upcoming launches. Also on youtube, everydayastronaut has great explanatory videos on space stuff.
https://spaceflightnow.com/launch-schedule/ is also available, but doesn't have the detailed preview.
Update, OneWeb lanuch another 36 satellites from Vostochny yesterday July 1. https://spaceflightnow.com/2021/07/01/oneweb-on-the-verge-of-commercial-service-after-another-successful-launch/
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This used to be true, it might not be true for much longer:
Lower earth orbit is getting crowded with broadband satellite constellations: Amazon.com Inc.’s Project Kuiper aims to put out 3,200 satellites, Britain’s OneWeb about 700 and Telesat of Canada around 300. Russia and China are working on their own, potentially massive, constellations.
An EU official said that owning a constellation that can beam broadband internet to Earth is a strategic priority for the bloc. It is expected to publish a road map for a public-private partnership to create a broadband satellite fleet worth around €6 billion, equivalent to $7.19 billion, by the end of the year.
WSJ: Elon Musk’s Satellite Internet Project Is Too Risky, Rivals Say (https://www.wsj.com/articles/elon-musks-satellite-internet-project-is-too-risky-rivals-say-11618827368)
Or am I missing something?
Nobody is going to be able to launch a true competitor to Starlink until they have access to cheap, reusable rockets like the Falcon 9 (https://en.wikipedia.org/wiki/Falcon_9), Starship (https://en.wikipedia.org/wiki/SpaceX_Starship), New Glenn (https://en.wikipedia.org/wiki/New_Glenn), Neutron (https://en.wikipedia.org/wiki/Rocket_Lab_Neutron), Terran R (https://en.wikipedia.org/wiki/Relativity_Space#Terran_R), or Amur (https://en.wikipedia.org/wiki/Amur_(launch_vehicle)). Without such a rocket, launch costs are simply too high to build a satellite constellation on that scale. Aside from the Falcon 9 and Starship which are both SpaceX rockets, none of these competitor rockets will be operational until 2024-2026. Well, maybe if we're lucky we might see the New Glenn operational by 2023, but I'm not holding my breath.
Indeed, which is why I'm a Rocketlab shareholder (well, VACQ technically).
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I thought I heard that falcon 9 would stop flying once starship was operating commercially? This seemed a bid odd but and maybe I heard wrong.
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Some SpaceX customers (notably the US Government) will want to keep using a proven rocket like Falcon 9 for awhile even after Starship is fully operational. So, expect some transition time. Years.
Once those customers stop paying enough to keep Falcon 9 flying, I expect SpaceX to discontinue Falcon 9. Presuming (of course) that Starship meets the cost objectives stated and is cheaper to fly than Falcon 9.
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I thought I heard that falcon 9 would stop flying once starship was operating commercially? This seemed a bid odd but and maybe I heard wrong.
Yep! Starship has almost ten times (https://everydayastronaut.com/definitive-guide-to-starship/#capabilities) the payload capacity of Falcon 9, yet it is actually cheaper (https://everydayastronaut.com/definitive-guide-to-starship/#costs) to launch! Once Starship is operational, Falcon 9 will be obsolete and SpaceX plans to focus almost exclusively on Starship. As TomTX says, there will be a lengthy transition time since stuff like Crew Dragon and certain US government payloads will continue to fly on Falcon 9 until Starship becomes human-rated and certified for sensitive government payloads.
Read more:
https://techcrunch.com/2017/09/28/spacex-aims-to-replace-falcon-9-falcon-heavy-and-dragon-with-one-spaceship/
https://www.teslarati.com/spacex-starlink-launches-starship-takeover/
This article has an in-depth comparison of Falcon 9 vs Starship:
https://everydayastronaut.com/definitive-guide-to-starship/
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Rocket Lab has become able to build a new Electron booster in just 26 days (https://mobile.twitter.com/RocketLab/status/1377450285816184835). 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.
Update: Rocket Lab just hit a production rate (https://www.slashgear.com/rocket-lab-turns-out-a-new-rocket-every-20-days-using-robotics-07681387/) of one Electron booster every 20 days (https://mobile.twitter.com/Peter_J_Beck/status/1410781450505396232)! They are super close to their goal of 18 days!
The real question, however, is if they can bring costs down. This will be needed to compete with the likes of Astra. Rocket Lab currently charges about $5-6 million (https://techcrunch.com/2020/01/30/rocket-lab-points-out-that-not-all-rideshare-rocket-launches-are-created-equal/) per Electron launch. Astra is targeting about $2-3 million (https://www.cnbc.com/2021/05/02/inside-astras-rocket-factory-as-the-company-prepares-to-go-public.html) per launch and hopes to eventually get the price down to about $1 million (https://techcrunch.com/2020/02/03/rocket-startup-astra-emerges-from-stealth-aims-to-launch-for-as-little-as-1m-per-flight/) per launch.
The fact that Rocket Lab is able to reduce their manufacturing times hints at greater automation (https://spacenews.com/rocket-lab-introduces-robotic-manufacturing-system-to-increase-electron-production/) and economies of scale, so hopefully they will be able to bring their costs more in line with what Astra is targeting. Plus, Rocket Lab aims to make Electron reusable, so we’ll see how that impacts launch costs as well.
For some additional context, Virgin Orbit is currently targeting launch costs of about $12 million (https://www.wired.com/story/virgin-orbit-just-launched-a-rocket-from-a-747/), so Rocket Lab’s prices aren’t so bad compared to that.
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It is exciting to watch the future take shape in front of us
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With regards to Rocket Lab increasing automation, reducing production time, and cutting costs, we just got another update from Peter Beck:
https://mobile.twitter.com/Peter_J_Beck/status/1412531974472798209
Apparently Rocket Lab's "Rosie" machine can process all of the parts of an Electron in about 12 hours. The bottleneck seems to be related to how fast the parts can be fed into the machine. There is a big difference between 12 hours and the 20 days that it currently takes Rocket Lab to manufacture an Electron. It is not clear how much of these 20 days are spent feeding Rosie, preparing the parts for processing, and other incremental work such as installing delicate electronics or electrical systems. However, it does seem clear that Rocket Lab has a clear path forward for increasing automation, reducing production time, and cutting costs.
The fact that Rocket Lab was able to design and build bespoke manufacturing equipment bodes well for their business. Vertically integrated companies who not just manufacture their own parts but also build the "machine that builds the machine" will be able to optimize their manufacturing processes and innovate much faster than those who do not (i.e. Old Space and their hundreds of subcontractors). I am very excited for Rocket Lab to carry forward this manufacturing mindset as they design and build the Neutron.
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Astra stock was down 13.5% today so I decided to sell off a portion of my VACQ and ARKX and start a position in ASTR. To the moon!
My space portfolio is still heavily weighted towards Rocket Lab, but now less so than before.
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Picked up more ASTR at 8.3 yesterday.
In recent news for Rocket Lab, they have identified and fixed the issue which caused their last mission to fail:
https://spacenews.com/rocket-lab-identifies-cause-of-electron-failure/
Their next launch is scheduled for just three days from now:
https://www.reddit.com/r/RocketLab/comments/op8t16/next_launch_notam_notification_27th_july_2021/
The site for their new Neutron rocket factory has been identified in Wallops Island, Virginia. Rocket Lab will be manufacturing the Neutron on-site and launching from Wallops Flight Facility:
https://shoredailynews.com/headlines/accomack-rezones-land-near-wallops-for-large-rocket-manufacturing-facility/
Finally, Rocket Lab has been putting the finishing touches on their third launch pad! Expect more frequent launches soon:
https://mobile.twitter.com/RocketLab/status/1407407254727393280
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Picked up more ASTR at 8.3 yesterday.
I wonder what's causing the drop.
How do you evaluate the long term value of ASTR?
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I wonder what's causing the drop.
How do you evaluate the long term value of ASTR?
Here’s a video which goes super in-depth into Astra’s plans:
https://youtu.be/6L3lKG6rtUE
Basically, Rocket Lab and Astra want to do much more than just build rockets. They want to build spacecraft and satellites as well and sell these as services to other companies who need spacecraft or satellites.
Space is hard, and to build a successful space company you need many years of R&D and tens to hundreds of millions of dollars of capital. If companies like Rocket Lab and Astra start offering their services to other companies, it will lower the barrier of entry to other companies who want to operate their own satellites or spacecraft, since they won’t need to build their own hardware. What this also means is that currently, it is very difficult for other companies to step in and challenge Rocket Lab and Astra.
By the time a potential competitor could scrape together the talent and funding as well as spend years of R&D to develop their product, it will be too late. Astra has spent five years of R&D to get to where they are currently. Rocket Lab spent twelve years and about 200 million dollars to develop their orbital launch capability. Virgin Orbit spent thirteen years and one billion dollars to develop their technology.
Here’s an article which discusses these steep development costs:
https://www.msn.com/en-us/news/technology/richard-branson-says-virgin-orbit-has-spent-dollar1-billion-trying-to-get-to-space-the-ceo-of-startup-rocket-lab-says-it-needed-a-fraction-of-that-to-reach-orbit/ar-BB1ar47U
In other words, the moat is deep. This both protects companies like Rocket Lab and Astra, as well as gives them the great opportunity to leverage their technology as a platform for other space companies. Rockets are one of the most difficult things in space to build. They push materials to the limits of physics, require immense precision for flight control, and must be designed to handle and diagnose extremely complex failure scenarios. If a company can build a rocket, they can probably also build spacecraft and satellites. The technological adjacencies are obvious, and this is why companies like Rocket Lab and Astra stand a good chance to become successful space platforms.
As far as dollar evaluations go, both Rocket Lab and Astra have given (optimistic) projections for the future value of their space systems businesses in their investor presentations.
Rocket Lab investor presentation:
https://www.rocketlabusa.com/assets/Rocket-Lab-Investor-Presentation.pdf
Astra investor presentation:
https://astra.com/wp-content/uploads/2021/02/Astra-Investor-Presentation.pdf
The opportunity is huge, and the moat is deep. SpaceX seems to be too focused on Starlink and going to Mars and has not competed in this area. If Rocket Lab and Astra can establish themselves in this space, they could become very successful space platform companies and it will be very difficult for any new startups to challenge them.
Therefore, because of the extremely high barrier of entry, the most successful space companies of 2030 probably already exist today. The challenge is identifying the correct companies to invest in.
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By the way, here is a very interesting article about Blue Origin and their dysfunction and lack of progress. For Blue Origin to be successful, Jeff Bezos needs to lead them like he led Amazon. So far, this hasn’t happened:
https://arstechnica.com/science/2021/07/despite-tuesdays-fight-jeff-bezos-is-running-out-of-time-to-save-blue-origin/
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As a cautionary note for investors, here is a recent article about Rocket Lab’s lack of profitability:
https://arstechnica.com/science/2021/07/rocket-lab-not-yet-close-to-profitability-proxy-statement-reveals/
Rocket Lab experienced net losses of $30 million and $55 million in 2019 and 2020, respectively. Given the company's financial position, an independent auditor, according to the proxy statement, "expressed substantial doubt" about Rocket Lab's "ability to continue as a going concern."
Rocket Lab reported revenue of $48 million in 2019 and $35 million in 2020. The decrease last year was due, in part, to the COVID-19 pandemic, the company said. It has contracts for 15 additional Electron launches for this year and beyond, valued at $127 million in launch and space systems revenue.
As of March 31 of this year, Rocket Lab has $34.2 million of cash and cash equivalents on hand. In addition to this, the company said it has access to both a $35 million revolving line of credit and a $100 million secured loan with Hercules Capital that is not repayable until June 2024. Rocket Lab acknowledged that there may be a fairly long pathway to profitability.
"We expect to continue to incur net losses for the next several years and we may not achieve or maintain profitability in the future," the proxy statement says.
Shareholders in Vector are due to vote on the proposed merger at a meeting on August 20. This merger will provide Rocket Lab with about $500 million in cash.
Lack of profitability is normal for a space company. Even SpaceX wasn’t profitable for most of its existence. However, the lack of profitability is definitely a huge risk.
Most importantly, I think there is a good chance that companies like Rocket Lab and Astra chose to go public because they ran out of money on the private market. Perhaps it was a choice between taking the SPAC money and going bankrupt for them. Definitely something that investors should consider!
That being said, Rocket Lab has solid revenue and is continuing to develop their technology at a rapid pace. I believe that their revenue will grow significantly as their launch cadence increases. I think if they can stay the course, profitability is very achievable for them.
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While I agree with you, this seems like a non-issue post merger. The cash on hand, the extra cash about to be injected in, the line of credit all seem to be plenty to keep Rocket Lab going.
Definitely a risk, but I didn't buy in expecting them to start flirting with profitability for 3-5 years and I expect real returns are 10 years out.
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Agreed that the $750MM in cash from the SPAC is enough to fund Rocket Lab for a long time. I don't think they are at any risk of going bankrupt in the next five years or so.
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I would also have expected RL to have a particularly bad year in 2020 from the significant travel lockdowns in New Zealand. Guess this is also a risk going forward for the next hand full of years.
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Congrats to Rocket Lab for their successful mission (https://www.space.com/rocket-lab-return-to-flight-military-satellite-launch) last night!
They have three more missions (https://nextspaceflight.com/launches/agency/upcoming/39/) planned for 2021, one of which will include another booster recovery splashdown test. This third splashdown test will test a "deployable decelerator (https://spacenews.com/rocket-lab-to-make-second-booster-recovery-attempt/)" intended to reduce the heat load on the stage by a factor of 10 so that it is protected from damage during reentry.
In 2022, Rocket Lab should be ready to start recovering and reusing its boosters.
As for the financial issue, here are some numbers to put this into perspective:
- Rocket Lab lost $55MM in 2020. They expect to have $750MM in cash after the merger is complete. This is enough cash to last them 13.6 years assuming they keep losing $55MM each year.
- Rocket Lab lost $55MM in 2020. The company is expected to be valued at $4.1B after the merger is complete. If they issue more shares to cover this annual loss, it would represent a 1.3% dilution.
So as far as I can tell, Rocket Lab is actually quite flush with cash and it would be very difficult for them to go bankrupt anytime soon. The main risk here is Neutron R&D which is expected to cost about $200MM. If Rocket Lab blows past that estimated cost, it could put them into hot water.
I would also have expected RL to have a particularly bad year in 2020 from the significant travel lockdowns in New Zealand. Guess this is also a risk going forward for the next hand full of years.
Keep in mind that Rocket Lab also has a launchpad in Wallops, VA that they will be using for Electron once NASA approves their Autonomous Flight Termination System.
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One more observation. Apparently ULA did an analysis about the small launch provider market:
https://twitter.com/torybruno/status/1420332078571327488
They assessed the size of the market and determined that there is only room for two small launch providers. Basically, this is another dimension of the business moat which I referred to in my previous post. There are only two small launch providers in existence who have achieved commercial launches: Rocket Lab and Virgin Orbit. Rocket Lab is far ahead of Virgin Orbit in terms of experience (21 launches vs 3), and their launches cost about half the price of Virgin Orbit. Astra is not far behind and should have their first commercial flight this year. In my opinion, Astra's technology and business model makes much more sense than Virgin Orbit. Virgin Orbit has also demonstrated that they can't efficiently execute on R&D in either cost or time, as I mentioned earlier.
If Rocket Lab and Astra can establish themselves in the small launch market then there simply won't be room for anyone else in the market, nevermind the huge R&D costs and time investment needed to compete with them. This means that any new startup competitor has to jump straight to larger rockets instead of practicing with small rockets, making it even harder for them to establish themselves.
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Are there any companies working on nuclear fusion that one can invest in?
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Are there any companies working on nuclear fusion that one can invest in?
Lockheed Martin (https://www.google.com/search?q=LMT). They are working on nuclear thermal rocket propulsion (https://www.popularmechanics.com/military/research/a36110192/pentagon-nuclear-thermal-propulsion-rocket-plans/) and compact nuclear fusion reactors (https://en.wikipedia.org/wiki/Lockheed_Martin_Compact_Fusion_Reactor).
I think that all of the other companies working on nuclear fusion and nuclear thermal rockets are private. Some examples of these are General Atomics, General Fusion, Helion Energy, and Blue Origin. By the way, nuclear thermal rocket designs like the one in the DRACO program currently use nuclear fission, not nuclear fusion. I would expect that once working compact nuclear fusion reactors are developed, they would be used to power nuclear thermal rockets as this would eliminate the dangerous radiation from fission reactors.
In any case, a spacecraft equipped with a nuclear thermal rocket engine would be revolutionary compared to anything that exists today. Such a spacecraft could travel from Earth to Mars in a matter of weeks compared to the months needed by conventional spacecraft. If that spacecraft also used a compact nuclear fusion reactor, even better, but not strictly necessary.
Also, there are a couple of companies developing low-powered electric propulsion systems that use nuclear fusion, including Astra Space (https://www.space.com/astra-acquiring-propulsion-company-apollo-fusion). However, this is just for spacecraft and space tugs that accelerate extremely slowly over long distances, and not as exciting as power generating fusion reactors or high-powered nuclear thermal rockets.
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Some interesting news today:
https://www.reddit.com/r/RocketLab/comments/ook4cf/rocketlab_stock_discussion_thread_2021_q3/h6oh5pl/
What this filing seems to mean is that Rocket Lab shareholders are incentivized if the stock price reaches $20 / share between 3-6 months from IPO date. Not super clear to me exactly which shareholders are eligible for the incentive. Regardless, it seems company insiders see a good chance of the stock price doubling in the next six months!
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I would expect that once working compact nuclear fusion reactors are developed, they would be used to power nuclear thermal rockets as this would eliminate the dangerous radiation from fission reactors.
A note on fusion...it's still in the crazy early stages. Yes, there has been some work recently where actual fusion has occurred for a short while, but compact nuclear fusion reactors still feel a looooong way off.
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Some news for Astra today! They have scheduled their next launch for August 27th. This will also be their first commercial launch:
https://www.cnbc.com/2021/08/05/astra-targeting-late-august-for-next-launch-with-space-force-satellite.html
The stock is up over 20% on the news.
Here is a good video about upcoming catalysts for Astra stock:
https://www.youtube.com/watch?v=8jMJujIfoAk
One takeaway from that video is that Astra is actually ahead of schedule right now, and their schedule was already extremely ambitious.
Astra plans for an extremely rapid launch cadence over the next few years:
- One launch a month by the start of 2022
- One launch a week by 2023
- Two launches a week by 2024
- One launch a day by 2025
Furthermore, they have a contract with Nasdaq to livestream all of their launches on a giant billboard in Times Square until 2025. All those rockets blasting off are bound to capture some attention!
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Some news for Astra today! They have scheduled their next launch for August 27th. This will also be their first commercial launch:
https://www.cnbc.com/2021/08/05/astra-targeting-late-august-for-next-launch-with-space-force-satellite.html
The stock is up over 20% on the news.
Good thing, too. I picked up some shares last week (?) but at $9.xx, so for me it's up not quite 10%. In the game though.
I like the launch cadence and the Times Square contract. :)
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Very glad I finally decided to get into ASTR on Monday....
I doubt these levels will hold forever, but it's great to see them ahead of schedule! Assuming this launch goes well, it'll re-enforce my plan to start pouring more into them.
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If Astra's first commercial flight is a success, I'll add them to the title of this topic as well. This topic has really become a Rocket Lab and Astra discussion!
On the subject of Rocket Lab, it looks like they will be announcing more information about the Neutron rocket at or around the SPAC merge date:
https://www.reddit.com/r/RocketLab/comments/oxfjv6/from_the_updated_investor_presentation/
VACQ shareholders will be voting to approve the merger on August 20th (I have already cast my votes in favor!):
https://www.businesswire.com/news/home/20210722005377/en/Vector-Acquisition-Corporation-Announces-Effectiveness-of-Registration-Statement-and-Annual-Meeting-Set-for-August-20-2021-to-Approve-Proposed-Merger-with-Rocket-Lab
Finally, Elon Musk had some interesting things to say about grid fins on Twitter (https://twitter.com/elonmusk/status/1421567416232984582):
Grid fin designs clearly work, but do they maximize payload? Good chance that they do not.
Something with much more drag to reduce terminal velocity & so reduce landing propellant might have better performance. Not sure.
Potential future optimization.
He says that something with much more drag to reduce terminal velocity and reduce landing propellant might have better performance than grid fins. Well, guess who doesn't have grid fins on their reusable rockets and is soon going to test a "deployable decelerator (https://spacenews.com/rocket-lab-to-make-second-booster-recovery-attempt/)" intended to slow their boosters down during reentry? Rocket Lab! Many people were very surprised when they saw that the design of the Neutron rocket does not include grid fins. It looks like Rocket Lab is on to something here!
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In recent news, Rocket Lab and Astra have landed some new contracts.
The space manufacturing company Varda just signed a deal with Rocket Lab to buy three Photon spacecraft. They want to attach some sort of mini space factory to the Photon and then use a capsule to drop the manufactured product back down to Earth. Presumably, this process would work better on board a commercial space station but for now I guess we have Photon. I would never have anticipated this use case!
https://techcrunch.com/2021/08/11/space-manufacturing-startup-varda-inks-deal-with-rocket-lab-for-three-spacecraft/
Astra has been added to a pool of 20 launch providers for the US Space Force. This doesn't actually mean they've won a contract to launch payloads, just that they will be allowed to bid on certain missions.
https://spacenews.com/abl-astra-relativity-selected-to-compete-for-u-s-space-force-responsive-launch-contracts/
Finally, Astra just added a former high ranking DOD member to their board of directors. Maybe her connections will help them to win more of those Space Force contracts?
https://www.businesswire.com/news/home/20210811005804/en/
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What an exciting time to be invested into space!
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Another day, another launch contract. This time for Astra:
https://www.businesswire.com/news/home/20210812005560/en/
I’m starting to see the feasibility of Rocket Lab and Astra’s optimistic revenue projections. It seems like there are multiple contracts being announced every week. Business is booming!
Also, we have a new interview with Peter Beck and Al Jazeera. No new information here, but good to see him getting more press coverage:
https://www.aljazeera.com/economy/2021/8/9/peter-beck-the-new-zealand-elon-musk-on-living-his-space-dreams
Finally, here is a video from a few days ago of Astra doing a static fire test of its rocket which is due to launch later this month. I can't wait!
https://vimeo.com/583576217
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Astra just posted their first quarterly earnings report. Their financial picture is not quite as rosy as Rocket Lab:
https://investor.astra.com/news-releases/news-release-details/astra-announces-second-quarter-2021-financial-results
Astra has $452.4MM on hand as of June 30th. In the first half of 2021, they burned through about $54.6MM in operating expenses (up from $22.5MM in the first half of 2020), and also spent $134MM to acquire Apollo Fusion so that they can build their own competitor to Rocket Lab's Photon. To put this into perspective, Astra seems to be burning through their cash at twice the rate of Rocket Lab which had a net loss of $55MM last year while Astra lost $54.6MM in just the last six months. Furthermore, Rocket Lab will have about $750MM in cash on hand after their merger, much more than Astra. Finally, Rocket Lab has revenue to help offset some of their losses, while Astra does not.
Assuming their current operating loss remains constant and they don't keep buying expensive companies, this gives them just over four years of runway before they burn through all of their cash. That being said, they still have yet to earn any revenue to offset these operating expenses. Once they can start to earn some money, it should really extend that runway. However, the fact that Astra is burning through cash at twice the rate of Rocket Lab while having less cash on hand and no revenue should not be ignored.
In other news, Rocket Lab did a nice interview on YouTube yesterday about their plans to build spacecraft to explore the solar system. It's very informative, check it out!
https://www.youtube.com/watch?v=XPsFymrE31k
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If anyone is interested in seeing what the rocket factories are like for Rocket Lab, Astra, and some of their competitors, here are some cool videos. A bunch of them came out in just the last few weeks!
As you can see, all of these companies are hustling hard! It really is a new space race. I was especially impressed by the sheer scale of the work being done at SpaceX, which reminded me of a scene from Independence Day or something. I bet that footage will be used as the basis for future movie scenes. Relativity Space is also super interesting with their cutting edge 3D printers and nerdy StarCraft references.
It's interesting to note the differences in philosophy between companies like Astra and Relativity Space who seem to have completely opposite approaches to rocket construction. Only time will tell who's approach will win out in the end. Although, the one thing that all of these companies share is vertical integration and rapid iterative development which is the key difference between Old Space and New Space.
Rocket Lab Factory Tour (https://www.youtube.com/watch?v=KKHiPf8cEFk)
Astra Factory Tour (https://www.youtube.com/watch?v=BKWG4RMgcgY)
SpaceX Factory Tour (Part 1) (https://www.youtube.com/watch?v=t705r8ICkRw)
SpaceX Factory Tour (Part 2) (https://www.youtube.com/watch?v=SA8ZBJWo73E)
SpaceX Factory Tour (Part 3) (https://www.youtube.com/watch?v=9Zlnbs-NBUI)
Relativity Space Factory Tour (https://www.youtube.com/watch?v=kz165f1g8-E)
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I wanted to point out one key advantage that Astra has over its competitors which just dawned on me today. Astra's launch system is designed to be rapidly deployable to bare concrete pads anywhere in the world using standard shipping containers, is highly automated, and can be operated by minimal personnel. As I mentioned earlier, Astra is very close to the US government. Astra has a long history (https://en.wikipedia.org/wiki/Astra_(aerospace)) with DARPA starting all the way back in 2005, and has built their facility on a repurposed US Navy air station (https://en.wikipedia.org/wiki/Naval_Air_Station_Alameda). Chris Kemp (https://astra.com/team/kemp/) worked with the White House to develop the cloud computing strategy for the U.S. federal government and Michèle Flournoy (https://astra.com/news/michele-flournoy-board/) was a high-ranking member of the Department of Defense--the principal advisor to the Secretary of Defense in the formulation of national security and defense policy.
The only other space company that seems to be developing launch capability this flexible is ABL Space Systems (https://en.wikipedia.org/wiki/ABL_Space_Systems), who also have close ties to the US military and defense contractors. They seem to be behind Astra in terms of R&D since they have yet to conduct any launches. Furthermore, their rocket is much more expensive ($12MM per launch (https://ablspacesystems.com/) vs Astra's $2.5MM per launch) and as a result they will probably have difficulty finding commercial customers compared to Astra. Perhaps they will carve out a niche launching military payloads which are too large for Astra’s smaller rockets. Is ABL Space Systems a threat to Astra? I don't think so.
As it turns out, the capabilities being developed by Astra and ABL Space Systems are a key part of the US military's strategy to fighting a war in space. Satellites are a critical part of the US military's intelligence gathering and communication systems. If a war involving space were to break out, the US military needs an extremely rapid and flexible way to launch replacement satellites into orbit as their existing satellites and launch sites are destroyed by the enemy. Astra and ABL Space Systems appear to have designed their products to specifically cater to this need. Astra's rockets are cheap, are designed to be mass produced in large quantities, are relatively small and highly mobile, and can be rapidly deployed to and launched from anywhere in the world. They are a perfect space launch system for wartime scenarios. In fact, Astra was the sole participant in the DARPA Launch Challenge (https://www.space.com/darpa-launch-challenge-astra-military-space.html) to provide exactly this functionality for the US military.
Rocket Lab, in comparison, lacks this "shipping container" flexibility, is restricted to launching from just three launch pads (two of which are in New Zealand), and refuses (https://www.gisborneherald.co.nz/local-news/20210626/no-military-payloads/) to launch "weapons or payloads that contribute to weapons programs or nuclear capabilities".
In conclusion, what this means is that Astra is very important to the US military, and it is likely that they will not let Astra fail. Aside from ABL Space Systems, no other competitor has this unique advantage.
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I wanted to point out one key advantage that Astra has over its competitors which just dawned on me today. Astra's launch system is designed to be rapidly deployable to bare concrete pads anywhere in the world using standard shipping containers, is highly automated, and can be operated by minimal personnel. As I mentioned earlier, Astra is very close to the US government. Chris Kemp (https://astra.com/team/kemp/) worked with the White House to develop the cloud computing strategy for the U.S. federal government and Michèle Flournoy (https://astra.com/news/michele-flournoy-board/) was a high-ranking member of the Department of Defense--the principal advisor to the Secretary of Defense in the formulation of national security and defense policy.
The only other space company that seems to be developing launch capability this flexible is ABL Space Systems (https://en.wikipedia.org/wiki/ABL_Space_Systems), who also have close ties to the US military and defense contractors. They seem to be behind Astra since they have yet to conduct any launches. Furthermore, their rocket is much more expensive ($12MM per launch (https://ablspacesystems.com/) vs Astra's $2.5MM per launch) and as a result they will probably have difficulty finding commercial customers compared to Astra. Perhaps they will carve out a niche launching military payloads which are too large for Astra’s smaller rockets.
As it turns out, the capabilities being developed by Astra and ABL Space Systems are a key part of the US military's strategy to fighting a war in space. Satellites are a critical part of the US military's intelligence gathering and communication systems. If a war involving space were to break out, the US military needs an extremely rapid and flexible way to launch replacement satellites into orbit as their existing satellites and launch sites are destroyed by the enemy. Astra and ABL Space Systems appear to have designed their products to specifically cater to this need. Astra's rockets are cheap, are designed to be mass produced in large quantities, are relatively small and highly mobile, and can be rapidly deployed to and launched from anywhere in the world. They are a perfect space launch system for wartime scenarios.
Rocket Lab, in comparison, lacks this "shipping container" flexibility, is restricted to launching from just three launch pads (two of which are in New Zealand), and refuses (https://www.gisborneherald.co.nz/local-news/20210626/no-military-payloads/) to launch "weapons or payloads that contribute to weapons programs or nuclear capabilities".
In conclusion, what this means is that Astra is very important to the US military, and it is likely that they will not let Astra fail. Aside from ABL Space Systems, no other competitor has this unique advantage.
Extremely eye-opening!
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Seems like the Astra model might lend itself to being a satellite-kill vehicle launcher at least as well as a replacement satellite launcher. But that sort of thing is probably best not put in a marketing pamphlet.
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Extremely eye-opening!
Also, did I mention that Astra has a long history (https://en.wikipedia.org/wiki/Astra_(aerospace)) with DARPA starting all the way back in 2005, and has built their facility on a repurposed US Navy air station (https://en.wikipedia.org/wiki/Naval_Air_Station_Alameda)? Heck, their logo (https://en.wikipedia.org/wiki/Astra_(aerospace)) even looks like the logo (https://en.wikipedia.org/wiki/United_States_Space_Force) for the US Space Force!
Yeah, they have very close ties to the military. Also, take a look at the wiki page (https://en.wikipedia.org/wiki/ABL_Space_Systems) for ABL Space Systems. A huge amount of their funding comes from the military, who has extensively partnered with them during R&D.
I would also like to point out another reason why you shouldn't think of ABL Space Systems as a threat to Astra. The US government has a philosophy of having at least two providers for critical services for redundancy reasons. This is why they are so obsessed with funding projects like Boeing Starliner, so that they can have redundancy with SpaceX Crew Dragon. So therefore, the combination of Astra and ABL Space Systems provides redundancy to the US government, and it is likely that they will always make sure that there are at least two companies with this capability.
In any case, the military angle gives Astra a very important customer who is almost guaranteed to support them and is unlikely to let them fail. But this should not detract from Astra's significant commercial opportunities. I expect that the vast majority of Astra's flights will be for commercial customers, who will also benefit from Astra's mission of building a "platform" in space (similar to Rocket Lab).
If you listen to Chris Kemp talk about Astra, his true intention is to create a "platform" for space systems similar to Amazon's AWS. He wants to build and launch generic satellites which can be sold to any customer who wants to operate their own constellation of satellites, such that these customers will no longer need to design and build their own satellites. Most likely, the US military will be one of these customers. They would love to own and operate a constellation of satellites which can be rapidly replenished during a war using Astra's unique capabilities. But I am sure that there will be even more commercial customers, for both Astra and Rocket Lab who is also building a similar platform.
If you have some time, listen to this interview with Chris Kemp where he lays out his long term vision for Astra:
https://www.youtube.com/watch?v=nB2JBjnWjbA
He has a strong software background and wants to run Astra like a software company (https://www.youtube.com/watch?v=6L3lKG6rtUE&t=188s), not like a traditional aerospace company. He seems to take a lot of inspiration from large technology companies like Amazon, in that he wants to build a platform (https://www.youtube.com/watch?v=nB2JBjnWjbA&t=792s) in space to enable other companies to build things in space without having to build their own hardware (https://www.youtube.com/watch?v=nB2JBjnWjbA&t=954s). Finally, he wants Astra to be a "customer-obsessed, product led company (https://www.youtube.com/watch?v=nB2JBjnWjbA&t=1705s)", which is directly out of Amazon's playbook.
Some choice Chris Kemp quotes from that interview:
"I really started to think about how to build the company like a software company where we take smaller, more iterative steps. By keeping the rockets small, we can basically test engines and entire rockets at relatively low cost, and so we've brought a lot of the principles that I've used building technology companies and software companies into the space industry. I'm taking that mentality that you would typically see more in a consumer electronics or software company and really bringing in a lot of people from that industry into the space industry to just frankly go faster."
"Throughout my career, one of the threads is platforms. I like to build platforms. Escapia was a platform for reservations for vacation homes. At NASA I built OpenStack which was a platform that allows data centers to be treated as logical services, it's like to a data center like Linux was to a personal computer.
At Astra, we're building a platform. We're allowing space to be a place where people can imagine things and build services that improve live on Earth. Our vision is a healthier, more connected planet--and we're not going to accomplish that all on our own, that's a hard problem to solve--but if there are hundreds, then thousands of companies that can be powered and lifted up by this platform then we're in a position to really make a bigger impact."
"My experience with Nebula allowed me to really see the space industry through a similar light. We were building an appliance for Dell, HP, Cisco, and IBM to go and build a cloud. Well nobody wanted to build clouds--we wanted to consume them as a service from Amazon or Google or Microsoft. And so, this massive shift has caused basically all computer companies to be flat, like if you look at the stocks of Dell, Cisco, HP, IBM, VMware, these are all companies that have not created a lot of value in the last five years.
If you look at a company like Amazon, and Amazon Web Services, this is probably the fastest growing business unit in corporate history--and it's because it's a completely vertically integrated platform. When we were selling Nebula to Oracle, I realized that I needed to do something else because Amazon was hiring chip designers and Google was hiring people to build better switches, better servers, better CPUs, than anything Dell, HP, Cisco would ever build--and they were operating them at a scale that no enterprise would be able to afford to build out.
And so the game had changed. And I think the game's changing in space too. I think that the idea that a company can start up and build a satellite from scratch is kind of like Steve Wozniak soldering chips onto a board in 1970, it's like the homebrew satellite club. We don't need to solve these problems again and again.
What the space industry needs is the equivalent of an Apple to come in and build a platform, and then it's really about the apps that you're building, and it's about being able to take a plug and play approach to peripherals. So if you want to put a camera in space, great. Plug it in, we got a USB port. It's about making the optimization around a platform verses around a rocket or a satellite form factor. And so a lot of things that I think people in this industry don't see, I can see clearly because it's just a different lens on the same problem."
"What we're trying to be is a customer obsessed, product led company. That doesn't exist in the aerospace industry. If you think about, how does aerospace do product management? Well, NASA says they want a space shuttle and the lowest bidder gets the contract. But NASA's doing the product management--and frankly whoever wins that contract has 50 years to deliver on it, typically billions of dollars over budget and a decade behind schedule. That's not good. I mean, what if Amazon or Google or Apple managed products like that?
So I think what we've got to do is we've got to bring in a new way of operating, and it's not familiar to the engineers that we've hired from other aerospace companies, and it's bringing together the best ways of thinking about product design into aerospace.
So we're putting product leaders at the heart of the company, so there's a Chief Product Officer and there's product managers of the things we're creating. They're not just concerned with the best highest performance engineering solution, they're concerned with the value that we're creating for our mission which is to improve life on Earth from space and what that does for the customers that are helping us accomplish that mission."
In my opinion, this guy really gets it! He reminds me of a combination of Steve Jobs and Jeff Bezos, with perhaps a light sprinkling of Elon Musk.
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Regarding my post about Astra's history with the US military, Astra was the sole participant in the DARPA Launch Challenge (https://www.space.com/darpa-launch-challenge-astra-military-space.html) to provide "agile and responsive orbital launches" for the US military (which they failed (https://www.darpa.mil/news-events/2020-03-03), by the way). So, this is not conjecture that the US military sees value in Astra--in fact, the requirements were specifically laid out in the DARPA Launch Challenge.
I wanted to take some time to list out what I see as some of the main threats to Astra's business plan:
1. They need to reach orbit
In just about 10 days, we'll know more about this! I hope they make it to orbit. If the upcoming launch fails, they must have a clear plan to fix the issue.
2. They need to scale up their payload capacity by a factor of six
Currently, Astra's rocket can only lift 50kg to orbit. This number is typically glossed over or omitted from Astra's press materials. In 2022, Astra plans to begin work on a rocket that can lift 100kg. In 2023, they hope to have a rocket that can lift 300kg. See this article (https://spacenews.com/astras-100-year-plan-qa-with-ceo-chris-kemp/) for the above plan. In comparison, Rocket Lab's Electron can already lift 300kg to orbit today, and ABL Space System's upcoming larger and more expensive rocket can lift 1,350kg. In order for Astra to meet the needs of megaconstellations like Amazon Kuiper, Astra must achieve this 300kg figure. Investors should pay close attention to Astra's progress of increasing their payload capacity.
3. Competition from large, cheap rockets like Starship
A big part of Astra's business model hinges on being able to deliver individual payloads to precise orbits on demand. Smallsat rideshare on Falcon 9 and Starship is cheaper than launching with Astra will ever be, even more so with Starship. But rideshare currently suffers from two issues: scheduling delays and lack of delivery to precise orbits. However, these issues could potentially be solved by launching many Starships at a very rapid cadence (which is the plan), and attaching space tugs to the ridesharing smallsats to deliver them to their precise orbits once the Starship drops them off.
Companies like Momentus plan to offer this space tug service, and in theory Rocket Lab could even put a bunch of Photons inside of a Starship and use them to deliver a bunch of smallsats to different orbits. Some drawbacks for that approach include space tugs being very slow and not appropriate for time-sensitive orbital insertions, and the added cost of the space tug itself which could be fairly expensive.
Time will tell how Astra's business model fares versus Starship + rideshare + space tugs. At least with Rocket Lab, they seem to be nervous about the long term viability of the small rocket business model and are pivoting to a larger, more reusable rocket.
4. Competition from other small rockets
Astra has to worry about competition from Rocket Lab's Electron, Virgin Orbit's LauncherOne, ABL Space Systems' RS1, Firefly Aerospace's Firefly Alpha, and Relativity Space's Terran 1. Out of these, I think Rocket Lab and ABL Space Systems are the biggest threats.
See this table for a quick comparison:
Payload to LEO Cost per launch Launch site flexibility? Commercial launches?
Astra 50kg $2.5MM Y N
Rocket Lab 300kg $5-6MM N Y
Virgin Orbit 500kg $12MM Y Y
ABL Space Systems 1,350kg $12MM Y N
Relativity Space 1,250kg $12MM N N
Firefly Aerospace 1,000kg $15MM N N
Rocket Lab has more experience and success than any of the other companies, and I expect the cost of the Electron to fall significantly over time as they continue to innovate. They are also the clear leader in satellites, spacecraft, and space systems, and have a large lead over Astra in their efforts to build a "platform" in space. Astra says they will build spacecraft, Rocket Lab is building and selling Photons. Astra says they will provide space services outside of launch to other space companies, Rocket Lab is actually doing it. But Astra's $134MM acquisition of Apollo Fusion shows that they are dead serious about competing with Rocket Lab on this front.
ABL Space Systems could be a threat depending on how rapidly they can innovate and whether they can bring down the cost of their rocket. Personally, I think ABL's offering is hands down better than Firefly and Relativity, given that they have larger payload capacity, lower cost, and the same capability as Astra to rapidly launch from anywhere. Notably, they seem focused only on launches for now and don't seem to have any plans of building a space platform like Astra and Rocket Lab. This is a company to watch!
Virgin Orbit's rocket is too expensive and they seem to be locked in to the unique constraints of their jumbo jet launched rocket design. Also, they innovate very slowly and have gotten a very poor return on their huge R&D investment. The only thing going for them is their ability to launch from anywhere.
Firefly Aerospace has yet to launch anything and they have already gone bankrupt once. Their rocket has 1,000kg payload capacity but also costs $15MM per launch. They also lack the ability to launch from anywhere, so not a threat IMO.
Relativity Space's rocket seems similar to Firefly Aerospace and also lacks the ability to launch from anywhere. Their 3D printing process will always be extremely slow compared to what the other companies are doing, and only makes sense for larger, extremely reusable rockets like their Terran R. 3D printing does not make sense for a small, non-reusable rocket. Honestly, I think the Terran 1 is just an R&D testbed for the Terran R, and not meant to be a serious product, like the Falcon 1 was to the Falcon 9.
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@Herbert Derp
You "forgot" to mention Northrup Grumman Pegasus XL (formerly Orbital ATK etc).
Q1) What advantage does Virgin Orbit have, or think it has, over Northrup Grumman Pegasus XL? Both are airdrop smaller launchers.
Q2) Why is Rocket Lab so eager to get into Falcon 9 territory with Neutron? I'd be terrified to get into a business line shared with something that could drop prices by a factor of two if necessary.
See this table for a quick comparison:
Payload to LEO Cost per launch Launch site flexibility? Commercial launches? Prototype launches?
Astra 50kg $2.5MM Y N Y
Rocket Lab 300kg $5-6MM N Y Y
Virgin Orbit 500kg $12MM Y Y Y
ABL Space Systems 1,350kg $12MM Y N N
Relativity Space 1,250kg $12MM N N N
Firefly Aerospace 1,000kg $15MM N N N
NG Pegasus 453kg $??? Y Y N
SpaceX Falcon9 4,500kg $60MM N Y N (Return to Launch Site - RTLS)
SpaceX Falcon9 15,000kg $60MM N Y N (ASDS landing - barge in the ocean)
Atlas V 401 8,900kg $80MM est N Y N
Thanks for bringing all this to our (my) attention.
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You "forgot" to mention Northrup Grumman Pegasus XL (formerly Orbital ATK etc).
Q1) What advantage does Virgin Orbit have, or think it has, over Northrup Grumman Pegasus XL? Both are airdrop smaller launchers.
Wikipedia puts the cost of the Pegasus XL at $40MM per launch. Hardly competitive with Virgin Orbit:
https://en.m.wikipedia.org/wiki/Northrop_Grumman_Pegasus
It was first flown 30 years ago, and doesn’t seem to have changed much since then. This is typical of Old Space companies like Northrop Grumman who prefer to milk money out of the government rather than to innovate. Old Space companies stand zero chance in the New Space economy.
Q2) Why is Rocket Lab so eager to get into Falcon 9 territory with Neutron? I'd be terrified to get into a business line shared with something that could drop prices by a factor of two if necessary.
One big reason is so that competitors to Starlink like Amazon Kuiper have a cost effective way to launch their satellites without paying SpaceX, their competitor. Also governments and companies don’t like to rely on a single launch provider due to redundancy and scheduling issues.
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Fwiw, just noticed this "NewSpace Summit" conference Zoom from April 14, including discussion by Peter Beck, Astra CEO Chris Kemp and Relativity Space CFO Muhammad Shahzad about the three companies' relative merits:
https://www.youtube.com/watch?v=_1LQWJJOpOg
Was alerted to the link by Reddit discussion, which opens with a summary - roughly, Beck is confident but rude; finance guys think better of Astra and Relativity than technical guys. Didn't follow the whole discussion yet, just sharing.
https://www.reddit.com/r/RocketLab/comments/pa9z5n/interesting_discussion_rocketlabastrarelativity/?%24deep_link=true&correlation_id=542af190-7db0-45fd-84b5-e851080146ea&post_fullname=t3_pa9z5n&post_index=3&ref=email_digest&ref_campaign=email_digest&ref_source=email&utm_content=post_title&%243p=e_as&_branch_match_id=953075524262996400&utm_medium=Email%20Amazon%20SES
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Ah yes, I remember that video! Peter Beck was definitely a bit rude, shaking his head when Chris Kemp made various claims about Astra’s future progress. But space is hard!
In other news, Astra is making progress on their new electric propulsion thrusters, the first test in space was successful:
https://astra.com/news/apollo-fusion-thruster-spaceflight/
This will be important for Astra as they build a platform for satellite constellations. Satellite constellations need this kind of electric propulsion to organize themselves and avoid collisions. SpaceX has very similar ion thrusters (https://www.reddit.com/r/spacex/comments/gaayqm/spacex_ion_thrusters_and_where_does_this/) on their Starlink satellites. I am not sure if it is a future competitor to Rocket Lab’s Curie thrusters which are suitable for interplanetary spaceflight. Astra’s thruster is far weaker than Rocket Lab's. Rocket Lab's Curie (https://en.wikipedia.org/wiki/Curie_(rocket_engine)) has 120 N of thrust while Apollo Fusion's ACE Max (https://apollofusion.com/) has a mere 60 mN of thrust, which is 2,000 times weaker!
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Well, Rocket Lab went public yesterday! If the stock drops significantly, it could be a good buying opportunity.
Some brief Peter Beck interviews on CNBC and Bloomberg:
https://www.youtube.com/watch?v=40ujz9ZQgGw
https://www.youtube.com/watch?v=JRo5xrBFV58
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Firefly's first orbital launch attempt is scheduled for NET 9/2/2021. Already had a static fire on the pad.
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Astra's rocket launch today was a failure:
https://www.msn.com/en-gb/money/technology/astra-rocket-fails-to-reach-space-during-test-launch-for-us-military/ar-AANRaaa
Video, for anyone who is interested:
https://www.youtube.com/watch?v=kfjO7VCyjPM
At launch, the rocket tipped over and slid sideways, hovering as it managed to right itself. As the rocket burned fuel and became lighter, it was able to rise into the air and managed to reach max q before the mission control shut it down since it was veering off course. Definitely a strange launch, I've never seen a rocket launch sideways! The explanation was that one of the five engines failed immediately after ignition, causing a loss of thrust and hence why the rocket was so slow to go up into the sky. I'm just amazed that the guidance system was able to keep the rocket steady despite initially tipping over and losing an engine.
Right when the engines ignited, some part of the launch system can be seen snapping up and violently colliding with the rocket (https://mobile.twitter.com/DJSnM/status/1431753623965364229). This seems to have caused external damage to the rocket, as a piece of metal protruding from the side of the rocket (https://mobile.twitter.com/MelissaJNeal/status/1431750658215096331) can clearly be seen from the on-board camera during ascent. This piece of metal eventually tore completely off of the side of the rocket after the engines were shut down and it started to tumble. Perhaps that damage also caused the engine to fail, but the cause of the failure is still unannounced. It would be nice if the problem was due to the launch system and not the rocket itself!
In any case, I expect Astra's stock to tank on Monday. It could be a good buying opportunity, especially if they explain more about why the engine failed and how they plan to address this in the future. Astra is supposed to be able to rapidly test their engines on-site at their factory, so if there is a flaw in the engine design it ought to be fixed quickly.
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A sad day for ASTRA investors, for sure. But not a killer.
Like you, I'm interested to learn what the root cause was here. I suspect it will take a little time for them to figure that out. But to your point, my hope is they can get it discovered and resolved quickly and dive right back into launches!
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I'm likewise impressed their rocket could list sideways off the launch pad like that but manage to remain upright, pass Max-Q, and make it a good part of the way to orbit with a chunk of debris sticking out of the side.
My prediction is the stock dips but doesn't crash. This was a mass simulator launch, not something with a valuable payload from a customer who will be upset about the failure.
Huge amount of respect for both announcers on the video. You can hear everything they are not saying from the initial sideways launch until the terminate signal comes but they still manage to keep their voices so level and calm.
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Here is an informative video from Scott Manley about the Astra launch failure:
https://youtu.be/x2jU5W4ehPE
I hope they fix the engine problem soon. Rockets need to go up, not sideways! The silver lining here is that this launch failure got Astra a lot of attention, it even made the front page of Reddit (https://www.reddit.com/r/space/comments/pdjs67/astra_rocket_experiences_lateral_launch/). If Astra can get their act together, this could be a mini Cybertruck broken glass moment for them, where the attention from the failure boosts their popularity in the long term.
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Without fins attitude control needs to be done via engine vectoring so I assume engine out control had been designed for and simulated. While engine out at lift off may not have been a primary goal it would probably come as a natural extension of a higher/faster EO condition where the engineers decided to extrapolate down because "might as well handle that case too". They got lucky it translated away from the tower and they could still get flight data.
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Does some smart person want to explain what MNTSW (https://www.nasdaq.com/market-activity/stocks/mntsw) is to me?
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Those are warrants (https://www.investopedia.com/ask/answers/08/stock-option-warrant.asp) for Momentus stock. You're probably better off just investing in normal MNTS shares unless you are an expert.
In other news, here is a fantastic article about how Rocket Lab is building out their space systems business. I'm super excited to see what comes out of this!
https://techcrunch.com/2021/09/01/rocket-lab-boosts-its-space-systems-divison-in-quest-to-become-an-end-to-end-space-company/
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Check out this tweet. Rocket Lab is exploring orbital refueling of Photon spacecraft! Cool!
https://mobile.twitter.com/hugo_blair/status/1433320987592835073?s=20
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Rocket Lab stock (https://www.google.com/search?q=rklb) went up 33% over the course of three days last week! I think people are digesting the recent news, and it is very favorable for Rocket Lab. Let’s dive in!
To put things in perspective, this last week was not a good week for other small rocket companies. On August 28th, Astra’s fifth launch was a failure (https://en.wikipedia.org/wiki/Rockets_by_Astra). This makes them 0 for 5 for launches. On September 2nd, Firefly’s first launch also ended in failure (https://spacenews.com/firefly-alpha-explodes-during-first-launch/). Also on September 2nd, the FAA grounded Virgin Galactic (https://www.cnbc.com/2021/09/02/faa-grounds-virgin-galactic-spacecraft-branson-launch-investigation.html) due to airspace violations. In other words, a lot of investors new to the sector are starting to realize how hard space is.
In comparison, Rocket Lab just went public under the ticket RKLB on August 25th. They are fresh off their recent successful launch (https://www.rocketlabusa.com/about-us/updates/rocket-lab-successfully-launches-u-s-space-force-mission/) on July 29th, and have many more launches planned for the tail end of 2021, including three launches which are planned for September (https://www.rocketlaunch.live/?filter=rocket-lab), assuming that New Zealand lifts their Covid lockdown. Rocket Lab had originally planned for one launch in late August and two in September, but it looks like all three of them have been pushed to September or later due to the lockdown. All in all, Rocket Lab plans to launch up to seven missions (https://www.rocketlaunch.live/?filter=rocket-lab) over the new four months—and compared to what we’ve seen with Astra and Firefly, these missions are very likely to succeed. This puts Rocket Lab in an extremely favorable position. They just went public amid very visible failures from their competitors. Rocket Lab now has a perfect opportunity to distinguish themselves from the competition in the eyes of the public, by launching multiple missions in rapid succession while the competition is forced to sit back and lick their wounds. This is their prime opportunity to capture investor momentum in a red-hot industry!
Rocket Lab’s space systems business is starting to gather more and more attention. They have already managed to scale their production of satellite reaction wheels to 2,000 units per year (https://techcrunch.com/2021/09/01/rocket-lab-boosts-its-space-systems-divison-in-quest-to-become-an-end-to-end-space-company/), which is estimated to provide $90MM of annual revenue (https://www.reddit.com/r/RocketLab/comments/pgwjtx/i_have_done_some_calculations_regarding/). To put this into perspective, Astra has $2.5MM in revenue per launch. They would have to launch 36 rockets per year just to match the revenue that Rocket Lab makes from selling reaction wheels! Clearly, Astra is nowhere close to launching 36 rockets per year, and who knows how much Rocket Lab’s business will have grown by the time that they do get there. Furthermore, Rocket Lab also manufactures star trackers (https://twitter.com/RocketLab/status/1433527431168626688) and solar panels (https://twitter.com/Peter_J_Beck/status/1411423056707211264), among other things. I can’t wait to hear more about their satellite components business!
In conclusion, Rocket Lab is set to distinguish themselves over the next four months, as the competition literally goes sideways (https://twitter.com/DJSnM/status/1431808519410380802?s=20). While the competition is busy fixing their broken rockets, Rocket Lab will be launching multiple missions in rapid succession, including a mission to the Moon and another booster recovery mission that takes them one step closer to being the only company besides SpaceX to reuse an orbital booster. Even as Rocket Lab launches these exciting missions, they will continue to ramp up their space systems and satellite components business, and develop their Photon spacecraft and Neutron launch vehicle. Rocket Lab is flush with $750MM in cash which they plan to invest heavily into R&D as well as to use to acquire other space companies to add to their portfolio of products and capabilities. I think it is safe to say that Rocket Lab has a significant lead on almost every other space company, and people are finally about to realize this! I wouldn't be surprised if the share price of RKLB hits $20 in the next six months, which it seems that the company has planned for (https://www.reddit.com/r/RKLB/comments/oskac6/sec_report_extract_price_targets_and_compensation/)!
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Well my 6 whole shares did quite well. Alas, this was just some spare cash leftover in an old brokerage account so I didn't buy anymore than that.
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A few interesting tidbits for today. New Zealand's lockdown seems to be working, and Covid cases are down (https://www.theguardian.com/world/2021/sep/05/new-zealand-reports-20-new-covid-cases-as-spread-of-delta-slows). Hopefully they will be able to eliminate the virus again and lift the lockdown, so that Rocket Lab can resume launch operations.
Expect to hear more about the Neutron soon. Apparently the images of Neutron that were released were completely fake and intended to mislead copycats, and the actual Neutron will "look like a rocket designed in 2050 (https://www.reddit.com/r/RocketLab/comments/pbgxr5/peter_beck_said_neutron_design_should_look_like/)". Furthermore, there are rumors going around that the Neutron might be fully reusable (https://www.reddit.com/r/RocketLab/comments/pblxn2/will_the_neutron_be_fully_reusable/) like the Starship, not just partially reusable like the Falcon 9. Obviously, take these rumors with a grain of salt, but they are exciting nevertheless. Hopefully we will be getting more information in the coming weeks, since Peter Beck has said that Rocket Lab will soon release a significant reveal of the Neutron (https://www.cnbc.com/2021/08/25/rocket-lab-begins-trading-on-nasdaq-as-rklb-after-spac-merger.html)!
Finally, here is an interesting bearish analysis (https://www.reddit.com/r/AstraSpace/comments/pe5d6b/is_astra_really_the_fastest_company_to_achieve/) of some of Astra's claims. Basically, Astra claims to have achieved orbital launch capability in just four years (https://i.imgur.com/pPgKF5U.png)--much faster than any other company. These claims are misleading, as Astra has been doing R&D since 2005. By that measure, Astra has actually taken a whopping 17 years to achieve orbital launch capability. In Astra's infographic from their investor presentation, they don't hesitate to include Rocket Lab's lengthy R&D efforts leading up to the development of the Electron, but they completely omit their own even lengthier R&D efforts!
Astra also makes misleading statements about the payload capacity of their rockets, saying stuff like "we send payloads of up to 500kg to up to 500km mid-inclination orbits, with more destinations coming soon (https://astra.com/launch-services/)", when in fact, their rocket is only capable of lifting a mere 50kg (https://arstechnica.com/science/2021/07/rocket-report-astra-shares-grand-plan-can-falcon-heavy-out-lift-delta-iv/) to LEO.
Yes, Astra does plan to scale up the payload capacity of their rockets with the introduction of the Rocket 4 design, planned for 2022. Plus, as the bearish analysis notes, if you measure the time that Astra took to develop their orbital rocket without accounting for prior R&D, Astra comes out looking a lot better--but not as good as Rocket Lab, who took less time to develop the Electron (4.25 years) than Astra spent developing the Rocket series (5 years). I appreciate what Astra is doing from a business and technology standpoint, but I do not appreciate these misleading claims. This definitely knocks the company down a few notches in my eyes.
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Finally, here is an interesting bearish analysis (https://www.reddit.com/r/AstraSpace/comments/pe5d6b/is_astra_really_the_fastest_company_to_achieve/) of some of Astra's claims. Basically, Astra claims to have achieved orbital launch capability in just four years (https://i.imgur.com/pPgKF5U.png)--much faster than any other company. These claims are misleading, as Astra has been doing R&D since 2005. By that measure, Astra has actually taken a whopping 17 years to achieve orbital launch capability. In Astra's infographic from their investor presentation, they don't hesitate to include Rocket Lab's lengthy R&D efforts leading up to the development of the Electron, but they completely omit their own even lengthier R&D efforts!
Isn't the more misleading bit that Astra talks about achieving orbital launch capacity but still hasn't put a rocket into orbit?
I appreciate what Astra is doing from a business and technology standpoint, but I do not appreciate these misleading claims. This definitely knocks the company down a few notches in my eyes.
This sort of hype and bending the truth seems to be endemic to startup culture. I don't like it either, but the fact that it is SO endemic makes me think that the strategy of bending the truth and presenting everything in the rosiest possible interpretation is just assumed, so if a company comes in completely honest and blunt about their progress and prospects, all their potential funders will assume "if this positive spin is this bad the reality must be terrible."
Of course that's the same culture which gave us Theranos.
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Rocket Lab stock (https://www.google.com/search?q=rklb) went up 33% over the course of three days last week! I think people are digesting the recent news, and it is very favorable for Rocket Lab. Let’s dive in!
To put things in perspective, this last week was not a good week for other small rocket companies. On August 28th, Astra’s fifth launch was a failure (https://en.wikipedia.org/wiki/Rockets_by_Astra). This makes them 0 for 5 for launches. On September 2nd, Firefly’s first launch also ended in failure (https://spacenews.com/firefly-alpha-explodes-during-first-launch/). Also on September 2nd, the FAA grounded Virgin Galactic (https://www.cnbc.com/2021/09/02/faa-grounds-virgin-galactic-spacecraft-branson-launch-investigation.html) due to airspace violations. In other words, a lot of investors new to the sector are starting to realize how hard space is.
In comparison, Rocket Lab just went public under the ticket RKLB on August 25th. They are fresh off their recent successful launch (https://www.rocketlabusa.com/about-us/updates/rocket-lab-successfully-launches-u-s-space-force-mission/) on July 29th, and have many more launches planned for the tail end of 2021, including three launches which are planned for September (https://www.rocketlaunch.live/?filter=rocket-lab), assuming that New Zealand lifts their Covid lockdown. Rocket Lab had originally planned for one launch in late August and two in September, but it looks like all three of them have been pushed to September or later due to the lockdown. All in all, Rocket Lab plans to launch up to seven missions (https://www.rocketlaunch.live/?filter=rocket-lab) over the new four months—and compared to what we’ve seen with Astra and Firefly, these missions are very likely to succeed. This puts Rocket Lab in an extremely favorable position. They just went public amid very visible failures from their competitors. Rocket Lab now has a perfect opportunity to distinguish themselves from the competition in the eyes of the public, by launching multiple missions in rapid succession while the competition is forced to sit back and lick their wounds. This is their prime opportunity to capture investor momentum in a red-hot industry!
Rocket Lab’s space systems business is starting to gather more and more attention. They have already managed to scale their production of satellite reaction wheels to 2,000 units per year (https://techcrunch.com/2021/09/01/rocket-lab-boosts-its-space-systems-divison-in-quest-to-become-an-end-to-end-space-company/), which is estimated to provide $90MM of annual revenue (https://www.reddit.com/r/RocketLab/comments/pgwjtx/i_have_done_some_calculations_regarding/). To put this into perspective, Astra has $2.5MM in revenue per launch. They would have to launch 36 rockets per year just to match the revenue that Rocket Lab makes from selling reaction wheels! Clearly, Astra is nowhere close to launching 36 rockets per year, and who knows how much Rocket Lab’s business will have grown by the time that they do get there. Furthermore, Rocket Lab also manufactures star trackers (https://twitter.com/RocketLab/status/1433527431168626688) and solar panels (https://twitter.com/Peter_J_Beck/status/1411423056707211264), among other things. I can’t wait to hear more about their satellite components business!
In conclusion, Rocket Lab is set to distinguish themselves over the next four months, as the competition literally goes sideways (https://twitter.com/DJSnM/status/1431808519410380802?s=20). While the competition is busy fixing their broken rockets, Rocket Lab will be launching multiple missions in rapid succession, including a mission to the Moon and another booster recovery mission that takes them one step closer to being the only company besides SpaceX to reuse an orbital booster. Even as Rocket Lab launches these exciting missions, they will continue to ramp up their space systems and satellite components business, and develop their Photon spacecraft and Neutron launch vehicle. Rocket Lab is flush with $750MM in cash which they plan to invest heavily into R&D as well as to use to acquire other space companies to add to their portfolio of products and capabilities. I think it is safe to say that Rocket Lab has a significant lead on almost every other space company, and people are finally about to realize this! I wouldn't be surprised if the share price of RKLB hits $20 in the next six months, which it seems that the company has planned for (https://www.reddit.com/r/RKLB/comments/oskac6/sec_report_extract_price_targets_and_compensation/)!
It was exciting to watch the price gain so much last week. Wish I'da bought a few shares beforehand...
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This just in, New Zealand has started to lift their lockdown (https://apnews.com/article/lifestyle-middle-east-business-health-travel-b7fee857060a0ea889d91117c89b0784)! Hoping to see some Rocket Lab launches soon!
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New news! Rocket Lab announced on Friday evening (9/3) that for its first time as a public company, it will report earnings on Wednesday, September 8 (https://www.nasdaq.com/articles/why-rocket-lab-stock-roared-higher-today-2021-09-07). That's tomorrow!
Since whatever positive news Rocket Lab has to announce tomorrow will be mostly related to future plans rather than current operations (they are almost certainly still losing money), I think there is a good chance that investors will sell the news. What we are seeing right now might be a classic buy the hype, sell the news kind of event, leading up to the earnings call. I think the most likely scenario tomorrow is that Rocket Lab will announce that they are still losing money, and drop some juicy tidbits about their future plans for Electron reuse, Neutron, and their space systems business. As a result, the share price will drop significantly, since it has ran up so high over the last few days and the company is still losing money. Buy the hype, sell the news. Of course anything is possible, but this scenario seems the most likely for now.
To give an example of a similar scenario, Tesla had a massively hyped event last September where they announced future plans to improve their battery technology. The stock increased significantly leading up to this event, rising from $330 on 9/8/2020 to $449 on 9/21/2020 (+36%). After Tesla made their announcement on the evening of 9/22/2020, the stock sold off to $380 on 9/23/2020 (-15%). This was despite the news from the event being very positive. Short term investors bought the hype and sold the news, creating a great buying opportunity for long term investors.
So if you're late to the party and looking for an entry point, buying a potential dip after tomorrow's earnings call might be your best bet. Rocket Lab has rocket launches booked solid for the rest of 2021, and assuming these missions succeed, the share price will probably go up.
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Here is a great analysis from Hugo Blair (https://twitter.com/hugo_blair/status/1434851573625016322?s=20) on Twitter of what we can look forward to hearing about in tomorrow's earnings call. I'm quoting it here because Twitter can suck for navigating multipart posts:
What can we expect from Rocket Lab’s Second Quarter 2021 Financial Results Conference?: A Thread. I discuss possible Neutron Updates, Expansions of Rocket Lab component offerings, and Revisions of both long term and short term revenue and earnings estimates.
Why do I think that there could be significant announcements? There are three conferences lined up back-to-back. RL revealed Neutron when they announced that they were going public. It only makes sense to unveil the full vehicle at their first earnings report as a public company.
Please note: Everything here is speculation and guesses. There could be absolutely nothing that comes out of these earnings conferences. Here are key announcements that could be revealed in the coming days, as well as some more key info:
- New Neutron Renders. Ever since RL unveiled Neutron 6 months ago, Enthusiasts have been clamoring for more info about the vehicle. Recently Peter mentioned that the original neutron renders were “a ruse”. He also said that the vehicle “should look like it was designed in 2050.”
- Whether Neutron Is Fully Reusable. In the latest CNBC and Bloomberg interviews, Beck said that Neutron was "fully re-usable". It is unknown whether he meant "fully re-usable first stage" or fully re-usable first and second stages.
- Is Neutron made out of a Carbon composite? RL's competitors (Relativity and SpaceX) have both been working on vehicles that are made out of stainless steel. The original Neutron renders showed RL following this trend. Speculation about the newest renders indicate a carbon body.
- Expansions of the RL component line-up. Richard French has detailed that RL will be expanding the range of satellite components, it is simply a matter of when. RL recently announced a new reaction wheel production line. Learn more in the linked tweet (https://twitter.com/hugo_blair/status/1433619784919248897).
- Revisions of long term financial estimates. It has become a trend in de-SPACed companies for their previous revenue estimates to drastically change from their prior guidance. I do not believe this will be the case for RL, but it is one to watch out for.
Peter has mentioned that the prior financial estimates do not include space applications or space data sales. I personally believe that this will be a significant driver of growth. We may see an announcement relating to this, and see these numbers included in the estimates.
- Possible decrease in near term financial results. Rocket Lab has faced delays in certifying AFTS for US launch sites. This has caused delays in launches from LC-2 Wallops. This will decrease their revenues.
RL recently faced the loss of the "Running Out Of Toes" Mission. This issue has been since resolved, but this would have caused a loss of revenue. This revenue will not be recorded for this quarter's earnings announcement (Q2), but will be reflected in the guidance for Q3.
New Zealand is currently in a nationwide lockdown. This has prevented both launches, and from RL working in their NZ facilities. As RL has facilities worldwide, this is not as bad as it could have been, but it will still be reflected in the Q3 guidance.
With NZ opening back up from lockdown, launches are expected to resume soon, and thus I do not foresee Q4 estimates as being significantly decreased. Auckland is currently still in lockdown, but the rest of the country has opened back up, with Auckland soon to follow.
- Acquisitions. Beck has previously stated that RL is looking for acquisitions targets. Potential target areas include space applications and in-space servicing.
- Unlikely Announcements: A RL Constellation. Peter has discussed the possibility of this before, and this is likely to happen at some point given Neutron being a "constellation builder", but I do not foresee this being announced so soon. This would involve a new Photon variant.
In-orbit refueling updates. RL has been working on this, but it is in the far off future, and I doubt it will be given any updates. I discuss refueling in this tweet (https://twitter.com/hugo_blair/status/1433320987592835073).
Let me know if what you guys think will happen! Are the earnings for the next couple of quarters going to be lower than expected? Will the long term estimates be changed? Will Neutron be announced?
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Sad I couldn't listen to the call live, but I do like those results!
https://www.sec.gov/Archives/edgar/data/0001819994/000119312521267875/d203150dex991.htm
Some highlights:
- Revenue of $29.5M, representing 237% Year-on-Year revenue growth, accompanied by an expansion in gross margins from negative 67% to a positive 13%.
- Increasing diversity in revenue, with Space Systems contributing 18% of total revenue in the period, compared to 3% in the prior year, accompanied with gross margins of 65%.
- Backlog grew 136% Year-on-Year to $141.4 million as of June 30, 2021 as compared to backlog of $59.9 million as of June 30, 2020.
Here is the investor presentation for 1H 2021: https://www.sec.gov/Archives/edgar/data/0001819994/000119312521267875/d203150dex992.htm
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OK, tell me a price and I'll put in a limit order. Or, say "market order".
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Well, I was totally wrong about Rocket Lab investors selling the news on the earnings report. The stock just keeps rocketing up!
As for a good entry price, you should have gotten in below $13 in my opinion, ideally at $10. The stock was hanging out in the low tens for months. Who knows what exactly the stock will do going forward, but keep in mind that there shouldn't be any major developments about Rocket Lab in the near term future. Their next launch seems likely to slip into October because of Covid delays, and Peter Beck said they won't be revealing details about the Neutron until a few months from now. Also, the next Electron flight with a recovery attempt wasn't scheduled until November, and that's probably pushed back too. All of these developments will take some time until they come along and boost excitement about the company and the share price. For now, I think our best bet is to sit back and wait for the share price to shake itself out, and look for a buying opportunity. As I said, there is quite some time before the next major development.
One catalyst that could spur a buying opportunity is if one of Rocket Lab's competitors like Astra has a major development. I think a lot of investors are moving money around between these companies and trying to pick the winning horse in this race.
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Yea, I got into RKLB at 10.52 and ASTR at 9.33. But it's just play money, 10 shares each.
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I'm in at
99 shares ASTR @ 10.91
59 shares RKLB @ 16.43
Just got into RKLB yesterday when the market opened, got lucky there with my quickest 25%+ gain ever. Mostly cancelled out though by my losses on ASTR (that went sideways..literally).
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I'm in at
99 shares ASTR @ 10.91
59 shares RKLB @ 16.43
Just got into RKLB yesterday when the market opened, got lucky there with my quickest 25%+ gain ever. Mostly cancelled out though by my losses on ASTR (that went sideways..literally).
Hello, @FrugalFukuoka!
LOL sympathetically on ASTR. I experienced the sideways movement too.
Also, cool screen name. :)
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I didn't get in on the RKLB blast off, but I did mention it to my penny stock gambler 84 y/o mom Wednesday morning before going to visit her for lunch. When I arrived at her place she told be that she'd sold off something that hadn't been moving and picked up 1500 shares pf RKLB at $15.60 Needless to say, she's had a very happy couple of days.
Herbert Derp, thanks for sharing RKLB with us.
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I'm in at
99 shares ASTR @ 10.91
59 shares RKLB @ 16.43
Just got into RKLB yesterday when the market opened, got lucky there with my quickest 25%+ gain ever. Mostly cancelled out though by my losses on ASTR (that went sideways..literally).
Hello, @FrugalFukuoka!
LOL sympathetically on ASTR. I experienced the sideways movement too.
Also, cool screen name. :)
Thanks!
LOL, fingers crossed with that one. I am still hopeful however, as long as SpaceX isn't going public, I reckon small successes for ASTR will translate into worthwhile stock movements.
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I traded in 1 share GME plus spare cash for 26 RKLB at 18.??. Worst buy posted yet, oh well. To the moon!!!...literally1!!!!!11
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I traded in 1 share GME plus spare cash for 26 RKLB at 18.??. Worst buy posted yet, oh well. To the moon!!!...literally1!!!!!11
Gamestop is by definition full of games, but at 250,000 miles to the moon, you're playing the long game now. :)
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Good news regarding Astra! Chris Kemp says that despite the recent launch failure, Astra anticipates no changes or delays (https://www.reddit.com/r/AstraSpace/comments/pm0os0/engine_failure_analysis_and_lv0007_launch_window/) to its launch schedule for the rest of the year, which consists of two launches.
They plan to make a statement next week explaining the root cause of the engine failure, and how they are going to fix it on their next rocket! Fantastic news!
I believe that next week we're going to be providing a very detailed overview of the findings. We obviously do need to address an issue. I think what we'll be sharing next week is what that issue was, how we were able to definitely find that root cause, and the change that we are making to rocket seven so that we can ensure a successful flight. I have no updates as to any changes to our plans as a result of what we've learned, which I think is great news.
Chris Kemp mentioned this in a talk yesterday which I think is worth listening to:
https://event.webcasts.com/viewer/event.jsp?ei=1492693&tp_key=464473055e
The part where he talks about the findings from the launch failure is at 16:00. There is also a very interesting segment starting at 22:05 where he discusses Astra's plans to essentially turn the second stage of their rocket into a satellite bus which incorporates Apollo Fusion's ion engine.
Typically, a rocket's second stage would consist of engines, fuel tanks, avionics and sensors, and a payload area. Astra's idea is to take all of the expensive avionics and sensors from the second stage and combine them with an Apollo Fusion engine to create a small spacecraft. This way, the second stage will just consist of some fuel tanks and engines which can separate from the "brains" of the second stage which becomes its own independent satellite.
This saves a lot of cost and weight, since in the past both the second stage and the satellite needed their own separate brains. Since the brainy part of the second stage is a satellite, the payload bay will no longer be needed, saving even more cost and weight. Instead, Astra's second stage satellite will become the platform which is sold to customers, who will no longer need to design and build their own satellites from scratch.
This makes a lot of sense, and is very similar to what Rocket Lab is doing with their "kick stage" and Photon satellite bus. Where Rocket Lab seems to differ, however, is they have designed the Photon satellite bus to be deployed as an independent payload rather than incorporating it completely into the second stage of Electron. In this way, Photon will be compatible with not just Electron, but Neutron as well, and even launch vehicles from other companies such as SpaceX. Someday, we might see a SpaceX Starship deploy a multitude of Photons!
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Here is an interesting article which explains more about how the New Zealand Covid lockdown is delaying Rocket Lab's launches:
https://spacenews.com/pandemic-delaying-rocket-lab-launches/
Hopefully the lockdown will end soon!
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I wanted to take some time to discuss my thoughts on investing in the space industry. I am super enthusiastic about investing in space because simply put, space is huge. I mean, what's bigger than space? In any case, the space industry is projected to reach well over $1 trillion in annual revenue by the end of the decade (https://www.cnbc.com/2020/10/02/why-the-space-industry-may-triple-to-1point4-trillion-by-2030.html). This is why I've chosen to invest a large amount of money into the space industry.
In my opinion, investing in space now is like investing in the Internet in 1997. However, there were issues with investing in the Internet in 1997. Investors understood the potential of the Internet back then, just as we do with space today. Unfortunately, investor enthusiasm at that time outstripped the maturity of the underlying technologies, which led to the Dot-com bubble of 2000. Also, most Internet companies at that time ended up going bankrupt, making it even harder for investors.
Space investors should be rightly concerned about investing into a bubble, although I don't think we have hit anywhere near the hype that was going on in the Dot-com bubble of 2000. If hype about space companies continues to increase despite a lack of actual revenue and actual real world results, I don't think investing is a good idea. It will be important to watch and see if companies like Rocket Lab and Astra grow their revenue like they plan to. But so far, so good. Rocket Lab's technology is real, and revenue growth seems to be on track. In the case of Astra, we'll have to wait and see.
Another key difference between the space industry of today and the Internet industry of 1997 is that space is hard. As I've mentioned before, to build a successful space company you need many years of R&D and tens to hundreds of millions of dollars of capital (https://www.msn.com/en-us/news/technology/richard-branson-says-virgin-orbit-has-spent-dollar1-billion-trying-to-get-to-space-the-ceo-of-startup-rocket-lab-says-it-needed-a-fraction-of-that-to-reach-orbit/ar-BB1ar47U). Companies like Rocket Lab, Astra, Virgin Orbit, SpaceX, and Blue Origin have been at this for the better part of two decades. Only serious companies with serious products and real results have been able to make it this far.
The barrier to entry into the space industry of today is sky high compared to the barrier to entry into the Internet industry of 1997. Back then, founders could attract millions of dollars of investor capital with nothing more than a PowerPoint presentation. As a result, it was very difficult to distinguish the real Internet companies from the posers. Plus, the market was literally flooded with Internet companies, making it very hard to pick a winner even among the serious companies. This is not the case in the space industry of today, where the high barrier to entry has ensured that there are only a relative handful of much higher quality companies to invest in. All of these new space companies have to pass an intense gauntlet of R&D and effort to even participate in this arena, and investors can easily research these companies and vet them out. Furthermore, new competition is largely shut out due to the aforementioned high barrier to entry.
Once some of the existing space companies build platforms, it may lead to a new wave of space companies which can bypass most of the current barriers to entry to the industry. At this point, choosing the correct companies to invest in will become much more difficult--but it is always a safe bet to invest in the companies who own the platform!
In conclusion, this is why I think investing in the space industry is such a unique opportunity. The potential for the industry is enormous, and the barrier to entry means that it is much easier to pick the winners when the pool of companies to choose from is so small. Furthermore, there is such huge enthusiasm about space exploration in the general public, meaning that successful space companies are going to get a ton of attention compared to successful companies in other industries. If nothing else, excitement is guaranteed!
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It's an interesting analogy between the internet and space.
However a less positive comparison between the two is that the internet was clearly going to be able to support a LOT of successful companies, because internet companies could do lots and lots of different things. Paypal, youtube, ebay, google, facebook, airbnb, reddit, lyft, flickr, expedia, and pets.com all operated in completely different markets even though they all are/were internet companies and some of them ended up owning each other.
Right now almost all the space are competing in the launch market. There may be room for 2-3 successful "platform builders" but I suspect there will be far fewer survivors from the current crop of space companies than there were from either the first or second generation of internet startups.
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Yeah, I think that the barrier to entry is currently too high to support the kind of diversity of companies that we've seen in the Internet industry. The way I see things developing, the handful of space launch companies in operation today will consolidate into an even smaller handful of 2-3 companies who are able to build successful platforms in space. Once these platforms are mature, it will lead to a second wave of expansion in the space industry consisting of companies who are able to build on these platforms. As a result, the companies who own and control these 2-3 platforms will be able to cement their positions and become the largest and most successful companies in the entire industry. This mirrors what we've seen with large tech platform companies in the Internet industry. As an investor, my strategy is to invest in these space platform companies at the earliest possible point in order to maximize my profits.
Back in 1997, who could have predicted that Amazon would have become a dominant platform company in the Internet economy? The barrier to entry was too low back then, and there were simply too many companies to choose from. This time it’s different, and only a handful of companies have the opportunity to become the first big space platform.
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Space is a platform, just like the internet. While launch providers may be the most visible part of the space industry, they're not the only part. Just like web hosting is only a part of the internet.
There's a group planning to build a massive development here in Albuquerque to build satellites that would basically surveil the entire world in near real-time. In addition to building the satellites here and flying them out on aircraft to be launched elsewhere (perhaps our state's $250 million dollar boondoggle Spaceport America) the plan is to have a huge data center to store and analyze all that data. The implications of having something like Google Maps/Google Earth that is updated daily or hourly are staggering.
https://tgi-hq.com/
However, I've remained highly skeptical that anything would actually come of it. New Mexico has a history of attracting big job announcements that end up never materializing. And based on this story that just came out last week, it looks like I'll probably be proven right: https://www.bizjournals.com/albuquerque/news/2021/09/07/theia-group-inc-sued-for-300-million.html
the first phase of the development is estimated to encompass about 4.1 million square feet, making it larger than the One World Trade Center in New York City. And “at least” 1,000 workers would be needed for an assembly facility on site, Theia vice president James Reid Gorman said in a November 2020 interview.
One 2020 research report from real estate firm Colliers International says the project is estimated to cost between $8 billion and $10 billion to construct throughout a decade. When the project was announced in November 2020, Mayor Tim Keller said the city "almost thought it was too big to be true."
If it sounds too good to be true, it probably is.
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Space is a platform, just like the internet. While launch providers may be the most visible part of the space industry, they're not the only part. Just like web hosting is only a part of the internet.
There's a group planning to build a massive development here in Albuquerque to build satellites that would basically surveil the entire world in near real-time. In addition to building the satellites here and flying them out on aircraft to be launched elsewhere (perhaps our state's $250 million dollar boondoggle Spaceport America) the plan is to have a huge data center to store and analyze all that data. The implications of having something like Google Maps/Google Earth that is updated daily or hourly are staggering.
There's actually a lot of companies doing this. Maxar (https://www.maxar.com/products/satellite-imagery), BlackSky (https://www.blacksky.com/products-services/), Planet (https://www.planet.com/products/monitoring/), Albedo (https://albedo.com/), Alba Orbital (http://www.albaorbital.com/nightlights), Pixxel (https://www.pixxel.space/), Capella Space (https://www.capellaspace.com/), etc. At least in the case of BlackSky, they are already using Rocket Lab components in their satellites (https://twitter.com/RocketLab/status/1433527431168626688).
I did some searching and couldn't find much info about these Theia Group guys. Certainty, whoever they are, they are not ready for a $10 billion construction project. If a company is going to be successful doing satellite imaging, it's probably one of the more established ones like Maxar, Planet, or BlackSky. I hope BlackSky does well, and that they continue to use Rocket Lab hardware in their satellites.
Speaking of space companies to keep an eye on, Maxar Technologies (https://en.wikipedia.org/wiki/Maxar_Technologies) (MAXR (https://www.google.com/search?q=maxr)) is definitely one to watch. They have a diverse portfolio of products centered on spacecraft and satellites. They are a clear leader in commercial satellite imaging--you may have seen some of their images (https://www.space.com/afghanistan-kabul-airport-evacuation-satellite-photos) capturing the US retreat from Afghanistan, which were broadly published (https://www.nbcnews.com/news/world/videos-show-desperation-kabul-airport-afghans-crowd-planes-cling-jets-n1276906). They have been selected by NASA to provide power and propulsion for the Lunar Gateway space station (https://www.theverge.com/2019/5/23/18637153/nasa-lunar-gateway-artemis-moon-program-space-station). They are also building a commercial space platform around the satellite bus they have developed (https://www.maxar.com/products/1300-class-platform), which puts them in competition with Rocket Lab and Astra who also want to build satellite bus platforms.
Some downsides to Maxar is that it has been around for a long time, and competitors like BlackSky portray it as a slow and inefficient Old Space company. Also, it has a massive amount of debt (https://www.benzinga.com/news/21/05/20936484/a-look-into-maxar-technologies-debt).
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Thought this was interesting, RKLB was #8 trending on Reddit the last week:
https://www.reddit.com/r/RKLB/comments/po742o/rklb_8_trending_on_reddit_the_last_week/
The stock has huge meme potential!
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Bad news for Astra investors. The announcement regarding engine fixes that was supposed to happen this week did not occur. Very disappointing. Maybe next week?
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Some interesting articles on Rocket Lab:
https://news.yahoo.com/why-rocket-lab-best-space-143143494.html
https://seekingalpha.com/article/4455962-rocket-lab-rklb-stock-space-new-frontier
This is definitely a long term hold. As the second article points out, we have the better part of the decade to go before Rocket Lab really comes into itself. I think that the recent run-up in the stock price is premature, and I'm glad that the stock has pulled back. However, this run-up in the price really shows how excited investors are about the stock. If you thought this was a big bump in the price, just wait until Rocket Lab starts to show actual results rather than just make forward looking statements!
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In an interesting turn of events, it looks like Astra has purchased the rights to manufacture Firefly's Reaver engines in-house for their upcoming rockets:
https://www.theverge.com/2021/9/21/22670063/astra-firefly-reaver-rocket-engine-ip-agreement
You can look at this both positively and negatively. On one hand, this new engine should take Astra closer to realizing its goal of being able to send a 500kg payload to a 500km orbit. On the other hand, this seems like evidence that Astra's current in-house engine designs are such a developmental dead-end that they had to resort to using another company's engine design.
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Rocket Lab just got handed $24MM of free money from the US Government for R&D work on Neutron:
https://www.reddit.com/r/RocketLab/comments/puvnl5/rocket_lab_awarded_space_force_contract_for_upper/
This is apparently for “upper stage resiliency enhancements”. What other reason for upper stage resiliency would there be other than making the upper stage reusable? I can’t wait to learn more about Neutron!
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For those of who want to look deeper into technical issues or just want to rocket-geek.
Generally https://forum.nasaspaceflight.com
Neutron updates:
https://forum.nasaspaceflight.com/index.php?topic=53408.0
@Herbert Derp, there are other things than reusability. Space is hard, even without reusability.
From the thread above,
by TrevorMonty on 25 Sep, 2021 01:08
RL to receive $24m towards US development. I think its to improve in orbit capabilities ie restarts and endurance. Saves adding expensive kick stage.
https://twitter.com/jeff_foust/status/1441536030176333826?s=19
edit
Rocketlab. Board
https://forum.nasaspaceflight.com/index.php?board=82.0
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Good point about the second stage resiliency. I think the speculations about second stage reusability are optimistic, but what rocket that looks like it was designed in the 2050’s isn’t fully reusable? Come on, Peter!
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Really like your posts here and didn't know about the nasaspaceflight site until now, thank you!
160 Astra and a short put on Astra for Oct 15th, 10$ -> will probably be 260 Astra in 3 weeks :-D
300 RKLB and a bull call spread 20/25 Oct 15th
Will periodically sell puts to purchase more stock until I hit at least 10k. Yes I will take that risk.
This is one of those long-run opportunities. Hopefully we can look back on 2021 and pat our shoulders when the real hype starts with LUNA and MARS in the years to come.
Can't wait for the future :-)
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Personally, I'm very disappointed with Astra's lack of communication about the launch failure, even when Chris Kemp personally promised that there would be an announcement. Some people are suggesting that Astra's shift to Firefly's Reaver engine reeks of desperation (https://forum.nasaspaceflight.com/index.php?topic=44689.msg2292751#msg2292751).
So basically, Astra's launch failed because one of their engines failed (https://spaceflightnow.com/2021/08/29/astra-rocket-fails-after-early-engine-shutdown/). Chris Kemp then comes out and promises an update (https://www.reddit.com/r/AstraSpace/comments/pm0os0/engine_failure_analysis_and_lv0007_launch_window/) explaining how they will fix their engines. Then, complete silence from Astra. Instead, the only thing we hear is that Astra has licensed the IP of Firefly's Reaver engines (https://www.theverge.com/2021/9/21/22670063/astra-firefly-reaver-rocket-engine-ip-agreement)--which by the way, also failed (https://spacenews.com/firefly-alpha-failure-blamed-on-premature-engine-shutdown/). It is very telling that Astra couldn't even license engines with a proven track record. Not very encouraging.
Also, one of Astra's key employees just left the company (https://twitter.com/tgmetsfan98/status/1441423298617880576). Combined with the other misleading things I've heard from Astra, it is really testing my patience with the company. They had better get their act together, and soon. Astra is supposed to launch again in October--let's see if they come through.
In other news, Peter Beck gave an interesting interview with Sharesies that is available on YouTube:
https://www.youtube.com/watch?v=hW_df95t1jc
Peter makes a lot of not so subtle digs against Astra in that interview, see if you can find all of them!
My favorite excerpt from that video:
https://www.youtube.com/watch?v=hW_df95t1jc&t=403s
Rocket Lab's an interesting company in the fact that we don't just build rockets. We're most well known for the Electron launch vehicle, but that was always intended to be the first product in the start. In fact, the very second Electron that we ever flew, the kick stage on that Electron had flat recesses in it for the express purpose of later on putting solar panels in to make that a satellite. From, very early on, we were thinking about building an end-to-end space company.
If you look at the space industry, the way to think about it is three pillars of value:
- Launch, which is about a 10 billion dollar total addressable market
- Satellites or space systems is about a 20 billion dollar total addressable market
- Applications, or all the things that we use from space, that's about a 320 billion dollar total addressable market
You can see, if you can get yourself into that applications space in a very competitive way, then that's a great place to be. Whoever holds the key to space has tremendous ability to be very competitive in all those other areas. As a company, we do launch, we also build satellites, and ultimately we'll be moving into applications where we actually provide services from space.
My second and third favorite excerpts are Peter Beck's thoughts on Rocket Lab's competition:
https://www.youtube.com/watch?v=hW_df95t1jc&t=1526s
https://www.youtube.com/watch?v=hW_df95t1jc&t=773s
It depends on what you want to call competition. We don't classify anything as competition unless they're actually delivering stuff to orbit. Until then, it's classified as emerging competition. Look, there's a lot of people in the small launch space that are trying. But for as long as I can remember, that has been the case. We've tracked 140 small launch startups since 2015. There's still 140 something small launch startups, but as of yet there's only been one, which is Virgin Orbit, that has made it to orbit other than Rocket Lab. I don't want to sound as arrogant as thinking that nobody else will make it, but I think there's a massive difference between trying to get there, getting there, and even a bigger difference between getting there and doing it reliably and regularly.
...
There's a lot of emerging or potential competitors in this market. There's a bunch of companies, even one that's gone public from the launch side of it. The reality is that the first private company to ever put a satellite into orbit was SpaceX, and the second private company to ever put a satellite into orbit was Rocket Lab. So, although there's a bunch of people trying, this is tough. This is a really, really tough thing to do. Even in the last few weeks, there's been two companies that have blown up rockets trying to get there. One company in particular has tried six times in a row (https://en.wikipedia.org/wiki/Rockets_by_Astra#Launch_history) and still hasn't gotten to orbit yet. So it is really, really hard. Getting your first rocket to orbit is hard. Getting your 10th or your 20th rocket to orbit is like hard squared--there needs to be like an exponential term on the hardness. It's very, very, very difficult.
So we're not as naïve to think that there aren't going to be competitors that come along in the future, but if you look at where we are and where everybody else is, there is quite a large gap. We continue to move out with new launch vehicles, reusability, satellites--there's a long tail here. As pure competitors go, I would say that we're in a really unique spot right now. From the spacecraft side as well, we offer a really unique offering.
What we're trying to do here is build an end-to-end space company, perhaps one of the first. We do see a lot of competitors trying to copy what we do. Other competitors are now trying to move into building spacecraft, but you've got to get your rocket working before you can build your spacecraft. Other competitors are now talking about building big rockets before they build their little rockets.
The thing for investors to look at in this industry is that this industry is tremendously exciting, and a lot of people promise a lot of stuff, but what investors should be looking for is execution. How many contracts are signed, how many payloads go to orbit, how many satellites work, those kinds of things. It is an industry that is very high profile and very exciting, but you have to filter through some of that to see who's delivering.
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The hard part during this stage of things is to figure out whether to double and triple down or to bail out completely. Is ASTRA around the corner from a successful launch or are they a company that will fail and fail and fail until they finally disappear from history.
It's hard to know.
ASTR has been trading for almost exactly 1 year and it's currently at -6% for the year. If this bad news continues, this is probably a the high for awhile. If they launch something in October, this could be the all time low.
I'm planning to stick with ASTR a bit longer, but invest more heavily into other places. I didn't buy these stocks to see a meaningful return in 2021, I'm looking for a 10-year time horizon.
Still, I'll be keeping a close eye on these broken promises, launch failures, and agreements to use third-party rockets...
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Good points regarding ASTRA. I think right now ROCKET LAB stands apart, too. Judging from other corporations that communicate well and those that don`t, it is usually like you would imagine: good communication = good business. The best thing about investing is IMHO, that you can make believability-weighted decisions. Astra seems higher risk, so a smaller position it is.
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I would like to take some time to compare and contrast Rocket Lab and Astra's technical strategies for developing their rockets.
For the sake of this post, let's say that in order to be successful, both companies need a rocket which can lift 300kg to LEO at a cost of $2.5MM per launch.
Currently, Rocket Lab's Electron can lift 300kg to LEO but costs a hefty $5-6MM per launch. In comparison, Astra's Rocket 3.3 costs 2.5MM per launch but can only lift a paltry 50kg to LEO.
So as you can see, the two companies are starting from opposite ends of the problem. Rocket Lab designed a rocket which had the desired performance from the start, but is too expensive. For Rocket Lab to succeed, they need to find a way to drive down the cost of the Electron. They are doing this by optimizing their manufacturing process and increasing the amount of automation in their facility, as well as by pursuing a project to make the Electron's first stage reusable.
On the other hand, Astra designed a rocket which had the desired cost from the start, but the performance is not high enough. For Astra to succeed, they need to increase the performance of the Rocket series. They are doing this by pivoting from Rocket 3 to their upcoming Rocket 4 design, which should have higher performance. Rocket 4 will be significantly larger than Rocket 3 and use Firefly's higher-performance Reaver engines.
At first glance, both of these approaches seem to be perfectly reasonable ways of solving the same problem from opposite directions. But does one approach make more sense than the other? Let's dive in!
From an engineering perspective, I think Rocket Lab's approach is sound. Rocket Lab started with something that works, and is optimizing it to make it more cost efficient. This seems much less risky since after all, their rocket already has the desired performance characteristics. Rocket Lab will also be able to take most of what they've learned from making the Electron reusable and apply that to their next generation Neutron rocket (https://www.reddit.com/r/RocketLab/comments/peidsc/the_progress_of_neutron/). So not only does investing in reusability help Rocket Lab make the Electron more cost effective, but it also helps them to develop the very same technologies that they need for Neutron. Two birds with one stone!
Astra, on the other hand, started with something that costs less but lacks the desired performance characteristics--and not by a little, but by a huge margin. For Astra to reach their own stated goal of 500kg to LEO, they need to increase their performance by ten times. In order to match Electron's performance, they need to increase by six times. In order for them to achieve this, they basically have to redesign a brand new rocket! Sure, Astra will be able to apply much of what they've learned building Rocket 3 into building Rocket 4, but Rocket 4 is still a brand new rocket with different engines. This is a huge change--you can't just swap out the engines on a rocket and keep everything else the same. Plus, Astra needs to do all of this redesign and performance increase without increasing the cost of their rocket, which seems like quite a bit to ask for. If Astra upgrades their rocket to match Electron's performance, but it also ends up costing as much, then what did Astra truly achieve? So basically, Astra is starting with something that doesn't work but costs a certain amount, and then needs to redesign a brand new rocket which works but still costs the same as the rocket which doesn't work. From an engineering perspective, this development strategy seems fraught with risk.
Astra's technical strategy for cost efficiency also relies on reaching economies of scale by mass producing their rockets, which seems difficult to do if they are in the middle of rapidly iterating towards their performance goal. How can you set up a production line to mass produce a rocket when the design isn't even finalized? It seems that Astra will have to do a lot of iteration on prototypes before they can truly kick off mass production.
Anyway, what do you guys think about Rocket Lab vs Astra's technical approaches for developing rockets with the desired performance and cost? I think that Rocket Lab's approach is much more sound from an engineering perspective, while Astra's approach is very risky. When you build and iterate on something, you always want to start with something that works, and optimize it afterwards! Trying to optimize something which doesn't work to begin with is questionable, to put it lightly. Chris Kemp likes to criticize the Electron and its high-performance carbon fiber body as a Ferrari of rockets which is too expensive to be practical. But I think he's missing the key point--the Electron has the desired performance characteristics, while his Rocket 3 design does not. The already working Electron design can be optimized for cost--exactly how much is up for debate. But what isn't up for debate is that the Rocket 3 design is not performant, and won't be so until it is evolved into the new Rocket 4 design.
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Agreed.
Premature optimization rarely works out. Get it working first, then see how much better you need to make it (if at all) once it works you can identify where the bottle necks & fat are.
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Institutional investors are starting to initiate coverage on Rocket Lab. They are very optimistic!
09/09/2021, Canaccord Genuity, Price Target: $30 (https://www.benzinga.com/news/21/09/22863183/canaccord-genuity-initiates-coverage-on-rocket-lab-usa-with-buy-rating-announces-price-target-of-30)
09/30/2021, Stifel, Price Target: $22 (https://markets.businessinsider.com/news/stocks/stifel-initiates-rocket-lab-with-buy-rating---read-why-1030834613)
09/13/2021, Cowen, Price Target: $18 (https://www.streetinsider.com/Analyst+Comments/UPDATE%3A+Cowen+Starts+Rocket+Lab+USA+%28RKLB%29+at+Market+Perform/18929647.html)
09/17/2021, Deutsche Bank, Price Target: $18 (https://markets.businessinsider.com/news/stocks/deutsche-bank-initiates-rocket-lab-usa-with-buy-sees-upside-of-17-1030807710)
In fact, I challenge anyone to find coverage on Rocket Lab's business outlook which isn't bullish. I haven't seen any. It is rare to see coverage this uniformly positive!
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In this interview (https://www.youtube.com/watch?v=RC5-o4wOVdY) with CNBC on Friday, Peter Beck said that Rocket Lab plans to build, launch, and operate its own satellite constellation! This follows in SpaceX's footsteps with their Starlink constellation. What kind of services do you think Rocket Lab will provide? How do you think the Rocket Lab stock price will react when the plans for the constellation are formally announced?
Ultimately, where we're trying to go is if you have your own rockets, you have your own ability to build satellites in an end-to-end space company, then ultimately you can start to deploy your own infrastructure in orbit through your own constellations.
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Ok, the price target is what I paid.
...
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That’s the value of getting in early. Myself and some others in this thread started our positions in RKLB about six months ago, well before the stock started blasting off. If you wait until the stock starts taking off before you invest, you’ll probably get a bad deal. If you are interested in making this kind of speculative investment, your goal should be to build conviction early and invest early.
Also, I’d like to stress that investing in stocks like RKLB is not for the faint-hearted. This is a high-risk speculative investment. Personally, I would not be investing in RKLB unless I could afford to lose every penny and still be financially independent. Which by the way, isn’t possible. Even if RKLB goes to zero, I can recoup about 33% of my losses as a tax write-off. Your risk tolerance may vary.
All that being said, I don’t think it is too late to invest in Rocket Lab, and I still plan to buy more shares in the future—with money that I can afford to lose!
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To echo and add to what Herbert Derp said, most of us got in before the merger, which is where the real early gains were. And of course this is a brave new industry with lots and lots of potential pitfalls and plenty of politics to cause mayhem.
Still, I'm in RKLB and other space companies with the plan to hold and accumulate for the next 10 years. Today's price targets are way, way, way below what I hope RKLB to be worth in a decade!
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Bought some more RKLB on the dip today at 14.74! To the moon!
I think once New Zealand lifts their lockdown and Rocket Lab starts burning through its huge backlog of delayed launches (https://www.rocketlaunch.live/?filter=rocket-lab), we’re really going to see some action on the share price. They have about seven rockets just sitting in the hanger ready to go—see this tweet (https://mobile.twitter.com/rocketlab/status/1419397564684668929) from July!
Speaking of New Zealand, just today they announced that they are shifting gears on their lockdown strategy, and will begin lifting the lockdown and reopening the country soon:
https://www.msn.com/en-us/health/medical/new-zealand-easing-covid-lockdown-admits-it-cannot-eradicate-delta-variant/ar-AAP85nl
This should be fantastic news for Rocket Lab, I wonder why the stock is down today?
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I am not a person who develops conviction easily, though I admire yours. I am actually entertained, not concerned. Somehow I ended up with a few hundred dollars which I regarded as entertainment money, and on a random day I decided Rocket Lab was more entertaining than Gamestop. That is a conviction I still have! Even so, I judge RKLB to have more speculative potential the GME at this point. Between those two I am solid in my holding. And if all else fails I have a strong anchoring bias! But, really, I should have exited and entered through limit orders. Also for that same reason an $18 target is good for me, because in practice that will be $18 +/- 50%, and that would allow me to sell at $27 with diligent limit orders if I wanted out.
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Speaking of price targets, ASTR at 7.78 is near its 52 week low. An Article on SeekingAlpha reports that B of A began covering ASTR but gave a bearish analysis, setting a price target of $9.
SeekingAlpha's contributor believes the negative coverage drove the dip in ASTR's price.
https://seekingalpha.com/news/3747930-astra-space-slips-after-bofa-starts-off-coverage-with-a-bearish-view
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Astra's been declining in share price since around September 27th, about a week before Bank of America initiated their coverage. Chris Kemp had promised an update on the engine failure by September 19th which never came.
Almost half of ASTR stock is owned by retail investors:
https://www.wallstreetzen.com/stocks/us/nasdaq/astr/ownership
In my opinion, the stock price is going down because investors are getting antsy about the continued radio silence from Astra regarding the engine failure. Especially retail investors, they are quick to dump stocks in these situations.
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PTF
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By the way, Spire Global (https://en.wikipedia.org/wiki/Spire_Global) (SPIR (https://www.google.com/search?q=spir)) just hit an all time low today. They are an interesting space company who operates one of the world's largest satellite constellations. Their satellites collect data on global weather patterns, shipping data, etc, which is then sold to customers for data analytics.
I'll have to do some more research to see if it is worth it to invest, at this price it seems like a steal!
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By the way, Spire Global (https://en.wikipedia.org/wiki/Spire_Global) (SPIR (https://www.google.com/search?q=spir)) just hit an all time low today. They are an interesting space company who operates one of the world's largest satellite constellations. Their satellites collect data on global weather patterns, shipping data, etc, which is then sold to customers for data analytics.
I'll have to do some more research to see if it is worth it to invest, at this price it seems like a steal!
Space companies going public through SPACs is a crowded field this year. Apparently they IPO'ed less than 2 months ago, and the stock only moved when they announced a partnership 2 weeks ago. But that spike upwards was temporary.
https://www.cnbc.com/2021/08/17/spire-global-space-company-spir-begins-nyse-trading-after-spac-merger.html
Are any of the other space SPACs better deals than Spire Global? In a crowded field, you can pick and choose.
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Wow! Rocket Lab stock just shot up by over 22% today due to NASA announcing that Rocket Lab will be launching a solar sail mission:
https://www.marketwatch.com/story/rocket-lab-stock-surges-after-nasa-deal-to-launch-solar-sail-announced-11633554117
This appears to be a one-off mission and there is nothing special about it. Mainly, this is evidence about how sensitive the Rocket Lab share price is to even minor news. Just wait until there is some real news! The stock is ready to blast off!
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This just in, apparently Neutron is designed to be "nearly 100%" reusable:
https://www.reddit.com/r/RocketLab/comments/q2w0dk/neutron_will_be_nearly_100_reusable/
I wonder what that could mean? Do you think Neutron will turn out to be a mini-Starship like Terran R (https://www.nasaspaceflight.com/2021/06/relativity-reveals-terran-r/)? Regardless of what design Rocket Lab ends up choosing, they have got to be considering Starship and Terran R since those will probably be some of Neutron's top competitors. Also, we already know that Blue Origin is pursuing second stage reuse for New Glenn (https://arstechnica.com/science/2021/07/blue-origin-is-developing-reusable-second-stage-other-advanced-projects/). Rocket Lab needs to keep up with the times and pursue some form of second stage reuse!
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The update from Astra that we were waiting for has finally arrived:
https://arstechnica.com/science/2021/10/astra-explains-previous-failure-sets-october-date-for-next-launch-attempt/
Their next launch could be as early as October 27th. I am glad they finally explained everything, I just wish they had done it sooner!
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It's about time! Don't make promises and then go radio silent....
I'm looking forward to seeing the next launch! Here's hoping the thing goes off without a hitch! As has been heavily discussed here, ASTRA has a long way to go before true viability, but a successful launch is badly needed.
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Rocket Lab bought Advanced Solutions Inc., a "Colorado-based software company focused on aerospace needs like simulating missions, testing components, and providing navigation." Deal "valued at $40 million."
Quotes are from Space Business, an industry newsletter by Tim Fernholz from Quartz. It's free. Here's a signup if anyone want it: https://qz.com/emails/space-business/?utm_source=email&utm_medium=space-business&utm_content=3a444ee5-2c3e-11ec-ae8d-165e1fbfded6
Article in Denver Business Journal:
https://www.bizjournals.com/denver/news/2021/10/12/rocket-lab-asi-space-startup-acquisition-colorado.html
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Yeah, I saw that. We still don't know why Rocket Lab bought Advanced Solutions, it would be interesting to hear what technology they were interested in and what's the plan to use it!
In other news, Astra just released this interesting interview with some of their key employees. They actually gave some very interesting insights into how Astra operates. It's worth a watch!
https://www.youtube.com/watch?v=YTsKF5E3YDI
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Over on the private side, SpaceX valuation just hit $100 billon: https://www.cnbc.com/2021/10/08/elon-musks-spacex-valuation-100-billion.html. That's up 33% since February.
I just can't really get excited about these small sat launchers. Maybe there's a market there, but it won't be anything transformational. If SpaceX can really get Starship working, on the other hand, it will be a complete game changer for how we think of space exploration. However, I'm also not sure I understand the investors so eager to get stock in a company Elon's clearly indicated he's not taking public and that seems likely to keep plowing its profits into R&D forever.
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Over on the private side, SpaceX valuation just hit $100 billon: https://www.cnbc.com/2021/10/08/elon-musks-spacex-valuation-100-billion.html. That's up 33% since February.
I just can't really get excited about these small sat launchers. Maybe there's a market there, but it won't be anything transformational. If SpaceX can really get Starship working, on the other hand, it will be a complete game changer for how we think of space exploration. However, I'm also not sure I understand the investors so eager to get stock in a company Elon's clearly indicated he's not taking public and that seems likely to keep plowing its profits into R&D forever.
Private companies can pay dividends right, and I assume one could sell within the private market place? Dividends would still have to be on a 10-30 year time horizon.
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If I were to invest in any alternative space company to SpaceX, it would be Rocketlab. If SpaceX did not exist, I would put substantial money in, because they are likely to blow the doors off Blue Origin (or, as BO is sometimes called in the space forums, Below Orbit), Boeing, and ULA. Virgin Orbit is not scalable, and Firefly and Astra are behind AND less well funded, though they are both likely to at least reach orbit.
I would do it mostly to have an excuse to follow Rocketlab, though, not because I expect them to make a lot of money long term. We have to assume that (1) the space industry grows a lot and (2) there are a lot of people who don't want to pay SpaceX for launch because they are competitors for them to have much of a market. Lets assume that in a year or two, which is pretty fast, they have the Neutron developed as a F9 competitor rocket. We also assume that the SpaceX Starship has been a failure, or at least no cheaper than a F9. Rocketlab offers a launch for less than the F9. SpaceX can just cut their price from ~60M down towards their marginal cost of a launch, which from their statements is probably around $20M. This is nice from a viewpoint of reducing launch costs for everyone, but its hard to see how Rocketlab makes much money out of it. The launch industry has also turned out to be fairly inelastic to date, so its not like halving the price doubles the launches. Maybe that will change?
Or, say Rocketlab launches their own, rival internet space constellation, which has much larger revenue potential than the total launch business. We'll assume they have costs near that of SpaceX, i.e. 1/3 or less what everyone else is paying for satellites. They get a few $B in funding to build their own thousands of satellites and get them launched. Again, they have to undercut SpaceX to get business, and by this time SpaceX has launched and amortized their constellation, they will have millions of subscribers for revenue flow, they can just price match, and nobody ends up making a ton of money.
I love having all these new space companies coming along and making space interesting again, I just find it difficult to make a specific business case for any of them after SpaceX. The one advantage I can see is that they may actually return money to shareholders, whereas I would not be surprised if SpaceX funnels all their revenues after Starship/Starlink development into putting people on Mars, which will be a huge money sink for decades. Potentially worthwhile for humanity, but not making money for investors.
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If I were to invest in any alternative space company to SpaceX, it would be Rocketlab. If SpaceX did not exist, I would put substantial money in, because they are likely to blow the doors off Blue Origin (or, as BO is sometimes called in the space forums, Below Orbit), Boeing, and ULA. Virgin Orbit is not scalable, and Firefly and Astra are behind AND less well funded, though they are both likely to at least reach orbit.
I would do it mostly to have an excuse to follow Rocketlab, though, not because I expect them to make a lot of money long term. We have to assume that (1) the space industry grows a lot and (2) there are a lot of people who don't want to pay SpaceX for launch because they are competitors for them to have much of a market. Lets assume that in a year or two, which is pretty fast, they have the Neutron developed as a F9 competitor rocket. We also assume that the SpaceX Starship has been a failure, or at least no cheaper than a F9. Rocketlab offers a launch for less than the F9. SpaceX can just cut their price from ~60M down towards their marginal cost of a launch, which from their statements is probably around $20M. This is nice from a viewpoint of reducing launch costs for everyone, but its hard to see how Rocketlab makes much money out of it. The launch industry has also turned out to be fairly inelastic to date, so its not like halving the price doubles the launches. Maybe that will change?
Or, say Rocketlab launches their own, rival internet space constellation, which has much larger revenue potential than the total launch business. We'll assume they have costs near that of SpaceX, i.e. 1/3 or less what everyone else is paying for satellites. They get a few $B in funding to build their own thousands of satellites and get them launched. Again, they have to undercut SpaceX to get business, and by this time SpaceX has launched and amortized their constellation, they will have millions of subscribers for revenue flow, they can just price match, and nobody ends up making a ton of money.
I love having all these new space companies coming along and making space interesting again, I just find it difficult to make a specific business case for any of them after SpaceX. The one advantage I can see is that they may actually return money to shareholders, whereas I would not be surprised if SpaceX funnels all their revenues after Starship/Starlink development into putting people on Mars, which will be a huge money sink for decades. Potentially worthwhile for humanity, but not making money for investors.
For the smaller payloads I thought RL's advantage was always that you could the the orbit and launch date you wanted without having to ride share with SpaceX. But how many people are willing to pay for that and by how much more I dont know but I would assume that is more limited market.
As you say SpaceX is going to put money into getting people to Mars (!!!!) so they may not want to reduce costs to much. Also Rocket Lab gets the benefit of looking at what worked/did not work for SpaceX. That is not to say RL has a business advantage now.
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The launch industry has also turned out to be fairly inelastic to date, so its not like halving the price doubles the launches. Maybe that will change?
I think the thing all the new launch companies (including spacex) are crossing their fingers for is that demand for launches is actually elastic, just with a significant time delay (it take a long time to build satellites).
At this point if it weren't for StarLink even SpaceX would be having trouble maintaining their launch cadence: there just aren't enough external customers to justify launching as often as they are logistically able to now.
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I think the thing all the new launch companies (including spacex) are crossing their fingers for is that demand for launches is actually elastic, just with a significance time delay (it take a long time to build satellites).
At this point if it weren't for StarLink even SpaceX would be having trouble maintaining their launch cadence: there just aren't enough external customers to justify launching as often as they are logistically able to now.
Another key point here is that Rocket Lab has acknowledged this issue. Many of their launches are delayed by months because it takes so long for the customer to get their payload ready. Turning Photon into a turnkey satellite bus platform will greatly simplify the effort needed by their customers to launch satellites on not just their rockets, but anyone's rockets. We've already seen this with Varda Space Industries' plan (https://www.yahoo.com/entertainment/varda-space-industries-send-first-162832875.html) to launch customized Photons on Falcon 9 rockets.
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We have more information about Rocket Lab's reusability plans today:
https://www.businesswire.com/news/home/20211019005608/en/
Rocket Lab's next launch, which is scheduled for November, will feature booster recovery. The booster will splash down into the ocean and be monitored by a helicopter. The company should attempt to use the helicopter to catch the booster on one of the next attempts, but for now they need more practice operating the helicopter in the recovery zone.
Rocket Lab stock is at a low point, perhaps now is a good buying opportunity? At least these guys seem to think so:
https://twitter.com/thesheetztweetz/status/1450839275126284294
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Looks like Rocket Lab will be reporting earnings on November 15th! Counting down...
https://investors.rocketlabusa.com/news/news-details/2021/Rocket-Lab-Announces-Date-of-Third-Quarter-2021-Financial-Results/default.aspx
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Yep! Rocket Lab has a few really big events coming in the next few days:
11/11: Next rocket launch + ocean recovery attempt (https://www.nzherald.co.nz/hawkes-bay-today/news/rocket-lab-launch-helicopter-prepares-for-reusable-rocket-catching-off-mahia-coast/PYQMUEA7ZJFB5TLH3YRHJMKRVI/)
11/15: Q3 earnings report (https://twitter.com/thesheetztweetz/status/1450920640639340547)
Get ready! BIG moves in the share price probably coming over the next week!
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Rocket Lab just gave their earnings call today, and things are looking good! Shares are up 4% in after hours trading.
Link to Q3 2021 investor presentation:
https://s28.q4cdn.com/737637457/files/doc_presentations/2021/11/Rocket-Lab-Financial-Results-Q321.pdf
A few takeaways:
1. Order Backlog
The order backlog has increased by almost $100MM in just the last 4.5 months!
June 30, 2021 order backlog: $141MM
Current order backlog (4.5 months later): $237MM
This is amazing! The company increased their order backlog by 68% in just 4.5 months! Also, many of these customers are returning customers who are booking multiple flights in a row. Now, we just need to start burning through this backlog. I think the main reason why there were so few launches this year was the Covid situation in New Zealand. I can't wait until the third launch pad in Virginia opens up and we start seeing Rocket Lab launches from the states!
2. Revenue Growth
Revenue growth looks good. Total revenue grew 79% year over year. Space Systems revenue grew 698% year over year, and is up 14% from last quarter. Even launch revenue is up 38% year over year despite the huge launch delays caused by Covid. If this growth keeps up, Rocket Lab is going to be a very successful company.
3. Cash Burn
Peter Beck says that Rocket Lab does not anticipate the need for any capital raises. Adjusted EBITDA net loss for 2021 including Q4 projections is estimated to be $46MM. Meanwhile, the company is sitting on $794MM of cash.
I am really impressed by Rocket Lab's scrappiness and cost control. The company seems to be in fantastic financial health and has no risk of running out of funds. Compare this to Astra (https://investor.astra.com/news-releases/news-release-details/astra-announces-third-quarter-2021-financial-results), who have no revenue and are burning through their smaller pile of cash ($379MM) at a more rapid rate (Adjusted EBITDA net loss for 2021: $110MM), and stated in their last earnings call that they will need to do a capital raise. Compared to Rocket Lab, Astra has half the cash and twice the burn rate. Not great for them.
At the rate Astra is going, they will run out of cash in about three years. A capital raise and share dilution seems inevitable, as Astra admitted on their conference call. Rocket Lab on the other hand seems to be in a very solid position and doesn't seem likely to run out of cash unless they spend large amounts of money on big ticket items like further acquisitions or Neutron R&D.
4. Acquisitions
In the call today, Peter Beck announced that Rocket Lab is acquiring Planetary System Corporation (https://techcrunch.com/2021/11/15/rocket-lab-acquires-planetary-systems-corporation-in-cash-and-stock-deal/) for $42MM, a small company that builds spacecraft separation systems for small satellites. This should help Rocket Lab develop its Photon satellite bus system into a more comprehensive end-to-end product for customers.
All in all, I am very pleased with the results! Looking forward to the Electron launch tomorrow evening--fingers crossed for no further delays!
BTW, I am not a finance guy. If anyone is interested, please double check my numbers here (https://s28.q4cdn.com/737637457/files/doc_presentations/2021/11/Rocket-Lab-Financial-Results-Q321.pdf) and here (https://investor.astra.com/news-releases/news-release-details/astra-announces-third-quarter-2021-financial-results) and let me know if I made any mistakes.
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Cool, great info. Are the looking to catch the first stage tomorrow?
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Cool, great info. Are the looking to catch the first stage tomorrow?
No, they are just doing a test with the helicopter in the area watching to prepare for when they'll catch the first stage.
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I wanted to take some time to explain what I believe to be Rocket Lab's biggest challenge with their upcoming Neutron rocket: the engines.
Rocket Lab has stated that the Neutron will be ready in 2024, but details have been very light. Specifically, we know very little about what engines the Neutron will be using.
There are two main issues at hand here:
1. Rocket Lab's Rutherford engine design is not scalable to the requirements of Neutron
Rocket Lab's electric pump fed Rutherford engine design will not scale up to the kind of larger engine needed for the Neutron. The turbopumps needed to power rocket engines need to be extremely powerful. For a tiny engine the size of the Rutherford, which is so small that you can hold it in your hands (https://3dprint.com/wp-content/uploads/2016/10/GettyImages-476477932-1024x683.jpg), the power requirements of the turbopump is relatively small. But for a much larger (https://i.pinimg.com/736x/56/97/7f/56977fbedb6dcb65832646d1a6104511.jpg) engine like the Falcon 9 Merlin, the power requirements are very high. Too high, in fact, for an electric pump fed engine--an electric pump that powerful would be too heavy as it would require massive batteries.
Electric pump fed engines like the Rutherford are thought to have an upper limit for thrust of about 22,000 - 25,000 lbs (the Rutherford has about 5,600 lbs of thrust (https://en.wikipedia.org/wiki/Rutherford_(rocket_engine))). In comparison, the Falcon 9 Merlin engine produces about 200,000 lbs of thrust (https://en.wikipedia.org/wiki/SpaceX_Merlin), ten times the theoretical maximum of an electric pump fed engine design. A more detailed discussion of this topic can be found here (https://youtu.be/IfaIkVgi0gw?t=735).
2. A new rocket engine takes about five years to develop, and it is unclear how much progress Rocket Lab has made on this front
Rocket Lab claims that the Neutron will be ready in 2024, only three years from now. However, as per the previous point, Rocket Lab's existing Rutherford design will not scale to the Neutron. This necessitates the development of a brand-new engine which uses a traditional turbopump design. The problem is that these types of engines are very complex and take considerable time to develop. For example, SpaceX's Merlin engine took about five years (https://forum.nasaspaceflight.com/index.php?PHPSESSID=80o4hq92l13ilhda331dmn7guq&topic=53194.msg2297307#msg2297307) to develop, SpaceX's Raptor engine took about six years (https://en.wikipedia.org/wiki/SpaceX_Raptor), and Blue Origin's BE-4 engine has been in development for ten years (https://en.wikipedia.org/wiki/BE-4) and still isn't completed (https://arstechnica.com/science/2021/08/blue-origins-powerful-be-4-engine-is-more-than-four-years-late-heres-why/).
Unfortunately, Rocket Lab seems to still be in the hiring phase for their new engine, and their open job posting (https://www.rocketlabusa.com/careers/positions/director-neutron-propulsion-development-long-beach-california-united-states-4743075003/) for the Director of Neutron Propulsion Development states: "As the Director of Neutron Propulsion, you are responsible for developing a liquid rocket engine (LOx /LNG) from a clean sheet. This is a key role in supporting the development of the Neutron launch vehicle where you will build a high performing team under your direction."
It seems that they still haven't hired the team needed to build their new engine, which will be extremely difficult to build and could take as long as five years to develop. In other words, Rocket Lab appears to be in quite the pickle.
Considering the above, it is critical to be on the lookout for any details about the engines when Rocket Lab releases their much-anticipated announcement about the Neutron. Perhaps Rocket Lab has made more progress on the engines than it seems. Perhaps they will go the route of Astra and give up on trying to develop an in-house engine for their new rocket and license somebody else's engine instead (https://www.theverge.com/2021/9/21/22670063/astra-firefly-reaver-rocket-engine-ip-agreement). I'm not surprised that Astra went this route--they faced the exact same problem as Rocket Lab in that their Delphin engine was also an electric pump fed engine design that wouldn't scale up for their new rocket.
Some clues can be found here (https://forum.nasaspaceflight.com/index.php?topic=53194.msg2300420#msg2300420), Rocket Lab executive Lars Hoffman is quoted as saying that Rocket Lab has looked at partnering with other propulsion developers for Neutron, and believes that Rocket Lab has found "a solution that is a perfect fit for us (https://www.nasaspaceflight.com/2021/10/reusability-small-launch-providers/)".
In any case, if Rocket Lab gives their Neutron update and doesn't present a clear path to having a viable engine, that is a huge red flag for the future of the Neutron program.
The silver lining is that Rocket Lab is diversifying away from the launch business. In the future, Rocket Lab will hopefully make more money from Space Systems and Space Services than Launch, and they won't necessarily need to launch everything on their own rockets. However, if Rocket Lab wants to maximize their competitiveness in Space Services, they probably need the capability of efficiently launching their own satellite constellations, for which the Neutron is instrumental. Otherwise they will be at the mercy of another launch provider, who will force Rocket Lab to adhere to their launch schedule and their cost structure.
What do you think Rocket Lab's plan for the Neutron's engines is?
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I wish I had answers. The job posting and the claim to have a perfect solution seem to be in conflict. It seems like the options are:
1. Build from scratch, accept slow Neutron timeline, emphasize space services until then
2. Start design program as negotiating tactic, but buy engine elsewhere, build Neutron on time
3. Screw up the design by rushing
I guess they'll do 2??
ETA: Or they could use purchased engines for Neutron version 1, then use their own engines in Neutron v2. That seems complicated and risky though.
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Planning to be ready in 2024 and actually being ready in 2026 (five years from now) wouldn't be the end of the world. At this point the pessimist in me says it'd probably still mean RocketLab would come in ahead of BlueOrigin/BE-4.
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Some of the people in the NASASpaceFlight forum thread are speculating that Rocket Lab might buy or license engines from Ursa Major (https://spacenews.com/ursa-major-technologies-wants-outsourcing-engines-to-be-the-norm/). There are barely any companies trying to sell rocket engines to other companies. Ursa Major (https://spacenews.com/rocket-engine-startup-sees-opportunities-in-crowded-launch-market/), Firefly Aerospace (https://firefly.com/firefly-to-become-the-premier-supplier-of-rocket-engines-and-spaceflight-components-for-the-emerging-new-space-industry/), and Aerojet Rocketdyne (https://en.wikipedia.org/wiki/Aerojet_Rocketdyne) are the only ones that come to mind. Aerojet Rocketdyne is an Old Space company and in the process of being acquired by Lockheed Martin (https://www.cnbc.com/2020/12/21/lockheed-martin-inks-4point4-billion-deal-to-acquire-aerojet-rocketdyne.html), so it seems unlikely that it would be them.
If Firefly can provide the engines, that would be a big win for them since they are also supplying Astra.
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Rocket Lab's mission (https://techcrunch.com/2021/11/17/rocket-labs-electron-booster-splashes-down-in-the-pacific-ocean/) today was a success! The payload was successfully deployed (https://twitter.com/RocketLab/status/1461161195088474115?s=20) and the booster successfully splashed down in the ocean (https://twitter.com/Peter_J_Beck/status/1461158303283642373?s=20)! I wouldn't be surprised if the stock price reaches 18 tomorrow. (Edit: I was wrong, people sold the news lol)
Also, with regard to Rocket Lab's purchase of Planetary System Corporation and their satellite separation systems, this could prevent issues like what happened when SpaceX's Zuma payload failed to separate successfully (https://spaceflightnow.com/2018/04/09/investigation-into-zuma-failure-reportedly-lays-blame-on-northrop-grumman/) from the 2nd stage. The more companies involved in a process, the greater the chance that that process will fail. I'm glad Rocket Lab is bringing this in-house!
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Looking forward, I am pumped! Rocket Lab hopes (https://spacenews.com/rocket-lab-to-acquire-planetary-systems-corp/) to have their 3rd launch pad in Virginia, United States certified this year. Also, New Zealand is finally lifting (https://www.reuters.com/world/asia-pacific/aucklanders-return-malls-new-zealand-eases-lockdown-biggest-city-2021-11-10/) their Covid restrictions and the country should be opened up (https://news.yahoo.com/fortress-zealand-outlines-plans-reopen-031209213.html) sometime early next year. This means that by early 2022, Rocket Lab will have three separate operational launch pads, two in New Zealand and one in the United States. They also have something like ten completed rockets sitting in their facility, and a huge backlog of unfulfilled contracts. Hopefully, what this means is that 2022 will be an extremely strong year for Rocket Lab, with many launches in rapid succession across multiple countries. I also think Rocket Lab will get a lot more publicity once they start launching from the states--I think people here just don't pay much attention to what is going on over in New Zealand.
Essentially, Rocket Lab is on the verge of launching a slew of missions in 2022, while at the same time achieving reusability and further expanding their Space Systems business, while also announcing big plans to develop their next generation Neutron booster and move into the lucrative Space Services business by building their own satellite constellation. Remeber, the total addressable market of Space Services ($320B / year) is 10x Launch ($10B / year) and Space Systems ($20B / year) COMBINED! All of these developments are huge for Rocket Lab.
Now, consider the competition. Only Virgin Orbit has had a successful commercial flight. Everyone else (Astra, Firefly, ABL, Relativity, etc.) is still struggling to get their first generation rockets into space and many of them probably won't even have their first successful commercial flight in 2022. Plus, none of these guys have even started building out a Space Systems or Space Services business! Rocket Lab is light-years ahead, and this will only become more apparent in 2022.
All of this means that Rocket Lab stock should really be going places in 2022! Looking forward to it!
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The booster has been recovered (https://mobile.twitter.com/RocketLab/status/1461412933703897091)! Looking forward to an announcement about the next booster recovery mission!
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Astra has finally reached orbit! (https://spacenews.com/astras-rocket-3-3-reaches-orbit-on-fourth-attempt/) They are now the 4th private space company to reach orbit, behind SpaceX, Rocket Lab, and Virgin Orbit.
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It's really good to see Astra finally do it! My favorite part was seeing all of the employees jumping around, hugging each other - all so excited. What a long, emotional endeavor just to get this far and seeing them finally succeed...it's cool to be part of this time in the world.
Still, Astra has a long road ahead. It's all been well laid out in previous posts, but I'm eager to see them build on this success.
If you're swinging this stuff, I'd bet Astra pops a bit on Monday before slowly falling back down to current levels.
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Astra has finally reached orbit! (https://spacenews.com/astras-rocket-3-3-reaches-orbit-on-fourth-attempt/) They are now the 4th private space company to reach orbit, behind SpaceX, Rocket Lab, and Virgin Orbit.
No love for Pegasus and the former Orbital Sciences Corporation/Orbital ATK?
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Still, Astra has a long road ahead. It's all been well laid out in previous posts, but I'm eager to see them build on this success.
If you're swinging this stuff, I'd bet Astra pops a bit on Monday before slowly falling back down to current levels.
Long road ahead, indeed! However it is important to keep in mind that Astra has a market cap of $2.46B compared to $6.96B for Rocket Lab. In other words, the market values Rocket Lab at 2.83x the value of Astra. The gap between these two companies in terms of capabilities and achievements is already priced in, IMO. With this latest launch, Astra has slightly closed that gap, so I wouldn’t be surprised if we see more than just a temporary bump in share price.
No love for Pegasus and the former Orbital Sciences Corporation/Orbital ATK?
I guess I just don’t appreciate Old Space companies very much, but point taken! Maybe I should modify my statement to say that Astra is the fourth private, commercial New Space company to reach orbit.
These Old Space companies just aren’t relevant in the New Space race. Northrop Grumman’s Pegasus rocket is clearly obsolete compared to Virgin Orbit’s LauncherOne, which has the same capabilities while using more modern technology at 1/4th the cost. The Pegasus Rocket has undergone very little innovation in the last several decades. That’s Old Space for you.
Also, although Pegasus is rendered obsolete by Virgin Orbit, even Virgin Orbit will struggle to compete for commercial contracts with the likes of Rocket Lab and Astra, who are innovating much faster and have a much lower cost structure.
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Fair enough. One more point on this though, which is that, depending on how you define Old Space vs New Space (chronologically or based on culture and approach), one could make an argument the original OSC was a new space company (https://en.wikipedia.org/wiki/Orbital_Sciences_Corporation#History):
Orbital was founded and incorporated in 1982 by three friends who had met earlier while at Harvard Business School—David W. Thompson, Bruce Walker Ferguson, and Scott L. Webster. ... In 1990, the company successfully carried out eight space missions, highlighted by the initial launch of the Pegasus rocket, the world's first privately developed space launch vehicle ... Shortly following the successful Pegasus launch, Orbital conducted an IPO in 1990 and began trading on the NASDAQ stock exchange.
That's eight years from founding to first orbital launch (SpaceX did it in six, Astra just did it in five, blue origin still hasn't managed it after 21 years) with a target of making orbital launches frequent, routine, and affordable. Their peak cadence was 30 launches in 15 months in the late 90s.
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It does look like Orbital Sciences Corporation was at one point a very innovative company. But then it seems they just stopped evolving at some point in the 2000’s and merged with various companies. What a shame. Looks similar to what happened with Boeing.
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It does look like Orbital Sciences Corporation was at one point a very innovative company. But then it seems they just stopped evolving at some point in the 2000’s and merged with various companies. What a shame. Looks similar to what happened with Boeing.
And a warning sign of what may end up happening to some of the current crop of "new space" companies in time.
Edit: I knew I'd manage to circle back around to thoughts on making investing decisions in time.
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Rocket Lab had a press conference yesterday where they explained their next steps for booster reusability:
https://spacenews.com/rocket-lab-ready-to-attempt-midair-recovery-of-electron-booster/
They plan to catch their first booster some time in the first half of next year. Also, the reusable Electron boosters are now covered in a layer of shiny, heat resistant graphite. Pretty!
Today, Rocket Lab announced that the next update on Neutron will take place on December 2nd, just one week from now:
https://twitter.com/RocketLab/status/1463553508406267915
Looking forward to hearing what the plans are for Neutron's engines!
BTW, Peter Beck and Elon Musk made a subtle dig on Astra yesterday, with Peter saying that non-reusable launch vehicles are a "dead-end product" and Elon agreeing to it:
https://twitter.com/elonmusk/status/1463291252527489029?s=20
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Looks like Rocket Lab is working on a new engine called Archimedes!
Not much is currently known other than the name:
https://www.reddit.com/r/RocketLab/comments/r33pba/archimedes_the_greatest_mathematician_who_ever/
The mystery unravels!
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Rocket Lab just got a new $20 price target and buy rating from Bank of America!
https://www.barrons.com/articles/rocket-lab-stock-buy-rating-51638287031
Hopefully this means that institutional interest in the stock is growing.
The price targets are now:
09/09/2021, Canaccord Genuity, Price Target: $30 (https://www.benzinga.com/news/21/09/22863183/canaccord-genuity-initiates-coverage-on-rocket-lab-usa-with-buy-rating-announces-price-target-of-30)
09/13/2021, Cowen, Price Target: $18 (https://www.streetinsider.com/Analyst+Comments/UPDATE%3A+Cowen+Starts+Rocket+Lab+USA+%28RKLB%29+at+Market+Perform/18929647.html)
09/17/2021, Deutsche Bank, Price Target: $18 (https://markets.businessinsider.com/news/stocks/deutsche-bank-initiates-rocket-lab-usa-with-buy-sees-upside-of-17-1030807710)
09/30/2021, Stifel, Price Target: $22 (https://markets.businessinsider.com/news/stocks/stifel-initiates-rocket-lab-with-buy-rating---read-why-1030834613)
11/30/2021, Bank of America, Price Target: $20 (https://www.barrons.com/articles/rocket-lab-stock-buy-rating-51638287031)
You can also view a live summary of the analyst ratings here:
https://www.benzinga.com/quote/RKLB/analyst-ratings
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Rocket Lab has just announced (https://finance.yahoo.com/news/rocket-lab-readies-electron-lift-203300866.html) that the launch window for their next mission opens on December 7th--just six days from now!
Between that and the Neutron announcement tomorrow, I'm stoked! The news just keeps coming for this company!
By the way, the Neutron announcement will be livestreamed on YouTube if anyone is interested in watching. Link is here:
https://www.youtube.com/watch?v=A0thW57QeDM
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Will be great to see if the new design concepts in Neutron work out. I expect there is some risk in how they intend to do the fairing, both how they will open and then have to reclose; if it they cant reclose that might result in the loss of the vehicle. But am sure they are working the details now.
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The Neutron update (https://www.youtube.com/watch?v=A0thW57QeDM) is here!
A few key points:
- Like the Electron, the Neutron will be made of carbon fiber. Peter Beck claims this will make the rocket lighter, stronger, and more resilient for continued reuse. Peter gave a live demonstration on the strength of his carbon fiber structural material by smashing a massive metal bar into it, which didn’t leave a scratch, while leaving massive dents in stainless steel and aluminum. Modifications and repairs seem like they would be more difficult on a carbon fiber vehicle, though.
- The Neutron has a very unique design where the fairings are integrated with the first stage, and the non-reusable second stage is like a gigantic kick stage which is deployed out of the fairings which are able to open and close like a flower. This means that the fairing is fully reusable and will not need to be recovered in the ocean since it is always attached to the first stage. This also means that the second stage is extremely light, since all of the structural elements are incorporated into the first stage. You can almost imagine the Neutron as an SSTO rocket with a gigantic kick stage! Very interesting and smart design, I’ve never seen anything like this before!
- The Neutron will indeed have an engine called Archimedes, which will be a low-performing methane-oxygen engine. Low-performing is a good thing in this case, because it means the engine will be under much less stress than high-performing engines like Raptor. This means that the Archimedes engine will be easier to design and manufacture, and will be more reliable as well. This smart design choice de-risks a lot of potential issues with the engine and leaves space for further optimizations in the future.
I think Rocket Lab took a lesson from SpaceX who is having tons of issues (https://spacenews.com/spacex-grapples-with-raptor-production-problems/) with the manufacturability and reliability of their new high-performance Raptor engine. Blue Origin is also having even worse issues (https://arstechnica.com/science/2021/08/blue-origins-powerful-be-4-engine-is-more-than-four-years-late-heres-why/) with their BE-4 engine. Apparently trying to design a mass-producible, extremely reliable, rapidly reusable engine that is simultaneously extremely high-performing and pushes material tolerances to the limits of the laws of physics is pretty hard, and even companies with massive resources like SpaceX and Blue Origin are struggling with it. I’m glad that Rocket Lab is not taking this route!
I also like the choice of methane-oxygen for the rocket fuel. This will be more reusable because methane burns clean and does not make soot like kerosene. Also, a lot of future space infrastructure like orbital fuel depots and Lunar/Martian fuel production will cater specifically to methane-oxygen rockets.
From a timeline perspective, Peter Beck claimed that the first Archimedes prototypes will be fired up in 2022. Looking forward to seeing if Rocket Lab can meet this timeline, that would be very bullish if so! - The Neutron has fixed landing legs which don’t fold in and out. Like the Starship, it is designed to return directly to the launch pad. This seems to have taken learnings from Starship and should be more economical than Falcon 9. Unlike the Falcon 9, Neutron does not have complicated, heavy landing legs and grid fins.
Overall, the Neutron is a very unique and innovative design! I see clear cost advantages over the Falcon 9. The Neutron is clearly designed to be economically and rapidly reusable. It should be able to land on the same launch pad that it took off from and then immediately launch again without any refurbishment. The Falcon 9 cannot do this! Compared to the Falcon 9, Neutron has the following benefits:
- Eliminated the time, cost, and effort needed to catch the first stage on a barge in the ocean and bring it back to the launch pad.
- Eliminated the time, cost, and effort to parachute the fairings into the ocean and fish them out of the water with a second boat, and then refurbish them for further use.
- Made the second stage much lighter and lower cost, by moving all of the structural components of the rocket into the first stage.
- Eliminated the complicated, heavy, and expensive folding landing legs and grid fins.
- Uses a methane-oxygen Archimedes engine which burns clean and should be more reusable than the soot-producing kerosene Merlin engines of the Falcon 9.
On a side note, Peter Beck really reminds me of Elon Musk in this presentation. I see that he took queues from Elon’s Cybertruck presentation by demonstrating the strength of carbon fiber vs steel and aluminum by smashing stuff with a huge metal bar. Very fun to watch!
I just bought more shares of RKLB at $14.74. Fingers crossed!
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"Made the second stage much lighter and lower cost, by moving all of the structural components of the rocket into the first stage."
I am having a little trouble seeing how this is a clear advantage in itself, this is increasing the landing weight, the weight that has to be turned around at stage separation and accelerated back towards the launch site. And the second stage still needs to be structurally sound enough for the accelerations seen under its own engine. This might be (and I hope it is!) the best option over all to keep the fairings attached to the main vehicle and have it all returning to launch site for easy reuse.
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I am having a little trouble seeing how this is a clear advantage in itself, this is increasing the landing weight, the weight that has to be turned around at stage separation and accelerated back towards the launch site. And the second stage still needs to be structurally sound enough for the accelerations seen under its own engine. This might be (and I hope it is!) the best option over all to keep the fairings attached to the main vehicle and have it all returning to launch site for easy reuse.
Yes, I think the point is that this design helps to maximize the percentage of the rocket which is rapidly reusable. I wonder if there could be some way for them to reuse the second stage by putting a circular heat shield in the front and parachutes in the back? Then it could be recovered in the same tried and true manner as existing astronaut capsules. Or maybe they can catch it with the helicopter like Electron!
Since Rocket Lab is planning on making Neutron human rated, this means that they may have to design an astronaut capsule for it. It seems that a reusable second stage and an astronaut capsule for human-rated Neutron would be extremely similar, and could reuse most of the same technologies for reentry.
If they can optimize the engines to get more thrust and efficiency, they might be able to squeeze out the extra performance they need to lift the heat shield and parachutes for the second stage. Not sure how feasible this really is, since the fuel tank of the second stage would be taking heavy forces during reentry, and the heat shield and parachutes would be rather heavy--but Peter Beck did say that the second stage would be extremely strong.
Take a look at this old SpaceX concept video (https://www.youtube.com/watch?v=sWFFiubtC3c) which showcases SpaceX's original idea for a reusable Falcon 9 second stage. The idea in this post would be very similar to the idea in that video, but would use parachutes and helicopters instead of landing legs. I think second stage reuse is more feasible for the Neutron than the Falcon 9 as depicted in that video, since the Neutron second stage would be smaller and lighter.
On an aside, people on Reddit are saying that James Bond predicted the Neutron! This fake movie rocket from 1967 really does look and behave a lot like Neutron:
https://www.youtube.com/watch?v=_qixtjMoMUA
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Definitely buying more RKLB!
I really appreciate your updates / thoughts / overviews / etc. and the general discussion on this board. It’s so much fun getting to watch the future unfolding before us!!!
In the short term, I’m most eager to see them achieve their December 7th launch plans. I’m concerned they’ll get delayed by Omnicron. They are in NZ after all :/.
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I see clear cost advantages over the Falcon 9. The Neutron is clearly designed to be economically and rapidly reusable. It should be able to land on the same launch pad that it took off from and then immediately launch again without any refurbishment. The Falcon 9 cannot do this! Compared to the Falcon 9, Neutron has the following benefits:
- Eliminated the time, cost, and effort needed to catch the first stage on a barge in the ocean and bring it back to the launch pad.
- Eliminated the time, cost, and effort to parachute the fairings into the ocean and fish them out of the water with a second boat, and then refurbish them for further use.
- Made the second stage much lighter and lower cost, by moving all of the structural components of the rocket into the first stage.
- Eliminated the complicated, heavy, and expensive folding landing legs and grid fins.
- Uses a methane-oxygen Archimedes engine which burns clean and should be more reusable than the soot-producing kerosene Merlin engines of the Falcon 9.
Can you expand a bit on your first point? Falcon 9 is also performing RTLS (return to launch site) profile missions. They're only able to do it when lifting lighter payloads to orbit, but the lighter end of the range for Falcon 9 missions are the ones where Falcon 9 would potentially directly competing with Neutron, based on Neutron's estimated payload capacity.
Agree with you on the second point. Worth noting that for both eliminating the need to catch fairings and switching from kerosine to methane, SpaceX and RocketLab are moving in parallel as they develop the replacements for their current workhorse rockets.
RocketLab is planning to switch from the kerosine fueled Rutherford in their currently flying Electron to the in development methane fueled Archimedes for the Neutron, and SpaceX switching from the kerosine fueled Merlins in the their currently flying Falcon 9/Falcon Heavy to methane fueled Raptors in the SuperHeavy/Starship. Rocket lab is integrating the fairing as a reuseable part of their first stage so they don't have to recover it, and Starship essentially acts as a (reuseable) fairing for SpaceX.
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Definitely buying more RKLB!
I really appreciate your updates / thoughts / overviews / etc. and the general discussion on this board. It’s so much fun getting to watch the future unfolding before us!!!
In the short term, I’m most eager to see them achieve their December 7th launch plans. I’m concerned they’ll get delayed by Omnicron. They are in NZ after all :/.
I’m glad you appreciate my topic. I like a place where I can share my thoughts and have others critique them. Exposing myself to other people’s perspectives gives me greater insights and hopefully prevents me from succumbing to tunnel vision. Hopefully those of you following this topic find it as interesting as I do! I have learned a ton about the space industry since I started this topic, and I hope that you guys have learned something too!
Yeah, I worry about Omicron too. The Wallops, Virginia launch site cannot come quickly enough! Getting that launch site online is another critical piece of Rocket Lab’s fundamentals that we should be watching for.
I see clear cost advantages over the Falcon 9. The Neutron is clearly designed to be economically and rapidly reusable. It should be able to land on the same launch pad that it took off from and then immediately launch again without any refurbishment. The Falcon 9 cannot do this! Compared to the Falcon 9, Neutron has the following benefits:
- Eliminated the time, cost, and effort needed to catch the first stage on a barge in the ocean and bring it back to the launch pad.
Can you expand a bit on your first point? Falcon 9 is also performing RTLS (return to launch site) profile missions. They're only able to do it when lifting lighter payloads to orbit, but the lighter end of the range for Falcon 9 missions are the ones where Falcon 9 would potentially directly competing with Neutron, based on Neutron's estimated payload capacity.
As you stated, Falcon 9 can only perform RTLS under very specific conditions—i.e. certain sizes of payloads and certain orbits. Neutron, on the other hand has been specifically designed to be capable of launching “98% of all satellites forecast to launch through 2029 (https://www.rocketlabusa.com/updates/rocket-lab-unveils-plans-for-new-8-ton-class-reusable-rocket-for-mega-constellation-deployment/)” while also being exclusively RTLS. So what Rocket Lab is saying is that Neutron is designed to be capable of delivering 98% of all possible satellites in RTLS configuration. The Falcon 9 cannot do this. I’m not sure what percentage of payloads it can handle in RTLS configuration, but it must be much less than 98%.
Agree with you on the second point. Worth noting that for both eliminating the need to catch fairings and switching from kerosine to methane, SpaceX and RocketLab are moving in parallel as they develop the replacements for their current workhorse rockets.
RocketLab is planning to switch from the kerosine fueled Rutherford in their currently flying Electron to the in development methane fueled Archimedes for the Neutron, and SpaceX switching from the kerosine fueled Merlins in the their currently flying Falcon 9/Falcon Heavy to methane fueled Raptors in the SuperHeavy/Starship. Rocket lab is integrating the fairing as a reuseable part of their first stage so they don't have to recover it, and Starship essentially acts as a (reuseable) fairing for SpaceX.
Yeah, it’s definitely interesting to watch Neutron and Starship being developed in parallel, and the different approaches they take to addressing the shortcomings of the Falcon 9.
On the subject of Starship (not a criticism of your post), one of the biggest criticisms of Rocket Lab that I see is the claim that Starship will “make them obsolete”. I disagree, since the Neutron is clearly designed to operate as a viable product in a world where Starship also exists, and nobody wants SpaceX to establish a monopoly. Not the government, not the military, not SpaceX’s commercial partners and competitors, and not even SpaceX want a SpaceX monopoly.
Also, it’s worth noting that Neutron was designed with the goal of being able to efficiently and profitably deliver 98% of possible satellites to orbit over the next decade, while Starship was designed to establish a self-sustaining city of human beings living on Mars. In other words, the design of the Neutron is purely profit motivated, while Starship is not. That being said, I still expect Starship to be more profitable than Neutron—it’s just not optimized for profit in the way that Neutron is.
Although this may come off as stating the obvious, Peter Beck has been asked directly about Starship on multiple occasions, and he has clearly stated that Neutron is being designed with the Starship in mind as a key competitor, and that he believes Neutron will be “highly competitive (https://arstechnica.com/science/2021/12/rocket-labs-next-booster-is-stubby-reusable-and-has-a-bond-movie-fairing/)”.
You don't go through all of the pain of developing a launch vehicle if you don't think you're going to be competitive with what's currently in the market today, and what's planned for the future. We think we're going to be highly competitive.
BTW, the market is down today. Could be a good time to pick up some shares of RKLB if you have some cash laying around!
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As you stated, Falcon 9 can only perform RTLS under very specific conditions—i.e. certain sizes of payloads and certain orbits. Neutron, on the other hand has been specifically designed to be capable of launching “98% of all satellites forecast to launch through 2029 (https://www.rocketlabusa.com/updates/rocket-lab-unveils-plans-for-new-8-ton-class-reusable-rocket-for-mega-constellation-deployment/)” while also being exclusively RTLS. So what Rocket Lab is saying is that Neutron is designed to be capable of delivering 98% of all possible satellites in RTLS configuration. The Falcon 9 cannot do this. I’m not sure what percentage of payloads it can handle in RTLS configuration, but it must be much less than 98%.
That's a bit misleading though. They are talking about the percentage of satellites rather than the percentage of launches. The vast majority of satellites forecast to launch between now and 2029 are starlink or similar large constellations of satellites planning to go up aggregated into a smaller number of rocket launches. So a single 400 starlink satellites scheduled to go up in one starship launch skews the average a LOT rather than being treated as a single datapoint.
Falcon 9 can throw about 11,000-12,000 kg to LEO in a RTLS mission*. It sounds like RL is targeting 8,000 kg to LEO for Neutron if they're aiming for reuse.
*Edit: Looking at some different numbers I found another (older) estimate that the more appropriate comparison to Neutron might be 9,500 kg to LEO for a Falcon 9 with RTLS.
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That's a bit misleading though. They are talking about the percentage of satellites rather than the percentage of launches. The vast majority of satellites forecast to launch between now and 2029 are starlink or similar large constellations of satellites planning to go up aggregated into a smaller number of rocket launches. So a single 400 starlink satellites scheduled to go up in one starship launch skews the average a LOT rather than being treated as a single datapoint.
That’s a good point. I don’t think that Neutron will be a cost-effective way to launch a massive constellation of tens of thousands of relatively large satellites like Starlink. However, it may be a great way to maintain such constellations over time when specific satellites need to be replaced. If you just need to replace a few satellites, why commission an entire Starship?
That being said, most commercial constellations do not seem to be as large as Starlink and the handful of other proposed global satellite internet constellations. Also, their satellites are smaller. For example, the well known Earth imaging company BlackSky plans to operate a constellation of only 60 satellites (https://spacenews.com/blacksky-launching-two-satellites-on-june-starlink-mission/) in the long term. This is all they think they need to get full coverage of the Earth’s surface. Spire Global, another similar company, operates a fleet of about 110 satellites (https://en.m.wikipedia.org/wiki/Spire_Global), and these are tiny CubeSats the size of a loaf of bread.
Furthermore, as I mentioned in a previous post (https://forum.mrmoneymustache.com/investor-alley/rocket-lab/msg2902437/#msg2902437), there are a lot of smaller space companies who are trying to build out constellations of tens to hundreds of satellites. The long list of satellite constellation companies I mentioned in that post is just scratching the surface. What we have is a lot of different companies launching a lot of different small constellations to a lot of different orbits on a lot of different schedules. All of these constellations will need to be maintained in a piecemeal fashion over time, even the huge ones like Starlink. Finally, satellites are going to get smaller over time, not larger.
In conclusion, given the above I think there is plenty of market for smaller launch vehicles like Neutron. Some things just can’t be done all at once in bulk.
Falcon 9 can throw about 11,000-12,000 kg to LEO in a RTLS mission*. It sounds like RL is targeting 8,000 kg to LEO for Neutron if they're aiming for reuse.
*Edit: Looking at some different numbers I found another (older) estimate that the more appropriate comparison to Neutron might be 9,500 kg to LEO for a Falcon 9 with RTLS.
Also a good point. On paper, Falcon 9’s RTLS capability seems on par with Neutron. But Falcon 9 is less reusable and will require more refurbishment on its reusable components than Neutron. In practice, though, I just don’t see many Falcon 9 RTLS missions. Maybe it is because they are prioritizing bulk launches like Starlink where RTLS isn’t an option?
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Yeah, it’s definitely interesting to watch Neutron and Starship being developed in parallel, and the different approaches they take to addressing the shortcomings of the Falcon 9.
On the subject of Starship (not a criticism of your post), one of the biggest criticisms of Rocket Lab that I see is the claim that Starship will “make them obsolete”. I disagree, since the Neutron is clearly designed to operate as a viable product in a world where Starship also exists, and nobody wants SpaceX to establish a monopoly. Not the government, not the military, not SpaceX’s commercial partners and competitors, and not even SpaceX want a SpaceX monopoly.
Also, it’s worth noting that Neutron was designed with the goal of being able to efficiently and profitably deliver 98% of possible satellites to orbit over the next decade, while Starship was designed to establish a self-sustaining city of human beings living on Mars. In other words, the design of the Neutron is purely profit motivated, while Starship is not. That being said, I still expect Starship to be more profitable than Neutron—it’s just not optimized for profit in the way that Neutron is.
Although this may come off as stating the obvious, Peter Beck has been asked directly about Starship on multiple occasions, and he has clearly stated that Neutron is being designed with the Starship in mind as a key competitor, and that he believes Neutron will be “highly competitive (https://arstechnica.com/science/2021/12/rocket-labs-next-booster-is-stubby-reusable-and-has-a-bond-movie-fairing/)”.
Just saw the edit.
Yeah, and appreciate your understanding that I'm not arguing Neutron won't be cost competitive or that RL should just fold up shop because of Starship being developed. It sounds like they are optimizing for cost pretty ruthlessly and, assuming the rocket ends up working as planned, I think they'll certainly be able Falcon 9 at the lower end of its range (missions it currently completes using RTLS mission profiles) by having a lower cost per launch and make a lot of money doing reliable custom launches for smaller payloads even in a world where starship/superheavy works out and is regularly launching as well.
At the same time I think RL (like all companies) often puts a lot of spin on their comparisons to make things sound even rosier than they really are, and one way they do that is when they emphasize comparisons to Falcon 9, which is a generation older than Neutron, or the 98% of planned satellites number as discussed above.
That's a bit misleading though. They are talking about the percentage of satellites rather than the percentage of launches. The vast majority of satellites forecast to launch between now and 2029 are starlink or similar large constellations of satellites planning to go up aggregated into a smaller number of rocket launches. So a single 400 starlink satellites scheduled to go up in one starship launch skews the average a LOT rather than being treated as a single datapoint.
Falcon 9 can throw about 11,000-12,000 kg to LEO in a RTLS mission. It sounds like RL is targeting 8,000 kg to LEO for Neutron if they're aiming for reuse.
That’s a good point. I don’t think that Neutron will be a cost-effective way to launch a massive constellation of tens of thousands of relatively large satellites like Starlink. However, it may be a great way to maintain such constellations over time when specific satellites need to be replaced. If you just need to replace a few satellites, why commission an entire Starship?
That being said, most commercial constellations do not seem to be as large as Starlink and the handful of other proposed global satellite internet constellations. Also, their satellites are smaller. For example, the well known Earth imaging company BlackSky plans to operate a constellation of only 60 satellites (https://spacenews.com/blacksky-launching-two-satellites-on-june-starlink-mission/) in the long term. This is all they think they need to get full coverage of the Earth’s surface. Spire Global, another similar company, operates a fleet of about 110 satellites (https://en.m.wikipedia.org/wiki/Spire_Global), and these are tiny CubeSats the size of a loaf of bread.
Furthermore, as I mentioned in a previous post (https://forum.mrmoneymustache.com/investor-alley/rocket-lab/msg2902437/#msg2902437), there are a lot of smaller space companies who are trying to build out constellations of tens to hundreds of satellites. The long list of satellite constellation companies I mentioned in that post is just scratching the surface. What we have is a lot of different companies launching a lot of different small constellations to a lot of different orbits on a lot of different schedules. All of these constellations will need to be maintained in a piecemeal fashion over time, even the huge ones like Starlink. Finally, satellites are going to get smaller over time, not larger.
In conclusion, given the above I think there is plenty of market for smaller launch vehicles like Neutron. Some things just can’t be done all at once in bulk.
I agree with your bolded conclusion. The validity of a conclusion does not mean every argument in favor of that conclusion is valid. But I still disagree with putting "Eliminated the time, cost, and effort needed to catch the first stage on a barge in the ocean and bring it back to the launch pad." as a competitive advantage of Neutron.
Falcon 9 and Neutron can both land at their launch site and Falcon 9 can lift (modestly) more payload to orbit while doing so. It's not inherently a disadvantage of Falcon 9 that, in addition to doing the same things as Neutron, it can also do other things that Neutron cannot.
I also would be interested in your reasoning for the statement that satellites are going to get smaller over time rather than larger. Right now satellites cost a lot more than their launch vehicles in part because of the extreme cost pressure to minimize weight using exotic materials and custom fabrication. As the cost of launch decreases, it may become possible to build much cheaper satellites using less exotic materials and off the shelf parts. Ars Technica has a great discussion about this in the context of planetary missions. Do I know that satellites are going to get bigger over time? No. But I'm also not comfortable confidently asserting that they are necessarily going to get smaller.
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I also would be interested in your reasoning for the statement that satellites are going to get smaller over time rather than larger. Right now satellites cost a lot more than their launch vehicles in part because of the extreme cost pressure to minimize weight using exotic materials and custom fabrication. As the cost of launch decreases, it may become possible to build much cheaper satellites using less exotic materials and off the shelf parts. Ars Technica has a great discussion about this in the context of planetary missions. Do I know that satellites are going to get bigger over time? No. But I'm also not comfortable confidently asserting that they are necessarily going to get smaller.
I figure it's just common sense. Satellites are getting smaller and cheaper for the same reason that computers that once filled an entire room can now fit in your pocket. Being smaller doesn't necessarily mean exotic materials, it means cheaper materials, cheaper logistics, easier to build, and less power consumption. One prime example (https://www.techradar.com/news/the-future-of-leading-edge-chips-according-to-tsmc-5nm-4nm-3nm-and-beyond) is how greater miniaturization in semiconductors leads to less power consumption and less heat generation, both of which are very important for satellites.
In fact, satellites have a lot in common with smartphones! A satellite is just a computer floating in space, connected to an onboard power supply, usually with the ability to transmit and receive radio signals, and usually with various sensors such as cameras. Smartphones possess all of these same characteristics! You could literally place a smartphone in orbit and it could function as a crude satellite. It wouldn't make economic sense to build gigantic smartphones, and the same applies to satellites. Large satellites used to cost millions or even billions of dollars each. Tiny CubeSats cost mere thousands of dollars each (https://www.space.com/34324-cubesats.html)!
Here's another related article:
https://westeastspace.com/2020/04/02/satellites-are-getting-smaller-hubble-size-to-starlink-and-smaller/
Could you share the article from Ars Technica where they mentioned satellites getting bigger?
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A few juicy tidbits I found on the web today!
Some people on NASASpaceFlight are pointing out (https://forum.nasaspaceflight.com/index.php?topic=53194.msg2316736#msg2316736) that Rocket Lab's Archimedes (https://en.wikipedia.org/wiki/Archimedes_(rocket_engine)) engine is remarkably similar on paper to the European Space Agency's Prometheus (https://en.wikipedia.org/wiki/Prometheus_(rocket_engine)) engine:
Anyone else find it interesting that the "Archimedes" engine description matches exactly the ESA/Arianegroup "Prometheus" specifications?
Who else has a 1000kN Methalox engine with 320s ISP, air re-startable, reusable , etc. read to fly in 2024?
it is interesting if they struck a deal to use Prometheus, & it is also interesting if they develop their own and beat slow moving ESA/Ariane to a re-usable vehicle.
Even the names of the engines are similar! Could there be a potential for collaboration? At this point, who knows--but it sure is interesting!
In other news, Auckland, New Zealand, where Rocket Lab's Electron program is currently based, just reached 90% of the population fully vaccinated (https://www.rnz.co.nz/news/national/457128/covid-19-ninety-percent-of-eligible-population-in-auckland-now-fully-vaccinated)! Some parts of the city have reached 97% of eligible people receiving their first dose. These vaccination rates are unheard of in the United States and most of Europe, and this is a very encouraging sign that New Zealand will be back open for business soon. My fingers are crossed in hoping for less covid-related delays in the Electron program! Nevertheless, the sooner we can get that United States Electron launch pad up and running, the better!
I'll leave you guys with a collection of news articles about the Neutron. It received pretty broad news coverage, especially in the financial media:
https://spacenews.com/rocket-lab-updates-neutron-design/
https://arstechnica.com/science/2021/12/rocket-labs-next-booster-is-stubby-reusable-and-has-a-bond-movie-fairing/
https://techcrunch.com/2021/12/02/rocket-lab-reimagines-rocket-design-with-its-neutron-launch-vehicle/
https://www.cnbc.com/2021/12/02/rocket-lab-reusable-neutron-rocket-update-competing-with-spacex.html
https://www.barrons.com/articles/rocket-lab-stock-new-rocket-neutron-51638483698
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In recent news, Rocket Lab just signed a three-launch contract with Synspective to launch their Earth imaging satellites:
https://www.rocketlabusa.com/updates/rocket-lab-to-launch-three-dedicated-electron-missions-for-earth-imaging-company-synspective/
Synspective is yet another Earth imaging startup who plans to operate a small constellation of about 30 satellites. This multi-launch contract comes on the heels of several other multi-launch contracts announced earlier this year: a five-launch contract for BlackSky (https://www.rocketlabusa.com/updates/rocket-lab-inks-deal-to-launch-five-missions-for-blacksky-constellation/) and a five-launch contract for Kinéis (https://www.rocketlabusa.com/updates/rocket-lab-lands-multi-launch-deal-to-deploy-entire-iot-satellite-constellation-for-kineis/). In the case of Kinéis, Rocket Lab will be launching their entire constellation of 25 satellites.
It is great news that Rocket Lab continues to get not just more contracts, but more multi-launch contracts. This is a sign of the strength of Rocket Lab's economics, if customers thought they could get better deals from Falcon 9 rideshares they would not be booking these multi-launch contracts with Rocket Lab. It also shows Rocket Lab's strength in launching multiple small constellations of small satellites for a variety of customers operating on different timetables.
This is something that Rocket Lab is uniquely situated for compared to say, Starship, because even launching the entirety of one of these small constellations would vastly underutilize the capacity of a single Starship. The only way that Starship works in this scenario would be rideshare plus space tugs to deploy the satellites to their different orbits, which introduces additional costs from the space tugs as well as massive scheduling delays from having to rideshare with a bunch of other companies. It turns out that the bottleneck in scheduling satellite launches tends to be with the customer getting their payload ready, not with the readiness of the launch vehicle--so the more customers are ridesharing, the more the delay in scheduling. Rocket Lab is well-positioned here with their ability to deliver small payloads directly to just the right orbits at a competitive cost, plus they are also building out Photon into its own space tug / satellite bus. I wouldn't be surprised to see Photons being launched on a Starship in the future--after all, we are already seeing Photons getting launched by Falcon 9 (https://techcrunch.com/2021/10/11/varda-space-industries-will-send-its-first-space-factory-to-orbit-on-a-spacex-falcon-9-rocket/)!
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I didn't really digest the details of the Neutron, but it's an interesting way to attempt to minimize second stage mass and maximize reusability. In general, mass hurts the most on the second stage, so that makes sense. However, I'm not buying the structural argument, because if the second stage needs to hold itself up under thrust, it needs the same structure that makes it able to sustain thrust loads under first stage ascent, too. The exception is if the second stage engine has less thrust/weight than the first stage, so acceleration is higher during first stage. The F9 second stage is very overpowered compared to what you see in many other designs (driven by having a common engine design with the first stage), so it reaches 5G during S2just like S1. If you look at e.g. Ariane or Atlas, I think you see a lot lower accelerations during second stage. I have no idea whether the Neutron falls into this category as well.
As for carbon fiber, it sounds great in theory, but manufacture is a lot more complicated than metals. That, in combination with Elon wanting to build thousands of starships, and reentry heat considerations, makes the choice of 304SS for Starship reasonable. The neutron stage two isn't reentering from orbit and won't be doing so (SpaceX explored that for the F9 S2 and it's too hard, adding the necessary structures makes it too heavy. Hence the fundamentally different design for Starship. Dragon can reenter on its ass because it doesn't have any engines there, an ascent vehicle can't.) I guess we'll see how long it takes RL to iron out the issues with carbon fiber.
My final thought is that you can't really compare the performance of a rocket on the drawing board, like Neutron, to a mature rocket like the F9. Compare the flying Falcon Heavy to what was talked about back in 2011. You discover a lot when you actually try to build something.
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Rocket Lab just completed another successful mission (https://www.space.com/rocket-lab-blacksky-satellites-launch-success-december-2021) today. They are making this look easy!
I didn't really digest the details of the Neutron, but it's an interesting way to attempt to minimize second stage mass and maximize reusability. In general, mass hurts the most on the second stage, so that makes sense. However, I'm not buying the structural argument, because if the second stage needs to hold itself up under thrust, it needs the same structure that makes it able to sustain thrust loads under first stage ascent, too. The exception is if the second stage engine has less thrust/weight than the first stage, so acceleration is higher during first stage. The F9 second stage is very overpowered compared to what you see in many other designs (driven by having a common engine design with the first stage), so it reaches 5G during S2 just like S1. If you look at e.g. Ariane or Atlas, I think you see a lot lower accelerations during second stage. I have no idea whether the Neutron falls into this category as well.
Yeah, I guess the compressive forces during Neutron's second stage ascent must be smaller than what they would have been during first stage ascent if the second stage was stacked on top of the first stage like a normal rocket. Otherwise Rocket Lab's argument about the benefits of utilizing tensile structures in the second stage during first stage ascent would not make sense. It seems that it would be really easy to figure this out, all you would need to do is calculate the G forces during first and second stage ascent and compare them to each other. Since Rocket Lab wants to minimize the second stage as much as possible, I would guess that the first stage is doing most of the heavy lifting and heavy acceleration.
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Rocket Lab just completed another successful mission (https://www.space.com/rocket-lab-blacksky-satellites-launch-success-december-2021) today. They are making this look easy!
I didn't really digest the details of the Neutron, but it's an interesting way to attempt to minimize second stage mass and maximize reusability. In general, mass hurts the most on the second stage, so that makes sense. However, I'm not buying the structural argument, because if the second stage needs to hold itself up under thrust, it needs the same structure that makes it able to sustain thrust loads under first stage ascent, too. The exception is if the second stage engine has less thrust/weight than the first stage, so acceleration is higher during first stage. The F9 second stage is very overpowered compared to what you see in many other designs (driven by having a common engine design with the first stage), so it reaches 5G during S2 just like S1. If you look at e.g. Ariane or Atlas, I think you see a lot lower accelerations during second stage. I have no idea whether the Neutron falls into this category as well.
Yeah, I guess the compressive forces during Neutron's second stage ascent must be smaller than what they would have been during first stage ascent if the second stage was stacked on top of the first stage like a normal rocket. Otherwise Rocket Lab's argument about the benefits of utilizing tensile structures in the second stage during first stage ascent would not make sense. It seems that it would be really easy to figure this out, all you would need to do is calculate the G forces during first and second stage ascent and compare them to each other. Since Rocket Lab wants to minimize the second stage as much as possible, I would guess that the first stage is doing most of the heavy lifting and heavy acceleration.
Conventional wisdom is that you want high thrust/weight for the first stage (to minimize gravity losses) and high ISP for the second (to maximize delta-v per mass). However, it seems Neutron will use 7 Archimedes engines on S1 and 1 vacuum-optimized Archimedes on S2, so the thrust ratio is 6.8 as opposed to 8.1 for F9. This would not seem to indicate that the Neutron second stage is accelerating less than the F9, certainly not if they also are trying to make the second stage very light. Something doesn't seem to add up.
I meant to comment on the RTLS discussion, too. Here, there's also no free lunch. The delta-V you need to RTLS comes directly out of your mass to orbit. If you can do X and RTLS, you can do >X if you land downrange, that's just physics. The comparative cost of RTLS, though, depends on what fraction of delta-V is done by the first and second stages. The F9, with a comparatively low-ISP second stage, gets more of its delta-V from the first stage than, say, an Atlas/Centaur with a super-high ISP RL10 upper stage engine. This makes RTLS for F9 costlier than it would be for other systems where the first stage is going slower at stage sep. A methalox engine has a bit higher ISP than the Merlin, so it makes sense that RTLS would be a slightly better option for a launch vehicle that uses a methalox upper stage. I don't know offhand how much difference that would be though.
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I didn't really digest the details of the Neutron, but it's an interesting way to attempt to minimize second stage mass and maximize reusability. In general, mass hurts the most on the second stage, so that makes sense. However, I'm not buying the structural argument, because if the second stage needs to hold itself up under thrust, it needs the same structure that makes it able to sustain thrust loads under first stage ascent, too. The exception is if the second stage engine has less thrust/weight than the first stage, so acceleration is higher during first stage.
Thrust loads aren't the only ones to be concerned about.
This arrangement means the second stage has no direct aerodynamic loads. ie - withstanding going supersonic, Max Q and such.
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New news! Yesterday, Rocket Lab has announced (https://www.businesswire.com/news/home/20211213005915/en/Rocket-Lab-to-Acquire-SolAero-Holdings-Inc.-a-Global-Leader-in-Space-Solar-Power-Products) they are buying SolAero, operator of the world’s largest production line of space solar cells. Notably, this acquisition adds 425 employees, bringing Rocket Lab to approximately 1,100 employees in total. In comparison, SpaceX has about 10,000 employees, Blue Origin has about 4,000, Maxar has about 4,400, and Astra has about 300. I'm curious to see what sort of things Rocket Lab will be able to achieve once they hit 4,000 employees--probably more than what Blue Origin is currently achieving!
This is the fourth company that Rocket Lab has acquired:
- Sinclair Interplanetary (https://www.rocketlabusa.com/updates/rocket-lab-closes-acquisition-of-satellite-hardware-manufacturer-sinclair-interplanetary/): Satellite and spacecraft hardware, including reaction wheels and star trackers
- Advanced Solutions (https://www.businesswire.com/news/home/20211012005509/en/Rocket-Lab-Acquires-Space-Software-Company-Advanced-Solutions-Inc): Flight software for spacecraft, including guidance, navigation and control (GNC) offerings, as well as mission simulation and test software
- Planetary Systems (https://www.businesswire.com/news/home/20211202005345/en/Rocket-Lab-Acquires-Space-Hardware-Company-Planetary-Systems-Corporation): Mechanical spacecraft separation systems and satellite dispensers
- SolAero (https://www.businesswire.com/news/home/20211213005915/en/Rocket-Lab-to-Acquire-SolAero-Holdings-Inc.-a-Global-Leader-in-Space-Solar-Power-Products): Space solar panels
From this series of acquisitions, you can see that Rocket Lab is dead serious about manufacturing satellites and spacecraft at volume. They are going to be one of only a handful of companies on the planet capable of building, launching, and operating their own megaconstellation of satellites, as well as being able to offer a comprehensive, modular satellite bus platform to other constellation builders.
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I keep forgetting how small they are. Considering what they've already been able to do, it's amazing to think about all they'll soon be able to accomplish if they can keep the momentum going!
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In related news, a space startup by the name of Stoke Space has a design for what looks like an "Electron Killer":
https://spacenews.com/stoke-space-raises-65-million-for-reusable-launch-vehicle-development/
This Twitter post (https://twitter.com/jenekuns/status/1457849962692165635) has some interesting information. Stoke Space's design is for a fully-reusable rocket which can lift 1,650 kg to LEO for under $500,000!
Stoke Space has just 29 employees, many of which are from Blue Origin and SpaceX. They are based in Kent, Washington, which is also where Blue Origin is based. The design of their rocket seems to be an evolution of New Shepherd, which doesn't come as a surprise given the Blue Origin heritage. Their rocket has a methalox first stage and a hydrolox second stage. The second stage is fully reusable, with integrated fairings like the Neutron, plus a heat shield on the bottom with aerospike engines incorporated into it. Very interesting! I wonder if companies like Rocket Lab could copy this design for their own reusable second stages if it works out?
They plan to focus on building their second stage first, and have a prototype second stage doing "hop" flight tests in late 2022. This puts their first commercial flight many years out, but the specifications of their rocket are very promising! Since they are developing the second stage first, I wonder if this means that they can launch it on someone else's rocket?
As you can see, Stoke Space blows everyone else in this table out of the water--but these specifications are presumably very optimistic and just on paper for the foreseeable future:
Comparison of Small Satellite Launchers
Payload to LEO Cost per launch Reusable? Launch site flexibility? Operational?
NG Pegasus 443kg $40MM N Y Y (1990)
Rocket Lab 300kg $5-6MM Partially N Y (2018)
Virgin Orbit 500kg $12MM N Y Y (2021)
Astra 50kg $2.5MM N Y Y (2021)
ABL Space Systems 1,350kg $12MM N Y N (2022?)
Relativity Space 1,250kg $12MM N N N (2022?)
Firefly Aerospace 1,000kg $15MM N N N (2022?)
Stoke Space 1,650kg $413K Fully ? N (2024+?)
That being said, these numbers from Stoke Space really make it apparent that the writing is on the wall for non-reusable rocket designs. Space companies need to aim their new products to where the industry is headed, not where the industry is at. Any company building a new rocket that is merely on par with what is existing today will deliver their product dead on arrival. This is why I am very skeptical of companies like ABL and Firefly, who’s upcoming rockets look like they will become obsolete almost from day one. Finally, all of this shows just how risky it is to develop a new product in this industry—companies have to develop for where they think the industry is headed, amidst strong competition from other players and an ultimate uncertainty as to where the industry is actually headed.
Anybody who's not developing a reusable launch vehicle at this point in time is developing a dead-end product because it's just so obvious.
If you are interested in learning more, here is a good interview with Stoke Space's co-founder:
https://www.youtube.com/watch?v=OCsnOmQRigc
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Aerospike engines! They are playing on expert mode :-) But maybe they would have to be to enter the game now. Has anyone ever launched anything with an aerospike? Am 100% behind the tech, its one of those things that should have (continued to have) govt funded to make practical.
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Aerospike engines! They are playing on expert mode :-) But maybe they would have to be to enter the game now. Has anyone ever launched anything with an aerospike? Am 100% behind the tech, its one of those things that should have (continued to have) govt funded to make practical.
To my knowledge, there has never been an operational launch vehicle with an aerospike engine. Perhaps Stoke Space could be the first to build one? In this case, it looks like Stoke Space selected an aerospike design not because of any performance benefits, but because they needed an engine which could be seamlessly integrated into their heat shield. Anyway, I'm excited to see where that company goes, and as Rocket Lab investors we need to keep a close eye on what the competition is up to!
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Today, Peter Beck did a pair of interviews on Youtube! There's almost two and a half hours of content here, and much is duplicated between the two interviews, but it's definitely worth it to listen to at least one of these!
Peter Beck Interview with Everyday Astronaut (https://www.youtube.com/watch?v=gcuOSXjevGs)
Peter Beck Interview with NASASpaceflight (https://www.youtube.com/watch?v=wNx4tpiyUAM)
I think these interviews show how dedicated Peter Beck is to getting more people excited about his company, and also how deeply knowledgeable he is about his company's technology. He went really deep into the weeds with some of the technical questions they were asking! This is definitely the kind of CEO that I want running a technology company that I am invested in.
I meant to comment on the RTLS discussion, too. Here, there's also no free lunch. The delta-V you need to RTLS comes directly out of your mass to orbit. If you can do X and RTLS, you can do >X if you land downrange, that's just physics. The comparative cost of RTLS, though, depends on what fraction of delta-V is done by the first and second stages. The F9, with a comparatively low-ISP second stage, gets more of its delta-V from the first stage than, say, an Atlas/Centaur with a super-high ISP RL10 upper stage engine. This makes RTLS for F9 costlier than it would be for other systems where the first stage is going slower at stage sep. A methalox engine has a bit higher ISP than the Merlin, so it makes sense that RTLS would be a slightly better option for a launch vehicle that uses a methalox upper stage. I don't know offhand how much difference that would be though.
Peter Beck shared some information that is relevant to this discussion. Check out this section (https://www.youtube.com/watch?v=gcuOSXjevGs&t=1404s) of the Everyday Astronaut interview from 23:24 to 26:00. Peter Beck says that the design of the Neutron lends itself to RTLS due to the extremely low mass of the launch vehicle. Because of its wide shape and low mass, Neutron has a favorable ballistic coefficient which allows the atmosphere to do more work during reentry and hence save a lot of fuel by negating the need for an entry burn like the Falcon 9 needs to do to slow itself down during reentry.
In other words, the Falcon 9 must do three burns (https://www.thespacetechie.com/re-entry-burns-of-falcon-9/) on its way back to the landing site: a boostback burn to send itself on a trajectory to the landing site, an entry burn to slow itself down before hitting the atmosphere, and a landing burn to land. In comparison, because of its unique design, the Neutron only needs to do two burns: the boostback burn and the landing burn!
How do these details impact your analysis of Neutron vs Falcon 9 RTLS efficiency?
Edit: Peter Beck also talks about this topic in his interview (https://www.youtube.com/watch?v=bVjYHLQtJUE&t=448s) with Scott Manley. 7:28 - 9:05.
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Another Peter Beck interview about Neutron! He is really pulling out all of the stops with this YouTube interview campaign!
Peter Beck Interview with Scott Manley (https://www.youtube.com/watch?v=bVjYHLQtJUE)
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Not much news this week, RKLB stock price is taking a serious beating. However, various institutions seem to like the stock.
Last week (https://www.benzinga.com/news/21/12/24721967/space-etf-adds-8-new-companies-including-7-that-completed-spac-mergers-what-investors-should-know), the UFO space ETF acquired 419,139 shares of RKLB worth about $5MM, accounting for 4.59% of their overall portfolio (https://procureetfs.com/ufo/).
A mutual fund called Riverpark Funds Trust just bought (https://finance.yahoo.com/news/riverpark-funds-trust-buys-parabellum-073807472.html) 127,212 shares of RKLB, for 5% of their overall portfolio.
Harvard University holds (https://www.insidermonkey.com/blog/harvard-university-stock-portfolio-5-latest-stock-picks-1016047/) about one million shares of RKLB, accounting for 0.94% of their 13F portfolio. It is not clear when they started this position, but it seems to have been in the second half of 2021.
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Harvard University holds (https://www.insidermonkey.com/blog/harvard-university-stock-portfolio-5-latest-stock-picks-1016047/) about one million shares of RKLB, accounting for 0.94% of their overall portfolio. It is not clear when they started this position, but it seems to have been in the second half of 2021.
Sorry to jump in here again, but this stat smelled off enough that I started running some back of the envelop numbers.
One million shares of rocketlab is worth $11M at current market prices. If $11M is equal to ~1% of Harvard's portfolio that would mean Harvard University's total portfolio had a value of about $1.1B (11M/.01). However we know that Harvard University's endowment portfolio is actually valued at $53B (https://en.wikipedia.org/wiki/Harvard_University_endowment) so something is very off with the article you are quoting.
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Sorry to jump in here again, but this stat smelled off enough that I started running some back of the envelop numbers.
One million shares of rocketlab is worth $11M at current market prices. If $11M is equal to ~1% of Harvard's portfolio that would mean Harvard University's total portfolio had a value of about $1.1B (11M/.01). However we know that Harvard University's endowment portfolio is actually valued at $53B (https://en.wikipedia.org/wiki/Harvard_University_endowment) so something is very off with the article you are quoting.
Turns out that those figures are just for the companies included in Harvard Management Company's latest 13F filing. As of 9/30/2021, Harvard Management Company reported that they had initiated a position (https://www.holdingschannel.com/13f/harvard-management-co-inc-top-holdings/) of 1,000,000 shares of RKLB. The report was filed (https://fintel.io/i13fs/harvard-management) on 11/12/2021 and contains data up to 9/30/2021.
At the time of filing, Harvard Management Company's 13F portfolio was worth $1,706,340,000 (https://whalewisdom.com/filer/harvard-management-co-inc#tabholdings_tab_link), and the Rocket Lab stake was worth $16.13MM, or 0.945% of the overall holdings.
So apparently, Harvard's $1.7B 13F portfolio is only a small subset of their overall portfolio of over $50B. As to the distinction between these two portfolios, I am not sure. It's still a big position in RKLB though!
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Sorry to jump in here again, but this stat smelled off enough that I started running some back of the envelop numbers.
One million shares of rocketlab is worth $11M at current market prices. If $11M is equal to ~1% of Harvard's portfolio that would mean Harvard University's total portfolio had a value of about $1.1B (11M/.01). However we know that Harvard University's endowment portfolio is actually valued at $53B (https://en.wikipedia.org/wiki/Harvard_University_endowment) so something is very off with the article you are quoting.
Turns out that those figures are just for the companies included in Harvard Management Company's latest 13F filing. As of 9/30/2021, Harvard Management Company reported that they had initiated a position (https://www.holdingschannel.com/13f/harvard-management-co-inc-top-holdings/) of 1,000,000 shares of RKLB. The report was filed (https://fintel.io/i13fs/harvard-management) on 11/12/2021 and contains data up to 9/30/2021.
At the time of filing, Harvard Management Company's 13F portfolio was worth $1,706,340,000 (https://whalewisdom.com/filer/harvard-management-co-inc#tabholdings_tab_link), and the Rocket Lab stake was worth $16.13MM, or 0.945% of the overall holdings.
So apparently, Harvard's $1.7B 13F portfolio is only a small subset of their overall portfolio of over $50B. As to the distinction between these two portfolios, I am not sure. It's still a big position in RKLB though!
That makes sense.
RKLB's valuation today is about 5.27B. So Harvard's stake is about .3% of market cap. A good example of institutional support, I guess?
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Bad news for Astra today! Kerrisdale Capital published (https://investorplace.com/2021/12/astr-stock-alert-9-things-to-know-about-the-short-report-hitting-astra-space/) a short report (https://www.kerrisdalecap.com/wp-content/uploads/2021/12/Astra-Space-Inc.-ASTR.pdf) today which paints a pretty damning picture of the company. To summarize, they say that launch demand simply isn't large enough for Astra to launch as many rockets as they claim. This jeopardizes Astra's entire business model, which only works if they can mass produce rockets and launch them at an extremely rapid cadence. Furthermore, they believe that Astra's plans to launch a constellation of satellites are half-baked, as the company has no credible ability to actually build satellites, let alone at scale, and the acquisition of Apollo Fusion doesn't make much sense.
None of the information in that report is really new information. They say a lot of the same negative things that I've personally been saying about the company, which is why I sold off half of my Astra holdings and moved them into Rocket Lab after the Neutron announcement. Now I just need to decide when and if I should dump the other half of my shares.
See here (https://www.reddit.com/r/ASTR/comments/rgs3a3/interesting_analysis_of_the_addressable_small/) for another insightful topic on how companies like Virgin Orbit and Astra are painting an overly optimistic, perhaps even delusional picture of how they can grow their launch revenue over the next 5-10 years in their investor presentations. Rocket Lab also has optimistic projections for launch revenue, but their projections are less optimistic than Virgin Orbit and Astra. Most importantly, Rocket Lab acknowledges that launch is not where the real revenue is in the space industry, and are making very credible moves to diversify their business away from launch and into space systems and space services.
Here is a quick comparison of the investor presentations for Rocket Lab (https://www.rocketlabusa.com/assets/Rocket-Lab-Investor-Presentation.pdf), Astra (https://astra.com/wp-content/uploads/2021/02/Astra-Investor-Presentation.pdf), and Virgin Orbit (https://virginorbit.com/wp-content/uploads/2021/08/Investor-Presentation.pdf):
Rocket Lab Revenue Projections
2021: $69MM ($49MM launch, $20MM space systems)
2022: $176MM ($115MM launch, $61MM space systems)
2023: $267MM ($141MM launch, $126MM space systems)
2024: $450MM ($232MM launch, $218MM space systems)
2025: $749MM ($399MM launch, $350MM space systems)
Astra Revenue Projections
2021: $4MM ($4MM launch, $0MM space systems, 3 launches)
2022: $67MM ($47MM launch, $21MM space systems, 15 launches)
2023: $256MM ($206MM launch, $49MM space systems, 55 launches)
2024: $780MM ($619MM launch, $161MM space systems, 165 launches)
2025: $1.501B ($1.125B launch, $376MM space systems, 300 launches)
Virgin Orbit Revenue Projections
2021: $15MM ($15MM launch, $0MM space systems)
2022: $70MM ($70MM launch, $0MM space systems)
2023: $331MM ($321MM launch, $10MM space systems)
2024: $914MM ($765MM launch, $148MM space systems)
2025: $1.554B ($1.24B launch, $314MM space systems)
As you can see, Astra and Virgin Orbit both claim that they can achieve triple the launch revenue and double the overall revenue of Rocket Lab in 2025. They also claim to be able to match Rocket Lab's space systems revenue by 2025 despite having no current space systems business and no clear plans to build one.
In my opinion, Rocket Lab's revenue projections are optimistic. Based on their Q3 earnings report, Rocket Lab has realized $34.8MM in 2021 revenue and is on track for a total of $58MM in revenue for the year--$11MM less than their original projections in the investor presentation. Astra and Virgin Orbit's revenue projections are downright delusional! Where on Earth is Astra going to find the demand to launch 55 rockets in 2023, let alone 165 in 2024 and 300 in 2025? Virgin Orbit is projecting nothing for space systems for years, until all of a sudden they will be on par with Rocket Lab in 2024? Nonsense! No wonder Peter Beck has such amusing body language (https://www.youtube.com/watch?v=_1LQWJJOpOg&t=93s) (1:33 - 2:07) when Chris Kemp is talking about Astra's history and future plans.
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watched only a fraction of the video (I read faster than I can view, rarely watch whole vids) - would love to know timecode of body language :)
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watched only a fraction of the video (I read faster than I can view, rarely watch whole vids) - would love to know timecode of body language :)
Added the timecode. My video link pointed to the relevant part of the video, but I guess that isn't obvious. Peter Beck grins when Chris Kemp claims Astra only started four years ago (Ventions?), and he shakes his head when Kemp says Astra plans for daily launches and is working on an integrated satellite-spacecraft system.
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Oh! I walked right past it while multitasking, my bad. Thanks for the quick reply.
On the bright side, I ended up listening /partly watching to a lot of the vid and learned a lot. Good discussion.
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Glad you liked the video. If you want to watch another video, I would recommend listening to Peter Beck's interview (https://www.youtube.com/watch?v=bVjYHLQtJUE) with Scott Manley about Neutron. It's pretty informative, and shorter than the other Neutron videos.
Speaking of space systems, did you know that the James Webb Space Telescope uses Rocket Lab solar cells (https://twitter.com/RocketLab/status/1476379226697699328?s=20) in its solar panels? Well, technically they are SolAero solar cells, but same difference. It's the 1,002nd satellite to incorporate SolAero solar cells. I'm curious to see how much space systems revenue Rocket Lab can get from this line of business!
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Let's take another look at Rocket Lab's revenue projections:
Rocket Lab Revenue Projections
2021: $69MM ($49MM launch, $20MM space systems)
2022: $176MM ($115MM launch, $61MM space systems)
2023: $267MM ($141MM launch, $126MM space systems)
2024: $450MM ($232MM launch, $218MM space systems)
2025: $749MM ($399MM launch, $350MM space systems)
Astra Revenue Projections
2021: $4MM ($4MM launch, $0MM space systems, 3 launches)
2022: $67MM ($47MM launch, $21MM space systems, 15 launches)
2023: $256MM ($206MM launch, $49MM space systems, 55 launches)
2024: $780MM ($619MM launch, $161MM space systems, 165 launches)
2025: $1.501B ($1.125B launch, $376MM space systems, 300 launches)
Virgin Orbit Revenue Projections
2021: $15MM ($15MM launch, $0MM space systems)
2022: $70MM ($70MM launch, $0MM space systems)
2023: $331MM ($321MM launch, $10MM space systems)
2024: $914MM ($765MM launch, $148MM space systems)
2025: $1.554B ($1.24B launch, $314MM space systems)
One of the biggest ways that we will be able to measure the performance of these companies is if they can keep up with these revenue projections. As I mentioned in the previous post, Rocket Lab has realized $34.8MM in 2021 revenue and is on track for a total of $58MM in revenue for the year--$11MM less than their original projections in the investor presentation.
However, things look better for 2022. Yahoo Finance has average analyst 2022 revenue estimate at $209.33MM. That's actually higher than what Rocket Lab themselves put in their own projections. Also, Rocket Lab is adding a lot of additional revenue through acquisitions (https://www.reddit.com/r/RKLB/comments/rs6hj4/analyst_consensus_for_revenue_in_2022_is_188m_how/). SolAero alone could add another $80MM / year of revenue. That being said, the fact that Rocket Lab was able to buy them for just $80MM means SolAero must not be very profitable.
In any case, the odds look really good that Rocket Lab is going to be able to more than triple their revenue from 2021 to 2022! If we compare Astra's and Virgin Orbit's extremely optimistic revenue projections to that, we'll see that in 2022 they will still be far behind Rocket Lab in terms of revenue:
Rocket Lab Revenue Projections
2022: $176MM ($115MM launch, $61MM space systems)
2023: $267MM ($141MM launch, $126MM space systems)
Astra Revenue Projections
2022: $67MM ($47MM launch, $21MM space systems, 15 launches)
2023: $256MM ($206MM launch, $49MM space systems, 55 launches)
Virgin Orbit Revenue Projections
2022: $70MM ($70MM launch, $0MM space systems)
2023: $331MM ($321MM launch, $10MM space systems)
But yet, somehow, they are planning on going from far behind Rocket Lab in 2022 to matching or surpassing them in 2023! And it's not just that, but they are estimating a much higher proportion of 2023 revenue from launch. How? Where is all this extra launch revenue in 2023 even coming from? And if all this 2023 launch demand does magically materialize, Rocket Lab should end up doing much better than they originally estimated, since they are relying much more on space systems to hit their revenue targets.
In conclusion, Rocket Lab seems to have a clear path to hitting their 2022 revenue projections, and their 2023 revenue projections are not massively higher than that--a 50% increase. In comparison, Astra and Virgin Orbit are projecting 282% and 373% revenue increases from 2022 to 2023, with the vast majority of that increase accounted for by launch. I strongly suspect that this launch revenue may simply never materialize, and Rocket Lab's revenue will remain far ahead of Astra and Virgin Orbit into 2023 and beyond. Rocket Lab is absolutely doing the right thing by focusing strongly on their space systems business rather than putting all of their eggs into the launch business.
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Rocket Lab just got a new $17 price target and "overweight" rating from Morgan Stanley! This is the lowest price target so far, but still high above the current price. Also, the $17 per share is the base case. Morgan Stanley's bull case is a whopping $40 per share!
https://seekingalpha.com/news/3787461-rocket-lab-usa-rallies-with-morgan-stanley-bullish-on-space-race-potential
The price targets are now:
09/09/2021, Canaccord Genuity, Price Target: $30 (https://www.benzinga.com/news/21/09/22863183/canaccord-genuity-initiates-coverage-on-rocket-lab-usa-with-buy-rating-announces-price-target-of-30)
09/13/2021, Cowen, Price Target: $18 (https://www.streetinsider.com/Analyst+Comments/UPDATE%3A+Cowen+Starts+Rocket+Lab+USA+%28RKLB%29+at+Market+Perform/18929647.html)
09/17/2021, Deutsche Bank, Price Target: $18 (https://markets.businessinsider.com/news/stocks/deutsche-bank-initiates-rocket-lab-usa-with-buy-sees-upside-of-17-1030807710)
09/30/2021, Stifel, Price Target: $22 (https://markets.businessinsider.com/news/stocks/stifel-initiates-rocket-lab-with-buy-rating---read-why-1030834613)
11/30/2021, Bank of America, Price Target: $20 (https://www.barrons.com/articles/rocket-lab-stock-buy-rating-51638287031)
01/12/2022, Morgan Stanley, Price Target: $17 (https://seekingalpha.com/news/3787461-rocket-lab-usa-rallies-with-morgan-stanley-bullish-on-space-race-potential)
You can also view a live summary of the analyst ratings here:
https://www.benzinga.com/quote/RKLB/analyst-ratings
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I'm pretty eager for that 10-k
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I took a loss for it, but I'm extremely glad I sold off my ASTR. I realize this may be a temporary dip as all of space is taking a bit of a hit right now, but I simply do not trust Chris to achieve any of the goals his company sets out. To date, they appear to have never hit a deadline.
As long as they keep stacking the deck, providing misleading presentations, and failing to make any progress on profitability, I don't see a reason to invest in to them. They are going to need more cash before they start generating revenue and I'm not planning on paying for more lies and mistakes.
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Tech stocks are getting clobbered these past few weeks, especially Rocket Lab and other space stocks. I still believe in Rocket Lab's business plan, nothing has really changed for the company.
Rocket Lab has announced the dates for their next two missions:
"Without Mission A Beat" (BlackSky) - Launch window opens 02/04/2022. (https://www.gisborneherald.co.nz/local-news/20220119/rocket-lab-sets-date-for-first-launch-of-the-year/)
CAPSTONE (NASA Moon mission) - No earlier than 03/19/2022. (https://twitter.com/thesheetztweetz/status/1483459571863760909)
The only thing that worries me is that Rocket Lab has failed to launch anything in January 2022. They really need to be launching at least once a month on average to meet their revenue targets. Hoping that they can make up for the shortfall later this year. That being said, these launch delays are due to problems with the customers, not with Rocket Lab. Rocket Lab has contracts signed and rockets ready, but customers just can't get their payloads together soon enough!
It turns out space is hard. ABL Space Systems, one of Rocket Lab's competitors, was supposed to attempt their first launch early last year (https://spacenews.com/abl-space-systems-tests-launch-vehicle-stage/) late last year (https://spacenews.com/abl-space-systems-to-launch-nasa-technology-demonstration-mission/) early this year, but now their rocket has exploded on the pad (https://spacenews.com/abl-space-systems-rocket-stage-destroyed-in-test-accident/). This probably means even further delays.
Astra's next launch attempt is currently scheduled (https://www.reddit.com/r/AstraSpace/comments/s1sfxg/lv0008_vcls_demo2a_launch_updates_and_discussion/) for this weekend from Cape Canaveral in Florida, although it will probably get delayed. Hoping it goes well for them!
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Well, put some of my "stupid money" in to RKLB, at $9.30. But as usual my problem is I'm too timid, so only put in a few thousand that I would be ok loosing. So even if it goes up 5-10x it's not really a life-changing amount of money. My 5x googl stocks gave me the gains to buy a gently used Kia! ;D. Maybe I'll consider adding more RKLB in the future.
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Welcome to the club. I think right now is a great buying opportunity for RKLB!
In somewhat recent news, Virgin Orbit, one of Rocket Lab's primary competitors, just had their third successful mission:
https://spacenews.com/virgin-orbit-launches-seven-cubesats-on-third-operational-mission/
However, things are not so rosy in the world of Virgin Orbit. Their SPAC was a disaster, raising less than half of the funds that they intended. They wanted to raise $483MM, instead they raised $228MM. This is because a massive amount of investors bailed on the SPAC, opting to get their $10/share back rather than own shares in the merged company. This is going to cause some significant financial pain for the company:
https://spacenews.com/virgin-orbit-raises-far-less-than-expected-from-spac-merger/
Perhaps opting for the SPAC route was not ideal for companies like Virgin Orbit and Astra. With their plummeting share prices, they are going to find it harder to raise the capital they need to stay alive--which may cause their stock prices to go down further. The good news is that Rocket Lab has enough cash to survive for quite a while without additional capital raises. Can't say the same for Virgin Orbit and Astra.
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I bought some at 14, then I bought some more at 9.9 - I hope you are right.
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Good news! Rocket Lab is opening a new space systems complex in Littleton, Colorado, near the current offices of Advanced Solutions, Inc. The new complex will have 40,000 square feet of office, lab and production space, and will include two mission operations centers. It will allow Advanced Solutions’ staff to double to more than 120 people by early 2023.
Growing space systems is more important to Rocket Lab's future than launch, in my opinion. The market for space systems and space services is much bigger than launch, and aggressively expanding out of launch is the only way Rocket Lab is going to get a slice of the true profits in the future space industry.
This is another opportunity to compare Rocket Lab and Astra, by the way. Both companies say they want to expand into space systems and space services, but only Rocket Lab is making credible moves to get there. So far, Astra has been almost nothing but talk.
https://spacenews.com/rocket-lab-expands-colorado-facilities-prepares-for-busy-launch-year/
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With everything Rocket Lab is doing, the companies they are buying, the diversification of their business, and the space contracts they keep winning...
I just don't see how anyone isn't bullish on RKLB.
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From the rocket side, a general discussion of sector stock picking.
Topic: Investment in space companies (Read 8397 times)
https://forum.nasaspaceflight.com/index.php?topic=53937.40
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With everything Rocket Lab is doing, the companies they are buying, the diversification of their business, and the space contracts they keep winning...
I just don't see how anyone isn't bullish on RKLB.
Last month 5 analysts covered RKLB, with 3 giving it a "strong buy" (versus 1 buy and 1 hold). Seems like analysts agreed with you.
One counter-argument: recent returns, like -22% YTD. High growth stocks may be up against a tough year.
https://www.morningstar.com/stocks/xnas/rklb/trailing-returns
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Astra's launch today has failed (https://spacenews.com/astra-launch-of-nasa-sponsored-cubesats-fails/). Four customer satellites were lost. Their stock is down 32% so far today. Bad news for Astra. Good news for Rocket Lab, prospective customers are going to be looking for a launch provider with reliable rockets, which Rocket Lab has and Astra doesn't.
Rocket Lab's upcoming mission, "Without Mission a Beat (https://www.rocketlaunch.live/launch/blacksky-3)", which was scheduled for February 14th, has apparently missed a beat after all and been pushed back into March. In response, Rocket Lab has pulled forward (https://finance.yahoo.com/news/rocket-lab-brings-forward-launch-233000743.html) a different mission ("The Owl’s Night Continues (https://www.rocketlaunch.live/launch/strix-b)") to February 28th. That's really cutting it close. At this point, it seems likely that Rocket Lab will fail to launch anything for both January and February. Again, space is hard.
Some good news is that last month, NASA released (https://spaceexplored.com/2022/01/05/nasa-released-autonomous-flight-termination-unit-software-paves-way-for-rocket-lab-launches/) their "Autonomous Flight Termination Unit" software to Rocket Lab. This is one of the final steps towards enabling Rocket Lab to launch from Virginia and increase their launch cadence.
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Rocket Lab just got a new $20 price target and buy rating from Bank of America!
https://www.barrons.com/articles/rocket-lab-stock-buy-rating-51638287031
Hopefully this means that institutional interest in the stock is growing.
The price targets are now:
09/09/2021, Canaccord Genuity, Price Target: $30 (https://www.benzinga.com/news/21/09/22863183/canaccord-genuity-initiates-coverage-on-rocket-lab-usa-with-buy-rating-announces-price-target-of-30)
09/13/2021, Cowen, Price Target: $18 (https://www.streetinsider.com/Analyst+Comments/UPDATE%3A+Cowen+Starts+Rocket+Lab+USA+%28RKLB%29+at+Market+Perform/18929647.html)
09/17/2021, Deutsche Bank, Price Target: $18 (https://markets.businessinsider.com/news/stocks/deutsche-bank-initiates-rocket-lab-usa-with-buy-sees-upside-of-17-1030807710)
09/30/2021, Stifel, Price Target: $22 (https://markets.businessinsider.com/news/stocks/stifel-initiates-rocket-lab-with-buy-rating---read-why-1030834613)
11/30/2021, Bank of America, Price Target: $20 (https://www.barrons.com/articles/rocket-lab-stock-buy-rating-51638287031)
You can also view a live summary of the analyst ratings here:
https://www.benzinga.com/quote/RKLB/analyst-ratings
So far not a single one of these brokers has even got the direction right, never mind the size.
OK, maybe that's a bit uncalled for. But be very careful. Most of this board is dyed in the wool indexers, with a small number of active stock picker trying to literally find the next rocketship. Maybe there's room for something healthily in the middle, like, I dunno, insurance companies.
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Rocket Lab just got a new $20 price target (https://www.benzinga.com/news/22/02/25774797/roth-capital-initiates-coverage-on-rocket-lab-usa-with-buy-rating-announces-price-target-of-20) and buy rating from Roth Capital! I couldn't find much info other than the price target itself, but it shows that analysts are still confident in Rocket Lab despite the recent downturn in space stocks. Personally, I think this downturn is a great buying opportunity.
In other news, Rocket Lab's second operational launch pad is officially open for business (https://news.satnews.com/2022/02/23/rocket-lab-adds-their-second-electron-launch-pad-with-pad-b-in-new-zealand-first-mission-already-scheduled/), with their next mission scheduled to launch from it in about a week! Check out this video (https://www.youtube.com/watch?v=l0ntnOtJDbw) which Rocket Lab put out today to commemorate their new launch pad.
Technically, this is Rocket Lab's third launch pad, as their launch pad in Virginia was completed (https://www.theverge.com/2019/12/12/21012548/rocket-lab-wallops-virginia-launch-site-complex-2-electron) all the way back in 2019. However, they are still not certified to fly from Virginia due to regulatory issues (https://www.satellitetoday.com/launch/2021/12/30/nasa-and-rocket-lab-clear-way-for-electron-launch-from-virginia-in-2022/). This certification process has been in progress for years. It seems like NASA didn't like Rocket Lab's Autonomous Flight Termination System (https://www.rocketlabusa.com/updates/rocket-lab-debuts-fully-autonomous-flight-termination-system/) which was ready in 2019, so they spent years (https://www.satellitetoday.com/launch/2021/12/30/nasa-and-rocket-lab-clear-way-for-electron-launch-from-virginia-in-2022/) either modifying it or creating their own version. Overall, the AFTS project appears to be a dumpster fire, but I guess it's par for the course when you have a complex collaborative software project between a private corporation and a government entity. The second Rocket Lab finally gets certified to launch from Virginia, you'll hear about it here!
As you can see, Rocket Lab currently has two rockets on the pad and ready to go at their launch facility in New Zealand!
(https://news.satnews.com/wp-content/uploads/2022/02/Rocket-Lab-LC1-Pad-B-2.jpg)
The price targets are now:
09/09/2021, Canaccord Genuity, Price Target: $30 (https://www.benzinga.com/news/21/09/22863183/canaccord-genuity-initiates-coverage-on-rocket-lab-usa-with-buy-rating-announces-price-target-of-30)
09/13/2021, Cowen, Price Target: $18 (https://www.streetinsider.com/Analyst+Comments/UPDATE%3A+Cowen+Starts+Rocket+Lab+USA+%28RKLB%29+at+Market+Perform/18929647.html)
09/17/2021, Deutsche Bank, Price Target: $18 (https://markets.businessinsider.com/news/stocks/deutsche-bank-initiates-rocket-lab-usa-with-buy-sees-upside-of-17-1030807710)
09/30/2021, Stifel, Price Target: $22 (https://markets.businessinsider.com/news/stocks/stifel-initiates-rocket-lab-with-buy-rating---read-why-1030834613)
11/30/2021, Bank of America, Price Target: $20 (https://www.barrons.com/articles/rocket-lab-stock-buy-rating-51638287031)
01/12/2022, Morgan Stanley, Price Target: $17 (https://seekingalpha.com/news/3787461-rocket-lab-usa-rallies-with-morgan-stanley-bullish-on-space-race-potential)
02/23/2022, Roth Capital, Price Target: $20 (https://www.benzinga.com/news/22/02/25774797/roth-capital-initiates-coverage-on-rocket-lab-usa-with-buy-rating-announces-price-target-of-20)
You can also view a live summary of the analyst ratings here:
https://www.benzinga.com/quote/RKLB/analyst-ratings
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More big news for Rocket Lab today!
Rocket Lab just signed a new $143M space systems contract (https://www.businesswire.com/news/home/20220224005536/en/) to build a fleet of 17 satellite buses for a satellite communications company called Globalstar (https://en.wikipedia.org/wiki/Globalstar). Rocket Lab is actually being subcontracted by a company called MDA (https://en.wikipedia.org/wiki/MDA_(company)) as part of a larger $327M contract (https://spacenews.com/globalstar-selects-mda-and-rocket-lab-for-new-satellites/) for MDA to manufacture Globalstar’s satellites, lead the development of the payload, and perform the final satellite assembly, integration, and testing. Apparently, this $327M fleet of satellites is 95% funded by a "mystery customer" of Globalstar (speculated to be Apple (https://spacenews.com/globalstar-selects-mda-and-rocket-lab-for-new-satellites/)) who wants to provide satellite internet for smartphones. The total initial contract value for Rocket Lab is $143M, with options to provide the satellite operations control center, launch dispensers, launch integration, and up to nine additional spacecraft with flexibility in timing to order such spacecraft.
All 17 of the 500kg spacecraft will be designed and manufactured at Rocket Lab’s Long Beach production complex and headquarters, where a new high-volume spacecraft manufacturing line is being developed to support growing customer demand for Rocket Lab satellites. Leveraging Rocket Lab’s vertically integrated space systems capabilities, the satellites will feature components and subsystems produced by Rocket Lab’s recently acquired companies including solar panels and structures from SolAero Technologies in Albuquerque, New Mexico, software from ASI by Rocket Lab in Denver, Colorado, and reaction wheels from Sinclair Interplanetary in Toronto, Canada. The telemetry and control radio for all spacecraft will also be a C-band variant of Rocket Lab’s Frontier Satellite Radio (Frontier-C).
As I've said previously, the market for space systems and space services is much bigger than launch, and aggressively expanding out of launch is the only way Rocket Lab is going to get a slice of the true profits in the future space industry. This contract shows that Rocket Lab is making great progress on this front! Although these satellite busses are going to be manufactured at Rocket Lab's facility in Long Beach, California, the fact that Rocket Lab is building out a whole new 40,000 square foot space systems facility (https://spacenews.com/rocket-lab-expands-colorado-facilities-prepares-for-busy-launch-year/) in Colorado shows that they expect much more of these contracts in the future!
This contract is huge, and is strong evidence that Rocket Lab's business model is gaining traction. No wonder their stock is up 14.6% today despite the dark shadow cast on the stock market by the rapid escalation of the conflict in Ukraine.
In the future, I'd like to see Rocket Lab cut out the middleman and do more of what MDA is doing--and I do think that Rocket Lab is heading in that direction. As they gain experience from contracts such as this, I expect Rocket Lab to start offering more and more services in-house as they march towards their goal of becoming an end-to-end space company that provides turnkey solutions to customers. Keep in mind that the total value of the Globalstar contract was a whopping $327M, of which Rocket Lab was able to capture $143M. Rocket Lab has a clear path to being able to capture an even larger slice of these pies in the future.
Finally, I'd like to bring up one of my old posts about the kind of satellite constellations that Rocket Lab will be working with. There are a multitude of small space companies trying to build small constellations of less than 100 satellites. Globalstar is a prime example of one such company. Rocket Lab is positioning themselves to not just launch these constellations with Neutron, but to build them as well!
That being said, most commercial constellations do not seem to be as large as Starlink and the handful of other proposed global satellite internet constellations. Also, their satellites are smaller. For example, the well known Earth imaging company BlackSky plans to operate a constellation of only 60 satellites (https://spacenews.com/blacksky-launching-two-satellites-on-june-starlink-mission/) in the long term. This is all they think they need to get full coverage of the Earth’s surface. Spire Global, another similar company, operates a fleet of about 110 satellites (https://en.m.wikipedia.org/wiki/Spire_Global), and these are tiny CubeSats the size of a loaf of bread.
Furthermore, as I mentioned in a previous post (https://forum.mrmoneymustache.com/investor-alley/rocket-lab/msg2902437/#msg2902437), there are a lot of smaller space companies who are trying to build out constellations of tens to hundreds of satellites. The long list of satellite constellation companies I mentioned in that post is just scratching the surface. What we have is a lot of different companies launching a lot of different small constellations to a lot of different orbits on a lot of different schedules. All of these constellations will need to be maintained in a piecemeal fashion over time, even the huge ones like Starlink.
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Big things are continuing to happen!!! It's so rewarding to be invested in a company that seems to be doing all the right things. This really feels like being on the ground floor of Costco or Walmart
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According to Yahoo Finance, the IPO price for Rocket Lab (RKLB) was $9.74 on Nov 25th, 2020. So with the post-market jump (to $10.10/sh), it has a +3.7% return so far. So the most pessimistic analyst expects +78% upside, with others expecting more. Yahoo Finance shows 6 analysts: 3 strong buy, 2 buy, 1 neutral. I suspect this company could beat the market over the next few years, but offers high volatility - it could be a fit for me.
I'm ignorant of rocket components, so bear with my estimates and questions. They have a $143 million contract for 17 spacecraft busses, with the option for 9 more. So if they do well, they could make $218 million worth of sales, and then take on additional responsibilities for the Globestar satellites. How long will it take Rocket Lab to produce those 17 spacecraft busses? 1 or 2 years?
The company has $50 million in revenue, which sucks compared to their $4.5 billion market cap. Yahoo shows N/A for price/sales, but I calculate it at 91.
I don't see a lot of space related ETFs, but "Procure Space ETF" has RKLB in it's top 10 holdings (barely) at 4% weight. The other space ETF I have to ignore, since ARKX added "Deere & Company" which isn't launching tractors into space any day soon. So... maybe Rocket Lab is one of the top 10 publicly traded space companies?
https://etfdb.com/etf/UFO/#holdings
I'm curious if others worked on a "bear/bull" case for Rocket Lab. Under what conditions would they fail (the bear case), and how might they do even better than expected (the bull case)?
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I'm ignorant of rocket components, so bear with my estimates and questions. They have a $143 million contract for 17 spacecraft busses, with the option for 9 more. So if they do well, they could make $218 million worth of sales, and then take on additional responsibilities for the Globestar satellites. How long will it take Rocket Lab to produce those 17 spacecraft busses? 1 or 2 years?
The satellites are expected to launch by the end of 2025, however Rocket Lab should finish the satellite busses and hand them off to MDA long before that.
The company has $50 million in revenue, which sucks compared to their $4.5 billion market cap. Yahoo shows N/A for price/sales, but I calculate it at 91.
Rocket Lab had ~$58M in revenue in 2021, however their revenue is growing at a rapid pace. Analysts are expecting $219M in revenue in 2022 (https://finance.yahoo.com/quote/RKLB/analysis/). This is actually higher than the $176M that Rocket Lab itself predicted in their investor presentation (https://www.rocketlabusa.com/assets/Rocket-Lab-Investor-Presentation.pdf), although I think the "beat" is driven by acquisitions rather than organic revenue growth.
I'm curious if others worked on a "bear/bull" case for Rocket Lab. Under what conditions would they fail (the bear case), and how might they do even better than expected (the bull case)?
Rocket Lab gave these revenue projections in their investor presentation (https://www.rocketlabusa.com/assets/Rocket-Lab-Investor-Presentation.pdf):
Rocket Lab Revenue Projections
2021: $69M ($49M launch, $20M space systems)
2022: $176M ($115M launch, $61M space systems)
2023: $267M ($141M launch, $126M space systems)
2024: $450M ($232M launch, $218M space systems)
2025: $749M ($399M launch, $350M space systems)
From what I've seen, the $4.1B valuation that Rocket Lab priced their SPAC at is based on their projected 2025 revenues and profits. Here is a decent video (https://www.youtube.com/watch?v=UUsdny5gmfY&t=282s) explaining the valuation, I'll see if I can dig up better sources. In other words, much of these revenue projections are already priced into the stock. If Rocket Lab can beat them, expect the stock price to rise sharply. That being said, revenue growth from acquisitions won't be treated the same as organic revenue growth. If they only beat revenue projections because of acquisitions, although this won't be a negative, don't expect anything huge. On the other hand, if they fail to meet revenue projections, don't expect much from the stock at all. Finally, keep in mind that the current valuation of Rocket Lab is based on the 2025 projections. If Rocket Lab stays on track with their revenue projections, this means that revenue should continue to rise sharply after 2025, and the stock price, being forward-looking, should rise accordingly.
In other words, Rocket Lab’s valuation is based on their projected performance four years from now, in 2025. If time passes and Rocket Lab stays on track to meet their 2025 goals, the valuation will shift forward accordingly into 2026 projections or beyond. With Rocket Lab’s revenue projected to grow well in excess of 50% per year, this would translate into correspondingly high gains in share price.
So in my mind, the bull/bear cases are all about revenue growth. Rocket Lab will achieve the bull case if they meet or exceed their revenue growth projections, whereas the bear case will be realized if demand for their services fails to materialize and they fail to meet revenue projections. Are Rocket Lab's revenue projections realistic? Only time will tell, but they definitely seem more realistic than the numbers their competitors are throwing out (https://forum.mrmoneymustache.com/investor-alley/rocket-lab/msg2954075/#msg2954075).
So far, things look good. As I said earlier, analysts are expecting $219M in revenue in 2022, which is higher than the $176M in the investor presentation.
I want to stress how huge the Globalstar/MDA contract is. The $143M from just that single space systems contract accounts for 18.9% of Rocket Lab's $755M total projected space systems revenue from 2022 to 2025! In other words, they've already locked in a fifth of the space systems revenue that they need over the next four years from just that single contract. If Rocket Lab can land more contracts like that, they will be well on track to meet or even exceed revenue growth projections.
All that being said, Rocket Lab's Q4 2021 earnings call (https://investors.rocketlabusa.com/events-and-presentations/events/event-details/2022/Fourth-Quarter-2021-Financial-Results-Update-and-Conference-Call/default.aspx) is scheduled for Monday, February 28th, less than two days from now! The critical thing to look for in that earnings call is the progress Rocket Lab is making towards growing their revenue. If they can stay on track, I will continue to expect great things from them in the future!
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In other news, it recently came to light that Virgin Galactic is burning cash at an extreme rate (https://arstechnica.com/science/2022/02/virgin-galactic-has-lost-1-billion-during-the-last-two-years/)--$1B in just two years! I think return on investment is a great way to tell good space companies from the bad, and Rocket Lab is galaxies ahead of both Virgin Galactic and Virgin Orbit in this regard.
Whereas Virgin Galactic burned through $1B over two years with only $3.5M in revenue to show for it, Rocket Lab burned through only $85M in two years while also realizing $83M in revenue (https://arstechnica.com/science/2021/07/rocket-lab-not-yet-close-to-profitability-proxy-statement-reveals/). The difference in ROI is night and day!
On the orbital side, Virgin Orbit spent $1B to develop orbital capability, whereas Rocket Lab only spent $180M (https://todayheadline.co/rocket-lab-spent-fraction-of-virgin-orbits-1-billion-to-reach-space/). This matters!
Analysts are worried (https://finance.yahoo.com/news/virgin-galactic-stock-demand-won-194553066.html) that Virgin Galactic can scale their business to meet demand, because of all the inefficiencies and technical issues they've been having--a clear indicator of their horrible ROI. It's no wonder that the investor who took Virgin Galactic public dumped all his shares (https://www.cnbc.com/2021/03/05/chamath-palihapitiya-sells-virgin-galactic-spce-stake.html) almost a year ago. When I first posted this topic, Rocket Lab's $4.1B market cap was 57% of Virgin Galactic's $7.16B, now Virgin Galactic's $2.37B market cap is only 56% of Rocket Lab's $4.24B. Meanwhile, Virgin Orbit’s SPAC was a disaster (https://spacenews.com/virgin-orbit-raises-far-less-than-expected-from-spac-merger/), unlike Rocket Lab (https://www.cnbc.com/2021/08/25/rocket-lab-begins-trading-on-nasdaq-as-rklb-after-spac-merger.html). The tables have turned!
The relative performance of these companies should not come as a surprise when you consider the background of their leadership. Prior to joining the company, Virgin Orbit's CEO spent his entire 34-year career (https://www.linkedin.com/in/dan-hart-0809b420/) at Boeing, an Old Space dinosaur with huge ROI problems of its own. Virgin Galactic's CEO was president of the Disneyland resort (https://www.cnbc.com/2020/07/20/meet-disneys-michael-colglazier-taking-over-as-virgin-galactic-ceo.html) and is an MBA with no engineering background (https://www.linkedin.com/in/colglazier/). In comparison, Rocket Lab's CEO was a child prodigy who built rocket engines in his backyard (https://www.bloomberg.com/news/features/2017-06-29/at-18-he-strapped-a-rocket-engine-to-his-bike-now-he-s-taking-on-spacex) and went on to found Rocket Lab on his own without a college degree. In other words, it's no surprise that the child prodigy who cobbled together rocket engines from scrap in his backyard can achieve better ROI for his aerospace company than a career executive from a grossly inefficient, washed out company like Boeing, and the president of a theme park!
In conclusion, there are only a handful of other companies competing with or even operating in the same space as Rocket Lab, and Rocket Lab is comparing very favorably to almost all of them. In my opinion, Rocket Lab is shaping up to be one of the winners in the new space race.
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It seems like the "spacecraft bus" is the infrastructure that supports the satellite component systems. I still don't know how long they take to design & produce, but it's a very significant part of the satellite. That's an interesting vote of trust in Rocket Lab.
Looking at other stocks in the "Procure Space ETF", I see some cautionary tales. The #1 holding is SES S.A. ("SESG") with +0% gain after 18 years, and a $3.9B market cap. Viasat (VSAT) has done better with +8.8%/year for 26 years, but that still leaves you invested in a $3.2B company that doesn't beat the market. Finally Iridium Communications (IRDM) comes in at 11%/yr for 14 years leaving it with a $5.0B market cap, which ties the market. Portfolio Visualizer shows 1995-2021 had an 11.0%/year annualized return.
I've listened to most of the hour long interview, looked at company stats, and I believe the company will achieve things - but the stock price may or may not. That's my biggest concern.
On the plus side, it offers incremental diversification from all my active picks - none of which are related to space exploration. I'm currently leaning towards a half allocation this week, and another half before the next quarterly meeting. I think many investors were disillusioned by all the space-related SPACs last year, and might have given up on the entire idea. That would certainly explain analysts with their 2x and 3x targets not getting much attention.
The light composite materials that "make all the difference", like slowing your descent "with an umbrella versus holding a golf ball" are probably a novel advance. As mentioned earlier, SpaceX uses 3 burns where Rocket Lab's spaceships use 2. I hope they've filed patents on it!
Speaking of which, what are their top patents? (Top meaning most significant for their products, and also most likely to pay off big if competitors imitate too closely). Here's the list I found, which is difficult to understand for a layperson:
https://patents.justia.com/assignee/rocket-lab-usa-inc
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It seems like the "spacecraft bus" is the infrastructure that supports the satellite component systems. I still don't know how long they take to design & produce, but it's a very significant part of the satellite. That's an interesting vote of trust in Rocket Lab.
Yes, the satellite bus is essentially the entire satellite, minus certain proprietary bits and bobs installed by the customer. So think of it like Rocket Lab is designing and building the satellites and Globalstar is just installing their proprietary satellite internet broadcasting and receiving equipment onto them.
Speaking of which, what are their top patents? (Top meaning most significant for their products, and also most likely to pay off big if competitors imitate too closely). Here's the list I found, which is difficult to understand for a layperson:
https://patents.justia.com/assignee/rocket-lab-usa-inc
Oddly enough, patents aren’t really a thing in the space industry (https://www.businessinsider.com/elon-musk-patents-2012-11). Competition is fierce among rival nations, and nobody wants to share their ideas to a rival nation by publishing patents.
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It seems like the "spacecraft bus" is the infrastructure that supports the satellite component systems. I still don't know how long they take to design & produce, but it's a very significant part of the satellite. That's an interesting vote of trust in Rocket Lab.
Yes, the satellite bus is essentially the entire satellite, minus certain proprietary bits and bobs installed by the customer. So think of it like Rocket Lab is designing and building the satellites and Globalstar is just installing their proprietary satellite internet broadcasting and receiving equipment onto them.
Would it be wrong to think of the "spacecraft bus" as similar to an electric car "skateboard"?
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It seems like the "spacecraft bus" is the infrastructure that supports the satellite component systems. I still don't know how long they take to design & produce, but it's a very significant part of the satellite. That's an interesting vote of trust in Rocket Lab.
Yes, the satellite bus is essentially the entire satellite, minus certain proprietary bits and bobs installed by the customer. So think of it like Rocket Lab is designing and building the satellites and Globalstar is just installing their proprietary satellite internet broadcasting and receiving equipment onto them.
Would it be wrong to think of the "spacecraft bus" as similar to an electric car "skateboard"?
That is a good comparison, but I think an even better one would be a PC tower. Rocket Lab’s vision of what a satellite bus should be is essentially a PC tower with solar panels, guidance and control systems, and a radio floating in space. They want to have a fully-functional, hardware and software platform that can be customized for customer use cases via plug-and-play peripherals. That being said, current satellite busses are more like EV skateboards in that integrating third party components is complex, costly, and time consuming.
Nevertheless, the eventual end goal is to have PC towers floating in space. Rocket Lab wants to build a platform that enables their customers to not have to worry about building satellites or managing satellites in orbit. Rocket Lab wants a future where customers only care about designing and building their custom sensors, broadcasting equipment, etc, and just plugging it in to Rocket Lab’s satellite bus. Rocket Lab will handle everything else, including launch, mission control, and orbital management. Much like how Amazon Web Services allows customers to build products on the Internet without worrying about Internet infrastructure, Rocket Lab’s platform will allow customers to build products in space without worrying about space infrastructure.
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I am watching the live stream of today's Rocket Lab launch. Launch is just 3 minutes from now!
https://www.youtube.com/watch?v=MjfNJjTyfKY
There are ~16K people watching now, these streams are getting popular! In the past I remember Rocket Lab streams had less than 5K viewers.
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The launch was a success! Also note that Rocket Lab's Q4 2021 earnings call (https://investors.rocketlabusa.com/events-and-presentations/events/event-details/2022/Fourth-Quarter-2021-Financial-Results-Update-and-Conference-Call/default.aspx) is scheduled for just 40 minutes from now, at 1:30 PM PT / 4:30 PM ET. I'm hoping that the company will share some juicy details about future revenue growth!
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The Q4 2021 earnings call (https://investors.rocketlabusa.com/events-and-presentations/events/event-details/2022/Fourth-Quarter-2021-Financial-Results-Update-and-Conference-Call/default.aspx) is over. The financial results (https://seekingalpha.com/news/3807194-rocket-lab-reports-q4-results) seem to be mildly positive and the stock is up slightly in after-hours trading. My key takeaways:
1. Revenue Growth
Rocket Lab's revenue grew 77% YoY from $35.2M in 2020 to $62.2M in 2021. Launch revenue grew 18% YoY, while space systems revenue grew by a whopping 1,464% YoY. The company posted a loss of $118M in 2021, up from $55M in 2020. They actually had a small profit of $2.8M in Q4 2021.
Revenue backlog growth is on track! Rocket Lab's revenue backlog grew from $82M in Q4 2020, to $183M in Q3 2021, to $241M in Q4 2021, to $545M today. This represents a 3x increase since Q3 2021 and a 2.3x increase since Q4 2021. Overall, Rocket Lab's revenue backlog grew by $463M or 6.5x since the start of 2021!
Putting things into perspective, these are the numbers that Rocket Lab needs to hit:
Rocket Lab Revenue Projections
2022: $176M ($115M launch, $61M space systems)
2023: $267M ($141M launch, $126M space systems)
2024: $450M ($232M launch, $218M space systems)
2025: $749M ($399M launch, $350M space systems)
Rocket Lab's revenue backlog growth of $463M since the start of 2021 accounts for 28% of the $1.642B of total revenue that they need to achieve over the next four years. So by that measure, they seem to have secured enough dollars in new contracts to be on track to meet their goals.
2. Launch Cadence
Rocket Lab said that they expect to achieve a consistent launch rate of one rocket per month by the end of 2022, and aim for two launches per month soon afterwards. They reiterated that launch delays are due to customer delays and that they are not production constrained. They have an inventory of multiple (3-7?) completed Electron rockets and plan to manufacture an additional 15 Electrons in 2022. Having more active launch pads will allow them to have parallel launch campaigns with more customers and hopefully fewer launch delays. They did not give a date for when their Electron launch pad at the Mid-Atlantic Regional Spaceport in Virginia will become operational. In my opinion, launch is the area where Rocket Lab has the greatest risk of missing revenue targets. I hope that the issue is just delayed schedules and not a true demand problem, but only time will tell.
3. Neutron Factory
Rocket Lab has officially selected a location within the Mid-Atlantic Regional Spaceport in Virginia, USA to build a 250,000 square foot facility (https://techcrunch.com/2022/02/28/rocket-labs-neutron-will-be-built-launched-and-landed-at-wallops-island-virginia/) to provide the manufacturing, assembly, integration, launch, and mission control for Neutron. As part of the deal, the state of Virginia is investing $45M: $30M for improvements to the Mid-Atlantic Regional Spaceport and $15M for the construction of Rocket Lab's facility. This money is significant considering that the total development cost of Neutron is estimated to be around $200M (https://www.cnbc.com/2021/03/01/rocket-lab-going-public-via-spac-with-neutron-rocket-expansion.html). Every dollar counts!
4. Acquisitions
Rocket Lab said that they are still looking to acquire additional companies but expect the rate of acquisitions to slow down significantly going forward. Of course, they did not give any hints as to what kinds of companies they are looking to acquire. Time will tell!
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Nice summary, Derp.
Thinking about increasing my little stake.
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Any chance RL could move towards a "subscription" or "razor blade" type business model where the launch is discounted but they make money on building and/or babysitting the satellite?
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In theory it could be possible if Rocket Lab can decrease launch costs enough. But currently, their business model relies too much on launch revenue for that to make sense.
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Bought a half allocation of RKLB today at $9.39/share. Half a day later, -2% ... or -99.9% annualized. Just poking fun at it! In a volatile market, drops are normal.
Quarterly report was 2/28, so expect another on 5/28. I'd like to have a full allocation before mid-May, since the market might get excited weeks earlier.
My hopes for RKLB:
(1) I hope RKLB keeps a low correlation to cloud computing stocks (as represented by WCLD).
(2) I hope analyst & income projections are accurate, pushing the stock higher.
(3) Their novel approaches are valued by customers who need satellite launches
Fears for RKLB:
(a) acquisition, ending their growth prospects. Typically the smaller company makes a big jump on this kind of news, but it also ends our journey.
(b) Rocket Lab follows in the footsteps of similar companies that underperformed the market and struggled to reach $5B market cap.
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Here is the best analysis of Rocket Lab stock post-earnings that I've seen so far:
https://www.youtube.com/watch?v=6w3BCx6R4Ts
Most of what they talk about was already brought up in this thread. Rocket Lab has enough cash on hand to sustain themselves for about 10 years, so running out of cash or going bankrupt isn't a concern. They also get fed a lot of money by the US government.
The main issue with the stock price is that it is priced for almost flawless execution according to Rocket Lab's 2025 revenue growth plan. However, the biggest growth year is 2022. After that, the growth rate slows down and there will be much less execution risk. In other words, it is absolutely critical for the stock price that Rocket Lab meets their 2022 growth projections which call for them to grow revenue from $62.2M in 2021 to $176M in 2022. If they can meet this extremely aggressive goal, expect to be rewarded. If they fail to meet that goal, the stock price probably isn't going anywhere, although the company itself doesn't face any risk of bankruptcy.
In other news, Rocket Lab has apparently increased the performance (https://twitter.com/Peter_J_Beck/status/1499201931096444929) of their Rutherford engines on the Electron by 5%. This shows that they are continuing to innovate with engine technology, and is a positive thing to consider since they are developing a new engine for Neutron. If they can increase the performance of Neutron over time, it will enable them to unlock a lot of additional capabilities, such as doing more varieties of RTLS missions. That being said, it seems that they achieved this performance gain by upgrading the engine's batteries. Neutron will use a different kind of engine without batteries, so this exact innovation is not applicable there.
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For better or worse, bought another block of RKLB.
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Interesting topic - posting to follow.
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Good news! We have another vote of confidence in Rocket Lab. After the earnings call last week, the investment banking firm Stifel has maintained their buy rating on Rocket Lab and raised (https://www.benzinga.com/news/22/03/25910588/stifel-maintains-buy-on-rocket-lab-usa-raises-price-target-to-23) their price target to $23!
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Rocket Lab frequently mentions that they try to acquire companies that have "best in class" technology. Yesterday, we saw a good example of this. Rocket Lab announced (https://www.businesswire.com/news/home/20220308006340/en/) that SolAero has developed a new space solar cell that has the highest efficiency of any commercial space solar cell globally (33%) and is 40% lighter than "typical space grade solar cells".
I don't think this means much for Rocket Lab's near-term prospects but it is good to see that they are innovating across so many areas.
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I am normally an index fund guy but have a small portion of my portfolio in individual stock.
Bought a little Rocket Lab today.
I see it as a small, long term bet with growth potential and if it doesn't pay off I'll be ok.
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Good luck!
Morgan Stanley gave the stock another vote of confidence today, reiterating (https://seekingalpha.com/amp/news/3812986-rocket-lab-usa-is-a-buy-at-morgan-stanley-with-near-term-catalysts-and-backlog-growth-standing-out) their buy rating. They seem to be happy that Rocket Lab's order backlog has more than doubled in just two months, and are looking forward to the upcoming helicopter recovery mission.
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Good news for Astra today, their launch today was a success (https://spacenews.com/astras-rocket-3-3-returns-to-flight-with-successful-launch/) and they finally launched their first three satellites into orbit. Rocket Lab stock is down on this news.
In other good news, congress' 2022 defense spending bill is pumping a lot of money into the space industry (https://spacenews.com/congress-gives-dod-more-money-for-space-with-caveats/)--$1.3B more than what the Biden administration requested. Notably, this includes $70M for small launch providers like Rocket Lab and Astra, $50M of which is for a new program called "Tactically Responsive Launch" which sounds like it would be a boon for Astra. See my previous post (https://forum.mrmoneymustache.com/investor-alley/rocket-lab/msg2889427/#msg2889427) for an explanation of why Astra is important to the US military and why they would be a major beneficiary of something called Tactically Responsive Launch.
Also of note, the defense spending bill includes $550M for a constellation of at least 28 satellites to track hypersonic missiles (https://spacenews.com/dod-estimates-2-5-billion-price-tag-for-global-constellation-to-track-hypersonic-missiles/). This $550M is just a "down payment", and the total cost of the constellation is estimated to be $2.5B. The first eight satellites of the constellation have already been ordered and are scheduled to launch in 2023, four from L3Harris and four from a SpaceX-Leidos team. The Department of Defense is expected to release a solicitation for the next batch of 28 tracking satellites in the next one to two weeks. Two vendors are likely to be selected to supply 14 satellites each. The first 14 would launch in 2024 and the second half in 2025. If Rocket Lab could somehow win part of this contract, it would be huge for them! The DoD is trying to diversify away from traditional defense contractors (https://spacenews.com/dod-wants-to-change-how-it-buys-space-technology-but-can-it/) like L3Harris and Leidos and source more of their space technology from commercial companies like SpaceX and Rocket Lab. However, I would still put my odds on one of the three companies involved in manufacturing the first eight satellites to win the contract for the next batch of satellites. Nevertheless, this contract is huge and something to keep an eye on, and is a great example of how much money is being invested in building out satellite constellations in the near future.
Finally, I think this spending bill really helps to illustrate where the money is. The DoD is investing $70M into small launch providers but $2.5B for a constellation of 28 satellites. It seems clear that there is more money to be made manufacturing and operating satellites than building rockets.
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Finally, I think this spending bill really helps to illustrate where the money is. The DoD is investing $70M into small launch providers but $2.5B for a constellation of 28 satellites. It seems clear that there is more money to be made manufacturing and operating satellites than building rockets.
RLKB -7% yesterday but up +1% in very early pre-market.
Correct me where I'm wrong, here: Space Lab has built generations of rockets (Electron, Neutron, etc). I assume that's much more expensive than design & construction of satellites. Their name has "rocket" in it, too. So are they focusing on the less profitable opportunity, rather than the more profitable design & construction of satellites? Or can they juggle both in some optimal manner?
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RLKB -7% yesterday but up +1% in very early pre-market.
Correct me where I'm wrong, here: Rocket Lab has built generations of rockets (Electron, Neutron, etc). I assume that's much more expensive than design & construction of satellites. Their name has "rocket" in it, too. So are they focusing on the less profitable opportunity, rather than the more profitable design & construction of satellites? Or can they juggle both in some optimal manner?
Rocket Lab is expanding aggressively into satellites because space systems (satellites) and space services (services provided by satellites) are more profitable than launch. In the future, Rocket Lab plans to manufacture, launch, own, and operate their own constellation of satellites (https://www.inverse.com/innovation/rocket-lab-ceo-megaconstellations/amp), much like SpaceX and Starlink. By acting as their own launch provider, Rocket Lab will have a huge vertical integration advantage in terms of launching, building, and operating their own satellite constellation. Peter Beck has said as much (https://twitter.com/Peter_J_Beck/status/1496902547608510465?cxt=HHwWgoCp2fS7iMYpAAAA). Rocket Lab will have much cheaper costs compared to competitors who hire others to manufacture and launch their satellites, plus they will have a much easier time with scheduling and payload integration.
Rocket Lab can build both rockets and satellites in a synergistic manner. The electronics, communication systems, orbital telemetry, etc are very similar, and building and operating rockets and satellites requires similar skillsets. A rocket's second stage is practically a satellite, and Rocket Lab's third stage (kick stage) literally is a satellite.
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Looking at a list of the hottest space companies for 2020 makes me nervous. For example, Telesat (TSAT) went public in 2006 at about $27/share. Over 15 years later, TSAT is $19.61/share, -28% over 15 years. As a pure play into satellite operations, they don't seem to have done much... and they are actually over 50 years old, but public for ~15.
It's possible Telesat has a limited mission in a limited market: satellite TV for Canada. Compare that to RocketLab in the U.S., which launches, builds and possibly operates satellites. Much larger scope in a much larger market... so if TV viewing in Canada is worth $1 billion, RKLB could have a much larger market cap in the U.S.
It's also a trend I see a bit too often: space related company IPO'ed over a decade ago and has gone nowhere. And we had a rash of space-related companies in the past couple years - many fueled by the SPAC (special purpose acquisition company) frenzy. I suppose a better approach would be to go through space companies that went public in the past couple years, and see how each compares to Rocket Lab. A frenzy is still a good time to collect funding from the public markets.
I thought about buying more shares today, but RKLB is now up about +3% in the pre-market. I'll wait for another day.
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Looking at a list of the hottest space companies for 2020 makes me nervous. For example, Telesat (TSAT) went public in 2006 at about $27/share. Over 15 years later, TSAT is $19.61/share, -28% over 15 years. As a pure play into satellite operations, they don't seem to have done much... and they are actually over 50 years old, but public for ~15.
It's also a trend I see a bit too often: space related company IPO'ed over a decade ago and has gone nowhere. And we had a rash of space-related companies in the past couple years - many fueled by the SPAC (special purpose acquisition company) frenzy.
I don’t think we should be comparing New Space companies like Rocket Lab to legacy Old Space companies from decades ago. Over the past decade or so, costs have been dropping rapidly and innovation in space technology is exploding. Modern computer-aided design tools allow engineers to design and build complex physical machines almost as easily as software engineers can write code. For example, with modern technology, engineers can design a product on a computer, run extremely realistic simulations on the product, and iterate on the design without ever building anything physical—and when it does become time to build something physical, we have tools like 3D printers that allow for extremely rapid prototyping. These advances in technology allow engineers to do more with less, allowing for greater vertical integration, rapid iteration, and lower costs across the board.
None of this was possible decades ago. Computer-aided design was clunky and slow to use and engineers were still designing things on drafting paper. Realistic computer simulations were slow to orchestrate, extremely expensive, and frequently impractical or not possible at all. 3D printers did not exist. Aerospace engineers used to have to draft their designs on a piece of paper, build a prototype, and put it into a wind tunnel to determine the performance characteristics. This process could take weeks. With today's cutting-edge technology, all they need to do is click a button on their CAD software and the software will realistically simulate a virtual wind tunnel and output the performance characteristics in a matter of minutes. Soon, we will have AI to optimize these performance characteristics and engineers will be able to do even more. The 2020’s are truly a whole new ball game for space.
The issue with Old Space companies versus New Space companies is that the Old Space companies were built prior to the adoption of all these new technologies that make New Space companies so productive and agile. Old Space companies have old engineers who struggle to understand and adopt new technology, and their company culture is built around old technologies and old methodologies such as hiring subcontractors to do work that could be vertically integrated thanks to new technology, or the "waterfall model (https://en.wikipedia.org/wiki/Waterfall_model)" which worked well in the past but is now obsolete compared to agile development and rapid iteration.
The prime example of the failings of Old Space is the Space Launch System (https://en.wikipedia.org/wiki/Space_Launch_System) (SLS) project led by NASA and Boeing. The project is billions of dollars over budget and almost four years behind schedule (https://www.theverge.com/2020/3/10/21173176/nasa-space-launch-system-inspector-general-audit-over-budget-schedule). A single launch of the SLS rocket is currently estimated to cost $4.1B, whereas a SpaceX Falcon 9 rocket only costs $50M. Earlier this month, NASA's Inspector General had some choice words (https://www.cnbc.com/2022/03/01/nasa-auditor-warns-congress-artemis-missions-sls-rocket-billions-over-budget.html) about the project:
We found that the first four Artemis missions will each cost $4.1 billion per launch, a price tag that strikes us as unsustainable. We did see very poor contractor performance on Boeing’s part — poor planning and poor execution. We saw that the cost-plus contracts that NASA had been using to develop that combined SLS and Orion system work to the contractors rather than NASA’s advantage, and for NASA’s part we saw poor project management and contract oversight.
That being said, you raise a good point about the recent influx of new space companies in the last few years. Obviously, not all of these companies are going to be successful. As investors, we need to pay special attention to what these companies are doing rather than what they are saying. We need find companies who achieve actual results, show demonstrable progress, and successfully commercialize their technology. Many of these new space companies do not fit this bill.
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Here’s another take on Rocket Lab which I found interesting. A lot of people think that SpaceX has the potential to be a trillion dollar company (https://markets.businessinsider.com/news/stocks/spacex-elon-musk-tesla-trillionaire-morgan-stanley-starlink-most-valuable-2021-10). Rocket Lab is the closest company to SpaceX that is publicly traded, and is shaping up to be one of their primary competitors (https://www.technologyreview.com/2021/03/02/1020212/rocket-lab-could-be-spacexs-biggest-rival-neutron-falcon-9/amp/). If you compare the business plans of both companies, they both plan to do pretty much the same thing: build and operate their own reusable rockets so that they can launch their own fleets of satellites into orbit, which they also build themselves. In other words, both companies have a broad focus across launch, space systems, and space services.
As it stands today, SpaceX has a valuation of $100B (https://markets.businessinsider.com/news/stocks/elon-musk-space-x-100-billion-share-sale-secondary-valuation-2021-10) and Rocket Lab is worth $3.86B (https://www.google.com/search?q=rklb). If in the future SpaceX becomes a $1T company, and if Rocket Lab is worth just 1/10 of that, they will be a $100B company which represents 25x growth from current levels!
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I do agree in very large part with what you said but must quibble with the characterization that generating aerodynamic models can take minutes - yes some can but some also can take months to run on a cluster - others still require a wind tunnel. And there can be big variation in quality of different methods or the suitability of different models for different phases of flight. Aerodynamics is still far from "solved".
AI... pifff.... The joke is that AI has never done anything because as soon as AI is applied to something and proven useful it is no longer called AI and renamed "ABC engineering" or "DEF math" or "GHI optimization".
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AI... pifff.... The joke is that AI has never done anything because as soon as AI is applied to something and proven useful it is no longer called AI and renamed "ABC engineering" or "DEF math" or "GHI optimization".
See this is the difference between the private sector and the public sector.
We take something we've been doing for years (like multivariate linear regression or random forest models), call it "machine learning" and round "machine learning" up to "artificial intelligence". So now everything is AI.
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I do agree in very large part with what you said but must quibble with the characterization that generating aerodynamic models can take minutes - yes some can but some also can take months to run on a cluster - others still require a wind tunnel. And there can be big variation in quality of different methods or the suitability of different models for different phases of flight. Aerodynamics is still far from "solved".
AI... pifff.... The joke is that AI has never done anything because as soon as AI is applied to something and proven useful it is no longer called AI and renamed "ABC engineering" or "DEF math" or "GHI optimization".
Absolutely, they can’t simulate everything perfectly yet. I admit that I may have overestimated the performance of current computer modeling. Otherwise SpaceX wouldn’t have had to blow up so many Starship prototypes! But you can’t deny that computer modeling has improved by leaps and bounds over the past two decades in terms of accuracy, cost, and accessibility.
BTW here is an article that discusses some of what Relativity Space is doing to use AI to assist with 3D printing:
https://www.wired.com/story/massive-ai-powered-robots-are-3d-printing-entire-rockets/amp
Ellis says the real secret to Relativity’s rockets is the artificial intelligence that tells the printer what to do. Before a print, Relativity runs a simulation of what the print should look like. As the arms deposit metal, a suite of sensors captures visual, environmental, and even audio data. Relativity’s software then compares the two to improve the printing process. “The defect rate has gone down significantly because we’ve been able to train the printer,” Ellis says.
With every new part, the machine learning algorithm gets better, until it will eventually be able to correct 3D prints on its own. In the future, the 3D printer will recognize its own mistakes, cutting and adding metal until it produces a flawless part. Ellis sees this as the key to taking automated manufacturing to other worlds.
“To print stuff on Mars you need a system that can adapt to very uncertain conditions,” Ellis says. “So we're building an algorithm framework that we think will actually be transferable to printing on other planets.”
This article discusses using AI to generate 3D structures with optimized performance characteristics:
https://www.bbc.com/future/article/20181129-the-ai-transforming-the-way-aircraft-are-built
It looks more like a chicken carcass than a drone. Wishbone-thin struts hold together a skeletal scaffold that seems too fragile to fly.
But don’t be fooled. It may not look it, but this design is one of the strongest among thousands of alternatives. We know because an artificial intelligence has dreamed up and tested every one of them.
The use of massive computing power to conjure radical new designs automatically – a process known as generative design – is revolutionising the way human designers work, letting us build things we previously couldn’t have imagined.
The technology is already designing everyday industrial components from seatbelt brackets in cars and motorbike chassis to cabin partitions in passenger aircraft. Not only are these computer-generated designs stronger and lighter than human-crafted solutions but they’re weird – designs that no human would have come up with in the first place.
Relativity Space is currently using generative design (https://spacenews.com/relativity-space-aims-to-3d-print-entire-launch-vehicles/) to design some of the structures for its upcoming rockets, most notably the dragonfly wing design for the grid fins on the Terran R:
“The launch vehicle that we’re going to be flying is going to look totally different from those that are traditionally manufactured,” Ellis claimed. “You get much more organic structures than you normally get. The shapes and forms of what comes out of the printer, and what the launch vehicles look like, will be significantly different.”
He gave few specifics about how that would work, but did give one example. “A far fewer part count is a real advantage,” he said. “You get more highly integrated components that look very, very complex, but there are fewer of them. The complexity is driven by software, so you end up with these more organic-looking shapes that are more efficient.”
(https://i.imgur.com/zEGfZlq.png)
This technology hasn’t gone mainstream yet but I expect that we’ll be seeing a lot more AI in aerospace manufacturing over the next decade.
A few more interesting articles on the subject:
https://medium.com/intuitionmachine/the-alien-look-of-deep-learning-generative-design-5c5f871f7d10
https://www.slashgear.com/vw-trained-ais-to-design-better-3d-printed-car-parts-03582659
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I really appreciate how you backed up your point about Old Space Companies not adapting with an example of cost overruns from Boeing. What about the James Webb Telescope? I think Boeing and Lockheed Martin contributed to it, and it is looking successful. Another example is NASA's Perseverance rover on mars, also successful and I think Lockheed Martin worked on that as well. If Older Space Companies can still deliver, will governments be reluctant to trust newcomers?
That could be the biggest obstacle to government contracts. But I suspect if Old Space Companies can't deliver, they'd be willing to subcontract to newer space companies.
Does anyone have a complete or partial list of space related companies that went public in the last 2 years?
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I really appreciate how you backed up your point about Old Space Companies not adapting with an example of cost overruns from Boeing. What about the James Webb Telescope? I think Boeing and Lockheed Martin contributed to it, and it is looking successful. Another example is NASA's Perseverance rover on mars, also successful and I think Lockheed Martin worked on that as well. If Older Space Companies can still deliver, will governments be reluctant to trust newcomers?
That could be the biggest obstacle to government contracts. But I suspect if Old Space Companies can't deliver, they'd be willing to subcontract to newer space companies.
I don’t think the James Webb Space Telescope is a good example of a successful Old Space project. Although the telescope has finally been deployed successfully, the project became infamous (https://www.npr.org/2021/12/22/1066377182/why-some-astronomers-once-feared-nasas-james-webb-space-telescope-would-never-la) for delays and cost overruns. Development began in 1996 for a launch that was initially planned for 2007 with a $500M budget. But it was actually launched in 2021 after spending $10B. So yeah, 14 years late and 20x over budget, not good!
Another prime example of the failings of Old Space is the Boeing Starliner, which has been delayed for years (https://observer.com/2021/10/boeing-starliner-delay-nasa-assigns-astronauts-spacex-crew-dragon) and still hasn’t completed a successful flight despite being billions of dollars more expensive (https://arstechnica.com/science/2019/11/nasa-report-finds-boeing-seat-prices-are-60-higher-than-spacex/) than SpaceX’s Dragon capsule which has been flying since 2019.
Does anyone have a complete or partial list of space related companies that went public in the last 2 years?
This website has some good information:
https://spacefund.com/intelligence/
Also check out the report linked to in this article:
https://www.forbes.com/sites/johnkoetsier/2021/05/22/space-inc-10000-companies-4t-value--and-52-american
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I would make a distinction between an "aerodynamic model" and a "simulation".
>> Aerodynamic model: static set of equations and data tables that calculates aero forces/moments given a vehicles configuration and state (state = airspeed, ambient air density, control deflections, direction air is impacting vehicle from, etc) Aerodynamic models (generally) exist independent of time or independent of the previous set of inputs (rotor craft can be there own beast).
>> Simulation: is (generally) the time domain prediction of how a vehicle (generally) will react. Where the simulation will include either the hardware components (bench testing) or software representations of the real components. ie a sim will have aerodynamics, propulsion, sensor, guidance/controls, weight and balance, etc models all interacting in a way that is designed to mimic the real world. A sim will integrate F = ma, where forces are aero + propulsion + ground reaction + other; mass is set at the start and changes with fuel burn. Integrate "a" to get velocity, integrate velocity to get position (adding in initial conditions).
JWST: is a one-off-cant-fail device where spacex and RL are trying to build large numbers of widgets. They can make the calculation that if x% of widgets fail it is cheaper than upping the engineering/production/launch weight so that only 0.9*x% fail - excluding launch vehicles :-)
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... What about the James Webb Telescope? I think Boeing and Lockheed Martin contributed to it, and it is looking successful. ... If Older Space Companies can still deliver, will governments be reluctant to trust newcomers?
I don’t think the James Webb Space Telescope is a good example of a successful Old Space project. Although the telescope has finally been deployed successfully, the project became infamous (https://www.npr.org/2021/12/22/1066377182/why-some-astronomers-once-feared-nasas-james-webb-space-telescope-would-never-la) for delays and cost overruns. Development began in 1996 for a launch that was initially planned for 2007 with a $500M budget. But it was actually launched in 2021 after spending $10B. So yeah, 14 years late and 20x over budget, not good!
Even measuring from when construction began in 2004, the predicted launch dates were 2007-2011. I did not know this was 14 years late and almost got canceled by Congress. I wonder if Congress has much motivation to pick New Space Companies? I recall NASA picking Space X for a project without taking bids, which upset other companies. But apparently for the cost, Space X was the only choice... maybe that's how this plays out. Space X can afford to lobby Congress, and show that contracts are better done by newer companies. I imagine a company Rocket Lab's size can't afford too much lobbying.
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Even measuring from when construction began in 2004, the predicted launch dates were 2007-2011. I did not know this was 14 years late and almost got canceled by Congress. I wonder if Congress has much motivation to pick New Space Companies? I recall NASA picking Space X for a project without taking bids, which upset other companies. But apparently for the cost, Space X was the only choice... maybe that's how this plays out. Space X can afford to lobby Congress, and show that contracts are better done by newer companies. I imagine a company Rocket Lab's size can't afford too much lobbying.
This is less of a concern than you might think. The US government has a vested interest in the success of the US space industry, and takes special care to feed money to pretty much all private space companies. NASA's VADR program (https://www.nasa.gov/press-release/12-companies-to-provide-venture-class-launch-services-for-nasa) is a great example of this, where Rocket Lab is getting a slice (https://www.businesswire.com/news/home/20220127005965/en/Rocket-Lab-Selected-to-Provide-Venture-Class-Launch-Services-for-NASA) of a $300M government handout. In another example, the government is giving Rocket Lab a $24M handout (https://www.rocketlabusa.com/updates/rocket-lab-wins-24m-u-s-space-force-contract-to-develop-neutron-upper-stage/) (out of a $75M pie) to help develop the upper stage for Neutron. These are just two examples out of many.
As it turns out, half of Rocket Lab's business is with the government! So they are not having any issues getting business from the government--in fact, the government is proactively feeding them business.
(https://i.imgur.com/V3kp8Yo.png)
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The US government has a vested interest in the success of the US space industry
To what extent is RKLB a New Zealand company, and to what extent a US company?
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To what extent is RKLB a New Zealand company, and to what extent a US company?
Rocket Lab is a US company with headquarters in Long Beach, California. Their Electron factory and launch pads are in New Zealand, and their CEO is a New Zealand citizen. Rocket Lab started as a New Zealand company in 2006 but in 2013 they established their headquarters in the US and became a US company because there was no way that they were going to be able to tap into US capital markets and continue to grow the company by operating out of New Zealand.
At this point in time they have the majority of their employees and facilities in the US, and are continuing to expand their footprint in the US as they build out their space systems facilities in California and Colorado and their Neutron factory in Virginia. Their presence in New Zealand is not expanding at anywhere near the rate that it is expanding in the US, and by the time that Neutron is flying I don’t think anyone will perceive them as a “New Zealand company”.
Just their Neutron facility alone should be larger than anything they have in New Zealand. Peter Beck is on record as saying that if they tried to launch Neutron from New Zealand, it would take all the liquid oxygen in the entire country just to fill up the tank halfway!
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I hope they write "1 New Zealand --- " halfway up the fuel tank. :)
Last week was very optimistic, which I don't expect to last. Sometime in the next 4-5 weeks I expect the markets to drop and take RLKB down a bit further... at which point I plan to reach a full allocation in RLKB stock.
While wondering about analyst predictions, I found the following page where Yahoo also mentions similar companies.
https://finance.yahoo.com/quote/RKLB/analysis?p=RKLB
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A couple of Rocket Lab's smaller competitors stood out because they have revenue. I bought a half allocation of both stocks today, mostly for more exposure to space companies.
"Planet Lab" (PL) $124M revenue, market cap 10x revenue
"Redwire Corp" (RDW) $103M revenue, market cap 4.5x revenue
Planet Lab has 7 analysts, with 6 "buys" and 1 "strong buy". They went public via SPAC and lost -50% in mid December. But I don't understand the almost cyclical volatility in the current environment.
Redwire isn't far above micro-cap size (250M), and has just 1 analyst ("strong buy"). Also a SPAC, but with a more gradual loss since IPO. Seems to be recovering right now.
This was motivated partly by my new view on Rocket Lab: I'm going to give it a 1.5x allocation in my portfolio, so I bought more today. Analysts have a favorable view (3 strong buy, 2 buy, 1 hold) of RKLB stock. I think there's enough parallels with Space X that it will... uh... take off. (sorry)
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A couple of Rocket Lab's smaller competitors stood out because they have revenue. I bought a half allocation of both stocks today, mostly for more exposure to space companies.
"Planet Lab" (PL) $124M revenue, market cap 10x revenue
"Redwire Corp" (RDW) $103M revenue, market cap 4.5x revenue
Planet Lab has 7 analysts, with 6 "buys" and 1 "strong buy". They went public via SPAC and lost -50% in mid December. But I don't understand the almost cyclical volatility in the current environment.
Redwire isn't far above micro-cap size (250M), and has just 1 analyst ("strong buy"). Also a SPAC, but with a more gradual loss since IPO. Seems to be recovering right now.
Since you seem so interested in the space industry, I recommend that you stay informed with the latest news and learn about the companies you are interested in on YouTube. Here are some resources that you might find helpful!
Best websites for news about the space industry:
- SpaceNews (https://spacenews.com/)
- Space.com (https://www.space.com/)
Good space investing YouTube channels:
- Unearthly Invest (https://www.youtube.com/c/UnearthlyInvest)
- Launch Window Research (https://www.youtube.com/channel/UC-PboJVtlRD_r6m4Wvb4sew)
- Sven Witney (https://www.youtube.com/channel/UCH8PP97QBzF3RVtA3UDktXA)
Here are some good videos on Planet Labs and Redwire from the above:
- Satellogic vs BlackSky & Planet Labs - Which Is the BEST Satellite Imagery Stock? (https://www.youtube.com/watch?v=hMt1lPraf3Y)
- Planet Labs vs BlackSky - Satellite Imagery Leader vs Promising Newcomer (https://www.youtube.com/watch?v=8l9KU8_1lwM)
- Why Redwire is the BEST SPACE stock out there (https://www.youtube.com/watch?v=9nZvOJHY6Ds)
- Rocket Lab's vs Redwire's Acquisitions (https://www.youtube.com/watch?v=C-L1NnroMKE)
- An Intro to Redwire Space Stock ($RDW) (https://www.youtube.com/watch?v=uTHhZtHUzj8)
- Why Redwire’s CEO Was the Perfect Choice (https://www.youtube.com/watch?v=ZAFvc1pur8w)
There are a lot of opinions among different people as to which space companies are the best to invest in. I like Rocket Lab because it is one of the largest and most diversified companies of the bunch, with technology that is both working and commercialized. I recommend that you do your own research and come to your own conclusions!
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A couple of Rocket Lab's smaller competitors stood out because they have revenue. I bought a half allocation of both stocks today, mostly for more exposure to space companies.
"Planet Lab" (PL) $124M revenue, market cap 10x revenue
"Redwire Corp" (RDW) $103M revenue, market cap 4.5x revenue
Planet Lab has 7 analysts, with 6 "buys" and 1 "strong buy". They went public via SPAC and lost -50% in mid December. But I don't understand the almost cyclical volatility in the current environment.
I'm a customer of PlantLab although we probably buy more from Maxar Technologies (30 cm resolution vs 50 cm is hard to pass up). Really happy with the product, I hope Planet moves to even higher resolutions soon. My understanding is the 30 cm threshold is a regulatory barrier rather than technical.
It's not entirely clear to me how effective a moat either Maxar or Planet have against new competitors springing up and offering the same service for less as the cost of launch continues to decline. Launch is most of the cost at this point, apparently a Planet Labs satellite only costs on the order of a few thousand bucks to build.
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It's not entirely clear to me how effective a moat either Maxar or Planet have against new competitors springing up and offering the same service for less as the cost of launch continues to decline. Launch is most of the cost at this point, apparently a Planet Labs satellite only costs on the order of a few thousand bucks to build.
That’s a great point. The satellite imagery space is very crowded and I expect to see some consolidation there in the near future. This could be a great opportunity for a launch company with ambitions to own a satellite constellation like Rocket Lab or Astra to swoop in, acquire one of the cheaper satellite imagery companies, and then beat out the competition because they won’t be able to compete on launch costs.
Launch might not be a huge revenue driver compared to space systems and space services, but it is key to building a business moat around lower cost structure. It’s the same sort of idea that railroad companies a century ago had when they used their advantages as the railroad owner to enter into adjacent industries. In other words, any space systems or space services companies who also own the “railroads to space” will have a huge competitive advantage over those that do not.
Imagine this, but in space and hopefully with less exploitative practices:
(https://images.theconversation.com/files/208953/original/file-20180305-146650-3i9vpv.jpg)
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The satellite imagery space is very crowded and I expect to see some consolidation there in the near future. This could be a great opportunity for a launch company with ambitions to own a satellite constellation like Rocket Lab or Astra to swoop in, acquire one of the cheaper satellite imagery companies, and then beat out the competition because they won’t be able to compete on launch costs.
Aside from Maxar and Planet Labs who all do you know who is playing in this space? I'm excited to learn about any new players. The frequency of imaging it is possible to get with Maxar is not so great. Planet's frequency is much better but they currently max out at 50 cm/pixel.
I guess there is also BlackSky -- they were the clients on Rocket Lab's failed launch back in May -- but BlackSky is all the way back 1 m/pixel resolution at least until 2023. Isn't much good for a lot of applications unfortunately.
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Aside from Maxar and Planet Labs who all do you know who is playing in this space? I'm excited to learn about any new players.
This post (https://forum.mrmoneymustache.com/investor-alley/rocket-lab/msg2902437/#msg2902437) has a brief list of companies. Hope you find that helpful!
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A couple of Rocket Lab's smaller competitors stood out because they have revenue. I bought a half allocation of both stocks today, mostly for more exposure to space companies.
Since you seem so interested in the space industry, I recommend that you stay informed with the latest news and learn about the companies you are interested in on YouTube. Here are some resources that you might find helpful!
...
Good space investing YouTube channels:
My goal is buying a large number of stocks that collectively beat the market. So these 3 companies are not actually that significant in my portfolio, and I haven't researched them much. I'm somewhat worried that my other stocks are too similar, so space provides some diversification from that.
While I watched the entire interview with Rocket Lab's CEO, I generally avoid watching YouTube to learn about stocks. I prefer reading material with data. And most important to me are third party opinions where I know there's no conflict of interest.
I think you're right about Rocket Lab being the best space stock out there. But for me, I'm investing in a number of stocks, which is why I bought a few more. But I'm only doing a light amount of research before making the buy decision. When I have less cash to invest that might change.
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"Planet Lab" (PL) $124M revenue, market cap 10x revenue
Planet Lab has 7 analysts, with 6 "buys" and 1 "strong buy". They went public via SPAC and lost -50% in mid December. But I don't understand the almost cyclical volatility in the current environment.
I'm a customer of PlantLab although we probably buy more from Maxar Technologies (30 cm resolution vs 50 cm is hard to pass up). Really happy with the product, I hope Planet moves to even higher resolutions soon. My understanding is the 30 cm threshold is a regulatory barrier rather than technical.
It's not entirely clear to me how effective a moat either Maxar or Planet have against new competitors springing up and offering the same service for less as the cost of launch continues to decline. Launch is most of the cost at this point, apparently a Planet Labs satellite only costs on the order of a few thousand bucks to build.
A few weeks ago I noticed Satellite images used by TV stations were from Maxar, and checked out their stock. The stock had already spiked, so the added business seems to already be priced in.
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I wouldn't necessarily recommend Maxar as an investment (as much as I like their products and so send them a bunch of money). They're something of a legacy space company that came out of a series of mergers of various commercial providers selling high resolution imagery to various branches of the US government. Their hardware is outstanding, but it's also expensive and it's not clear to me they have the cash flow to replace it as it reaches end of life, let alone invest in additional throughput.
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Good news, word on Twitter (https://twitter.com/thesheetztweetz/status/1506345289350885386?t=S_KKvONsEMIAbLIAWRQdlw&s=19) is that Rocket Lab’s first helicopter catch attempt will happen the launch after next. So just one more normal launch to go before the helicopter recovery attempt! I can’t wait!
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Good news, word on Twitter (https://twitter.com/thesheetztweetz/status/1506345289350885386?t=S_KKvONsEMIAbLIAWRQdlw&s=19) is that Rocket Lab’s first helicopter catch attempt will happen the launch after next. So just one more normal launch to go before the helicopter recovery attempt! I can’t wait!
As crazy as helicopter recovery might sound, Rocket lab has already done a test of helicopter recovery (https://www.youtube.com/watch?v=HOnNYWu6onU). Even parts of the rocket can have GPS, and then they combine that with a type of maneuverable parachute (which has a technical term I forgot). It's a bit like a glider following a fixed direction while transmitting GPS co-ordinates, and relying on something maneuvering below it.
Realistically, I don't expect the first real attempt to work as well as the demo (https://www.youtube.com/watch?v=GjjChCi-ghE). Don't you expect the first attempt to fail, and provide more information towards a successful follow up attempt?
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"As it stands today, SpaceX has a valuation of $100B and Rocket Lab is worth $3.86B. If in the future SpaceX becomes a $1T company, and if Rocket Lab is worth just 1/10 of that, they will be a $100B company which represents 25x growth from current levels!"
Yeah these kinds of arguments where it's like "if they can only, then..." is somewhat misleading because it lies under the assumption that some highly speculative thing would happen, and it's impossible to assign a probability to it. That said, I've a dumb question:
They've got some customers and some successful missions. Their last 10K said they did (in thousands):
5287 in revenue by end of Sept 2021
10670 in revenue by end of Sept 2020.
So their revenue dropped 50% YoY. Doesn't this seem unhealthy, regardless of how many customers they have?
Also, their cost of revenue is 17738 for end of Sept 2021 and 12555 end of Sept 2020, with 60% of it just in labor/manufacturing. This means they're doing a net of -5355 and 3137, respectively if we pretended everything was free except for the labor and manufacturing. They basically said this is the main cost they want to drive down, but was wondering like what are the initiatives of driving that down and how do you gauge what their progress is in driving down labor/manufacturing costs?
Also in a separate expense category their selling, general, and admin (not marketing and not R&D, and won't contribute to the actual product) was 25655 in 2021 and 6057 in 2020. Just admin and selling is exceeding revenue of 2021 and the 6057+12555*.6 also exceeds revenue of Sept 2020.
You might conclude their R&D would decrease their manufacturing costs, but how do you determine by how much?
And also, they say: "We will continue to actively promote our products. We also expect to invest in our corporate organization and incur additional expenses associated with transitioning to, and operating as, a public company, including increased legal and accounting costs, investor relations costs, higher insurance premiums and compliance costs. As a result, we expect that selling, general and administrative expenses will increase in absolute dollars in future periods but decline as a percentage of total revenue over time." How do you determine by how much?
Seems like they need initiatives that they will need to execute almost flawlessly in order for this to have a positive cashflow, which is a lot of "ifs". Say they cut their costs in HALF by next year, or:
17738*.3 + 25655*.5 (not even counting shareholder stuff, R&D, and other expenses) -- they'd only breakeven with their revenue if they 4X'd business (in other words, their admin / selling needs to increase by a factor of 4*2 = 8X).
Also keep in mind there might be some underlying in inflation of value in SpaceX's valuation due to Elon's reputation. In other words, people might count Elon being evolved as a massive value boost to the company, which is orthogonal to the fundamental business.
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Realistically, I don't expect the first real attempt to work as well as the demo (https://www.youtube.com/watch?v=GjjChCi-ghE). Don't you expect the first attempt to fail, and provide more information towards a successful follow up attempt?
I'm pretty optimistic about it, actually. Mid-air retrieval (https://en.wikipedia.org/wiki/Mid-air_retrieval) of equipment returning from space is a proven process that was first done all the way back in 1955. Rocket Lab did another round of helicopter catch tests in January 2022 and they were very successful (https://twitter.com/Peter_J_Beck/status/1484706051257925632). By now, Rocket Lab has had a lot of practice catching stuff with the helicopter and understanding where the booster will hit the ocean.
Yeah these kinds of arguments where it's like "if they can only, then..." is somewhat misleading because it lies under the assumption that some highly speculative thing would happen, and it's impossible to assign a probability to it.
Yeah, that is just speculation. But it is based off of the observed fact that companies like Rivian, Lucid, and Nikola got massive valuations because they are the “same” as Tesla and Tesla is a $1T company. Rocket Lab is to SpaceX as Rivian is to Tesla IMO.
So their revenue dropped 50% YoY. Doesn't this seem unhealthy, regardless of how many customers they have?
Their order backlog is increasing by leaps and bounds, and I am confident that this will translate into revenue growth in the future. These are signed contracts. My main concern with the company right now is that Rocket Lab has a demand problem for launches. I am not seeing enough launches taking place this year and enough new launch contracts being signed to get us to one launch per month. Peter Beck swears that there is not a demand problem but for now it seems we have to take him at his word.
Also, their cost of revenue is 17738 for end of Sept 2021 and 12555 end of Sept 2020, with 60% of it just in labor/manufacturing. This means they're doing a net of -5355 and 3137, respectively if we pretended everything was free except for the labor and manufacturing. They basically said this is the main cost they want to drive down, but was wondering like what are the initiatives of driving that down and how do you gauge what their progress is in driving down labor/manufacturing costs?
Also in a separate expense category their selling, general, and admin (not marketing and not R&D, and won't contribute to the actual product) was 25655 in 2021 and 6057 in 2020. Just admin and selling is exceeding revenue of 2021 and the 6057+12555*.6 also exceeds revenue of Sept 2020.
You might conclude their R&D would decrease their manufacturing costs, but how do you determine by how much?
I can’t say how much but the general idea is that the R&D needed to make Electron and Neutron reusable should greatly decrease manufacturing costs. Also, the pivot to space systems and space services is very important because those are higher margin businesses than launch, where the majority of Rocket Lab’s revenue is currently coming from.
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More good news for Rocket Lab! Russia's invasion of Ukraine effectively ended commercial business for Russia’s Soyuz rocket, and former Soyuz customers are looking elsewhere for launch services.
To be fair, SpaceX is going to be the primary beneficiary of these developments. Rocket Lab's Electron rocket is simply too small to act as a replacement for Soyuz, and Neutron won't be in service until 2024 at the earliest. For example, OneWeb just inked a contract with SpaceX (https://www.theverge.com/2022/3/21/22988867/oneweb-spacex-launch-agreement-russia-roscosmos-soyuz) to launch their satellites on Falcon 9, even though OneWeb is a direct competitor to SpaceX’s Starlink and doesn't want to give SpaceX their business. However, Rocket Lab is getting a ton of interest in Neutron from former Soyuz customers. Peter Beck revealed in an interview today that Rocket Lab is considering to build three Neutrons in 2024, instead of just one as originally planned (https://finance.yahoo.com/news/rocket-lab-weighs-speeding-development-150745066.html). If this comes to pass, it will be great news for Rocket Lab.
In other news, the debut of Blue Origin's New Glenn (https://en.wikipedia.org/wiki/New_Glenn) rocket just got delayed (https://news.yahoo.com/blue-origin-again-delays-upcoming-174354542.html) by another year. New Glenn is an important competitor to Neutron, and it is looking increasingly likely that both rockets are going to debut around the same time. New Glenn was originally supposed to have its first launch in 2020. Hopefully Neutron will not encounter similar delays!
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The market capitalization is only $7.1B right now for Rocket Labs right? That's what Alexa just told me.
Is this a relatively low market cap for a public space company? Is there a lot of room for growth? Could it 10X?
I saw the stock doubled for a short period a few months back.
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The market capitalization is only $7.1B right now for Rocket Labs right? That's what Alexa just told me.
Is this a relatively low market cap for a public space company? Is there a lot of room for growth? Could it 10X?
I saw the stock doubled for a short period a few months back.
Rocket Lab currently has a market cap of $3.94B. They have one of the highest market caps of all pure-play New Space companies. That being said, SpaceX has a valuation of $100B, many times higher than Rocket Lab. If Rocket Lab succeeds in their long term plans, the stock should be worth multiples of what it is today.
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Thanks I got a GTC+EXT buy limit order of 50 shares for $8.76 :) I'll give it a shot :)
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The market capitalization is only $7.1B right now for Rocket Labs right? That's what Alexa just told me.
Is this a relatively low market cap for a public space company? Is there a lot of room for growth? Could it 10X?
I saw the stock doubled for a short period a few months back.
Rocket Lab currently has a market cap of $3.94B. They have one of the highest market caps of all pure-play New Space companies. That being said, SpaceX has a valuation of $100B, many times higher than Rocket Lab. If Rocket Lab succeeds in their long term plans, the stock should be worth multiples of what it is today.
The valuation of SpaceX is just based on irrational Elon Musk swagger, wall street circle-jerk. He gets high and talk about self-parking teslas on Mars > stock goes up billion dollars, etc. So not useful comparison for any company that operate in the "real world".
In other news; RKLB has been dropping a bit more than the market lately, I'm thinking of a adding a bit more funny-money. At some sub-$9 point.
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Thanks for the info. I DCA'd down from the original 50 @ $8.76. Now I am 100 shares at $8.68. :) To be honest, I might set a sell limit order for 100 @ $13.02 or so (for a 50% gain on my $868).
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Rocket Lab’s next launch has been scheduled (https://investors.rocketlabusa.com/news/news-details/2022/Rocket-Lab-Confirms-Next-Electron-Launch-Window-Opens-for-BlackSky-April-1-2022-UTC-Provides-Update-on-Effect-to-Prior-Q1-Revenue-Guidance/default.aspx) for April 1st, 2022—next Friday. Because of the delay, the revenue for this launch had to be shifted from Q1 to Q2, meaning that Rocket Lab will miss their Q1 2022 guidance. The stock is down today as a result.
In other news, I think this recent article (https://spacenews.com/satellite-supplier-with-in-house-production-bid-the-lowest-price-for-dod-constellation/) underscores the importance of vertical integration in satellite manufacturing. Last month, the Department of Defense awarded three contracts: $700M to Lockheed Martin, $692M to Northrop Grumman, and $382M to York Space for a constellation of military communication and surveillance satellites. Each company has to deliver 42 satellites by 2024. Why was York Space vastly cheaper than the other two contract winners? Because they build their satellites in-house, whereas Lockheed Martin and Northrop Grumman are buying satellite buses from partner companies.
Rocket Lab is aiming to be one of the most vertically integrated satellite manufacturers in the world, even manufacturing their own solar panels and providing their own launch services. In other words, Rocket Lab will be even more vertically integrated than York Space. I am excited to see the level of cost efficiencies that Rocket Lab can achieve with their incredible level of vertical integration!
Check out this excerpt from the article:
“That is something that we’re seeing on both of our first two tranches, that one company is much lower than the other,” he said.
“When you see the three awards that we made, two to very large traditional defense primes that are not building their own satellites, they’re actually buying them,” Turner said. “Only one of our primes is literally building their own buses. And I think we’re seeing that in some of the costs that we’re getting.”
Turner said SDA is trying to create a competitive marketplace with real opportunities for companies to win satellite contracts every two years. The agency has said it wants to avoid “vendor lock,” or becoming dependent on a single vendor for any product or service.
However, two of the winners of Transport Layer Tranche 1 — Lockheed Martin and York Space — also won Transport Layer Tranche 0 in 2020.
That seems to contradict SDA’s rhetoric, Turner said. The agency is aware of that and is trying to figure out ways to open up the playing field despite government contracting rules that often favor incumbents because they have more experience.
“That’s actually something that has bothered me a little bit since we did the acquisition for the latest round of satellites,” he said. “We firmly believe at SDA that we do not have incumbents. We firmly believe that what we’re trying to do is create a marketplace and send a demand signal to the market.”
The Department of Defense really wants to open up (https://spacenews.com/dod-wants-to-change-how-it-buys-space-technology-but-can-it/) these lucrative government contracts to companies like Rocket Lab. Just think of how competitive Rocket Lab can be here! This round of DoD contracts is worth a whopping $1.8B. Just last week, we were talking about a separate $2.5B satellite constellation (https://spacenews.com/dod-estimates-2-5-billion-price-tag-for-global-constellation-to-track-hypersonic-missiles/) that the DoD is building. These contracts absolutely dwarf the $143M Globalstar contract that Rocket Lab won. If Rocket Lab can just land part of one of these contracts, they will be sitting pretty!
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Cynical take: York Space is given 21.5% of the cash to build 1/3rd of the satellites. Meanwhile Lockheed gets almost twice as much (39.5%) to build another 1/3rd. It's nice a new space company get a cut, but ~80% still goes to old space companies.
Hopefully success with York Space can shift more money their way - and more money, in general, to newer space companies.
Herbert Derp - Personally I avoid mentioning exact amounts and shares to keep my portfolio more private. That said, the individual stock picks I buy are roughly 0.1% each of my portfolio. Is your Rocket Lab holding closer to 1%, 5%, 20% or 50% of your overall portfolio?
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Herbert Derp - Personally I avoid mentioning exact amounts and shares to keep my portfolio more private.
Just curious; why should this matter? Especially when it's only a couple hundred. If you have millions yes maybe some hackers will track you down here and try to steal it, but even that seems rather unlikely.. I say this as someone who's usually very paranoid about privacy. We all know people here have a lot of money invested, what it's invested in seems pretty irrelevant..?
on topic; bought few more shares at $8! Total is above a couple grand now, which is about as much as I'm comfortable having in individual stocks. Just not enough to get really rich if it goes 10x, lol :D
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Cynical take: York Space is given 21.5% of the cash to build 1/3rd of the satellites. Meanwhile Lockheed gets almost twice as much (39.5%) to build another 1/3rd. It's nice a new space company get a cut, but ~80% still goes to old space companies.
Hopefully success with York Space can shift more money their way - and more money, in general, to newer space companies.
I think the pro-Rocket Lab narrative here is that:
- Vertically integrated New Space companies are outcompeting (https://spacenews.com/satellite-supplier-with-in-house-production-bid-the-lowest-price-for-dod-constellation/) legacy Old Space defense contractors on cost for lucrative US Department of Defense satellite contracts.
- The DoD understands this, and wants to “open up (https://spacenews.com/dod-wants-to-change-how-it-buys-space-technology-but-can-it/)” these contracts so that commercial New Space companies have a better chance to win these contracts.
- Rocket Lab is positioning themselves to be one of the most vertically integrated satellite manufacturers in the world, and will be a prime beneficiary of the “opening up” of these contracts, because they will be extremely competitive on price. Rocket Lab has said flat out that they plan to be an extremely vertically integrated satellite manufacturer and launcher, and the list of companies that they have acquired shows clear progress towards this goal.
- All of this is more plausible because Rocket Lab has a history of working with the DoD (https://www.newshub.co.nz/home/new-zealand/2021/07/rocket-lab-s-peter-beck-defends-contracts-with-us-military-says-space-industry-intertwined-with-defence.amp.html) and has stated that their business is “very, very intertwined with defence”. Some people in New Zealand have a problem with this but Rocket Lab has pivoted away from New Zealand and is now a US-based company with a burgeoning capability to design, manufacture, and launch satellite constellations from the US.
Herbert Derp - Personally I avoid mentioning exact amounts and shares to keep my portfolio more private. That said, the individual stock picks I buy are roughly 0.1% each of my portfolio. Is your Rocket Lab holding closer to 1%, 5%, 20% or 50% of your overall portfolio?
Just curious; why should this matter? Especially when it's only a couple hundred. If you have millions yes maybe some hackers will track you down here and try to steal it, but even that seems rather unlikely.. I say this as someone who's usually very paranoid about privacy. We all know people here have a lot of money invested, what it's invested in seems pretty irrelevant..?
I no longer discuss the contents of my portfolio on this website but let’s just say that I have enough RKLB that it will make a material difference for me if the stock 10x’s but won’t have much of an impact if it goes to zero.
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The opportunity is huge, and the moat is deep. SpaceX seems to be too focused on Starlink and going to Mars and has not competed in this area. If Rocket Lab and Astra can establish themselves in this space, they could become very successful space platform companies and it will be very difficult for any new startups to challenge them.
Trying to understand how going to Mars would be profitable. I mean the planet is desolate and 6 months away via travel -- at it's closest. How would the astronaughts be protected from all the solar radiation for an extended period of time? The space shuttles and ISS are all beneath an atmospheric belt which protects them from the sun's radiation right? (I think I read that but I forget what protects them.)
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Trying to understand how going to Mars would be profitable.
Going to Mars is not profitable. The point I was making is that industry leader SpaceX seems too focused on its other endeavors to try and compete with Rocket Lab by selling satellite busses or satellite components to other companies or building out custom built constellations for third party clients.
In any case, there is a huge opportunity in the space industry. Many analysts expect the industry to rake in over $1T in annual revenue (https://www.marketwatch.com/story/space-infrastructure-is-the-next-investment-frontier-and-spacs-are-a-launch-pad-11618294752) by the end of the decade, and this new space race may generate a fresh crop of billionaires (https://finance.yahoo.com/news/the-billionaires-of-tomorrow-will-be-made-in-space-astra-ceo-193629562.html).
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Trying to understand how going to Mars would be profitable.
Going to Mars is not profitable. The point I was making is that industry leader SpaceX seems too focused on its other endeavors to try and compete with Rocket Lab by selling satellite busses or satellite components to other companies or building out custom built constellations for third party clients.
In any case, there is a huge opportunity in the space industry. Many analysts expect the industry to rake in over $1T in annual revenue (https://www.marketwatch.com/story/space-infrastructure-is-the-next-investment-frontier-and-spacs-are-a-launch-pad-11618294752) by the end of the decade, and this new space race may generate a fresh crop of billionaires (https://finance.yahoo.com/news/the-billionaires-of-tomorrow-will-be-made-in-space-astra-ceo-193629562.html).
Do you also have some invested in Astra? Or just RKLB?
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I do own some Astra stock but that company is less mature than Rocket Lab and has some issues that need sorting out. I sold off half of my shares of Astra a few months ago after their first successful launch. Astra fills an important niche for the US military though, and I think they will stay around.
Now that Astra’s stock price has tanked to $4, it might be a good investment opportunity again. Their rockets are proven to work and they have finally deployed satellites to orbit. However, Astra is still extremely focused on launch, but most of the profit in the space industry is in space systems and space services, not launch. Astra remains fixated on launch because they need to make huge upgrades to their current rocket for their business model to work.
Rocket Lab has more resources than Astra and can afford to aggressively expand into space systems and space services while developing their next-generation Neutron rocket in parallel. As a result, Rocket Lab has a massive lead over Astra in terms of space systems and space services, and this lead is only getting larger as time passes.
Again, the real money in the space industry is in space systems (manufacturing satellites and satellite components) and space services (services provided by satellites). Rocket Lab recently signed a single $143M space systems contract to build satellite busses for Globalstar. Just that single contract brings them the same revenue as almost 24 Electron rocket launches, or two years worth of launches at Rocket Lab’s current launch rate!
Astra also has much less cash on hand. Astra will probably need to raise money and dilute the value of their stock in the future, whereas Rocket Lab can get by without raising money.
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Terran Orbital (https://terranorbital.com/), a satellite manufacturer and key competitor to Rocket Lab, has just gone public (https://www.cnbc.com/2021/10/29/terran-orbital-going-public-via-spac-at-1point8-billion-valuation.html) via SPAC. The SPAC currently trades under TWNT and will change its ticker symbol to LLAP ("Live Long And Prosper") once the merger is complete. The company will be valued at $1.8B, about half of Rocket Lab. Headquartered in Boca Raton, Florida, the company plans to build a 660,000 square foot manufacturing facility near Cape Canaveral, Florida. Terran Orbital says the facility will cost $300M to build, and will be able to produce over 1,000 spacecraft per year once operational. This facility is much larger than Rocket Lab’s space systems facilities. Terran Orbital is highly vertically integrated (https://spacenews.com/terran-orbital-merger-completed/) and produces 65 different satellite components, or 85% of the satellites it manufactures.
The earth imagery sector is getting even more crowded! Terran Orbital plans to expand into space services by building its own constellation of earth imagery satellites, with 96 spacecraft in orbit. The company plans to launch the first two of its satellites next year, and have the full constellation in orbit by 2026. Rocket Lab still hasn’t announced what their space services constellation will be. Surely, it won’t be for earth imagery—the market for that just seems too saturated.
Terran Orbital had $25M in revenue in 2021, all from its satellite solutions unit, and expects that to rise to $35M in 2022. In comparison, Rocket Lab had about $23M in space systems revenue in 2021 and expects that to rise to $61M in 2022. Terran Orbital expects to be profitable on an adjusted EBITDA basis by 2023, and projects $2.6B in revenue by 2026—with $918M coming from satellite solutions (space systems) and $1.7B from its earth imagery business (space services). This is more than double the $1.159B in revenue ($658M launch, $501M space systems) that Rocket Lab is projecting in 2026. Given how crowded the earth imagery sector is, I find it rather optimistic to think that Terran Orbital could out-muscle strong, established competitors like Maxar, Planet Labs, and BlackSky and claw out $1.7B of annual revenue from that business by 2026.
Rocket Lab is currently ahead of Terran Orbital in terms of space systems revenue for 2022, and it will be interesting to see if Terran Orbital can meet their revenue projections and overtake Rocket Lab in the coming years. In any case, I think the comparison of revenue projections between these two companies speaks to how realistic and achievable Rocket Lab's projections are compared to the extremely optimistic projections of some of their competitors.
Terran Orbital is definitely a company to keep a close eye on and compare to Rocket Lab going forward. We will soon see which contracts these companies manage to win and who's revenue projections come true.
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^Interesting!
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As I mentioned in my previous post, it is a very tall order for a company like Terran Orbital to out-muscle strong, established competitors like Maxar, Planet Labs, and BlackSky and carve out a niche in the earth imagery sector. I don't think Rocket Lab could pull off this feat, even with the cost structure advantage of being their own launch provider. However, Peter Beck has clearly stated (https://www.inverse.com/innovation/rocket-lab-ceo-megaconstellations) that he intends for Rocket Lab to own its own space services constellation.
That is why I am skeptical that Rocket Lab will try and build out a completely new space services constellation of their own. Other companies have already established themselves in every space services sector that makes financial sense, such as earth imaging and satellite internet. Rocket Lab has to either come up with a novel idea for a space services constellation that hasn't been done yet, muscle their way in to a crowded market like Terran Orbital is attempting to do, or acquire an existing space services company. Personally, I can't think of any novel ideas for constellations aside from building infrastructure around the Moon or Mars, which doesn't make financial sense right now. Trying to go the Terran Orbital route and muscle in to a crowded market doesn't make sense either.
Therefore, I think it makes the most sense for Rocket Lab to acquire or merge with an established space services company. There is bound to be more consolidation in the space industry, and Rocket Lab has deliberately positioned themselves to benefit from this. The main reason why they went public in the first place was to facilitate the acquisition of other companies. So far, the companies that Rocket Lab have acquired have all been partners with Rocket Lab in the past. Rocket Lab was already used to working with these companies before acquiring them, and had made use of their technology on previous missions.
Furthermore, the stock prices of some space services companies like Spire Global (https://spire.com/) and BlackSky (https://www.blacksky.com/) have been plummeting in recent months. Spire Global and BlackSky both went public at $10 per share but have now dropped to $2.02 (https://www.google.com/search?q=spir) and $1.75 (https://www.google.com/search?q=bksy), respectively. At this point, Spire Global has a market cap of only $305M and BlackSky has a market cap of just $203M. These companies are getting cheap enough to be acquired by Rocket Lab!
Also, both of these companies have worked with Rocket Lab in the past. Rocket Lab has launched satellites for both Spire Global and BlackSky, and BlackSky's satellites use Rocket Lab's separation systems, reaction wheels, and star trackers. Since BlackSky's market cap has gone so low and they use so much of Rocket Lab's technology, I think they would be a prime target for acquisition. BlackSky is more of a software company than a hardware company, and their investor presentation (https://ir.blacksky.com/company-information/presentations) focuses on their artificial intelligence and big data analytics software platform than on the hardware of their satellites, which they do build in-house.
If Rocket Lab acquired BlackSky, they would gain another satellite factory which is already used to working with Rocket Lab's satellite components, but more importantly, they would get BlackSky's expertise in AI and big data. Rocket Lab has historically been a hardware company and acquiring BlackSky could be a good way to strengthen their software skills! That being said, Rocket Lab keeps saying that they only acquire companies that are "best in class", but as maizefolk has pointed out, the resolution on BlackSky's images is not best in class at 100 cm per pixel whereas their competition is at 30-50 cm per pixel. I wonder how easy it would be for BlackSky to upgrade their resolution? @maizefolk, do you know what their plans are for 2023?
Nevertheless, I think Rocket Lab and BlackSky have strong synergies. Imagine how competitive BlackSky's services could be if all that money they spent on Rocket Lab launches, separation systems, reaction wheels, and star trackers went straight to the bottom line! Meanwhile, the acquisition could provide Rocket Lab an entry point to space services, much needed AI and software expertise, and another satellite factory.
What do you guys think? Is the acquisition strategy Rocket Lab's best option to break into the space services sector?
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If Rocket Lab acquired BlackSky, they would gain another satellite factory which is already used to working with Rocket Lab's satellite components, but more importantly, they would get BlackSky's expertise in AI and big data. Rocket Lab has historically been a hardware company and acquiring BlackSky could be a good way to strengthen their software skills! That being said, Rocket Lab keeps saying that they only acquire companies that are "best in class", but as maizefolk has pointed out, the resolution on BlackSky's images is not best in class at 100 cm per pixel whereas their competition is at 30-50 cm per pixel. I wonder how easy it would be for BlackSky to upgrade their resolution? @maizefolk, do you know what their plans are for 2023?
In principle BlackSky's Gen-3 satellites will be able to deliver 50 cm resolution. They'd like to start launching these in 2023, but the whole industry is launch capacity constrained particularly now that no one is ever going to trust Russia to be a commercial launch provider again.
But again, this is BlackSky aiming to catch up to today's state of the art in the next couple of years. Their challenge is that the state of the art isn't standing still. By the time BlackSky is able to get significant numbers of Gen3 50 cm resolution satellites into orbit, they'll likely be competing with Planet's Pelican constellation which will have resolution significantly below 50 cm resolution (we don't know exactly how much below 50 cm resolution yet). Planet contracts with SpaceX for launch which is probably the only non-capacity constrained launcher at the moment.
It's even possible that by the time BlackSky's Gen-3 satellites are in order they'll be competing with Albedo's 10 cm resolution imagery (they're the first people to ever get approval to sell imagery with resolution that high!) which is currently scheduled to start coming online in 2024. But they're an early stage startup so could easily fail or see timeline slippage.
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In principle BlackSky's Gen-3 satellites will be able to deliver 50 cm resolution. They'd like to start launching these in 2023, but the whole industry is launch capacity constrained particularly now that no one is ever going to trust Russia to be a commercial launch provider again.
Neutron to the rescue?
But again, this is BlackSky aiming to catch up to today's state of the art in the next couple of years. Their challenge is that the state of the art isn't standing still. By the time BlackSky is able to get significant numbers of Gen3 50 cm resolution satellites into orbit, they'll likely be competing with Planet's Pelican constellation which will have resolution significantly below 50 cm resolution (we don't know exactly how much below 50 cm resolution yet). Planet contracts with SpaceX for launch which is probably the only non-capacity constrained launcher at the moment.
It's even possible that by the time BlackSky's Gen-3 satellites are in order they'll be competing with Albedo's 10 cm resolution imagery (they're the first people to ever get approval to sell imagery with resolution that high!) which is currently scheduled to start coming online in 2024. But they're an early stage startup so could easily fail or see timeline slippage.
Good points! I’d like to know what Terran Orbital is smoking if they think they can just barge into the earth imagery sector and achieve such a massive revenue by 2026 despite having no expertise with state of the art satellite optics technology. That gigantic satellite factory isn’t going to help them get to 30 cm per pixel. Does their strategy make any sense to you?
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Looking at Black Sky's statistics on Yahoo Finance, something puzzled me. How does a company with 29M revenue and -65M EBIDA wind up with $195M cash? And then I realized - the SPAC deal funded them.
https://finance.yahoo.com/quote/BKSY?p=BKSY
I think the key question is this: is Black Sky in decent financial shape? I don't actually know. But here's my random speculation as a lay person trying to think like a venture capitalist.
You can spot SPAC offerings by their months of $10/share price, like Black Sky. Since then BKSY has fallen over 80% to wind up at $1.75/share. That gives them a market cap of $212M.
Acquiring companies always pay a premium. It looks like BKSY fell dramatically to around $2.65/share, and then fell more slowly from there. If negotiating a buy out began around that time, or if management mentally locked in on that price, it could be difficult. Paying a +50% premium is too expensive.
Maybe there's a compromise for +30% over current market price? Which would mean a market cap of $275M. Let's stay Rocket Lab does a stock swap, issuing new shares worth $275M to buy BKSY stock. Rocket Lab's stock would dilute 7% (hitting us), and that $275M worth of stock would buy out holders of BKSY stock.
This gives Rocket Lab $195M in cash! I think this is money from going public through SPAC, since their $29M revenue and -65M EBIDA is probably just eating away at cash. If RocketLab knows how to fix that situation, it might make sense.
For the April 1 launch, RocketLab filed an 8-K capturing the news release:
"Customer: BlackSky through Spaceflight Inc"
If RocketLab buys BlackSky, they have a rocket and satellites to launch within the same company, and can sometimes cut Spaceflight Inc out of it - saving what I assume is a very small amount of money relative to valuations.
So the question still remains, is BlackSky in financial trouble?
($29M revenue, -65M EBIDA, $195M cash remaining)
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Rocketlab’s road map doesn’t have Neutron planned to launch until 2024 and probably won’t be launching in customer projects in bulk until 2025 right? Not soon enough to help Black Sky hit their current 2023 target for Gen3.
If black sky’s market cap is 212 and they have 195 in cash, does that imply the market is valuing their infrastructure satellites IP and existing business at only $17M?
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If black sky’s market cap is 212 and they have 195 in cash, does that imply the market is valuing their infrastructure satellites IP and existing business at only $17M?
Oops, that ignores their debt. Yahoo Finance lists $195M cash and $78M debt, giving a net cash position of $117M. But later on the same screen, BYSY shows:
"Total Debt/Equity (mrq) 51.09"
https://finance.yahoo.com/quote/BKSY/key-statistics?p=BKSY
Back in 2020 I bought beaten up stocks (and made a huge profit), and one of my screening criteria was reasonable debt/equity. I didn't want to own the first companies to go bankrupt, in case Congress waited before acting. So this looks very sketchy to me, 51x as much debt as equity. Where is that debt?
There's no information about the value of their inventory or sales in the pipeline, which could also be important. I don't know if I'm seeing a mess because the company is a mess, or because Yahoo's data about the company is lacking.
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So that would value the business itself (IP infrastructure sales relations satellites etc) at closer to 100M. That makes a lot more sense to me. Even with their lower res and lower revisit times, Black Sky does have working satellites in orbit and presumably a significant number of customers. They could shut down almost everything they are trying to invest in new satellites and services and have a significant amount of revenue at low cost for a number of years. Thanks!
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You can look for "reddit blacksky" to find someone doing their version of due diligence. BlackSky has tried to put a constellation of satellites in orbit 3 times before, and never reached their stated goal. Based on that, it's very likely their goal for 2023 will fail. BlackSky lists "relationships" rather than committed sales. They tout their relationship with RocketLab, but don't point to anything binding. The reddit poster said they will be waiting on the sidelines until things are more stable at BlackSky.
That article mentioned Plantir Tech and Peter Thiel as investors in BlackSky. So one thesis for the stock is that these investors open doors for BlackSky to more government contracts. Looking at their press release, you could also claim most of their losses are from one time costs related to going public.
Here's their 2022 Feb press release talking about their full 2021 financials.
https://www.blacksky.com/2022/02/22/blacksky-reports-fourth-quarter-and-full-year-2021-results/
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It was also interesting that BlackSky had a $18.4M satellite loss on their 2021 balance sheets. Presumably that's the two satellites lost from the failed Rocket Lab launch last May? If that loss hit their books does that mean they were self insuring? I assumed everyone launching satellites had insurance against the risk of loss during launch.
I think I found the reddit post you mean (BlackSky 4.0?). Some of the person's concerns are less valid than they were a year ago. BlackSky demonstrably has a, admittedly small, operational constellation of satellites now.
But I agree with the concern that poster makes about them having no moat. The post also brought up that Maxar (referenced up thread as the sole company providing 30 cm resolution imagery at the moment) launching a new constellation in 2022 called Worldview Legion that will dramatically reduce the current bottleneck for 30 cm imagery, in addition to Planet's new sub 50 cm resolution constellation.
The difficulty and cost of building satellites with high resolution imaging, getting them into the right orbits, and getting all the right permits and approvals to sell high resolution imagery commercially is sufficiently high, and the demand for satellite imagery for different applications is sufficiently large and price elastic, that once a satellite and constellation is up and functioning, the imagery it collects is going to have value. So I think the value of BlackSky's existing functional constellation is substantially greater than zero. (Edit: This is why I was surprised to see the satellite imaging space described as "crowded" in this thread. There are lots of companies planning to launch birds, but just not all that many places you can go to buy imagery today.)
It's just a question of whether the value of the imagery those satellites will collect over their designed lifespan is sufficiently greater than zero to justify the cost of building, launching and permitting. If not, it doesn't make sense to invest in a company that is going to spend its cash continuing to build and launch new satellites.
I don't find the argument that they will carve out a niche from having more access to government contracts particularly compelling. It is true that successfully competing for government contracts is its own art form that prioritizes a lot of additional things beyond just cost and capabilities. That's basically the approach UAL took to define a niche with respect to SpaceX. The problem is that over time success in the commercial market results in dramatic increases in capabilities and decreases in cost until cost and performance gap is so big that being really good about all other stuff isn't enough to win contracts anymore.
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Yes, I think the deep dive had "4.0" in the thread.
I was trying to come up with a positive from that thread, and mentioned the government contracts. But the article focused more on the lack of contracts. I don't know if that's still true - do you have some insight on that? Especially for their 2023 constellation (if it happens).
If BlackSky starts touting signed contracts, instead of hopes at getting contracts, that would be a turning point for them. One of the quarterly reports mentioned lowering an earnings target, which stock analysts hate. First, it shows the company is having problems meeting it's own numbers. But probably more important, it suggests growth is falling. A slow growing tiny company isn't as interesting to investors, who can get slow growth in much more stable companies.
I wonder a little why BlackSky shot up to $1.90/share today... currently trading at $1.85, up +5.7% on ... no news? I bought zero shares... but someone bought hundreds of thousands of dollars worth in early trading.
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Would the missed earnings target coincide with the loss of satellites from the failed Rocket Lab launch? If that that's pretty clearly an external shock rather than something broken within their business model or projections. If it doesn't line up with that, the miss is significantly more worrying.
BlackSky announced some signed contracts in the fall of 2021 which would be after the due diligence thread was posted and after their small constellation went live. One from the NGA worth "up to" $30M over five years and a five year NASA contract of non-specified total value. With the satellites in orbit and functioning I suspect there will be some more similar contracts in the future. Whether it's enough to make BlackSky's business model work long term, I don't know. But the birds they're currently flying should throw off a non-zero revenue stream for some years to come.
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Liking the thoughtful discussion here!!
It contrasts hearteningly with my own more primitive processes. S&P is up (4561 or so), RKLB down (under $7.70), time to buy! Sold a bit of an S&P 500 fund, bought another nibble of RKLB.
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I recall reading that $30M + unspecified contracts... hard to value. I don't think BlackSky is interesting enough for me.
Like BicycleB, I bought more RocketLab today, so I'm at my full 1.5x allocation now.
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Agreed that BlackSky is too risky of an investment for me. This YouTube video (https://www.youtube.com/watch?v=gNiHVcvWK80) pointed out that BlackSky has an overreliance on government contracts, and combined with the Reddit post (https://www.reddit.com/r/SPACs/comments/mfqnn6/blacksky_40_a_deep_dive_for_reddit_into_blackskys/) you guys mentioned, it definitely seems like the company is on shaky ground. With stronger competitors like Planet Labs, I am not sure exactly what value proposition BlackSky brings to the table.
I never really considered investing in BlackSky stock in the first place, but now I don't think that Rocket Lab would benefit much from absorbing BlackSky's business.
In other news, Rocket Lab CFO Adam Spice is going to be giving some sort of presentation about satellite innovation (https://twitter.com/RocketLab/status/1506732455683772417) on Wednesday. I will be on the lookout for any juicy details about Rocket Lab's satellite business.
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That article mentioned Plantir Tech and Peter Thiel as investors in BlackSky. So one thesis for the stock is that these investors open doors for BlackSky to more government contracts. Looking at their press release, you could also claim most of their losses are from one time costs related to going public.
Palantir's investment in BlackSky was interesting. I learned from that YouTube video (https://www.youtube.com/watch?v=gNiHVcvWK80&t=337s) that Palantir made the investment in BlackSky on the terms that BlackSky would spend the money that Palantir gave them on Palantir's services. In other words, BlackSky paid Palantir's money back to them. The end result was that BlackSky got a big discount on Palantir's services and Palantir gained a new customer. Not saying this is a bad thing, but there's more to it than just Palantir handing BlackSky money.
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Hey, just a sidebar question here. But what service are you folks using to purchase individual stocks? And how do you purchase stocks where the trade happens right away?
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Recovered my losses over the past few days with today's gains. I have zero invested in RKLN now at the moment. Stock's too volatile for me at the moment. If there are some big discounts later I'll buy up some RKLB, Astra etc. :) Of course it'll probably go up 30% tomorrow knowing my luck :)
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I have always been an index fund guy, but a couple years ago I decided I would make some small bets. Eg I never bought any of the Faang stocks and missed out on that growth (except whatever represented in SP 500 index).
So my philosophy I will make small bets less than 1% of net worth for things that may be companies at the forefront of growing industries. Eg like trying to find the next Amazon or google, once they’ve started to emerge but before they get too richly valued so the potential is there for a big win if things go well. Or the opposite they could go to nothing but that won’t ruin me since I’m 95% index funds.
Two+ years ago I bought some Tesla and that has a nice paper profit thus far, beginners luck. Recently bought Coinbase, that’s down a bit, and Rocket Lab like a week or two ago.
So I have one company each for EVs/batteries, crypto mgmt, and space.
I look at these as long term plays to see if they can be big 5-10 years down the line. I am not too worried about the week to week variance although it’s interesting to follow the news on them. Also it will be more tax efficient if they do grow if I can sell them in retirement when my income is lower.
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Hey, just a sidebar question here. But what service are you folks using to purchase individual stocks? And how do you purchase stocks where the trade happens right away?
There are a variety of brokerage services you can use for this, some of the most notable being Robinhood, Vanguard, Fidelity, and Webull.
Recovered my losses over the past few days with today's gains. I have zero invested in RKLN now at the moment. Stock's too volatile for me at the moment. If there are some big discounts later I'll buy up some RKLB, Astra etc. :) Of course it'll probably go up 30% tomorrow knowing my luck :)
Yeah, it's going to be a rough ride. No idea why the stock was down so much yesterday and up so much today! Some people say that the volatility is due to price manipulation. In any case, what matters to me is what is going on with Rocket Lab's actual business, not the stock price.
IMO, Rocket Lab is best played as a long term investment over the next 5-10 years. The space industry is going to be huge, and Rocket Lab is one of the largest and most diversified pure-play New Space companies, with real revenue and working, commercialized technology. I believe that this really sets Rocket Lab apart from most other space companies. So much of the competition is either focused on just one small niche of the space industry (i.e. Planet, Momentus), is legacy Old Space (i.e. Boeing), is not a pure-play space company (i.e. Lockheed Martin), lacks revenue (i.e. Virgin Galactic), or has technology that is either not yet in the hands of paying customers or completely unproven (i.e. AST SpaceMobile).
As long-term investors we need to ignore the fluctuations in the stock price and focus on Rocket Lab's business fundamentals. Does the company's technology work? Is the company making the correct strategic investments to set themselves up for long-term growth? Is the company meeting their revenue and profitability goals? Is the competition a threat? Does the company have an economic moat? Is the company financially healthy? These are the sort of questions that everyone should be asking themselves.
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Thanks for the research on Palantir... they were pretty much demanding their money back, which isn't much of an investment. And a discount thrown in, too.
I've got brokerage accounts at Vanguard, IBKR and Schwab. I like IBKR's "Trader Workstation" the best, although IBKR seems to charge commissions on stocks that would be $0/trade at Schwab or Vanguard. Vanguard charges $1/call option while their competitors charge $0.65/call (Schwab, IBKR).
As to why RKLB is rising today, I think it's an overall market lift over the possibility the leaders of Ukraine and Russia might hold face to face talks. I have a lot of these small growth stocks, and all of them are up significantly (though RKLB up more than most). I suspect the market is overly optimistic, as world leaders who know Putin far better are cautioning it's actions not words that matter.
If you haven't watched a YouTube video of a rocket launch, it's worth a look. Even if the stock goes nowhere, you can enjoy supporting the effort while you wait. (Which is an unfair comment on a day RocketLab went up +9.2% so far)
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Hey, just a sidebar question here. But what service are you folks using to purchase individual stocks? And how do you purchase stocks where the trade happens right away?
There are a variety of brokerage services you can use for this, some of the most notable being Robinhood, Vanguard, Fidelity, and Webull.
I buy mine through Fidelity.
I purchase stocks right away by using the "market" setting for order price, instead of the "limit" setting, in the Buy/Sell Stocks part of Fidelity's account interface for personal investors. A "market" order goes through very quickly (immediately/a few seconds/something like that) because this setting accepts in advance whatever price the market would give me at the time Fidelity processes the order.
A "limit order", for example "I want 100 shares of RKLB but only if it's less than $8/share", would wait until the "less than $8" condition is filled; if the price never goes below $8, the order would never complete itself.
My way may not be the smartest way. Buying individual stocks is pretty new for me and most of my portfolio is in index funds/ETFs.
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I think market orders are pretty typical. If you're risk averse you can also put in a limit order for 5-10% above the market clearing price. Should function just like a market order EXCEPT if the price magically spikes up by more than 5-10% it won't execute, instead of having you buy at the new higher price.
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I also do market orders very often :)
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@Viking re CoinBase - Do you think CoinBase has a sufficient moat? What would it take for Schwab/Vanguard/Bank of America/etc to replicate the service they provide? May (all?) harder-core decentralized crypto people would reject them out of hand but there are 100x more "normal" mom and pop people that could become customers with a known name on the front end.
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@Viking re CoinBase - Do you think CoinBase has a sufficient moat? What would it take for Schwab/Vanguard/Bank of America/etc to replicate the service they provide? May (all?) harder-core decentralized crypto people would reject them out of hand but there are 100x more "normal" mom and pop people that could become customers with a known name on the front end.
I am not an expert and not making recommendations to others. I have a small investment in coinbase that I consider a long term bet.
Having said that I think they have a good combination of first mover advantage/ customer base, leading technology, and regulatory compliance (which is not easy in financial services at all, and in an area that other financial services are not as familiar).
There could be a million reasons the investment doesn’t work but I’m not that worried about them being overtaken by the companies you mention or someone similar. Large financial institutions like that are not nimble and way behind coinbase. Just my opinion, of course I could be wrong.
I’m more worried about nimble startup competitors (existing or potential new ones), or just the industry/ opportunity not being lucrative enough given the current valuation. But again it’s a small bet of mine that I’ll let play out. Apologize also for distracting from Rocketlab thread.
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AlanStache - taking the hint from Viking Thor's apology, maybe you want to ask about CoinBase in a separate thread?
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I count myself warned by the forum stay-on-topic police and will definitely not discuss any pros or cons of different brokerage platforms or the fees they may charge.
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I count myself warned by the forum stay-on-topic police and will definitely not discuss any pros or cons of different brokerage platforms or the fees they may charge.
@AlanStache, I think the other brokerages were being discussed as methods for buying Rocket Lab stock. Can Coinbase be used to buy stock?
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Rocket Lab's mission (https://spacenews.com/rocket-lab-launches-blacksky-satellites-as-it-prepares-for-mid-air-booster-recovery/) yesterday was a success! Two more BlackSky satellites are in orbit. The next mission will be the helicopter recovery attempt!!!
In other news, Cathie Wood's CTRU fund just opened a small position (https://ark-funds.com/wp-content/uploads/funds-etf-pdf/ARK_TRANSPARENCY_ETF_CTRU_HOLDINGS.pdf) in Rocket Lab. 22,461 shares. Given the recent performance of Cathie's funds, not sure if this is a good thing lol
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Looks like the launch was in New Zealand. At what point to they switch to the US? Is that when they need a large launch vehicle with excessive liquid oxygen required?
https://www.businesswire.com/news/home/20220402005035/en/
RKLB stock up +2.5% on the news today in the first 40 min of trading.
https://finance.yahoo.com/quote/RKLB/
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Looks like the launch was in New Zealand. At what point to they switch to the US? Is that when they need a large launch vehicle with excessive liquid oxygen required?
https://www.businesswire.com/news/home/20220402005035/en/
From Derp a couple weeks ago:
"Rocket Lab is a US company with headquarters in Long Beach, California. Their Electron factory and launch pads are in New Zealand, and their CEO is a New Zealand citizen. Rocket Lab started as a New Zealand company in 2006 but in 2013 they established their headquarters in the US and became a US company because there was no way that they were going to be able to tap into US capital markets and continue to grow the company by operating out of New Zealand.
At this point in time they have the majority of their employees and facilities in the US, and are continuing to expand their footprint in the US as they build out their space systems facilities in California and Colorado and their Neutron factory in Virginia. Their presence in New Zealand is not expanding at anywhere near the rate that it is expanding in the US, and by the time that Neutron is flying I don’t think anyone will perceive them as a “New Zealand company”.
Just their Neutron facility alone should be larger than anything they have in New Zealand. Peter Beck is on record as saying that if they tried to launch Neutron from New Zealand, it would take all the liquid oxygen in the entire country just to fill up the tank halfway!"
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Good news! Rocket Lab has just scheduled a second launch for this month! Dubbed “There and Back Again (https://www.businesswire.com/news/home/20220405005568/en/Rocket-Lab-to-Attempt-First-Mid-Air-Helicopter-Capture-of-the-Electron-Rocket-During-Next-Mission)”, it is scheduled for April 19th. This is a rideshare mission coordinated by Spaceflight Inc. and will launch 34 satellites for six companies.
Most importantly, this mission will include a midair helicopter recovery attempt of the first stage booster. I am pleasantly surprised by this increased launch cadence and look forward to the booster recovery attempt! If Rocket Lab can pull this off, they will be the second company in human history to recover a fully intact orbital rocket booster!
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Spaceflight Inc will be happy to have a launcher.
https://spacenews.com/spacex-severs-ties-with-spaceflight/
Possible issues:
https://spacenews.com/propellant-leak-forces-sherpa-tug-off-spacex-rideshare-mission/
OR per https://forum.nasaspaceflight.com/index.php?topic=48741.msg2353399#msg2353399 it might have to do with :
I wonder if it was because the recent Swarm SpaceBees were launched through Spaceflight Inc. on Astra's previous Rocket 3 launch. Swarm was acquired by SpaceX, and IIRC the deployable Spaceflight payloads were to be originally flown on a transporter mission. Also, the timing fits that theory: It's been a while since that leak, but the exact day that SpaceBees were announced as having been on board. SpaceX must really not want anyone to launch any of their satellites, especially given the seemingly hasty nature of this decision.
The Sherpa thing probably won't be an issue with RocketLab, as RocketLab has the equivalent (or better) Proton.
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We have some news (https://spacenews.com/york-space-to-triple-satellite-production-to-meet-military-and-commercial-demand/) on York Space (https://www.yorkspacesystems.com/), one of Rocket Lab's competitors in the satellite industry. This is the space systems company that recently won a $382M contract (https://spacenews.com/satellite-supplier-with-in-house-production-bid-the-lowest-price-for-dod-constellation/) with the Department of Defense. York Space is tripling their satellite production capacity (https://spacenews.com/york-space-to-triple-satellite-production-to-meet-military-and-commercial-demand/) by building a new space systems facility in Denver that can produce 540 satellites per year. York Space plans to hire up to an additional 450 employees in the Denver metro area over the next two years. It will be interesting to see how Rocket Lab competes with pure-play space systems companies like York Space and Terran Orbital in the coming years.
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BicycleB - That's good background info, although I was focused more specifically on the date when more than half of cargo is launched in the U.S., rather than mostly in New Zealand.
Earlier this week I sold off all individual stocks for reasons completely unrelated to Rocket Lab. But Rocket Lab was part of that sell off, which you can read about in the journal area of the forum, if anyone is curious.
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BicycleB - That's good background info, although I was focused more specifically on the date when more than half of cargo is launched in the U.S., rather than mostly in New Zealand.
I would expect this to happen around 2025 once Neutron is operational.
However, if you consider space systems revenue, Rocket Lab will soon be earning most of their money in the US. That’s more important than which country they are launching Electron from.
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New news today! Rocket Lab has officially broken ground (https://www.wavy.com/news/virginia/youngkin-celebrates-rocket-lab-neutron-launch-site-groundbreaking/) at the Neutron facility in Virginia. Also, their Q1 2022 earnings call (https://finance.yahoo.com/news/rocket-lab-announces-date-first-204500023.html) is scheduled for Monday, May 16, 2022.
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New news! Rocket Lab just signed a three-launch contract (https://www.businesswire.com/news/home/20220419006088/en/Rocket-Lab-Secures-Multi-Launch-Contract-with-HawkEye-360-Confirms-First-Launch-Planned-from-Virginia) with a company called HawkEye 360 (https://www.he360.com/) to launch 15 satellites from their spaceport in Virginia. This will include Rocket Lab's first mission to launch from Virginia, which is tentatively scheduled for December 2022.
As a reminder, Rocket Lab's next launch with helicopter recovery is currently scheduled (https://twitter.com/RocketLab/status/1514374490825756672) for this Friday, April 22nd!
Their rocket with the shiny new protective coating is currently ready on the launch pad! I can't wait to see a helicopter try and snatch it out of the sky!
(https://i.imgur.com/ZR9ghHx.png)
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Thanks for sharing these updates. I quite like the new look of the rocket. So if the recovery on Friday is successful - do we expect that as a share price catalyst? As that will significantly reduce their future cost. Have any other company done similar recovery before with helicopter? If you would share your opinion - how complex is the recovery and what are the chances of success: 50/50; 80/20?
Would market react very negatively if the recovery isn’t a success?
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Thanks for sharing these updates. I quite like the new look of the rocket. So if the recovery on Friday is successful - do we expect that as a share price catalyst? As that will significantly reduce their future cost. Have any other company done similar recovery before with helicopter? If you would share your opinion - how complex is the recovery and what are the chances of success: 50/50; 80/20?
Would market react very negatively if the recovery isn’t a success?
Mid-air retrieval (https://en.m.wikipedia.org/wiki/Mid-air_retrieval) has been done since the 1960’s, so there is plenty of precedent. I’d give Rocket Lab an 80% chance of success, they have done extensive tests catching dummy payloads with the helicopter and have been very successful at that.
Yes, I think this will impact the stock price one way or the other, but it’s important to note that their efforts won’t truly be successful until they re-fly a recovered booster. Simply catching a booster isn’t enough to dispel any pessimism in the market around this technology, for that they will need to re-fly the caught booster.
It’s also important to note that Electron reuse is super important not just for increasing the launch cadence and reducing the cost of Electron but also in terms of de-risking Neutron. Most of the technology Rocket Lab develops for reusing Electron will then be reused for Neutron.
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Rocket Lab's upcoming launch has been delayed until next Wednesday, April 27th:
https://twitter.com/RocketLab/status/1517328086345281536
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Rocket Lab should be live in four hours with coverage of the helicopter recovery mission!
https://www.youtube.com/watch?v=6nODVPGHQcc
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The launch was delayed again. Rocket Lab is now live and launching in just five minutes!
https://www.youtube.com/watch?v=6nODVPGHQcc
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The launch was delayed again. Rocket Lab is now live and launching in just five minutes!
https://www.youtube.com/watch?v=6nODVPGHQcc
Crazy world - was watching it live but then was like meh - need to get other stuff done, can just watch the replay over dinner. That that is an option!
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Looks like they caught it, but what was the "oohhhh" right before they cut the feed?
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Well done rocket lab.
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Rocket Lab managed to catch the booster as planned, but then the helicopter pilots decided that the load was dangerous so they dropped the booster into the ocean. You can read more details in this article (https://spacenews.com/rocket-lab-launches-smallsats-catches-but-drops-booster/).
Personally, I suspect the issue could be related to the full-sized rocket booster having different aerodynamic characteristics than the much smaller mass simulator payloads that were used during testing. Hopefully they can do some more helicopter tests and get this issue ironed out. But I am glad they caught the falling booster on their first attempt. SpaceX had such incredible difficulty catching falling fairings and eventually had to give up (https://spacexfleet.com/the-state-of-spacex-fairing-recovery-in-2021/), I was worried that a similar thing might happen with Rocket Lab.
Incredible catch (https://twitter.com/Peter_J_Beck/status/1521279458140823552) by the recovery team, can’t begin to explain how hard that catch was and that the pilots got it. They did release it after hook up as they were not happy with the way it was flying, but no big deal, the rocket splashed down safely and the ship is loading it now.
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Kind of glad the pilot dropped the booster. Only because I'm attributing the further drop in stock price to that (though "risky stock in falling market" may be investors' idea too). Either way, market down but RKLB down more, so picked up another nibble.
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I do agree in very large part with what you said but must quibble with the characterization that generating aerodynamic models can take minutes - yes some can but some also can take months to run on a cluster - others still require a wind tunnel. And there can be big variation in quality of different methods or the suitability of different models for different phases of flight. Aerodynamics is still far from "solved".
AI... pifff.... The joke is that AI has never done anything because as soon as AI is applied to something and proven useful it is no longer called AI and renamed "ABC engineering" or "DEF math" or "GHI optimization".
Absolutely, they can’t simulate everything perfectly yet. I admit that I may have overestimated the performance of current computer modeling. Otherwise SpaceX wouldn’t have had to blow up so many Starship prototypes! But you can’t deny that computer modeling has improved by leaps and bounds over the past two decades in terms of accuracy, cost, and accessibility.
Well, computer simulations are GIGO -- garbage in, garbage out. If you don't know what physics to put in and you miss something that actually is important, the simulations will be wrong. There was a lot of worry about the aerodynamics of Starship's belly flop landing but in the end the simulations ended up being spot on; instead the landing failures were because of engine hardware failure and propellant slosh and thermodynamics effects which are really hard to simulate.
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I was able to glean some important new information from articles about the recent mission. These statements give me confidence that Rocket Lab's reuse program is feasible and will result in significant cost savings for the company. Rocket Lab investors should take note!
Rocket Lab’s helicopter is more than capable of lifting an Electron booster—the weight of the booster is just 1/5 of the helicopter’s lift capacity.
Rocket Lab does plan to refurbish and re-fly the booster they recovered from the ocean in the recent mission. The cost of the first stage booster is 70-80% of the total cost of the rocket, so recovering it will make a big difference in Rocket Lab’s economics. Only about 50% of flights will be recoverable, though.
https://www.cnbc.com/2022/05/03/rocket-lab-ceo-99percent-toward-reusing-rockets-after-first-helicopter-catch.html
https://edition.cnn.com/2022/05/03/tech/rocket-lab-helicopter-next-attempt-scn/index.html
On the catch attempt:
Rocket Lab’s Sikorsky S-92 helicopter is capable of lifting 5,000 kilograms, Beck noted, with the Electron booster weighing “just a little under 1,000 kilograms.” While the test had “a ton of margin,” Beck said, Rocket Lab used “really conservative estimates” to maximize safety during the catch. The helicopter flies with a crew of three: A pilot, a co-pilot and a spotter.
The only problem was that, for the helicopter pilot, the capture created an uncomfortable "load" on the helicopter beyond what they had experienced during testing. So they dropped the rocket into the ocean, something the company hoped to avoid because sea water is corrosive and damaging to electronic components.
"We didn't want to bite off more than we could chew," Beck told reporters after the flight. "The pilots were well briefed: If anything was different from the simulation that they felt that they weren't happy with, then the most important thing is everybody's safety. ... And that's exactly what they executed. So they got a great catch. And and they just didn't like the way the the load was feeling."
Despite saying the fix needed to make the rocket capture work is "trivial," Rocket Lab CEO Peter Beck told reporters at a post-flight briefing that the company will need to go back to the testing phase. The plan is to build a better replica of the rocket booster to use in simulations so that the helicopter pilots won't be caught off guard by the physics involved with catching the real thing, as they were after Monday night's attempt.
On reuse:
In making its boosters reusable, Rocket Lab would be able to launch more often while simultaneously decreasing the material cost of each mission.
Beck disclosed that the Electron’s booster makes up between 70% and 80% of the total cost of the vehicle. Reusing it would bring significant savings for the company and shrink the number of boosters it needs to produce.
Rocket Lab will next return the Electron booster to its factory to strip it down, inspect it and begin the process of refurbishing it for the next flight.
While Beck cautioned that the company needs “to do a bunch of testing” on the booster, Rocket Lab will “endeavor to fly that one again” – in what would be its first reused rocket launch.
Beck estimates about half of Rocket Lab’s missions will utilize reusable rockets. Night launches, when the helicopter wouldn’t fly, or launches that require the rocket’s full capability bring that number down. (Rocket Lab loses about 10% of payload capacity on the Electron in its reusable configuration.)
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@Herbert Derp - i know you are long on RKLB but what do you make of the decline since the SPAC stuff? Is it a victim of a dropping market or is there something else going on with share price?
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@Herbert Derp - i know you are long on RKLB but what do you make of the decline since the SPAC stuff? Is it a victim of a dropping market or is there something else going on with share price?
I think it's a trend in the overall sector of speculative, high-growth technology stocks that Rocket Lab belongs to. Compare the last six months performance of RKLB (https://www.google.com/search?q=rklb) to ARKK (https://www.google.com/search?q=arkk) which is a basket of 36 speculative, high-growth technology stocks, not including RKLB.
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I too am guessing the plunge in RKLB price is a general effect of falling markets losing confidence in the previously hot category of speculative, tech-y stocks. It appears to me that whenever the market (S&P 500) swings, RKLB usually swings more, but in the same direction. I don't think the real long term value has changed much at all.
I'm far from a knowledgeable or experienced stock picker; this is really my first foray into closely following an individual stock. My simple strategy is buy a little more RKLB when it seems the market (S&P 500) has dropped but RKLB has dropped more. So I bought some more ("another nibble") today! I don't know how to call a bottom or decide When To Finish Loading Up; interested in ideas on that. (ETA 5/13: Overnight, decided this is enough drop to load up a little; added several more nibbles today despite RKLB being up already. Done for now unless there's another big drop in RKLB/GSPC ratio.)
At $5.10 or less, the price is less than half of what I paid for the first block of shares. I'm sure the market's history is full of people who invested on the way down and lost all their money, so I comfort myself that I'm still only putting in a small percentage of my portfolio.
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MOON MISSION BEGINS!
"Rocket Lab Begins Payload Integration for CAPSTONE mission to the moon."
https://finance.yahoo.com/news/rocket-lab-begins-payload-integration-203500993.html
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And ouch they dropped 14.8% today. Was at $4B mkt cap like a month or two ago? but now closer to $2B.
I wonder what the true value of this company is? Everything is dropping like mad though especially speculative small to mid cap techs.
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This thing is down by three quarters and could easily fall another three quarters, because on a current price to sales of 42 it's still priced to the moon.
And as is common with new unprofitable companes they have already begun to dilute existing holdersto add insult to injury.
Dodge.
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The only securities I'd have hope for is U.S. Total Market Index and S&P 500 Index. They are okay to buy, DCA'ing etc.. they always go back up. But any single stock can keep diving forever and never recover.
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This thing is down by three quarters and could easily fall another three quarters, because on a current price to sales of 42 it's still priced to the moon.
Come on, it's a rocket company. If any company gets to go to the moon it'a a rocket company. 🚀🚀🚀
Also, it's only down 52.5% since I bought into the SPAC listing.
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This thing is down by three quarters and could easily fall another three quarters, because on a current price to sales of 42 it's still priced to the moon.
Come on, it's a rocket company. If any company gets to go to the moon it'a a rocket company.
Also, it's only down 52.5% since I bought into the SPAC listing.
Soon to be literally going to the moon.
CAPSTONE mission.
Apparently the first Artemis mission, since it is going to a NRHO (Near Rectilinear Halo Orbit, just like Gateway.
https://forum.nasaspaceflight.com/index.php?topic=50152.0
Edit for spelling
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Unfortunately, the CAPSTONE mission isn’t going to send Rocket Lab’s share price to the moon. The mission is cool but it doesn’t demonstrate any new capabilities. I think the only things that will boost Rocket Lab’s share price are broader market activity, another big contract like Globalstar, or significant progress on Neutron. At this point, it may be safe to say that those of us who invested early in Rocket Lab were too early!
In other news, Astra seems to be making progress with their Rocket 4.0, which will have similar performance to Electron at a cost of $4M per launch whereas Electron costs about $7M per launch. However, I would expect Electron to be reusable by the time Rocket 4.0 takes flight, which should keep Electron competitive. Astra also has plans to launch from the UK, which demonstrates the mobility of their launch system.
Overall, this is encouraging news, but I still wouldn’t rate Astra as a buy right now since their revenue is so dependent on launch, which seems to have a demand problem. Astra’s new rocket is cool, but it’s only going to work out for them if demand increases vastly beyond current levels.
https://spacenews.com/astra-reveals-details-of-next-larger-rocket/
https://spacenews.com/astra-to-launch-from-u-k-spaceport/
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Herbert Derp - I appreciated your analysis earlier, but I predicted bad markets ahead when I sold RKLB at $8/share. I was right, and RKLB is $5/share. I expect it to hit $3/share within 1 to 12 months.
Look at RKLB since Thanksgiving, down 67%. Amazon down 40%! The market's beliefs should be shattered on June 11 when inflation data comes out, but markets can maintain denial for months.
Earlier this week I sold off all individual stocks for reasons completely unrelated to Rocket Lab. But Rocket Lab was part of that sell off, which you can read about in the journal area of the forum, if anyone is curious.
I sold RKLB somewhere near $8/share, and everyone else can get out just under $5/share right now. This past week Walmart announced earnings, and their stock dropped more in one day than any day in the past 40 years. Target followed, the stock lost 1/4th of it's value in a day. Consumer spending is critical to the U.S. economy, and two of the biggest, well-run retail stores just took historic losses. Look at the data - this does not end well.
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This past week Walmart announced earnings, and their stock dropped more in one day than any day in the past 40 years. Target followed, the stock lost 1/4th of it's value in a day. Consumer spending is critical to the U.S. economy, and two of the biggest, well-run retail stores just took historic losses. Look at the data - this does not end well.
Yeah and we've had seven weeks of losses in the S&P 500 which hasn't happened since March 2021 -- i.e. seven consecutive red weekly candles on stock charts. The dow has had 8 consecutive red weekly candles, which hasn't happened since 1923.
I know I'm timing the market, but I am going to wait until there is a strong weekly green candle before buying some more VTI. The market must prove itself before I invest. It also must have a follow through day where the candle is above the 21 day moving average.
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Or....and this is CRAZY, I know. If you have a long-term view of RKLB (10+ year horizon), you can keep accumulating throughout this recession and reap the rewards in 5+ years.
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Or....and this is CRAZY, I know. If you have a long-term view of RKLB (10+ year horizon), you can keep accumulating throughout this recession and reap the rewards in 5+ years.
Is it true, the saying I believe it is, that only 1 out of 10 startups succeed? Do I have the ratios right? I can "hope" RKLB will go up but the market doesn't care what I want. I rather just invest in VTI when the market is down because it always goes back up, guaranteed.
I might consider an actively managed position in RKLB after it decreases in price a bit, goes sideways for a while, starts getting record earnings, has some sort of disruptive innovative tech other competitor's don't have. Then set a trailing stop loss accordingly. If it gets to big enough I might set the trailing stop loss to be -20%. I'll add to my position as it continues to grow. (Basically a William O'Neil CANSLIM approach.)
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I think Rocket Lab will make it through the recession just fine. They picked the perfect time to raise capital, and are now sitting on about $600M of cash. They can use this cash to weather the storm and develop their next generation technology like Neutron. Meanwhile, the recession will paralyze most of the competition because they won’t be able to raise capital like Rocket Lab did.
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I sold RKLB somewhere near $8/share, and everyone else can get out just under $5/share right now. This past week Walmart announced earnings, and their stock dropped more in one day than any day in the past 40 years. Target followed, the stock lost 1/4th of it's value in a day. Consumer spending is critical to the U.S. economy, and two of the biggest, well-run retail stores just took historic losses. Look at the data - this does not end well.
I guess the way I see it, everything is going down right now. I may as well just ride the market through this dip the same way as last time.
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I think Rocket Lab will make it through the recession just fine. They picked the perfect time to raise capital, and are now sitting on about $750M of cash. They can use this cash to weather the storm and develop their next generation technology like Neutron. Meanwhile, the recession will paralyze most of the competition because they won’t be able to raise capital like Rocket Lab did.
One big risk I see is Rocket Lab falls near $3/share, and then Elon Musk offers to buy the company for $4.20/share (Space X sold shares at $420/share, no surprise). In that scenario, you could lose money even as Rocket Lab succeeds.
Could Rocket Lab be sitting on $600 million cash with $150 million debt, per Yahoo Finance?
https://finance.yahoo.com/quote/RKLB/key-statistics?p=RKLB
I looked at various competitors, and Rocket Lab's financials look better than any of them. RKLB has more cash, and spends it more slowly. You mentioned competitors being paralyzed - for some, maybe it's permanent.
I don't know if Yahoo Finance has the right data for Redwire, but it shows $6M cash on $90M in debts. Then again, their quarterly report (from 10 days ago) mentions an arrangement for "enhanced liquidity", which sounds like they're in trouble.
https://finance.yahoo.com/quote/RDW/key-statistics?p=RDW
https://finance.yahoo.com/news/redwire-corporation-reports-first-quarter-200500497.html
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Yeah, it’s going to be a rough time for many of these space startups. Rocket Lab may have an opportunity to make more acquisitions.
You can find Rocket Lab’s financials here. Not sure how the level of detail compares to Yahoo Finance.
https://investors.rocketlabusa.com/news/news-details/2022/Rocket-Lab-Announces-First-Quarter-2022-Financial-Results-and-Guidance-for-Second-Quarter-2022/default.aspx
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Yeah, it’s going to be a rough time for many of these space startups. Rocket Lab may have an opportunity to make more acquisitions.
You can find Rocket Lab’s financials here. Not sure how the level of detail compares to Yahoo Finance.
https://investors.rocketlabusa.com/news/news-details/2022/Rocket-Lab-Announces-First-Quarter-2022-Financial-Results-and-Guidance-for-Second-Quarter-2022/default.aspx
Your link, annual report:
"(in thousands ..."
"Cash and cash equivalents ... $603,144"
Yahoo Finance:
"Total Cash (mrq) 603.14M"
Looks like a good match. You said this is a dip like last time? Did you mean March 2020? I had to check if you lived in the UK when you said that! Sounds like a very British way to keep a stiff upper lip during a 35% drop.
I predict 2022-2023 will be worse than March 2020. The S&P 500 ETF "SPY" peaked at $480 and is $390 now, and I predict it falls below $300. I'm already betting on it with -100% equity exposure through ETFs that hold derivatives. If you're investing in RKLB and other US stocks, you're taking the other side of that bet.
What if someone offered you a bet: markets will drop 20% from here (SPY $390) within the next 12 months. Would you bet that decline does not occur? What if you were given 2:1 odds, meaning you triple your money if no correction happens?
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Would there be regulatory issues with spacex buying rocketlab? would this make the industry too consolidated? I thought us govt people have specifically spoken about wanting alternate companies going into space to prevent a spacex monopoly. Unless there were viable alternatives at the time of the acquisition, but that seem unlikely in the next few years.
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I looked at various competitors, and Rocket Lab's financials look better than any of them. RKLB has more cash, and spends it more slowly. You mentioned competitors being paralyzed - for some, maybe it's permanent.
I don't know if Yahoo Finance has the right data for Redwire, but it shows $6M cash on $90M in debts. Then again, their quarterly report (from 10 days ago) mentions an arrangement for "enhanced liquidity", which sounds like they're in trouble.
That looks really rough for Redwire. Their market cap is only $235M (https://www.google.com/search?q=rdw+stock) right now. If companies like Redwire keep getting hammered by the recession, I wonder if Rocket Lab will have a chance to buy them out? Rocket Lab did mention that they were still looking to make additional acquisitions in their latest conference call. I personally think there’s a lot of synergy between Rocket Lab and Redwire and it would be interesting to see these companies come together.
I also took a look at Astra’s financials (https://investor.astra.com/news-releases/news-release-details/astra-announces-first-quarter-2022-financial-results). They have $161M in cash and a loss of $85M in Q1 2022. Last quarter, they had $325M in cash. In comparison, Rocket Lab has $600M in cash and a loss of $26M in Q1 2022. Rocket Lab has more than triple the cash of Astra, and Astra has more than triple the loss of Rocket Lab! At this rate, Astra will run out of money in 2-3 quarters! I don’t think they will go bankrupt, but raising the cash they need to survive will be difficult in this market. Maybe the US government will bail them out somehow.
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Would there be regulatory issues with spacex buying rocketlab? would this make the industry too consolidated? I thought us govt people have specifically spoken about wanting alternate companies going into space to prevent a spacex monopoly. Unless there were viable alternatives at the time of the acquisition, but that seem unlikely in the next few years.
I doubt SpaceX would be interested in buying Rocket Lab. Rocket Lab doesn’t have anything that SpaceX needs, their carbon fiber rocket technology is fundamentally different and incompatible with what SpaceX is doing, and SpaceX would much rather do things in house. In my opinion, it would be easier for SpaceX to just build their own version of whatever Rocket Lab is doing than to actually acquire Rocket Lab.
On the other hand, I do think it is likely that Rocket Lab will acquire one or more struggling space companies during the recession.
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SpaceX's valuation has now reached $125B (https://news.crunchbase.com/news/elon-musk-spacex-valuation/)! Compare this to Rocket Lab's measly $2.12B (https://www.google.com/search?q=rklb) valuation. If you think the huge gap in valuation is interesting given the similarities between the two companies, you're not the only one. Deutsche Bank's Edison Yu seems to think along the same lines, and believes that the disconnect in valuation between the two companies will decrease (https://www.tradingview.com/news/mtnewswires.com:20220524:A2671526:0-rocket-lab-usa-s-growth-margins-to-inflect-deutsche-bank-says/) over time.
Rocket Lab USA's (RKLB) growth and margins for several business lines are expected to inflect over the next year, Deutsche Bank said in a note.
The company's new and larger Neutron rocket will be fully sold out for two to three years ahead of its first voyage, analyst Edison Yu said.
Yu said Rocket Lab's Space Systems segment is unappreciated.
"Looking ahead, the stock may be volatile due to tactical factors ... but we think the enormous disconnect in valuation will likely compress relative to SpaceX," the analysts said.
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SpaceX's valuation has now reached $125B (https://news.crunchbase.com/news/elon-musk-spacex-valuation/)! Compare this to Rocket Lab's measly $2.12B (https://www.google.com/search?q=rklb) valuation. If you think the huge gap in valuation is interesting given the similarities between the two companies, you're not the only one.
In defense of the big differential, so far this year Rocketlab has launched on the order of 0.2% of the payload to orbit of SpaceX*, so the market is valuing RocketLab ~10x as high as SpaceX in terms of price to launch.**
*Very rough estimate based on the payload of each rocket and the number of launches so far this year.
*Yes RocketLab also has a satellite manufacturing arm but SpaceX also has Starlink so let's pretend those cancel out.
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I guess the way I see it, everything is going down right now. I may as well just ride the market through this dip the same way as last time.
Not quite everything, SpaceX's stock valuation is up from $56 to $70, a 25% increase: https://www.bloomberg.com/news/articles/2022-05-17/musk-may-sell-spacex-shares-to-fund-twitter-deal-new-york-post
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In defense of the big differential, so far this year Rocketlab has launched on the order of 0.2% of the payload to orbit of SpaceX*, so the market is valuing RocketLab ~10x as high as SpaceX in terms of price to launch.**
I heard somewhere that year to date, SpaceX has launched something like 85% of worldwide mass to orbit. (And most of that mass is Starlink.) Pretty nuts.
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In defense of the big differential, so far this year Rocketlab has launched on the order of 0.2% of the payload to orbit of SpaceX*, so the market is valuing RocketLab ~10x as high as SpaceX in terms of price to launch.**
I heard somewhere that year to date, SpaceX has launched something like 85% of worldwide mass to orbit. (And most of that mass is Starlink.) Pretty nuts.
Yeah, if I'm counting right SpaceX has launched 22 times in the first 21 weeks of this year (14 starlink missions and 8 external customer missions). That's enough lift to put half a million tons into low earth orbit*.
The numbers are close enough that it makes me wonder if they developed the starlink launch schedule for 2022 with a goal of breaking the >1 launch/week barrier this year.
*The true mass to orbit number is lower since not all launches were to low earth orbit and not all launches use Falcon 9's maximum (with booster recovery) payload capacity.
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I guess the way I see it, everything is going down right now. I may as well just ride the market through this dip the same way as last time.
Not quite everything, SpaceX's stock valuation is up from $56 to $70, a 25% increase: https://www.bloomberg.com/news/articles/2022-05-17/musk-may-sell-spacex-shares-to-fund-twitter-deal-new-york-post
Valuation of a private company really doesn't mean anything, though. If SpaceX were a publicly traded organization, it would have dropped the same as everything else.
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I guess the way I see it, everything is going down right now. I may as well just ride the market through this dip the same way as last time.
Not quite everything, SpaceX's stock valuation is up from $56 to $70, a 25% increase: https://www.bloomberg.com/news/articles/2022-05-17/musk-may-sell-spacex-shares-to-fund-twitter-deal-new-york-post
Valuation of a private company really doesn't mean anything, though. If SpaceX were a publicly traded organization, it would have dropped the same as everything else.
It's not the same as a public market price, obviously, but it does mean something, in that there are investors that are willing to also pay that higher price, even now.
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It's not the same as a public market price, obviously, but it does mean something, in that there are investors that are willing to also pay that higher price, even now.
That is the asking price to buy SpaceX? But do we know how many takers they have at that price? I dont fully understand how private companies like this work when you want to buy into them from the outside. What I have seen elsewhere is than a valuation is made based on standard multiples of revenue or profit.
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It's not the same as a public market price, obviously, but it does mean something, in that there are investors that are willing to also pay that higher price, even now.
That is the asking price to buy SpaceX? But do we know how many takers they have at that price? I dont fully understand how private companies like this work when you want to buy into them from the outside. What I have seen elsewhere is than a valuation is made based on standard multiples of revenue or profit.
I don't recall where I heard it exactly, but I think it was CNBC"s David Faber who mentioned that private equitiy (PE) valuations are inflated right now. Experts in PE know the deal, but prices do not reflect conditions that have already impacted public markets. That information is probably less useful over time, but I wouldn't trust PE values at the moment.
Didn't Elon Musk manipulate a funding round so SpaceX stock was priced at $420/share (before 10:1 stock split)? I'm not sure it makes sense to trust that SpaceX has gone up 25% in an environment where RocketLab has lost over half it's value. Mr Musk will have to compare the losses in TSLA stock (-28% YTD) with those in SpaceX (? YTD) and decide what mixture to sell. Mr Musk offered $54.20/share for Twitter, and discovered he was very wrong about the price, pointing to the excuse of bot numbers to back out. I wouldn't trust his assessment of SpaceX stock, but would wait for a funding round where actual buyers decide the price.
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...
It's not the same as a public market price, obviously, but it does mean something, in that there are investors that are willing to also pay that higher price, even now.
That is the asking price to buy SpaceX? But do we know how many takers they have at that price? I dont fully understand how private companies like this work when you want to buy into them from the outside. What I have seen elsewhere is than a valuation is made based on standard multiples of revenue or profit.
We know there were at least some takers.
I think in general private valuations are based on an analysis of the financials in the absence of any market signal, but any funding rounds have a strong pull on the valuation such that if someone's actually paid $X, that tends to be the valuation, too.
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Astra had another launch failure tonight. https://twitter.com/astra/status/1536046415679393793
They are currently batting 2 for 7 at successful launches. Space remains hard.
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RocketLab recently won a new contract in the non-launch space business, this one to build solar cells for a 2025 mission that another company (Ball Aerospace) is conducting for NASA. The mission, called GLIDE, is to study the earth's atmosphere on behalf of NOAA.
https://www.businesswire.com/news/home/20220609005322/en/Rocket-Lab-selected-by-Ball-Aerospace-to-Power-NASA%E2%80%99s-GLIDE-Spacecraft
https://spacewatch.global/2022/06/rocket-lab-selected-by-ball-aerospace-to-power-nasa-glide-mission/
https://www.rocketlabusa.com/updates/rocket-lab-selected-by-ball-aerospace-to-power-nasas-glide-spacecraft-2/
I didn't see a contract price, even on Rocketlab's press release / website update, but I assume this slightly strengthens the contention that RocketLab is succeeding in its plans.
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At $4/share, is RKLB a buy now? If not, when does it become one?
(as I write, most recent quote dropped from $4.03 to $4.02)
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I sold RKLB at around $8/share back in April.
Earlier this week I sold off all individual stocks for reasons completely unrelated to Rocket Lab. But Rocket Lab was part of that sell off, ...
The S&P 500 fell 10.1% since Jun 7, and Nasdaq 100 fell 11.0%. Over that same time, RKLB fell 16.6%.
My prediction: RKLB hits $3/sh before it hits $5/sh.
While it helps RLKB fell 50% in 2 months, the prediction is also based on the S&P 500 falling further and RKLB falling at least as far as the S&P 500 (probably further). So with apologies to the great discussions and contributors in this thread, I would short RKLB here instead of buying it. (It's actually better to find competitors that are in worse shape than RKLB, and that fell at least as far. I do not have a short position on RKLB)
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Gizmodo summarizes the CAPSTONE mission, now scheduled for takeoff Monday 27th via Electron from Rocket Labs's New Zealand site.
https://gizmodo.com/nasa-capstone-artemis-lunar-gateway-1849104950
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My prediction: RKLB hits $3/sh before it hits $5/sh.
You're probably right!
Capstone mission seems to have taken off fine, yet RKLB stock price was $3.70 yesterday. https://www.cnbc.com/2022/06/28/rocket-lab-launch-of-capstone-begins-nasa-return-to-the-moon.html
Unconfident of predicting prices precisely, I picked up a few more nibbles.
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In recent news, Rocket Lab is expanding into a new 24,000+ sq ft facility in Auckland (https://www.stuff.co.nz/business/industries/129324896/rocket-lab-plans-to-create-more-than-110-new-hitech-jobs-in-nz). They will use this facility to house a new production line for satellite components as well as to assist with the Electron and Neutron programs.
Last week, Rocket Lab had yet another successful launch (https://www.nasaspaceflight.com/2022/07/rocket-lab-wise-one-looks-ahead/)! This makes five successful launches this year over seven months, and eight back-to-back successful launches since the last failure. They really do seem to be reaching a monthly launch cadence. Compare this to Astra's track record this year of three launch attempts and two failures, and Virgin Orbit's two launches this year. Rocket Lab has launched more payloads into orbit this year than both Astra and Virgin Orbit combined.
Earlier this month, Rocket Lab introduced a new "Responsive Space Program (https://techcrunch.com/2022/07/06/rocket-lab-offers-next-day-shipping-to-space/)" where Rocket Lab can partner with other companies to have a rocket on call to be ready to rapidly launch a payload into orbit within 24 hours of payload arrival to the launch site. I wonder if we will see any of these launches soon?
I am eager to learn more about what is going on with the Neutron factory in Virginia. There have been no updates (https://www.reddit.com/r/RocketLab/comments/vwvn1u/are_there_updates_anywhere_on_the_virginia/) since the groundbreaking ceremony three months ago. Hopefully they will give an update on Neutron in their next earnings call (https://investors.rocketlabusa.com/events-and-presentations/events/event-details/2022/Second-Quarter-2022-Financial-Results-Update-and-Conference-Call/default.aspx) on August 11th.
In other news, Relativity Space has reached a $1.2B order backlog (https://techcrunch.com/2022/06/30/relativity-space-inks-deal-with-oneweb-reaches-1-2b-in-terran-r-launch-contracts/), despite having launched nothing to orbit. They are still gearing up to launch their first Terran 1 prototype rocket (https://www.floridatoday.com/story/tech/science/space/2022/05/27/cape-canaveral-rocket-printer-relativity-space-ready-terran-mission-florida/7318869001/) later this summer. Compare this to Rocket Lab's $551M order backlog. Clearly, there is more money to be made from larger rockets like the Terran R. Rocket Lab can't get the Neutron flying fast enough!
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I am eager to learn more about what is going on with the Neutron factory in Virginia. There have been no updates (https://www.reddit.com/r/RocketLab/comments/vwvn1u/are_there_updates_anywhere_on_the_virginia/) since the groundbreaking ceremony three months ago. Hopefully they will give an update on Neutron in their next earnings call (https://investors.rocketlabusa.com/events-and-presentations/events/event-details/2022/Second-Quarter-2022-Financial-Results-Update-and-Conference-Call/default.aspx) on August 11th.
In other news, Relativity Space has reached a $1.2B order backlog (https://techcrunch.com/2022/06/30/relativity-space-inks-deal-with-oneweb-reaches-1-2b-in-terran-r-launch-contracts/), despite having launched nothing to orbit. They are still gearing up to launch their first Terran 1 prototype rocket (https://www.floridatoday.com/story/tech/science/space/2022/05/27/cape-canaveral-rocket-printer-relativity-space-ready-terran-mission-florida/7318869001/) later this summer. Compare this to Rocket Lab's $551M order backlog. Clearly, there is more money to be made from larger rockets like the Terran R. Rocket Lab can't get the Neutron flying fast enough!
I don't think we'll hear much until it's closer to completion in 2024. I mean, we'll probably get little "it's on schedule" sort of updates, but I'm not sure what they can tell us at this point since we're still almost 2 years from it being real.
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Last week RocketLab was going to try to demonstrate the capability to launch two rockets from Mahia within a nine-day window with their 5th and 6th launches of 2022. However launch #6 got delayed as a result of updates to the payload on the second launch. Not RL's fault, but certainly a missed opportunity to test how well they would manage the sort of launch cadence they'll need to be competitive in the market we're seeing develop for commercial space.*
*The same week SpaceX launched their 32nd rocket of the year, breaking the record they set last year of 31 total launches in a year from a single provider. SpaceX is currently averaging one launch per 6.4 days since the start of 2022. Some much shorter individual launch-to-launch intervals in there.
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I don't think we'll hear much until it's closer to completion in 2024. I mean, we'll probably get little "it's on schedule" sort of updates, but I'm not sure what they can tell us at this point since we're still almost 2 years from it being real.
I'm hoping that someone can just drive past the build site or something and see if the Neutron factory is getting built. This happens on a regular basis with companies like SpaceX and Tesla.
Last week RocketLab was going to try to demonstrate the capability to launch two rockets from Mahia within a nine-day window with their 5th and 6th launches of 2022. However launch #6 got delayed as a result of updates to the payload on the second launch. Not RL's fault, but certainly a missed opportunity to test how well they would manage the sort of launch cadence they'll need to be competitive in the market we're seeing develop for commercial space.*
*The same week SpaceX launched their 32nd rocket of the year, breaking the record they set last year of 31 total launches in a year from a single provider. SpaceX is currently averaging one launch per 6.4 days since the start of 2022. Some much shorter individual launch-to-launch intervals in there.
Yeah, NRO needs to update software on their payload (https://www.space.com/rocket-lab-launch-nrol-199-delay-software), bummer. At least Rocket Lab is maintaining a higher launch cadence than any other company besides SpaceX. Only SpaceX and the Chinese and Russian space agencies have launched more rockets this year (https://en.wikipedia.org/wiki/2022_in_spaceflight#By_rocket) than Rocket Lab.
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At least Rocket Lab is maintaining a higher launch cadence than any other company besides SpaceX. Only SpaceX and the Chinese and Russian space agencies have launched more rockets this year (https://en.wikipedia.org/wiki/2022_in_spaceflight#By_rocket) than Rocket Lab.
Do you know how far in advance RocketLab typically announces their launch dates?
Right now Electron has a one-launch lead over old-space ULA's Atlas platform, but Atlas is currently scheduled for their next launch in 11 days. With the delayed launch from the Mahia LC-1B pad and nothing else scheduled between now and then (as far as I can tell), that launch would let Atlas/ULA tie Electron/RL for the #5 slot behind Falcon 9, Soyuz, Long March 4, Long March 2, and Atlas.
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Rocket Lab hasn't been very open about their launch schedule. They only seem to announce upcoming launch dates until just a few weeks before launch.
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I'm hoping that someone can just drive past the build site or something and see if the Neutron factory is getting built. This happens on a regular basis with companies like SpaceX and Tesla.
Is the address public, dont really want to wander about the eastern shore? I have not gone up to wallops, no clue what is visible from public areas. We get told that we could maybe/sort of see launches sometimes but have never had good luck with that.
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Is the address public, dont really want to wander about the eastern shore? I have not gone up to wallops, no clue what is visible from public areas. We get told that we could maybe/sort of see launches sometimes but have never had good luck with that.
I did some digging around and looks like the facility is going to be located here:
32355 Causeway Rd, Assawoman, VA 23302 (https://goo.gl/maps/NcymEgJ8bCRBzAa2A)
37.867194, -75.508750 (https://goo.gl/maps/zt6yHuKunQSufpBK7)
This article shows the location and preliminary plans for the Neutron facility:
https://www.easternshorepost.com/2021/07/22/zoning-approvals-clear-the-way-for-rocket-production-in-accomack/
If you live in the area, you should just be able to drive over to 32355 Causeway Rd and see if that chicken farm is still there or not. Hopefully they have demolished it and are working on building the Neutron factory!
Also FYI, Rocket Lab's Electron launch pad is located here:
Wallops Island - Launch Pad 0-A (https://goo.gl/maps/1X5kUywkuvLq27P2A)
If you want to view a rocket launch from Wallops, you should go to the official rocket launch viewing area:
Rocket Launch Viewing Area
34267 Wright Rd, Wallops Island, VA 23337 (https://goo.gl/maps/Yqq8cH1Z8KjpAypr5)
Although you may get better views from Assateague Island (the beach may be closed during rocket launches, not sure?):
https://goo.gl/maps/UAWZ3Y4TWuVe7jfz5
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Is about a 2hr drive. Will see how this or next weekend shape up and if it would be nice to go for a drive. Maybe hit up the visitor center too. Looks like a gate just past the farm but dont expect security will be to hard core on a saturday; "I just want to see the rocket factory", "why", "to tell people on the internet about it..." yeah that will work great.
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@AlanStache, looking forward to your report! :)
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Is about a 2hr drive. Will see how this or next weekend shape up and if it would be nice to go for a drive. Maybe hit up the visitor center too. Looks like a gate just past the farm but dont expect security will be to hard core on a saturday; "I just want to see the rocket factory", "why", "to tell people on the internet about it..." yeah that will work great.
Hahaha, that would be a hilarious conversation! That gate leads directly down to the Wallops Island launch pads, and everything past the gate is access restricted. But all you have to do is drive up to the gate, not past it. If the security guard asks what you're doing you can just tell them you were looking for the visitor center lol
BTW, the address 32355 Causeway Rd, Assawoman, VA 23302 seems somewhat questionable. I am not sure if that is actually a real address or if Google just made it up somehow! If you try and put that into your navigation system, it might send you to the wrong location. I would recommend navigating to the GPS coordinates:
37.866210, -75.509760 (https://goo.gl/maps/ZPEpAcL5twHhHYrT8)
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While cooking dinner I was trying to figure out what actor would try to manipulate someone into driving out there for a in person report. Like who would not have there own people or just pay someone local near the facility or just buy commercial space imagery but still care about a building breaking ground? Seems like any serious organization would have far better ways to get intel than asking some random guy online to maybe drive up there in the next few weeks. So I am mostly sure Herbert is not some Venezuelan spy, maizefolk on the other hand I am 100% sure he is working for Hydra.
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Maybe the goal isn't to directly gather intelligence from your observations but instead learn more about RocketLab's security procedures from watching how they respond to a random guy from the internet driving by to take a look?
That's the backstory I'd write anyway. As I while away the hours at my desk in the bowels of the Organization of Democratic Intelligence Networks.
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@maizefolk, aren't you a customer of Maxar? Maybe you can get us some up-to-date satellite imagery! :P
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Don't remind me. I've still got to find $40k in the budget to cover the cost of a handful of photography runs in September.
For something like this, PlantLabs/SkySat is the way to go. 0.65m resolution, much more frequent revisit times (daily if cloud cover cooperates) so you can track changes over time, and lower cost, particularly with academic discounts.
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Crazy - looks like you can buy a la carte with a cc from https://www.spymesat.com/web/#/Home, with images are cheap at 5$. Did not bother signing up.
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Crazy - looks like you can buy a la carte with a cc from https://www.spymesat.com/web/#/Home, with images are cheap at 5$. Did not bother signing up.
According to that website, the most recent images of the Neutron factory location are by Maxar on 5/30/2022, for $40. Interesting. The website shows a low-resolution preview image, which I was able to download and attach to this post. Based on that, it seems that as of 5/30/2022, the chicken farm buildings were demolished but the foundation work for the new buildings has yet to commence.
I'll check this website periodically for new images and share them here! Amazing what we've been able to discover just by clicking around on the Internet today.
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It's getting so no one is going to want to hire a shadowy and probably-evil non government organization or international men of mystery.
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In other news, Relativity Space has reached a $1.2B order backlog (https://techcrunch.com/2022/06/30/relativity-space-inks-deal-with-oneweb-reaches-1-2b-in-terran-r-launch-contracts/), despite having launched nothing to orbit. They are still gearing up to launch their first Terran 1 prototype rocket (https://www.floridatoday.com/story/tech/science/space/2022/05/27/cape-canaveral-rocket-printer-relativity-space-ready-terran-mission-florida/7318869001/) later this summer. Compare this to Rocket Lab's $551M order backlog. Clearly, there is more money to be made from larger rockets like the Terran R. Rocket Lab can't get the Neutron flying fast enough!
Not to mention https://techcrunch.com/2022/07/19/relativity-and-impulse-want-to-go-to-mars-as-early-as-2024/ (https://techcrunch.com/2022/07/19/relativity-and-impulse-want-to-go-to-mars-as-early-as-2024/).
This is pretty ridiculous. The press is going "these companies may beat SpaceX to Mars" because they put out some press release with neither Relativity nor Impulse ever having built anything. Now, both of them are led by competent ex-SpaceXers, but timelines about going to Mars in 2024 without having flown a single piece of hardware are clearly fictional.
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Do you know how far in advance RocketLab typically announces their launch dates?
Rocket Lab just announced (https://twitter.com/RocketLab/status/1552753767837483009) the date of their next launch which is scheduled for August 2nd. Just four days from now! So not very far in advance lol
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The rocket is on the pad, t-minus 5 minutes. Looks like this launch attempt may be cancelled due to high winds. This is another booster with the reusable hardware, but they do not plan on recovering it. This is the second such mission I’ve seen so far where they are throwing away a reusable booster.
I wonder what Rocket Lab’s reason is for throwing away reusable boosters—this seems like a waste of money. Do they lack the manufacturing capacity to build both types of booster at once? Is the reusable hardware so cheap that it doesn’t matter if they throw it away?
https://youtu.be/S6PxSE29hQU
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Astra just announced (https://www.businesswire.com/news/home/20220802006156/en/) a $100M capital raise. This was inevitable, given the trajectory of their cash burn as we have discussed (https://forum.mrmoneymustache.com/investor-alley/rocket-lab/msg3018464/#msg3018464) previously in this topic. At the current market cap, this represents a 25% dilution. However it looks like they are capping the capital raise at 20% dilution, so they won't be able to raise all $100M unless the share price rises.
Astra lost $85M in Q1 2022 (https://investor.astra.com/news-releases/news-release-details/astra-announces-first-quarter-2022-financial-results). At the rate they are burning through cash, $100M won't last them for very long. If they can't get any revenue going soon expect more capital raises in the future. Unfortunately, their dwindling market cap is making capital raises increasingly difficult.
Astra needs successful launches, and they need them now. If Astra’s launches keep failing, this could further devalue the company and put them in a dire position where they cannot raise the capital needed to survive.
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Rocket Lab has announced (https://www.businesswire.com/news/home/20220802005464/en/Rocket-Lab-Announces-Date-for-2022-Investor-Day-and-Neutron-Development-Update) that they are going to hold an investor presentation on September 21, 2022 focused on progress the Company has made since its de-SPAC in August 2021, its current roadmap, development of the Neutron launch vehicle, and future growth opportunities.
I guess the market sees this as a vote of confidence, because Rocket Lab stock is up by over 9% on the news. Looking forward to the earnings report on August 11th and then the investor presentation a month later!
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In other news, Masten Space Systems (https://en.m.wikipedia.org/wiki/Masten_Space_Systems) filed for bankruptcy (https://spacenews.com/masten-space-systems-files-for-bankruptcy/) last week. They will be selling some of their assets to a competitor in a last-ditch effort to survive.
Let this be a warning to all who invest in the new space race. Consolidation is inevitable, and many of these space startups are going to crash and burn!
That being said, Rocket Lab is in a fantastic financial position compared to much of the competition. They are not at risk for bankruptcy over the next few years. Furthermore, Rocket Lab has growing revenues and has a good chance to become one of the first space startups to stop burning cash and start turning a profit. If they can demonstrate tangible progress towards profitability in their upcoming presentations, expect the stock price to skyrocket!
Rocket Lab’s strategy of going public in order to provide currency for acquisitions really does seem like a stroke of genius. If Rocket Lab can continue to distinguish themselves and stay ahead of the competition, they stand to make out like a bandit as the crowded space industry enters an inevitable consolidation phase. Rocket Lab may have the pick of the litter as various assets and companies go on sale at steep discounts!
As long as Rocket Lab stays ahead of the competition and maintains a comparably high market cap, they can enter into a virtuous cycle where they are able to use the heft of their market cap to issue stock and make acquisitions without even dipping into their cash reserves. These acquisitions will grow the company and pave the way for future acquisitions. It’s a snowball effect, and it seems like a brilliant strategy to follow when you are an industry leader in a crowded space that is primed for consolidation. Peter Beck’s strategy is really coming clear, and I am eager to see how it unfolds.
Competitors like Masten Space Systems and Astra are too focused on not going out of business and have no hope of executing Rocket Lab’s strategy. SpaceX and Blue Origin are so well funded that they are not very interested in acquisitions and prefer to build everything in-house. I’m curious to see how Rocket Lab’s acquisition based growth strategy will stack up to SpaceX and Blue Origin’s in-house growth strategies. Rocket Lab is setting themselves up to accomplish big things with much less resources than SpaceX and Blue Origin, but they run the risk of making bad acquisitions that are difficult to integrate into a coherent whole and lead to less synergistic growth.
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Mission success (https://www.space.com/rocket-lab-spy-satellite-launch-nrol-199)! Rocket Lab now has six successful launches this year, for a total of nine consecutive successful launches since the last failure.
A few recent articles I saw about investing in Rocket Lab:
Rocket Lab Vs. SpaceX: Buy 2nd Place For 98% Less (https://seekingalpha.com/article/4528614-rocket-lab-vs-spacex-which-stock-to-buy)
Rocket Lab Is Red-Hot -- So Why Is Its Stock Ice-Cold? (https://www.fool.com/investing/2022/08/01/rocket-lab-is-red-hot-so-why-is-its-stock-ice-cold/)
Rocket Lab continues to show consistent execution despite the downward trend in the stock price. Personally, I think this stock is due for some big upward moves. It really depends on how the upcoming earnings report and investor presentation go.
That being said, I don’t recommend investing in this stock until we get greater clarity on Rocket Lab’s progress towards profitability. There’s still too many unknowns here.
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Thanks for all the updates they are very interesting to follow.
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More consolidation! Satellite communications company SES (https://en.m.wikipedia.org/wiki/SES_S.A.) is at the center of a bunch of recent mergers and acquisitions. I think SES and their peers might be in trouble, they are going to have a really rough time competing with Starlink which seems superior to their offerings.
SES closes $450 million acquisition of DRS’ satellite communications business (https://spacenews.com/ses-closes-450-million-acquisition-of-drs-satellite-communications-business/)
Consolidation wave pushes rivals SES and Intelsat into merger talks (https://spacenews.com/consolidation-wave-pushes-rivals-ses-and-intelsat-into-merger-talks/)
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Astra just reported their Q2 2022 financial results (https://investor.astra.com/news-releases/news-release-details/astra-announces-second-quarter-2022-financial-results). After their latest failure with Rocket 3, Astra seems to have given up and cancelled the Rocket 3 program (https://spacenews.com/astra-cancels-rocket-3-to-focus-on-larger-vehicle/). This is basically admitting that Rocket 3 was never going to be an economical design. Chris Kemp even admitted in the earnings call that the market for Rocket 3 never materialized, satellites are getting larger, and customers are looking for larger rockets. Astra has re-manifested (https://twitter.com/TGMetsFan98/status/1555286454829568002) all payloads to Rocket 4, which is still under development and might not have its first launch until 2024, when Rocket Lab's Neutron is supposed to have its first launch.
As a result, Astra has no additional launches scheduled this year (https://twitter.com/thesheetztweetz/status/1555293159109922818). Astra has admitted that they might not even launch anything next year (https://twitter.com/sciguyspace/status/1555292835259338755), either. On the financial side, Astra lost another $82M last quarter! The company currently has $104M in cash on hand. The stock is down 4.24% today and an additional 13.21% after hours. This looks grim.
Astra has spent five years and $300M developing a rocket and engines they are not going to use. Now they will develop a completely new rocket, with engines where the intellectual property is owned by another company. But they only have enough cash to last one more quarter—two quarters if you count the new funds they are raising. Their last ditch effort seems to be to stop the bleeding by cancelling their rocket program, but by doing so they are also cancelling the revenue stream which was supposed to bring them to profitability.
By the time Rocket 4 flies—if it ever flies—Astra’s competition will have further established themselves. Astra continues to burn cash and has abandoned any chance of earning significant revenues for at least the next two years. At this point, Astra's sole source of revenue is the sale of their Apollo Fusion spacecraft engines (https://spacenews.com/astra-to-acquire-spacecraft-propulsion-company-apollo-fusion/), which currently amounts to less than a paltry $3M per quarter. Rocket Lab will spend the next two years growing their revenues and expanding their business even further. Who knows, Rocket Lab might even be profitable by then! There is no way to portray this in a positive light for Astra. The business model and growth plan Astra presented in their original investor presentation (https://astra.com/wp-content/uploads/2021/02/Astra-Investor-Presentation.pdf) has been abandoned and is officially a failure.
At least Rocket Lab is up another 5.83% today. They are up 19.52% over the last five days. Go Rocket Lab!
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Glad I dropped ASTRA last year. As the saying goes, rockets are hard....
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It's also worth pointing out that Astra currently has a $343.40M market cap (https://www.google.com/search?q=astr+stock), approximately $200M of which (58%!) is represented by their cash and the funds they just raised. Once they run out of cash, how much will the company still be worth? What are their chances of raising additional funds at that point?
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After the failure of Astra, I've been thinking more about the viability of small launch vehicles. Did you know that Virgin Orbit has flown nothing but CubeSat rideshare missions (https://en.wikipedia.org/wiki/LauncherOne)? Combined with their low launch cadence, it indicates that there is a severe demand problem for Virgin Orbit.
Furthermore, rumors that Electron is not profitable (https://www.reddit.com/r/RocketLab/comments/wj1e77/rocket_lab_generating_negative_revenue_on/) continue to swirl around the Internet. I hope that Rocket Lab can provide some more clarity on this issue. Will Electron reusability solve the problem?
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Saw a great article on Ars Technica today:
Rocket Lab’s launch cadence now “100 percent” driven by market demand (https://arstechnica.com/science/2022/08/peter-beck-explains-why-electron-may-only-ever-launch-10-15-times-a-year/)
Peter Beck has admitted in a recent interview that there is only enough demand in the market for 10-15 Electron launches per year, and this may not ever change. Rocket Lab can currently build an Electron in just 18 days, and their facilities are designed to manufacture and launch one Electron per week. But the demand simply isn't there! The small launch market segment is dead on arrival and companies with a business model based on small launches are also doomed unless they can pivot to larger launch vehicles or other segments of the space industry.
It is very encouraging that Rocket Lab understands that there is a demand problem and is making great strides in pivoting away from small launch compared to competitors like Astra and Virgin Orbit. Astra and Virgin Orbit are likely doomed. Astra's Rocket 4 is still too small and will be dead on arrival even if they survive long enough to actually launch it. Virgin Orbit has no demand, no clear path to a larger rocket, and no progress towards pivoting away from a launch-centric business model.
Update - Peter Beck has clarified some of his statements that were used in that article.
The demand is there and growing steadily, but the customer readiness has lagged more than expected. In general, the rockets are often ready before the spacecraft are, which is part of the reason for our move into space systems to help streamline the spacecraft build and launch for our customers, making it faster and more cost-effective to get hardware on orbit. As for the future demand of Electron, launch cadence will be dictated by customer readiness, but we absolutely see potential for this to exceed 10 to 15 launched per year. Some single customers are seeking that many launches alone.
This is much more encouraging, I hope he is right!
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If anyone is interested in what Relativity Space is doing, check out this awesome NASASpaceflight interview with their CEO from yesterday:
NSF Live: 3D Printing Rockets with Relativity CEO Tim Ellis (https://www.youtube.com/watch?v=F9uNjVnLIvo)
I'm super excited about what Relativity Space is doing. Tim Ellis is definitely in the running to become the next Elon Musk. It is amazing to see how much such a young person has accomplished so far. The most interesting things I heard in the interview is that Relativity Space sees their 3D printing technology as a key competitive advantage and has no plans to sell it to any other company. Instead, they want to use their manufacturing technology to manufacture different things in the aerospace industry such as aircraft, and disrupt other parts of the aerospace industry. I think Tim Ellis has his eyes set on Boeing and Airbus!
It’s worth pointing out that Tim Ellis mentioned Rocket Lab multiple times in the interview. Rocket Lab, SpaceX, and Blue Origin are the only space companies that he mentioned, which shows that he sees Rocket Lab as a more serious competitor than other companies. The interviewers did not specifically ask Tim about Rocket Lab, he brought them up on his own. On Rocket Lab, Tim had four things to say:
- [21:53 (https://youtu.be/F9uNjVnLIvo?t=1313)] Even with Neutron, New Glenn, and Falcon 9 fully operational, he sees a huge demand in the market that all of those vehicles combined will be unable to address on their own. He claims there is a 2:1 to 3:1 demand to supply deficit in the medium and heavy launch segment, even with the announced future plans of all companies. He says there is 20 times more demand for Terran R than Terran One [26:05 (https://www.youtube.com/watch?v=F9uNjVnLIvo&t=1565s)].
- [1:01:37 (https://youtu.be/F9uNjVnLIvo?t=3697)] He believes that parachute recovery of Electron will work, but it seems like too little return for too much investment, and he thinks the engineering hours could be better spent elsewhere.
- [1:02:16 (https://www.youtube.com/watch?v=F9uNjVnLIvo&t=3736s)] He thinks Rocket Lab could have aimed bigger with Neutron and that it is still “small”.
- [49:13 (https://www.youtube.com/watch?v=F9uNjVnLIvo&t=2953s)] Relativity Space has no plans to operate any satellite constellations or manufacture satellites or satellite components and hence won’t compete with Rocket Lab in that area.
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Saw a great article on Ars Technica today:
Peter Beck explains why Electron may only ever launch 10-15 times a year (https://arstechnica.com/science/2022/08/peter-beck-explains-why-electron-may-only-ever-launch-10-15-times-a-year/)
Peter Beck has admitted in a recent interview that there is only enough demand in the market for 10-15 Electron launches per year, and this may not ever change. Rocket Lab can currently build an Electron in just 18 days, and their facilities are designed to manufacture and launch one Electron per week. But the demand simply isn't there! The small launch market segment is dead on arrival and companies with a business model based on small launches are also doomed unless they can pivot to larger launch vehicles or other segments of the space industry.
It is very encouraging that Rocket Lab understands that there is a demand problem and is making great strides in pivoting away from small launch compared to competitors like Astra and Virgin Orbit. Astra and Virgin Orbit are likely doomed. Astra's Rocket 4 is still too small and will be dead on arrival even if they survive long enough to actually launch it. Virgin Orbit has no demand, no clear path to a larger rocket, and no progress towards pivoting away from a launch-centric business model.
Update - Peter Beck has clarified some of his statements that were used in that article.
The demand is there and growing steadily, but the customer readiness has lagged more than expected. In general, the rockets are often ready before the spacecraft are, which is part of the reason for our move into space systems to help streamline the spacecraft build and launch for our customers, making it faster and more cost-effective to get hardware on orbit. As for the future demand of Electron, launch cadence will be dictated by customer readiness, but we absolutely see potential for this to exceed 10 to 15 launched per year. Some single customers are seeking that many launches alone.
This is much more encouraging, I hope he is right!
How much of this is aimed at would be investors of his competition? Am being some what rhetorical here, I dont have 100mm to put into a rocket startup :-(
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How much of this is aimed at would be investors of his competition? Am being some what rhetorical here, I dont have 100mm to put into a rocket startup :-(
Not much, I would assume most of what Peter Beck says publicly is aimed at Rocket Lab investors as he depends on them to raise money. Investors of the competition, not so much.
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Since we’ve been on the topic of demand, here is a graph from Wikipedia (https://en.m.wikipedia.org/wiki/CubeSat) showing the amount of tiny satellites launched over time. It looks like the number of tiny satellites is increasing sharply over time. I bet that this is the data that Astra and Virgin Orbit used as the basis for their revenue growth projections. However, demand doesn’t seem to be increasing along with the number of satellites. I wonder how many of these will end up going up on Falcon 9 rideshares?
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I appreciate your continued updating of this thread. I currently have three lots of RKLB shares with an average share price of $4.70 so ATM I'm above water. I can't say the same about my ASTR.
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I wish my RKLB cost basis was so low! Truly, I was Too Soon on this one!
By the way, I sold all of my ASTR at a huge loss after their earnings report last week. I truly believe the company is headed for failure and can no longer justify holding any of their shares.
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I appreciate your continued updating of this thread. I currently have three lots of RKLB shares with an average share price of $4.70 so ATM I'm above water. I can't say the same about my ASTR.
Well done, @PDXTabs!
I have multiple lots but a cost of about $6.50, so slightly under water. RKLB performance to date for me is now close to S&P since my purchases, I think. Lost another few hundred dollars on ASTR but sold a while back.
An informative experience. Still learning.
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I hope at the very least we can all learn a lot about the space industry by participating in this thread. Space is awesome!!!
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I appreciate your continued updating of this thread. I currently have three lots of RKLB shares with an average share price of $4.70 so ATM I'm above water. I can't say the same about my ASTR.
Well done, @PDXTabs!
I have multiple lots but a cost of about $6.50, so slightly under water. RKLB performance to date for me is now close to S&P since my purchases, I think. Lost another few hundred dollars on ASTR but sold a while back.
An informative experience. Still learning.
@Herbert Derp and BicycleB, I promise you that it was by complete accident that I'm currently in the black. I purchased when I had the money to spend. My first lot was for $10 in the SPAC, but my second and third lots were in July 2022 after I sold a house (obviously 90% of the house proceeds went into boring index funds).
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I appreciate your continued updating of this thread. I currently have three lots of RKLB shares with an average share price of $4.70 so ATM I'm above water. I can't say the same about my ASTR.
Well done, @PDXTabs!
I have multiple lots but a cost of about $6.50, so slightly under water. RKLB performance to date for me is now close to S&P since my purchases, I think. Lost another few hundred dollars on ASTR but sold a while back.
An informative experience. Still learning.
Made me curious to check mine; price at $7.30, so quite a bit in the red. Guess I should buy more <$5.50 to bring it down ;)
And some of that is a few $5 puts I sold that "accidentally" executed, ops..
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The Wall Street Journal published an interesting bullish article on Rocket Lab today:
Unlike Other Former SPACs, Rocket Lab Is Already Science, Not Fiction (https://www.wsj.com/articles/unlike-other-former-spacs-rocket-lab-is-already-science-not-fiction-11660045735)
Rocket Lab really has distinguished themselves from the competition. They have reliable, working technology, large cash reserves, minimal cash burn, and significant revenues which are growing over time.
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It turns out that after Astra cancelled Rocket 3, NASA is looking (https://spacenews.com/nasa-looking-for-new-launch-of-remaining-tropics-cubesats/) for a new launch provider for its TROPICS constellation. TROPICS has specific orbit requirements needed to meet its science goals. That orbit, though, is not commonly used by other spacecraft, ruling out rideshare opportunities. There were three contenders in the original bid to launch TROPICS: Rocket Lab, Astra and SpaceX. Rocket Lab was rejected only on price. Now that Astra is out of the running, it looks like Rocket Lab might be the second cheapest option. This could be the first direct evidence that Astra's demise means more business being funneled to Rocket Lab!
In other news, Peter Beck claims that NASA has assured (https://twitter.com/jeff_foust/status/1556722181047865344) him that the AFTS software will be ready for the Wallops launch in December. Rocket Lab will be shipping an Electron to Virginia later this month. Fingers crossed for no more delays on getting the 3rd launch pad up and running!
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Rocket Lab has posted their Q2 2022 financial results (https://www.businesswire.com/news/home/20220811005658/en/Rocket-Lab-Announces-Second-Quarter-2022-Financial-Results-and-Guidance-for-Third-Quarter-2022). You can find the webcast and presentation slides of the earnings call here (https://investors.rocketlabusa.com/events-and-presentations/events/event-details/2022/Second-Quarter-2022-Financial-Results-Update-and-Conference-Call/default.aspx).
There's not a lot to report, it seems to be mostly business as usual. Rocket Lab did not announce any new contracts, and their business backlog actually decreased by $14.5M to $531.4M due to more revenue being realized than was added to the backlog. Revenue for Q2 was $55.5M, up 36% from $40.7M last quarter. Rocket Lab had a net loss of $37.4M in Q2 2022, up from $26.7M last quarter. Rocket Lab currently has $542.5M in cash on hand. Rocket Lab's current cash burn rate is around $130M per year, which gives them over four years of cash remaining before they run out of funds.
I am disappointed that Rocket Lab didn't close on any big new contracts over the past few months. In their conference call, Rocket Lab said they are pursuing multiple contracts, and blamed the lack of new signed contracts on a "lumpy" contract signing process. I am curious if we will see any contracts for deep-space probes in the future--Rocket Lab is touting their ability to construct and launch cost effective deep-space probes such as the Lunar Photon. Deep-space probes used to cost hundreds of millions to billions of dollars and take decades to develop, Rocket Lab is claiming they design and execute deep-space probe missions with tens of millions of dollars over a matter of months.
It is good to see that Rocket Lab's revenues are growing in line with their original projections. Rocket Lab has realized $96.2M in revenue in the first half of the year, putting them well on track to exceed $200M in revenue in 2022. This is actually greater than their original projection of $176M in revenue in 2022:
Original Rocket Lab Revenue Projections
2021: $69M ($49M launch, $20M space systems)
2022: $176M ($115M launch, $61M space systems)
2023: $267M ($141M launch, $126M space systems)
2024: $450M ($232M launch, $218M space systems)
2025: $749M ($399M launch, $350M space systems)
Overall, I am glad to see the Rocket Lab's revenue growth remains in-line with and is even exceeding their original projections. Certainly, the same cannot be said for the likes of Astra, Virgin Orbit, and Virgin Galactic. Also unlike those companies, Rocket Lab has about four years of cash left and no risk of bankruptcy. However, I don't see any huge news here that will propel the stock price forward. We will need to see some good new contracts added to Rocket Lab's backlog, the successful reuse of an Electron booster, or very encouraging progress on Neutron for that to happen.
In terms of achieving profitability, this is what Rocket Lab had to say on the conference call about improving their gross margins:
I think the real important focus item for us to achieving and maintaining healthy gross margins on space systems is really around implementing some of the things that we know we need to do on the SolAero side of the business. That brought with it gross margins that when we acquired the company was in the high single digits gross margins and we have a path and a target to get to 30 points of gross margin for that business. When we achieve that, it will land us exactly where we want to be. I think we know what we need to do, it's just a matter of time. When we did the SolAero acquisition we said it was about a 24 month path to get from where they were to where we want to go. Nothing is really pushing off of that view. We remain encouraged by the fact that the new business that we sign up continues to come in at higher gross margins than what existed in the existing backlog when we closed the deal in January. All the indicators are pointing in the right direction that we can achieve the margin targets that we are hoping for in space systems and on the launch side.
I'm curious what exactly Rocket Lab's plans are for SolAero. Keep in mind that since SolAero accounts for a large chunk of Rocket Lab's revenues. Rocket Lab said that revenue from the acquired companies SolAero, Advanced Solutions Inc, and Planetary Systems Corporation was $28M this quarter, and the vast majority (> $20M?) was from SolAero. Therefore, increasing the gross margin to 30% on SolAero revenue is a really big deal! Combined with other profitability initiatives such as Electron reuse, this could easily put Rocket Lab on the path to profitability, which will be huge! I will be sure to pay attention to what they say over the next conference calls so I can hold them to this statement.
Rocket Lab also said that for their new Responsive Space Program (https://www.rocketlabusa.com/updates/rocket-lab-introduces-responsive-space-program/), the cost per launch is 15-30% higher than the typical Electron launch price of $7.5M, and the vast majority of that 15-30% markup goes directly to gross margin since most of their launch costs are fixed costs. Between the Responsive Space Program and Electron reuse, I see a clear path to increasing the gross margins of Electron!
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It looks like the market has reacted positively to Rocket Lab's earnings, because the stock (https://www.google.com/search?q=rklb) has surged over 20% today on the news! Apparently they beat analyst expectations for revenue by 12.66%, which is great.
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Yay! Another 41% and I'll be back to break even!
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Welcome to the struggle bus! My cost basis is at $13.11.
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My cost basis is $12.08. However, that's for 6 shares. So, I made a whopping $7 today with that 21% jump. I basically just used what was leftover in a taxable brokerage account a while back to purchase it.
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I've heard of money pits and a pit will eventually fill up, right? But space... It's an infinite money pit!
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I've heard of money pits and a pit will eventually fill up, right? But space... It's an infinite money pit!
There's a lot of money (https://www.cnbc.com/2022/05/21/space-industry-is-on-its-way-to-1-trillion-in-revenue-by-2040-citi.html) to be made in outer space.
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I've heard of money pits and a pit will eventually fill up, right? But space... It's an infinite money pit!
There's a lot of money (https://www.cnbc.com/2022/05/21/space-industry-is-on-its-way-to-1-trillion-in-revenue-by-2040-citi.html) to be made in outer space.
OMG, best case $30/kg by 2040. By 2040 I might be able to buy a microsat to taunt my enemies and have it launched into orbit and it won't even put a dent in my stache.
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Reading all these red days I went to check my cost basis and...I'm in the black! I got lucky, I suppose. In June, I came into a significant one-time bonus and increased my position in Rocket Lab by 179% and dropped my cost basis down to $6.70!!
Still, everything purchased before June is sitting in the red. Things need to hit $10 to gain profits on most of my positions, and we need to hit $16 before I am 100% in the black. A ways to go, for sure, but I didn't invest in this company for short-term gains. 2025 here we come!
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In response to last week's news, Deutsche Bank just raised (https://www.marketbeat.com/instant-alerts/nasdaq-rklb-a-buy-or-sell-right-now-2022-08-2/) their price target for Rocket Lab to $15! Wells Fargo also initiated coverage at $5 per share back in June, but the average price target for Rocket Lab is still $15.80.
The price targets are now:
- 08/15/2022, Deutsche Bank, $15
- 06/21/2022, Wells Fargo, $5
- 05/18/2022, Morgan Stanley, $16
- 03/01/2022, Stifel, $23
- 02/23/2022, Roth Capital, $20
- 11/30/2021, B of A Securities, $20
- 09/13/2021, Cowen & Co., $18
- 09/09/2021, Canaccord Genuity, $30
You can also view a live summary of the analyst ratings here:
https://www.benzinga.com/quote/RKLB/analyst-ratings
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In new news, Rocket Lab has just announced (https://www.businesswire.com/news/home/20220815005680/en/Rocket-Lab-to-Launch-150th-Satellite-on-Upcoming-Mission-for-Synspective) their next mission, with the launch window opening in mid-September! This is Rocket Lab's 30th launch, and will deliver Rocket Lab's 150th payload to space for Earth-imaging satellite constellation operator Synspective. The mission is the second of a bulk buy of three Electron launches by Synspective to deliver their StriX satellites to low Earth orbit. Rocket Lab is really hitting their stride with a monthly launch cadence.
Meanwhile, Virgin Orbit has reduced their launch forecast (https://spacenews.com/virgin-orbit-reduces-launch-forecast-while-increasing-per-launch-revenue/) to just four missions this year. This is troubling news for Virgin Orbit, they clearly have a demand problem. Rocket Lab's lead over competitors Virgin Orbit and Astra is indisputable at this point.
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Quartz’s Space Business website / newsletter recently released its “Power Rankings” of small rocket companies. Rocket Lab ranked number one!
Each company’s description seems insightful, accurate per articles in this thread, and contains a pithy “vibe” summary.
https://qz.com/emails/space-business/1849390218/space-business-rocket-power-rankings/
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Cool article!
I gleaned a few interesting tidbits from a recent presentation (https://www.youtube.com/watch?v=2Vjqneuu0I4) Rocket Lab gave at the Canaccord Genuity 42nd Annual Growth Conference.
Rocket Lab apparently could have done their previous launch for the NRO as a recovery mission (https://www.youtube.com/watch?v=2Vjqneuu0I4&t=1082s), but the window of the responsive launch meant that they didn't have time to install the reusability hardware on the rocket.
Rocket Lab's vertical integration of satellite components allows them to remove bottlenecks for customers (https://www.youtube.com/watch?v=2Vjqneuu0I4&t=1289s) by prioritizing the manufacturing of Rocket Lab satellite components for Rocket Lab customers. This way, customers won't be stuck waiting months for their reaction wheels, etc.
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In new news, Astra's stock has dipped below $1 per share and is now at risk of being delisted from the Nasdaq (https://newspaceeconomy.ca/2022/08/24/will-astra-be-delisted-from-the-nasdaq-astr-astra-astraspace/). If Astra’s stock price trades below $1 for 30 consecutive business days, the company will be notified that it is non-compliant with Nasdaq listing requirements. It will be given 180 calendar days to become compliant. If, after 180 days, the company is still not compliant, it will be notified that its company will be delisted. The company may be allowed another 180 calendar days under specific circumstances. With no commercial launches this year or probably next, it's difficult to see what might make Astra's stock increase in value in the coming months, outside of a large outside investment, or significant sales of its in-space thruster.
Yesterday, SpaceX sent ripples through the telecommunications industry by announcing (https://www.cnet.com/tech/mobile/t-mobile-spacex-partner-to-use-starlink-satellites-to-cover-dead-zones/) that Starlink will soon be able to provide service to cellphones and Tesla vehicles (https://electrek.co/2022/08/25/direct-to-satellite-starlink-coming-to-tesla-vehicles/). SpaceX's new "Starlink v2.0" satellites will be able to connect directly to cell phones and vehicles on the ground, anywhere in the world. This is huge, and competitors like AST Space Mobile (https://en.wikipedia.org/wiki/AST_SpaceMobile) and Lynk Global (https://en.wikipedia.org/wiki/Lynk_Global) will be scrambling to launch their own constellations to compete.
Following the success of Rocket Lab's moon mission (https://www.cnbc.com/2022/06/28/rocket-lab-launch-of-capstone-begins-nasa-return-to-the-moon.html), the company has been getting increased press coverage for its upcoming Venus mission (https://gizmodo.com/rocket-lab-mission-to-venus-clouds-life-1849430459) which is currently scheduled for May 2023. This may be the first ever privately funded science mission to another planet! I hope Rocket Lab gets more customers signed up to buy space probes!
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In new news, Astra's stock has dipped below $1 per share and is now at risk of being delisted from the Nasdaq (https://newspaceeconomy.ca/2022/08/24/will-astra-be-delisted-from-the-nasdaq-astr-astra-astraspace/). If Astra’s stock price trades below $1 for 30 consecutive business days, the company will be notified that it is non-compliant with Nasdaq listing requirements. It will be given 180 calendar days to become compliant. If, after 180 days, the company is still not compliant, it will be notified that its company will be delisted. The company may be allowed another 180 calendar days under specific circumstances. With no commercial launches this year or probably next, it's difficult to see what might make Astra's stock increase in value in the coming months, outside of a large outside investment, or significant sales of its in-space thruster.
Isn't a reverse split the most likely outcome?
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In new news, Astra's stock has dipped below $1 per share and is now at risk of being delisted from the Nasdaq (https://newspaceeconomy.ca/2022/08/24/will-astra-be-delisted-from-the-nasdaq-astr-astra-astraspace/). If Astra’s stock price trades below $1 for 30 consecutive business days, the company will be notified that it is non-compliant with Nasdaq listing requirements. It will be given 180 calendar days to become compliant. If, after 180 days, the company is still not compliant, it will be notified that its company will be delisted. The company may be allowed another 180 calendar days under specific circumstances. With no commercial launches this year or probably next, it's difficult to see what might make Astra's stock increase in value in the coming months, outside of a large outside investment, or significant sales of its in-space thruster.
Isn't a reverse split the most likely outcome?
Unless they can pull off a miracle, I don't see how they can do anything other than a reverse split followed by dilution to earn some cash to keep them alive and stay on the Nasdaq so they can keep bringing in cash through more and more dilution.
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Had some cash lying around, bough another 100 shares at $5.18! Promptly dropped below $5! Lol.
Sent from my IN2017 using Tapatalk
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Isn't a reverse split the most likely outcome?
Yes, I think that’s the most likely outcome. I don’t expect the company to be delisted. It seems more probable to me that Astra will go bankrupt before they are delisted.
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Check out this picture (https://twitter.com/Peter_J_Beck/status/1564468027382321152) of the recently recovered Electron booster shared by Peter Beck. This is the most detailed image of a recovered Electron to date. Here is an earlier image (https://twitter.com/Peter_J_Beck/status/1521349199299719168) of the same booster, showing just the engines. The condition looks fairly good for being dunked in the ocean! I wonder what a helicopter-caught Electron will look like?
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Analysts continue to be bullish on Rocket Lab. The stock is up today because Cowen published a report recognizing Rocket Lab as an industry leader which has distinguished itself from the competition.
Articles:
Rocket Lab could surge 55% as leader in launch market, Cowen says (https://www.cnbc.com/2022/08/31/rocket-lab-could-surge-55percent-as-leader-in-launch-market-cowen-says.html)
Time to Buy This SpaceX Peer, Says Analyst (https://www.barrons.com/articles/spacex-rocket-labs-stock-51661954770)
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Analysts continue to be bullish on Rocket Lab. The stock is up today because Cowen published a report recognizing Rocket Lab as an industry leader which has distinguished itself from the competition.
Articles:
Rocket Lab could surge 55% as leader in launch market, Cowen says (https://www.cnbc.com/2022/08/31/rocket-lab-could-surge-55percent-as-leader-in-launch-market-cowen-says.html)
Time to Buy This SpaceX Peer, Says Analyst (https://www.barrons.com/articles/spacex-rocket-labs-stock-51661954770)
I saw the first article. Surge 55%? So back to a whole $8?? Lol. Still way down from the high. I'd hope it would do more then that
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Analysts continue to be bullish on Rocket Lab. The stock is up today because Cowen published a report recognizing Rocket Lab as an industry leader which has distinguished itself from the competition.
Articles:
Rocket Lab could surge 55% as leader in launch market, Cowen says (https://www.cnbc.com/2022/08/31/rocket-lab-could-surge-55percent-as-leader-in-launch-market-cowen-says.html)
Time to Buy This SpaceX Peer, Says Analyst (https://www.barrons.com/articles/spacex-rocket-labs-stock-51661954770)
I saw the first article. Surge 55%? So back to a whole $8?? Lol. Still way down from the high. I'd hope it would do more then that
I'm sure it'll depend entirely on timeline. On a 1-year time horizon, 55% is pretty darn bullish. On a 10-year time horizon, it's pretty ridiculously behind where RKLB needs to be be....
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I'm sure it'll depend entirely on timeline. On a 1-year time horizon, 55% is pretty darn bullish. On a 10-year time horizon, it's pretty ridiculously behind where RKLB needs to be be....
Analyst price targets are for a 12-18 month time horizon (https://www.investopedia.com/terms/p/pricetarget.asp).
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CNN Money puts them at a 12 month forecast median price of $13.50
https://money.cnn.com/quote/quote.html?symb=RKLB
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Rocket Lab just posted a video (https://twitter.com/rocketlab/status/1565446554638356480) of them test firing one of the Rutherford engines that they fished out of the ocean. Pretty cool! I wonder when one of these engines will go back to space?
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New news! Rocket Lab has signed a cooperative agreement with the U.S. military to explore the possibility of using the company’s space launch vehicles to transport cargo around the world. The U.S. military has signed similar agreements with SpaceX and Blue Origin.
https://spacenews.com/rocket-lab-signs-on-to-u-s-militarys-rocket-cargo-program/
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New news! Rocket Lab has signed a cooperative agreement with the U.S. military to explore the possibility of using the company’s space launch vehicles to transport cargo around the world. The U.S. military has signed similar agreements with SpaceX and Blue Origin.
https://spacenews.com/rocket-lab-signs-on-to-u-s-militarys-rocket-cargo-program/
Very, very cool. And also, is this another punch in the gut for Astra? Wasn't this exact use case one of their biggest drivers to market?
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Very, very cool. And also, is this another punch in the gut for Astra? Wasn't this exact use case one of their biggest drivers to market?
Astra's payload capacity is too small to carry meaningful amounts of cargo. Their use case for the US Military is the rapid and responsive launch of replacement satellites, from anywhere, during a conflict.
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New news! Apple has been confirmed as the primary customer (https://spacenews.com/apple-to-be-largest-user-of-globalstars-satellite-network-for-iphone-messaging/) for the new satellite constellation that Rocket Lab is building for Globalstar. Back in February, it was revealed that Globalstar's $327M fleet of satellites was 95% funded by a "mystery customer" (speculated to be Apple (https://spacenews.com/globalstar-selects-mda-and-rocket-lab-for-new-satellites/)) who wanted to provide satellite internet for smartphones.
As part of its agreement with Apple, Globalstar said it will allocate 85% of its network capacity to Apple. Globalstar said it will continue to offer its own services, such as internet-of-things connectivity, through the remaining 15% of capacity on the system, while also exploring terrestrial applications of its spectrum. Apple will use Globalstar's network to provide emergency connectivity (https://www.cnn.com/2022/09/07/tech/apple-emergency-sos-satellites-scn/index.html) for iPhones across the world.
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Firefly Alfa launch attempt tomorrow .
Details
https://everydayastronaut.com/flta002-to-the-black-alpha/
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Blue Origin just lost a booster:
https://arstechnica.com/science/2022/09/blue-origin-rocket-explodes-on-ascent-but-spacecraft-escape-system-works-well/
I believe Blue Origin is still the only company other than SpaceX that has demonstrated the capability to refly a booster, isn't it?
Edit: Got to give a lot of credit to the announcer, she stays calm and collected but you can just hear the pain in her voice as she talks through the explosion and subsequent landing of the (uncrewed) crew module after the launch abort system functions as intended: https://youtu.be/SqAVWvOT-1c?t=4872
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Blue Origin just lost a booster:
https://arstechnica.com/science/2022/09/blue-origin-rocket-explodes-on-ascent-but-spacecraft-escape-system-works-well/
Wow, that sucks. Glad they didn't have humans on board. Nevertheless, this is going to put a pause on New Shepard launches for some time while Blue Origin sorts out the issue.
I believe Blue Origin is still the only company other than SpaceX that has demonstrated the capability to refly a booster, isn't it?
Yes, although New Shepard is not capable of reaching orbit so it is not really on par with Falcon 9.
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In response to last week's news, Deutsche Bank just raised (https://www.marketbeat.com/instant-alerts/nasdaq-rklb-a-buy-or-sell-right-now-2022-08-2/) their price target for Rocket Lab to $15! Wells Fargo also initiated coverage at $5 per share back in June, but the average price target for Rocket Lab is still $15.80.
The price targets are now:
- 08/15/2022, Deutsche Bank, $15
- 06/21/2022, Wells Fargo, $5
- 05/18/2022, Morgan Stanley, $16
- 03/01/2022, Stifel, $23
- 02/23/2022, Roth Capital, $20
- 11/30/2021, B of A Securities, $20
- 09/13/2021, Cowen & Co., $18
- 09/09/2021, Canaccord Genuity, $30
You can also view a live summary of the analyst ratings here:
https://www.benzinga.com/quote/RKLB/analyst-ratings
I'm not saying that RKLB is a terrible company, although it IS a very risk sector to be operating in.
I'd just like to point out that out of 15 analyst ratings, ALL 15 of them have a price target that is higher than current price - by a factor of anywhere from 20% - 600% above current price.
Not a single analyst thinks that it should be lower than its current price - not a single analyst issued sell recommendations when this thing was double or triple its current price. That tell you much less about RKLB and than it does about analyst ratings. It's like asking an insurance salesman if you should need life assurance. 15 geniuses who's job is to literally tell you how much this thing is worth, and at last year's much higher prices not one of them told you that it could be worth less.
If ever you wanted proof that supposed experts either a) have no clue, or b) don't act in your best interest, or both, then looking at this sort of thing will confirm it.
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What if someone offered you a bet: markets will drop 20% from here (SPY $390) within the next 12 months.
I guess I should stick to S&P 500 predictions: SPY closed at $368 today.
I sold RKLB at around $8/share back in April.
...
My prediction: RKLB hits $3/sh before it hits $5/sh.
My prediction was wrong, as RKLB spiked up in the July-Aug rally. I've lost track of it since selling in April.
That prediction was motivated by a similar prediction for Bitcoin's price ($20k before $40k) which did come true while I shorted it.. But here's the interesting part: RKLB has fallen more than Bitcoin this year, and been more volatile over the past 3 months. If markets fall far enough, I want to buy RKLB shares or long-dated call options.
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Last week, Rocket Lab gave their 2022 Investor Day & Neutron Update (https://www.youtube.com/watch?v=Q6FW3WQu0w0). The stock is down about 18% since then, so I guess the market sold the news again. That being said, there really wasn't anything groundbreaking in the investor presentation--most of it was stuff that astute Rocket Lab followers already knew.
Some tidbits that I picked up:
* [1:18:10 (https://youtu.be/Q6FW3WQu0w0?t=4690)] Rocket Lab plans to test-fire the Archimedes pre-burner by the end of this year.
* [1:19:48 (https://youtu.be/Q6FW3WQu0w0?t=4788)] Rocket Lab has switched the Archimedes engine from a gas generator cycle to an oxidizer-rich closed cycle. Apparently the oxidizer-rich closed cycle design will have robust tolerances and low power in the initial design, but has more opportunity for optimization in the future. I am not a rocket engine expert so can't comment much here.
* [1:25:22 (https://youtu.be/Q6FW3WQu0w0?t=5122)] Rocket Lab has poured the foundations of the Neutron factory in Wallops. The first structures should be constructed by the end of the year.
* [1:22:57 (https://youtu.be/Q6FW3WQu0w0?t=4977)] Rocket Lab has partnered (https://au.news.yahoo.com/rocket-lab-selects-nasa-stennis-113000539.html) with the NASA Stennis Space Center Engine Test Facility to test the Archimedes engine.
* [1:13:00 (https://youtu.be/Q6FW3WQu0w0?t=4380)] The Neutron fairing design has changed from four "petals" to two. This was a very predictable change, IMO.
* [1:14:55 (https://youtu.be/Q6FW3WQu0w0?t=4495)] Rocket Lab has created a 3D rendering of a Neutron astronaut capsule. They specifically stated that this is only a 3D rendering and that they do not have any ongoing capsule development program. Honestly, I don't know what the point of this was. Rocket Lab does not have the financial or engineering resources to embark on a capsule program, and I think embarking on such a program would be a distraction for the company even if they did have the resources.
Read more in this article:
https://techcrunch.com/2022/09/21/rocket-lab-expands-us-presence-with-engine-testing-launch-facilities/
In other news, Cathie Wood's ARKX and ARKQ funds bought (https://www.reddit.com/r/RKLB/comments/xp0rko/arkx_buying_rklb_today/) 500,000 shares of Rocket Lab today. This is her first investment in Rocket Lab. Her reputation isn't what it used to be, but it's interesting to see that she finally decided to open a position in Rocket Lab.
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Astra's stock (https://www.google.com/search?q=astr+stock) has fallen to a new low of $0.60 today, and their market cap is just $160M. I am glad that I sold out of that company when I did. I think at this point, the value of their company is less than the value of the cash they have on hand. This would indicate that the market has decided that their business has negative value! Not a good sign.
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What if someone offered you a bet: markets will drop 20% from here (SPY $390) within the next 12 months.
I guess I should stick to S&P 500 predictions: SPY closed at $368 today.
I sold RKLB at around $8/share back in April.
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My prediction: RKLB hits $3/sh before it hits $5/sh.
My prediction was wrong, as RKLB spiked up in the July-Aug rally. I've lost track of it since selling in April.
That prediction was motivated by a similar prediction for Bitcoin's price ($20k before $40k) which did come true while I shorted it.. But here's the interesting part: RKLB has fallen more than Bitcoin this year, and been more volatile over the past 3 months. If markets fall far enough, I want to buy RKLB shares or long-dated call options.
For me, the volatility looks like an advantage. Since I assume RKLB's long term value isn't changing much and is high enough that buying under $5 is reasonable, low points are buying opportunities. Bought some more nibbles today.
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Cathie Wood is still at it! She picked up another 223,000 shares of RKLB today!
https://www.reddit.com/r/RKLB/comments/xpxubh/arkx_arcq_continued_buying_rklb_927/
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Last week, Rocket Lab gave their 2022 Investor Day & Neutron Update (https://www.youtube.com/watch?v=Q6FW3WQu0w0). The stock is down about 18% since then, so I guess the market sold the news again.
I actually think you're overly pessimistic (!) by quoting RKLB's price in isolation. I'd suggest quoting a space-related ETF, and an unrelated ETF that has similar price moves. Then you can see how much of the move was market conditions (like the Sept 21 Fed meeting), and how much was RKLB disappointment.
SPY -6.2% (S&P 500, overall U.S. performance)
ARKX -6.1% (Ark Space & Exploration ETF)
ARKK -7.8% (Ark Innovation ETF, which you mentioned earlier)
RKLB -16.7%
About 1/3rd of the drop is from overall market conditions, or maybe 1/2 if you view RKLB as part of ARKK. Yes, investors were disappointed, but a fraction of the move was the overall market, not RKLB.
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I sold RKLB at around $8/share back in April.
...
My prediction: RKLB hits $3/sh before it hits $5/sh.
My prediction was wrong, as RKLB spiked up in the July-Aug rally. I've lost track of it since selling in April.
That prediction was motivated by a similar prediction for Bitcoin's price ($20k before $40k) which did come true while I shorted it.. But here's the interesting part: RKLB has fallen more than Bitcoin this year, and been more volatile over the past 3 months. If markets fall far enough, I want to buy RKLB shares or long-dated call options.
For me, the volatility looks like an advantage. Since I assume RKLB's long term value isn't changing much and is high enough that buying under $5 is reasonable, low points are buying opportunities. Bought some more nibbles today.
I would have bolded "if the markets fall far enough", which hasn't happened yet. RKLB is -60% YTD, with market conditions getting worse (globally).
RKLB closed at $4.19/sh, but in after hours trading is $4.37/sh. Six months from now (say, mid March 2023), is it more likely RKLB stock will be up 20% ($5.24/sh) or down 20% ($3.50/sh)?
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Cathie Wood's RKLB buying made it onto CNBC:
https://www.cnbc.com/2022/09/28/cathie-woods-ark-buying-rocket-lab-stock-a-space-spac.html
Perhaps now is an ideal time to open a position?
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I sold RKLB at around $8/share back in April.
...
My prediction: RKLB hits $3/sh before it hits $5/sh.
My prediction was wrong, as RKLB spiked up in the July-Aug rally. I've lost track of it since selling in April.
That prediction was motivated by a similar prediction for Bitcoin's price ($20k before $40k) which did come true while I shorted it.. But here's the interesting part: RKLB has fallen more than Bitcoin this year, and been more volatile over the past 3 months. If markets fall far enough, I want to buy RKLB shares or long-dated call options.
For me, the volatility looks like an advantage. Since I assume RKLB's long term value isn't changing much and is high enough that buying under $5 is reasonable, low points are buying opportunities. Bought some more nibbles today.
I would have bolded "if the markets fall far enough", which hasn't happened yet. RKLB is -60% YTD, with market conditions getting worse (globally).
RKLB closed at $4.19/sh, but in after hours trading is $4.37/sh. Six months from now (say, mid March 2023), is it more likely RKLB stock will be up 20% ($5.24/sh) or down 20% ($3.50/sh)?
This is a very good question!
You may be right in implying it's more likely to be down 20%, or even 40%. But if that's wrong, I still want to buy some at today's prices.
If it goes down, I'll buy more. This is just the little bit that I bought in case, surprisingly, it turns out to be the last good chance.
If ARKK's purchase gets swamped by the falling market, great. If ARKK's attention buoys the price and it never drops to $3,50, at least I have a little at a price I can live with. (My thought process may not be the best. I'm just recording it for accountability, and to enliven the thread by allowing others to see my mistakes.)
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The facebook rocket lab page has pics of the new Va production site.
Link to the pic incase someone does not do FB.
https://imgur.com/a/jtClqei (https://imgur.com/a/jtClqei)
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So I'm just getting caught up on the thread, and--we're remote schooling--so my young kids saw the name of that town (Assawoman) and they are losing it.
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^ @talltexan, lol!
That launch site has awfully high water around it. Can that place flood??
***
Undaunted, picked up another nibble or two of RKLB.
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That launch site has awfully high water around it. Can that place flood??
we will find out this weekend
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Firefly has successfully launched satellites into orbit (https://www.space.com/firefly-aerospace-alpha-rocket-launch-success) on their Alpha rocket, putting them in a very small/elite group of private companies.
Firefly's Alpha has a payload capacity of about ~1,200 kg to low earth orbit for about $15M. Call it 4x the payload of an Electron for about 2x the launch cost.
Given the RocketLab is trying to pivot towards larger rockets themselves with Neutron as more likely to be a viable long term business than Electron sized rockets, this could be a significant shift in the smaller-than-SpaceX launch market. But that's only true if Firefly can keep launching and is able to sustain a reasonably consistent cadence.
First test of that will be the next launch Firefly has scheduled coming up next month.
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It's cool to see that Firefly's rocket is finally working! Their design is remarkably similar to Electron, which also uses a carbon fiber body. The solid black appearance of the boosters gives this away. Firefly Alpha is almost like a scaled-up Electron.
That being said, there are other launch companies waiting in the wings to launch their first rocket. In the coming months, Relativity Space is due to launch their Terran One, and ABL Space Systems is due to launch their RS1. Both of these rockets are roughly comparable to Firefly Alpha in payload capacity and cost. So buckle up tight, the space launch industry is about to get a lot more crowded!
That being said, Rocket Lab is years ahead of the competition when it comes to space systems. None of Rocket Lab's newer launch competitors even have a space systems business to begin with! As time goes on, Rocket Lab is poised to become more of a space systems company than just another launch company.
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Cathie Wood is still at it. She picked up 200k shares of RKLB on 10/3 (https://www.reddit.com/r/RKLB/comments/xuztp5/increased_rklb_position_in_arkx_arkq_oct_3_2022/) and 82k shares on 10/4 (https://www.reddit.com/r/RKLB/comments/xvuxp6/82000_rklb_shares_added_between_arkx_arkq_oct_4/). I wonder how much longer her buying spree will continue?
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Cathie Wood is still at it. She picked up 200k shares of RKLB on 10/3 (https://www.reddit.com/r/RKLB/comments/xuztp5/increased_rklb_position_in_arkx_arkq_oct_3_2022/) and 82k shares on 10/4 (https://www.reddit.com/r/RKLB/comments/xvuxp6/82000_rklb_shares_added_between_arkx_arkq_oct_4/). I wonder how much longer her buying spree will continue?
Considering her record; is this the time to sell all RKLB?? ;)
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Rocket Lab just had another successful launch! Named "It Argos Up From Here (https://techcrunch.com/2022/10/07/rocket-labs-8th-launch-of-2022-breaks-record-for-worst-pun-in-space/)", this was Rocket Lab's eighth launch this year, and 31st launch in total. Rocket Lab has now deployed 151 satellites (https://twitter.com/RocketLab/status/1578446583485472768?t=6QQazcmBEClv_GE23JaHZg&s=34) into orbit, and has a 90% mission success rate with Electron (28 out of 31).
Cathie Wood is still at it! Yesterday, she bought (https://www.reddit.com/r/RKLB/comments/xxkbxt/94000_rklb_shares_added_between_arkx_arkq_oct_6/) another 94,000 shares.
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I think it's time to put things into perspective. When I created this topic back in March 2021, I gave a list of catalysts which I believed would propel the Rocket Lab stock price higher:
1. Massive investor interest in the space industry
2. Launch of 100th satellite into orbit (https://www.stuff.co.nz/business/124193815/rocket-lab-to-launch-100th-satellite-on-photon-rocket-ahead-of-moon-mission)
3. Moon mission (https://techcrunch.com/2020/02/14/rocket-lab-will-launch-a-satellite-to-the-moon-for-nasa-to-prepare-for-the-lunar-gateway/)
4. Further progress towards Electron booster recovery and reuse (https://www.space.com/rocket-lab-booster-recovery-success-for-reusability)
5. Announcement of location for Neutron rocket factory (https://www.msn.com/en-us/news/technology/rocket-lab-unveils-plans-for-new-rocket-to-launch-from-nasa-wallops-new-factory/ar-BB1e9aRK)
6. Launch of ARKX Space Exploration ETF (https://www.cnbc.com/2021/01/13/cathie-woods-ark-invest-plans-space-exploration-etf-arkx.html)
7. Free publicity for space industry from SpaceX
At this point, all of the catalysts in my list have been realized. However, the stock price has gone sharply down, rather than up. Perhaps this means Rocket Lab is a good buying opportunity now, but clearly I was wrong about the catalysts driving the share price up. The good news is that Rocket Lab is still doing what they said they would do back in 2021, unlike certain other space companies. In any case, I think I am done with stock picking. I will continue to enthusiastically follow Rocket Lab's progress because I am a huge fan of the company, but I think I am done with trying to figure out what the next winning stock will be. I have no idea about how to predict such things and my track record is 0 for 1.
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I think it's time to put things into perspective. When I created this topic back in March 2021, I gave a list of catalysts which I believed would propel the Rocket Lab stock price higher:
1. Massive investor interest in the space industry
2. Launch of 100th satellite into orbit (https://www.stuff.co.nz/business/124193815/rocket-lab-to-launch-100th-satellite-on-photon-rocket-ahead-of-moon-mission)
3. Moon mission (https://techcrunch.com/2020/02/14/rocket-lab-will-launch-a-satellite-to-the-moon-for-nasa-to-prepare-for-the-lunar-gateway/)
4. Further progress towards Electron booster recovery and reuse (https://www.space.com/rocket-lab-booster-recovery-success-for-reusability)
5. Announcement of location for Neutron rocket factory (https://www.msn.com/en-us/news/technology/rocket-lab-unveils-plans-for-new-rocket-to-launch-from-nasa-wallops-new-factory/ar-BB1e9aRK)
6. Launch of ARKX Space Exploration ETF (https://www.cnbc.com/2021/01/13/cathie-woods-ark-invest-plans-space-exploration-etf-arkx.html)
7. Free publicity for space industry from SpaceX
At this point, all of the catalysts in my list have been realized. However, the stock price has gone sharply down, rather than up. Perhaps this means Rocket Lab is a good buying opportunity now, but clearly I was wrong about the catalysts driving the share price up. The good news is that Rocket Lab is still doing what they said they would do back in 2021, unlike certain other space companies. In any case, I think I am done with stock picking. I will continue to enthusiastically follow Rocket Lab's progress because I am a huge fan of the company, but I think I am done with trying to figure out what the next winning stock will be. I have no idea about how to predict such things and my track record is 0 for 1.
Interesting. I own two individual stocks that I'm excited about: ABNB, and RKLB. In both cases these are bets that in 7-10 years I will get a good ROI. RKLB being down right now doesn't depress me.
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Interesting. I own two individual stocks that I'm excited about: ABNB, and RKLB. In both cases these are bets that in 7-10 years I will get a good ROI. RKLB being down right now doesn't depress me.
Oh, I haven't sold any of my RKLB. I love the company and I plan to ride this one out and see what happens. I just mean that I'm done with trying to find the next big stock and want to stick with safer investment choices for now. I got burned too much on RKLB and ASTR.
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In other news, just this week we've just seen another two huge satellite contracts get awarded to Rocket Lab's competitors by the US Department of Defense's Space Development Agency. The SDA is giving out these lucrative satellite contracts like candy and I hope Rocket Lab gets one. Hopefully they aren't too busy with the MDA/Globalstar contract (https://www.businesswire.com/news/home/20220224005536/en/Rocket-Lab-Selected-by-MDA-to-Design-and-Build-Spacecraft-for-Globalstar) that they can't take on any more. That contract was great, but I want to see more!
10/04/2022: Ball Aerospace wins $176 million contract to build and operate 10 satellites for Space Development Agency (https://spacenews.com/ball-aerospace-wins-176-million-contract-to-build-10-satellites-for-space-development-agency/)
10/06/2022: York Space wins $200 million Space Development Agency contract for 12 satellites (https://spacenews.com/york-space-wins-200-million-space-development-agency-contract-for-12-satellites/)
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Article states and gives a graph showing that during the past year, Rocket Lab insiders have been selling RKLB stock and not buying it. Average price sold about $5.55. Most of the sales were by Executive VP of Operations Shaun O'Donnell, apparently.
https://www.nasdaq.com/articles/more-money-in-the-bank-for-insiders-who-divested-us%241.4m-worth-of-rocket-lab-usa-inc.
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Speaking of Astra Space (ASTR):
"The company has 180 days to lift its share price or face delisting, according to a regulatory filing."
https://www.cnbc.com/2022/10/07/rocket-builder-astra-space-gets-delisting-warning-from-nasdaq.html
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Apparently Firefly’s recent launch was not as successful as it looked. Firefly’s rocket failed to deploy the satellites into the correct orbit and the satellites have all came crashing back to Earth, mere days after launch. The mission is now considered a failure. Space is hard!
https://spacenews.com/firefly-says-alpha-launch-a-success-despite-payload-reentries/
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Credit Suisse just initiated coverage (https://www.benzinga.com/news/22/10/29230614/credit-suisse-initiates-coverage-on-rocket-lab-usa-with-underperform-rating-announces-price-target-o) on Rocket Lab with a price target of just $3. Rocket Lab stock has dipped down to $3.78 today, perhaps in response to that.
Meanwhile, Cathie Wood continues to buy up Rocket Lab stock, and has amassed over 1.6M shares (https://www.reddit.com/r/RKLB/comments/y1oqk5/ark_up_to_16m_shares_and_counting/) to date.
It is clearly a difficult time to invest in the space industry. However, Rocket Lab is in good shape compared to many companies in the space industry. Rocket Lab continues to execute well, has significant and growing revenue streams across a diversified product portfolio, and has plenty of cash on hand to sustain itself as it moves towards profitability. I saw a telling quote from Jared Isaacman in this article (https://spacenews.com/space-companies-face-difficult-investment-environment/) today:
Isaacman, despite his concerns about overall funding, said he felt some companies were in good shape. “That’s not to say that the world will just be SpaceX,” he said. “I think there’s a couple really good space companies that have been smart on their capital allocation, they bought other businesses, they diversified their revenue streams, they’re more vertically integrated. I think they’ll succeed.” He didn’t give any examples of such companies.
But, he warned, “A lot of the space industry won’t be able to cut it.”
If you read between the lines, it is pretty obvious that Jared Isaacman is referring to Rocket Lab in that article.
For those that don’t know who he is, Jared Isaacman is the billionaire founder of payments company Shift4. Isaacman is best known in the space industry for leading the Inspiration4 private astronaut mission on a Crew Dragon last year and backing the Polaris Program of private missions with SpaceX.
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Other fora are also following investments in space companies.
Slightly more technical focus, but a lot of finance comments also.
https://forum.nasaspaceflight.com/index.php?topic=53937.80
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Looks like RKLB was allergic to a stock price under $4 (Oct 13), and is now approaching $5 a couple weeks later. RKLB began 2022 at an opening price of $12.30, so in a recovery it could make a +150% return from here. A key stat for me is debt/equity of 0.21, which means they're not deep in debt at a time when debt is expensive.
That's why I bought RKLB today at $4.89/share. I don't know if I'm renting or owning the stock yet, as the current rally in markets may get spoiled by recession fears at some point.
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Did you know that a single investment company called AE Industrial Partners (AEI) owns huge stakes in both Firefly and York Space? They actually have a majority stake (https://spacenews.com/aei-acquires-york-stake/) in York Space. Check out this video:
https://www.youtube.com/watch?v=zopqmg8-Ukk
AEI may have the opportunity to combine Firefly and York Space into a competitor for Rocket Lab. They have a track record of doing this, and already purchased and combined three space companies to create Redwire.
Rocket Lab seems to be doing better than Firefly in the launch industry, but York Space has been doing better than Rocket Lab in the satellite business and has landed a lot of huge satellite contracts:
$200M satellite contract: https://spacenews.com/york-space-wins-200-million-space-development-agency-contract-for-12-satellites/
$382M satellite contract: https://spacenews.com/lockheed-martin-northrop-grumman-york-space-selected-to-build-dods-internet-in-space-constellation/
$94M satellite contract: https://spacenews.com/lockheed-martin-york-space-win-contracts-to-produce-20-satellites-for-space-development-agency/
Firefly and York Space also have a business partnership that goes back several years. In 2018 Firefly and York Space announced that they were partnering to provide "integrated satellite solutions (https://spacenews.com/firefly-aerospace-and-york-space-systems-partner-to-provide-integrated-satellite-solutions/)", although, it’s worth pointing out that York Space also made a similar agreement with Rocket Lab.
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AEI may have the opportunity to combine Firefly and York Space into a competitor for Rocket Lab. They have a track record of doing this, and already purchased and combined three space companies to create Redwire.
Poking around, those two private space companies have private equity (PE) valuations of a billion (market cap) each. But I've heard numerous stories of current PE valuations ignoring market conditions. So for comparison, it might make sense to take RKLB's $5.12/sh price and double it, giving a roughly $5 billion valuation.
When AEI combines companies, do they first own most of both companies? I assume they want to make improvements and would then cash in by going public. I'd guess they are years away from having a competitor to Rocket Lab by comining companies.
You mentioned Redwire was created by AEI combining three companies. But the result is a micro-cap stock with a $160 million market cap. That's a bit of a flop, the way I see it. If investors look at AEI's flop, they might be less interested in buying their next combined company.
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RKLB at $5.13 a share, average cost per share $5.53 after all my nibbles. Really glad the nibbles at 3.85, 4.10, etc brought the average down. Almost at breakeven! Rise, RocketLab, rise!
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In actual news: Here's an interview with Kirk Konert, an investor on the boards of Redwire Space and Firefly Aerodyne, explaining how his private equity fund AE Industrial Partners came to specialize in space and buy large stakes in numerous small space-related firms.
"We're in business to go be the acquirer of choice in the space sector."
"The industry will be consolidated in the next twelve months."
https://qz.com/emails/space-business/1849704814/space-business-dealbook
I too wonder whether AE's conglomeration of services firms make it a strong competitor to RKLB in space services. I'm guessing RKLB wouldn't sell itself to them, but if it did, its strong financing and progress would require a higher price than the current stock, maybe?
PS. Link above is to website but you can get articles in newsletter form, where I first saw it.
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Good job on the cost basis, @BicycleB! I wish my cost basis was that low!
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In pruning my portfolio, I've come down to a choice to keep one of two stock picks: Rocket Lab (RKLB) and Meta/Facebook (META). My goal is the greatest certainty of the greatest profit.
In the past 12 months, RKLB (-64%) and META (-69%) have lost about the same amount. They both have the exact same debt/equity ratio (0.21). When I look at P/E ratios, META is 9.5 while RKLB is "n/a", which strongly favors META in my view. It's also much easier for RKLB to get bought out ($3 billion?) versus META (quarter trillion). Since I have to pick one, I'll sell RKLB and keep META.
When we see a market recovery, I hope we'll see both META ($93.16) and RKLB ($5.09) double from current prices.
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In pruning my portfolio, I've come down to a choice to keep one of two stock picks: Rocket Lab (RKLB) and Meta/Facebook (META). My goal is the greatest certainty of the greatest profit.
In the past 12 months, RKLB (-64%) and META (-69%) have lost about the same amount. They both have the exact same debt/equity ratio (0.21). When I look at P/E ratios, META is 9.5 while RKLB is "n/a", which strongly favors META in my view. It's also much easier for RKLB to get bought out ($3 billion?) versus META (quarter trillion). Since I have to pick one, I'll sell RKLB and keep META.
When we see a market recovery, I hope we'll see both META ($93.16) and RKLB ($5.09) double from current prices.
Understandable thought process. Thanks for posting.
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Doesn’t Meta have a lot of headwinds, though? The general impression seems to be that they are not getting good traction with younger users, and their metaverse project seems to be going nowhere. Zuckerberg is like a dictator trapped in a circle of yes men. He has absolute control over the company, nobody to tell him no, and I am not sure about his judgment as a leader.
By all accounts Zuckerberg seems to be a talented programmer elevated way out of his competence zone, much like Sergey Brin and Larry Page who proved to have limited aptitude as tech executives. Sadly, unlike Sergey and Larry, Zuckerberg is unwilling to cede control of his company to someone more competent. He seems to be betting everything on the metaverse and it is not clear if this bet will pan out. Many people seem to think that Meta’s business has peaked and that the company is in decline.
Personally, most of my friends and I have been boycotting Facebook for years because we think it is a bad influence to society and to our mental health in general.
I just saw this article today, which says much of the same:
https://www.vice.com/amp/en/article/epzkne/facebooks-monopoly-is-imploding-before-our-eyes
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Doesn’t Meta have a lot of headwinds, though? The general impression seems to be that they are not getting good traction with younger users, and their metaverse project seems to be going nowhere. Zuckerberg is like a dictator trapped in a circle of yes men. He has absolute control over the company, nobody to tell him no, and I am not sure about his judgment as a leader.
Feel free to expand my list of headwinds:
- advertising revenue is down overall (GOOG -35% YTD for example)
- Apple blocked FB targeted ads, which requires a technical solution to overcome
- Zuckerberg is investing billions in metaverse, which looks like a waste so far
- Something to do with reels, not sure if that is Instagram or Facebook
- executive who made critical acquisitions has left (Instagram and one other)
Positives in favor:
+ "We sell ads, senator" to 2 billion Facebook users and 2 billion Instagram users.
+ as to management, the company didn't survive 18 years on just luck
+ debt/equity ratio of 0.21 plus surviving 2008 suggest they will survive 2023-2025
+ valuation measures like p/e of 9 are good for this high inflation market
+ so much bad news priced in (-72% YTD), anything goes right results in a profit
For both Meta and Rocket Lab, their recovery might be limited to doubling. There are stocks down -67% and -75% which could triple or quadruple. Even Rocket Lab's growth will struggle to match the speed of those recoveries. And actually, that's probably what I should do with the money invested in Meta: switch to a better stock.
Does the same logic hold for Rocket Lab? Let's say Rocket Lab recovers a year earlier (doubling), and then grows for a year. Is it really going to grow faster than a stock that triples or quadruples? Maybe it would be better to buy more beaten up stocks now, and after recovery use the profits to buy Rocket Lab.
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Personally the only timeline that I have (imaginary in my case) clarity about is:
1) Sometime in middle 2020s, maybe end 2025, RocketLab will or will not have implemented its ambitious previously stated growth plans discussed upthread.
2) If it does, then barring a devastated stock market, probably RKLB stock has a higher value than today because it shifted from a company with big plans to one with big accomplishments; it will be in a more mature phase. Realized results are more valuable than hoped-for results.
3) Market might need more time to pay off; I don't assume ability to harvest profit until late 2020s even if company achieves its sales and operational goals. That gives some time for variances from Mr. Market.
So my approach is:
a) to buy cheaply during this early stage
b) wait and see
c) if there's a wild runup before then, fine, I'll sell some (or all if goes GameStop)
The comparisons with other stocks short term are something I'd like to be competent in but am not yet competent I think, will read others' comments with interest.
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So RocketLab is supposed to launch tomorrow. Mission name is "Catch Me If You Can"; intent is catch falling booster again with helicopter, bring it back to dry land this time. Both articles based on press release.
https://gizmodo.com/rocket-lab-attempt-second-helicopter-booster-catch-1849732268
https://interestingengineering.com/innovation/rocket-lab-to-catch-a-rocket-booster-again
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In pruning my portfolio, I've come down to a choice to keep one of two stock picks: Rocket Lab (RKLB) and Meta/Facebook (META). My goal is the greatest certainty of the greatest profit.
Thinking about it, it seems like META is closer to certainty.
It's very hard to tell, but from casual reading, it sounds like META has such a profitable ad business that it's still running a profit after subtracting expenses of metaverse development. If I were investing, I'd study that part more carefully, then consider what happens if the ad business erodes gently and include a small factor in case of collapse. Even if the metaverse fails, possibly the Facebook ad $ stream could sustain the company. RKLB still has to prove profitability, and much of that depends on the uncertain future of the space industry, including competitors as well as demand.
Conceptually I suppose RKLB's ceiling is higher, in that uncertainty includes possible growth. But with the minimum plan for success already requiring lots of growth under uncertainty, RKLB has less certainty of profiting at all. Which is better when you multiply likelihood by contingent payoff, I don't know, but my offhand guess is META would serve your goals better even if the economic value were equal.
A thought worth only what you are paying for it, though!
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The big distinction to keep in mind (for better or worse) is that META ultimately is Mark Zuckerberg. The risk that is scaring people into bidding down the value of the company isn't that facebook might not be able to sell enough ads to cover expenses. It is that Mark might be willing to ride the company into the ground trying to launch the metaverse. Because of his special voting rights, no one could stop him from doing so. Even if he wanted to, say, sell off the facebook and instagram business units within META to raise more money to invest in the metaverse.*
*Obviously a ridiculously extreme example. But if he wanted to do that no one could stop him.
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The big distinction to keep in mind (for better or worse) is that META ultimately is Mark Zuckerberg.
I suspect Roblox's 2021 IPO lit a fire under Mr Zuckerberg. Roblox is mostly by children for children, but when they become teenagers they tend to stay on the platform. It's a metaverse run with a virtual currency. Facebook's attempt to add a virtual currency and its focus on the metaverse make a lot more sense if you view Roblox as Facebook's main future competitor.
Congress only seems interested in the harm Facebook can do to elections or free speech. I wonder if a divided Congress would allow Facebook to buy Roblox? They should have blocked the Instagram acquisition, but didn't. META has spent $36 billion on its metaverse, so why not spend $33 billion to buy Roblox? ($26 billion market cap plus 25% acquisition premium). If that happens, META will fall further as RBLX stock surges towards the offering price. I think I might want to buy protective call options on RBLX to protect against the risk of acquistion by META.
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Mark and I are of roughly the same generation. My guess based just on that is the motivation for the metaverse he's entering middle age and would really REALLY like to be living in the world of Neil Stephenson's Snowcrash, like he imagined when he was reading that book at a teenager.
...it's quite possible I'm projecting though...
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In pruning my portfolio, I've come down to a choice to keep one of two stock picks: Rocket Lab (RKLB) and Meta/Facebook (META). My goal is the greatest certainty of the greatest profit.
I would argue that META is large cap value (https://www.fool.com/investing/2022/06/29/is-meta-platforms-a-value-stock-now/) and RKLB is small cap growth. Keep META if you want certainty.
As for me, I don't own META directly and plan to ride RKLB to the moon. 🚀🚀🚀
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Bad news! Rocket Lab aborted their recent catch attempt after losing telemetry with the booster:
https://spacenews.com/rocket-lab-launches-swedish-satellite-fails-to-catch-booster/
I am wondering if Rocket Lab’s booster catches will end up as unreliable as when SpaceX was trying to catch their fairings in a giant net?
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It can take a lot of attempts to get innovation right in rocketry. The good think for RL is that they're in a similar position to SpaceX when SpaceX was first trying to get first stage landing right: they're getting paid to launch the rockets and can take as many shots on goals as needed to get their R&D add on (landing for spacex, catching for rocketlab) right.
I highly recommend this montage of all the different rockets SpaceX lost learning how to land a rocket over ~3 years before the first time they actually succeed: https://www.youtube.com/watch?v=bvim4rsNHkQ
Now it's a routine process. RocketLab isn't quite hitting their one launch a month target cadence, but they're launching faster than spaceX was back in 2013-16, so hopefully it won't take them three years to get enough reps to figure this out.
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It can take a lot of attempts to get innovation right in rocketry. The good think for RL is that they're in a similar position to SpaceX when SpaceX was first trying to get first stage landing right: they're getting paid to launch the rockets and can take as many shots on goals as needed to get their R&D add on (landing for spacex, catching for rocketlab) right.
Yes, I believe Rocket Lab can and will solve these issues, it's more a matter of how long that will take. And, as you rightly point out, they get paid for each attempt!
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RKLB at $5.13 a share, average cost per share $5.53 after all my nibbles. Really glad the nibbles at 3.85, 4.10, etc brought the average down. Almost at breakeven! Rise, RocketLab, rise!
It rose! Irrelevant to the company as a whole, but at yesterday's close of $5.63, finally reached the first few pennies of unrealized gain. The rocket is 10 millimeters off the launching pad. :)
(Temporarily. I'm enjoying this while it lasts because I fully expect it to be lower at some point. Maybe as soon as Monday!)
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The market reacted really strongly to that 7.7% CPI-U print, lifting Rocket Lab off the launch pad with the rest of the stocks. Meta (+21.3%) has done better than Rocket Lab (+10.6%) since I switched - I think layoffs at Meta provided the first evidence of cost controls.
According to Yahoo Finance, Rocket Lab has $500 million in cash, which looks like about 5 years worth. It looks like they'd last longer than most companies if bad economic conditions drag on for a few years.
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Some sort of tent has been erected at the Neutron production site:
https://www.reddit.com/r/RKLB/comments/ytjio5/november_12_visit_to_the_wallops_neutron/
Interesting! I wonder what's going on in there?
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CAPSTONE has successfully reached the moon!
https://arstechnica.com/science/2022/11/the-first-cubesat-to-fly-and-operate-at-the-moon-has-successfully-arrived/
Also, Rocket Lab just landed a contract to provide separation systems for US military satellites:
https://spacenews.com/rocket-lab-wins-14-million-in-contracts-to-supply-hardware-for-u-s-military-satellites/
Finally, Rocket Lab will be supplying the “Satellite Operations Control Center” for the Globalstar satellites that they are building:
https://finance.yahoo.com/news/rocket-lab-selected-mda-deliver-211000419.html
These are small wins, but it’s good to see progress being made!
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I doubt SpaceX would be interested in buying Rocket Lab. Rocket Lab doesn’t have anything that SpaceX needs, their carbon fiber rocket technology is fundamentally different and incompatible with what SpaceX is doing, and SpaceX would much rather do things in house. In my opinion, it would be easier for SpaceX to just build their own version of whatever Rocket Lab is doing than to actually acquire Rocket Lab.
Sorry for being late to the party...
Anyway, I agree.
SpaceX tried carbon fiber as a first material choice for Starship and gave up on it, dumping many millions of dollars of custom equipment they had purchased. They already know how to build, launch and land larger scale rockets. They build (and rapidly iterate) their own satellites inhouse - currently they have the largest satellite fleet of any company or country. Not seeing what a Rocketlab purchase would do for them.
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RKLB now at $4.46, down from $5.64 at 3:30 Friday 11th and $5.22 yesterday 3:45 pm. Anybody know why?
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RKLB now at $4.46, down from $5.64 at 3:30 Friday 11th and $5.22 yesterday 3:45 pm. Anybody know why?
Success of SLS? Different class but still demonstrates others can build rockets
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RKLB now at $4.46, down from $5.64 at 3:30 Friday 11th and $5.22 yesterday 3:45 pm. Anybody know why?
Success of SLS? Different class but still demonstrates others can build rockets
Thanks for reply, @AlanStache!
That's an interesting idea. I'd assumed that was good news, not bad, but you've pointed out it could be construed the other way.
Absent clearer info, I settled for buying a nibble or two.
Still open to other info too for understanding's sake. Maybe RKLB investors overlap with crypto and somebody needed to sell a lot RKLB to cover something not rocket-related?
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RKLB now at $4.46, down from $5.64 at 3:30 Friday 11th and $5.22 yesterday 3:45 pm. Anybody know why?
Success of SLS? Different class but still demonstrates others can build rockets
SLS is an INSANELY overpriced rocket stack. SLS+Orion has cost over $50B in development costs (plus whatever else was buried) - and each launch is an additional $4B.
SLS should have absolutely no bearing whatsoever on commercial rocketry. SLS only exists as it is due to a massive Congressional pork mandate. NASA is required to develop SLS and Orion, using "legacy" contractors.
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RKLB now at $4.46, down from $5.64 at 3:30 Friday 11th and $5.22 yesterday 3:45 pm. Anybody know why?
Success of SLS? Different class but still demonstrates others can build rockets
SLS is an INSANELY overpriced rocket stack. SLS+Orion has cost over $50B in development costs (plus whatever else was buried) - and each launch is an additional $4B.
SLS should have absolutely no bearing whatsoever on commercial rocketry. SLS only exists as it is due to a massive Congressional pork mandate. NASA is required to develop SLS and Orion, using "legacy" contractors.
yep to all that.
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Rocket Lab announced their Q3 2022 earnings results a few days ago:
https://www.cnbc.com/2022/11/09/rocket-lab-q3-results-record-revenue-added-contract-wins.html
Looks like it is more of the same. Revenue continues to grow and costs are under control. However, no new major contracts were signed and the revenue backlog shrunk again.
You can listen to the conference call here if you are interested:
https://investors.rocketlabusa.com/events-and-presentations/events/event-details/2022/Third-Quarter-2022-Financial-Results-Update-and-Conference-Call/default.aspx
One key piece of information that was shared in the conference call is that Rocket Lab needs 16 Electron launches per year for Electron to become profitable. They hope to launch 14 Electrons in 2023. Rocket Lab hopes to be profitable once Neutron R&D spending winds down in 2024.
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Reading the report, revenue is expected to drop in 4th quarter. However the majority of 3Q revenue ($40.1M of ~63M) is from space systems rather than launch, which I guess is good for the future.
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NASA has just awarded (https://www.nasa.gov/press-release/nasa-awards-launch-services-task-order-for-tropics-cubesats-mission) a contract for the remaining two launches for the TROPICS hurricane tracking constellation to Rocket Lab. These launches had previously been contracted to Astra, who cancelled (https://www.space.com/astra-cancels-rocket-3-production-launch-failures) their rocket program after failing (https://spacenews.com/astra-launch-of-nasa-tropics-cubesats-fails/) the first TROPICS launch and losing two of NASA’s six TROPICS satellites.
The two launches will launch back-to-back over a 60-day period beginning no earlier than May 1, 2023, enabling NASA to provide observations during the 2023 Atlantic hurricane season, which begins June 1. Great news for Rocket Lab! I wonder if these two launches were included in the 14 Electron launches Rocket Lab projected for 2023 in their recent conference call?
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Interestingly ASTR is also up today despite the TROPICS launch contracts announcement.
I'm just jumping into this thread, but I'm in the industry (albeit only for 30 more days) and have kept an eye on RKLB for several years. They're the real deal, likely to survive the small launch industry shakeout.
Unfortunately it's still damn hard to tell what their revenue growth is going to look like and whether broader economics will lift the share price over the medium term. Should I take a gamble?
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Lol, I was hoping you would tell us :)
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Should I take a gamble?
None of us can tell you what to do. We just like the stock!
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I wonder if these two launches were included in the 14 Electron launches Rocket Lab projected for 2023 in their recent conference call?
This is what I would like to know as well! If they become profitable in 2023, that would be quite a thing.
Should I take a gamble?
That's of course up to you, but whatever you decide, I'd be very interested to hear your reasoning! What do you do in the industry?
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Lol, I was hoping you would tell us :)
Ha, that was a rhetorical question. I took a very risky gamble this morning ... not sure I'm ready to share anything more than it's a long position.
Here's what I like: #1 RKLB is flight proven with demonstrated reliability. Potential customers, governments, insurers, and financiers are going to take them more seriously than, say, Relativity. #2 They have recurring revenue and the business is diversified. #3 Their launch model, with unique launch sites and dedicated launchers, differentiates them from their larger competitors. #4 Their deal with Apple/GlobalStar/MDA has potential, including stock-moving revenue growth. #5 They seem to be expanding cautiously.
Here's what I don't like: #1 SpaceX's huge lead in the same business areas, incl. med/heavy launch, rideshare, Starlink and the partnership with T-Mobile. #2 Neutron design seems to be very immature, suggesting it won't be operational several years. Side note, hopefully they come around to a ship based recovery option. #3 They are relatively late in the economic cycle relative to business growth stages. #4 They're not well positioned to capture the big money U.S. government contracts from SDA, NASA, and Space Force. #5 Limited existing TAM (overstated in their docs) for some of their recent initiatives.
Weighing all of this, I can't help but the stock is too beaten down at a $2B market cap. I can see many scenarios to $10B in a year or two. There are certainly scenarios where it goes completely bust, but those are much less probable IMO. I'll be following things VERY closely for awhile.
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Lol, I was hoping you would tell us :)
Ha, that was a rhetorical question. I took a very risky gamble this morning ... not sure I'm ready to share anything more than it's a long position.
Here's what I like: #1 RKLB is flight proven with demonstrated reliability. Potential customers, governments, insurers, and financiers are going to take them more seriously than, say, Relativity. #2 They have recurring revenue and the business is diversified. #3 Their launch model, with unique launch sites and dedicated launchers, differentiates them from their larger competitors. #4 Their deal with Apple/GlobalStar/MDA has potential, including stock-moving revenue growth. #5 They seem to be expanding cautiously.
Here's what I don't like: #1 SpaceX's huge lead in the same business areas, incl. med/heavy launch, rideshare, Starlink and the partnership with T-Mobile. #2 Neutron design seems to be very immature, suggesting it won't be operational several years. Side note, hopefully they come around to a ship based recovery option. #3 They are relatively late in the economic cycle relative to business growth stages. #4 They're not well positioned to capture the big money U.S. government contracts from SDA, NASA, and Space Force. #5 Limited existing TAM (overstated in their docs) for some of their recent initiatives.
Weighing all of this, I can't help but the stock is too beaten down at a $2B market cap. I can see many scenarios to $10B in a year or two. There are certainly scenarios where it goes completely bust, but those are much less probable IMO. I'll be following things VERY closely for awhile.
(sorry) @LightStache, what is TAM?
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In this context I think it stands for "total addressable market" (i.e. how big is the total market for launches small enough to fit on proton, or on neutron, or the market for assembling satellites)
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In this context I think it stands for "total addressable market" (i.e. how big is the total market for launches small enough to fit on proton, or on neutron, or the market for assembling satellites)
Thanks, that makes sense
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In this context I think it stands for "total addressable market" (i.e. how big is the total market for launches small enough to fit on proton, or on neutron, or the market for assembling satellites)
Thanks, that makes sense
Right, I was looking at their Sep Investor Day briefing and thought both current stated TAM and growth through 2030 were overstated.
If we look at the launch market only, SpaceX probably has between $2B-$2.5B in revenue: https://payloadspace.com/spacexs-22-revenues-a-reformed-wall-street-analysts-best-guess/ (https://payloadspace.com/spacexs-22-revenues-a-reformed-wall-street-analysts-best-guess/)
SpaceX has completed 52 launches this year out of a global addressable market of 79, implying a capture of 66%. But we need to back out Starlink because that's arguably not part of the market and, even if it is, not addressable by RKLB. So that gives us 21 SpaceX launches out of 48, or a capture of 44% of TAM.
That implies a 2022 launch TAM for RKLB of $4.5B - $5.7B, which is way smaller than the ~$20B stated in their briefing. When they combine that with an optimistic 12.8% CAGR, the projections are pretty unrealistic.
But like I said above, they seem to be conservative with their facility footprint, so even if their TAMs are overestimated, RKLB won't be crushed by stupid fixed cost investments. Their Neutron "Production Complex" looks both small and cheap, which is great. Out there in BF Virginia they'll be able to expand easily if their manifest grows.
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In this context I think it stands for "total addressable market" (i.e. how big is the total market for launches small enough to fit on proton, or on neutron, or the market for assembling satellites)
Thanks, that makes sense
Right, I was looking at their Sep Investor Day briefing and thought both current stated TAM and growth through 2030 were overstated.
If we look at the launch market only, SpaceX probably has between $2B-$2.5B in revenue: https://payloadspace.com/spacexs-22-revenues-a-reformed-wall-street-analysts-best-guess/ (https://payloadspace.com/spacexs-22-revenues-a-reformed-wall-street-analysts-best-guess/)
SpaceX has completed 52 launches this year out of a global addressable market of 79, implying a capture of 66%. But we need to back out Starlink because that's arguably not part of the market and, even if it is, not addressable by RKLB. So that gives us 21 SpaceX launches out of 48, or a capture of 44% of TAM.
That implies a 2022 launch TAM for RKLB of $4.5B - $5.7B, which is way smaller than the ~$20B stated in their briefing. When they combine that with an optimistic 12.8% CAGR, the projections are pretty unrealistic.
But like I said above, they seem to be conservative with their facility footprint, so even if their TAMs are overestimated, RKLB won't be crushed by stupid fixed cost investments. Their Neutron "Production Complex" looks both small and cheap, which is great. Out there in BF Virginia they'll be able to expand easily if their manifest grows.
Interesting!
I thought the main thing for RocketLab was future TAM (now that I know the term), and that year by year growth was the trackable path by which they hoped to reach their growth targets. I originally invested only very small sums because I figured future TAM was a fuzzy number. Surprising, weird and troubling that current TAM would be so off.
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That implies a 2022 launch TAM for RKLB of $4.5B - $5.7B, which is way smaller than the ~$20B stated in their briefing. When they combine that with an optimistic 12.8% CAGR, the projections are pretty unrealistic.
Where are you getting that number from? I’m looking at their slide #87 entitled “EXPANSION OF ADDRESSABLE MARKET (LAUNCH & SPACE SYSTEMS)” and the 2022 launch TAM seems less than $5B. It’s not anywhere near $20B. They are not projecting $20B launch TAM until 2026.
Link to investor presentation:
https://www.rocketlabusa.com/assets/Final_Investor%20Day%20Presentation%202022_Sept%2021.pdf
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That implies a 2022 launch TAM for RKLB of $4.5B - $5.7B, which is way smaller than the ~$20B stated in their briefing. When they combine that with an optimistic 12.8% CAGR, the projections are pretty unrealistic.
Where are you getting that number from? I’m looking at their slide #87 entitled “EXPANSION OF ADDRESSABLE MARKET (LAUNCH & SPACE SYSTEMS)” and the 2022 launch TAM seems less than $5B. It’s not anywhere near $20B. They are not projecting $20B launch TAM until 2026.
Link to investor presentation:
https://www.rocketlabusa.com/assets/Final_Investor%20Day%20Presentation%202022_Sept%2021.pdf
I was looking at slide 10 TAM figures. Slide 87 seems to be showing SAM.
ETA: I would think my comment about not being well positioned to capture the big money U.S. government contracts would be more controversial than my TAM observation, but I guess we just went down the TAM-hole because @BicycleB wasn't familiar with the acronym.
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In this context I think it stands for "total addressable market" (i.e. how big is the total market for launches small enough to fit on proton, or on neutron, or the market for assembling satellites)
Thanks, that makes sense
Right, I was looking at their Sep Investor Day briefing and thought both current stated TAM and growth through 2030 were overstated.
If we look at the launch market only, SpaceX probably has between $2B-$2.5B in revenue: https://payloadspace.com/spacexs-22-revenues-a-reformed-wall-street-analysts-best-guess/ (https://payloadspace.com/spacexs-22-revenues-a-reformed-wall-street-analysts-best-guess/)
SpaceX has completed 52 launches this year out of a global addressable market of 79, implying a capture of 66%. But we need to back out Starlink because that's arguably not part of the market and, even if it is, not addressable by RKLB. So that gives us 21 SpaceX launches out of 48, or a capture of 44% of TAM.
That implies a 2022 launch TAM for RKLB of $4.5B - $5.7B, which is way smaller than the ~$20B stated in their briefing. When they combine that with an optimistic 12.8% CAGR, the projections are pretty unrealistic.
But like I said above, they seem to be conservative with their facility footprint, so even if their TAMs are overestimated, RKLB won't be crushed by stupid fixed cost investments. Their Neutron "Production Complex" looks both small and cheap, which is great. Out there in BF Virginia they'll be able to expand easily if their manifest grows.
Interesting!
I thought the main thing for RocketLab was future TAM (now that I know the term), and that year by year growth was the trackable path by which they hoped to reach their growth targets. I originally invested only very small sums because I figured future TAM was a fuzzy number. Surprising, weird and troubling that current TAM would be so off.
You can get to pretty high TAM numbers by taking a few liberties in your model. Startups are usually (always) over-optimistic, sometimes bordering on misleading (or if you're Theranos, just straight misleading), so I'd say it's pretty normal. Future TAM is a fuzzy number and only one small piece of the valuation puzzle.
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In this context I think it stands for "total addressable market" (i.e. how big is the total market for launches small enough to fit on proton, or on neutron, or the market for assembling satellites)
Thanks, that makes sense
Right, I was looking at their Sep Investor Day briefing and thought both current stated TAM and growth through 2030 were overstated.
If we look at the launch market only, SpaceX probably has between $2B-$2.5B in revenue: https://payloadspace.com/spacexs-22-revenues-a-reformed-wall-street-analysts-best-guess/ (https://payloadspace.com/spacexs-22-revenues-a-reformed-wall-street-analysts-best-guess/)
SpaceX has completed 52 launches this year out of a global addressable market of 79, implying a capture of 66%. But we need to back out Starlink because that's arguably not part of the market and, even if it is, not addressable by RKLB. So that gives us 21 SpaceX launches out of 48, or a capture of 44% of TAM.
That implies a 2022 launch TAM for RKLB of $4.5B - $5.7B, which is way smaller than the ~$20B stated in their briefing. When they combine that with an optimistic 12.8% CAGR, the projections are pretty unrealistic.
But like I said above, they seem to be conservative with their facility footprint, so even if their TAMs are overestimated, RKLB won't be crushed by stupid fixed cost investments. Their Neutron "Production Complex" looks both small and cheap, which is great. Out there in BF Virginia they'll be able to expand easily if their manifest grows.
Interesting!
I thought the main thing for RocketLab was future TAM (now that I know the term), and that year by year growth was the trackable path by which they hoped to reach their growth targets. I originally invested only very small sums because I figured future TAM was a fuzzy number. Surprising, weird and troubling that current TAM would be so off.
You can get to pretty high TAM numbers by taking a few liberties in your model. Startups are usually (always) over-optimistic, sometimes bordering on misleading (or if you're Theranos, just straight misleading), so I'd say it's pretty normal. Future TAM is a fuzzy number and only one small piece of the valuation puzzle.
Yes, surely future TAM is fuzzy, we agree on that.
Is current TAM ~$20B in their presentation, which is confusing to me because it differs from past discussions? Or less than $5B as HerbertDerp said, which would be less confusing because it's similar to past discussions of their plans (and similar to your own calculation of $4.5B-5.7B if I'm reading correctly)?
PS. I liked your balancing of factors and comments based on industry experience, am just pursuing the thing that seemed like an anomaly. Also, since it was mentioned as apparently a key argument for your conclusion, would wonder if you have the same conclusion in the event that current TAM is correct. You may still have the same conclusion, and that would be important information!
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SpaceX has completed 52 launches this year out of a global addressable market of 79, implying a capture of 66%. But we need to back out Starlink because that's arguably not part of the market and, even if it is, not addressable by RKLB. So that gives us 21 SpaceX launches out of 48, or a capture of 44% of TAM.
Are you sure Rocketlab could capture much of the remaining 48? How many of those are basically government determined (Russia, China, Europe) so would not be willing to launch with a U.S. company?
It is very possible that Rocketlab's main market could just be the subset of commercial launches with "anyone but SpaceX", i.e. competing constellation launchers like Amazon. That could be rather small, though it will certainly exist since multiple entities, including the U.S. government, do want competition for SpaceX.
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SpaceX has completed 52 launches this year out of a global addressable market of 79, implying a capture of 66%. But we need to back out Starlink because that's arguably not part of the market and, even if it is, not addressable by RKLB. So that gives us 21 SpaceX launches out of 48, or a capture of 44% of TAM.
Are you sure Rocketlab could capture much of the remaining 48? How many of those are basically government determined (Russia, China, Europe) so would not be willing to launch with a U.S. company?
It is very possible that Rocketlab's main market could just be the subset of commercial launches with "anyone but SpaceX", i.e. competing constellation launchers like Amazon. That could be rather small, though it will certainly exist since multiple entities, including the U.S. government, do want competition for SpaceX.
Agree with your point 100%. The 48 / 79 figures excluded RUS, PRC, and EUR. While I think it's possible for RKLB to capture some of the EUR market, they've only had three launches this year, and I think that's probably fewer than they'd be willing to let go abroad moving forward.
I suspect that RKLB used the full global launch market to arrive at the $20B TAM, in which case the number might be reasonably close. But if the RUS / PRC / EUR segment is not "addressable" by the company, then it's overstated by about 400%.
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I see that the CFO and GC both sold shares on Nov 25. What do you all make of the insider selling trend? Obviously not a bullish sign.
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I saw the same thing:
https://www.secform4.com/insider-trading/1819994.htm
At least in the case of CFO Adam Spice, he only sold a minuscule percent of his shares. Not the case for board member Michael Griffin, though.
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I see that the CFO and GC both sold shares on Nov 25. What do you all make of the insider selling trend? Obviously not a bullish sign.
I have read that in general insiders *selling* stock is not a good or bad sign, because they may just want to pay for something they happen to be buying or diversify. What you want to look for is insiders *buying* their own stock, as the only reason for that is they expect Good Things going forward.
I would take that general statement with a grain of salt, though, this is an industry where even Rocketlab, as arguably the closest to competing with SpaceX, is still years and hundreds of millions of dollars away from being able to do so. SpaceX has already taken a lot of their small rocket payloads with cheap rideshare launches. Rocketlab still has to design and build their Neutron competitor to the Falcon 9, fly it, reuse it (to have a chance of competing price wise) and do these things often enough that people will trust them with payloads. There is also a pretty good chance that by the time they can do this (2 years away?), SpaceX will have flown their Starship and gotten reuse worked out, for an even cheaper cost to orbit than the Neutron. They also can't just pour money into facilities and development, since they don't have a passionate billionaire who doesn't expect a return on money backing them, and this is a super capital intensive business.
I would invest in Rocketlab over any other launch competitor in a heartbeat, but I'm just not sure if being the least far behind SpaceX is enough to justify it. . .
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I flipped bearish on Friday and expect more losses for the market in early 2023. For those investing in RKLB, consider the 18.47% losses in the past 30 day as an indicator of where things could go.
($5.09 on Nov 7, now $4.15 on Dec 5)
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First launch from Va scheduled for this friday, I would be very tempted to drive up and have a watch but will be out of town :-(
I have tried looking for launches from home before and never got lucky, am sort of at the limit of where you could see them from.
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RKLB is now my smallest short position, sold short at $4.04/sh.
Of people who expect lower inflation and a soft landing, many expect market drops next quarter. And everyone who predicts lower inflation seems unaware that historically nobody can accurately predict inflation. So I can either bet that some of them are right, and we see stocks drop in 2023 Q1. Or I can bet they're wrong, and inflation turns out worse than expected, and stocks drop in 2023. To me there's a lot more room to succeed with put options and shorting, which is why I shorted various stocks including a very small position on RKLB.
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RKLB is now my smallest short position, sold short at $4.04/sh.
Of people who expect lower inflation and a soft landing, many expect market drops next quarter. And everyone who predicts lower inflation seems unaware that historically nobody can accurately predict inflation. So I can either bet that some of them are right, and we see stocks drop in 2023 Q1. Or I can bet they're wrong, and inflation turns out worse than expected, and stocks drop in 2023. To me there's a lot more room to succeed with put options and shorting, which is why I shorted various stocks including a very small position on RKLB.
Your thesis is proving right today. Ouch!
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RKLB is now my smallest short position, sold short at $4.04/sh.
Of people who expect lower inflation and a soft landing, many expect market drops next quarter. And everyone who predicts lower inflation seems unaware that historically nobody can accurately predict inflation. So I can either bet that some of them are right, and we see stocks drop in 2023 Q1. Or I can bet they're wrong, and inflation turns out worse than expected, and stocks drop in 2023. To me there's a lot more room to succeed with put options and shorting, which is why I shorted various stocks including a very small position on RKLB.
Your thesis is proving right today. Ouch!
Too bad I covered my RKLB short position after a 4% loss...
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RKLB is now my smallest short position, sold short at $4.04/sh.
Of people who expect lower inflation and a soft landing, many expect market drops next quarter. And everyone who predicts lower inflation seems unaware that historically nobody can accurately predict inflation. So I can either bet that some of them are right, and we see stocks drop in 2023 Q1. Or I can bet they're wrong, and inflation turns out worse than expected, and stocks drop in 2023. To me there's a lot more room to succeed with put options and shorting, which is why I shorted various stocks including a very small position on RKLB.
Your thesis is proving right today. Ouch!
Too bad I covered my RKLB short position after a 4% loss...
No! I was hoping at least one of us would be winning haha.
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Rocket Lab's December launch got pushed back to January due to high winds:
https://www.space.com/rocket-lab-1st-electron-launch-delayed-by-winds
This is a completely normal thing in the world of rocket launches but from an accounting perspective it means the financials for this launch will be pushed into next year. Perhaps it will inch us even closer to the 16 launches needed for Electron to be profitable? Previously, Rocket Lab had estimated 14 Electron launches in 2023.
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Relativity Space is making progress with their Aeon R engines that they will use for Terran R (a Neutron competitor). By all accounts, they seem to be ahead of Rocket Lab in terms of engine development. Rocket Lab has yet to demonstrate this level of progress with their Archimedes engine.
12/20/2022 test:
https://twitter.com/thetimellis/status/1605066435021004800
12/24/2022 test:
https://twitter.com/thetimellis/status/1606368351051075584
Note that this is not a complete engine.
We are in process of building the first full engine with turbopumps, and will begin testing w/ pumps next year. This thrust chamber assembly testing will help us get regen, injector, and performance data which is key.
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Relativity Space is making progress with their Aeon R engines that they will use for Terran R (a Neutron competitor). By all accounts, they seem to be ahead of Rocket Lab in terms of engine development. Rocket Lab has yet to demonstrate this level of progress with their Archimedes engine.
12/20/2022 test:
https://twitter.com/thetimellis/status/1605066435021004800
12/24/2022 test:
https://twitter.com/thetimellis/status/1606368351051075584
Note that this is not a complete engine.
We are in process of building the first full engine with turbopumps, and will begin testing w/ pumps next year. This thrust chamber assembly testing will help us get regen, injector, and performance data which is key.
I agree. I posted up-thread that Neutron design seems to be immature relative to a first flight in 2024. That was largely based on the announcement in Sep '22 that they're changing Archimedes from GG to OSRC. That's a change you make in the earliest design stages, not midway through development.
Still Electron is a proven, revenue-generating workhorse and RKLB has a long cash runway. So as a business they're ahead of Relativity even if Terran R flies before Neutron, which is not a sure thing this early in the dev cycles.
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Relevant thread on another forum
Who will flight first, Beta, Terran-R or Neutron?
https://forum.nasaspaceflight.com/index.php?topic=57314.msg2415054#msg2415054
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It may not be an engine hot fire, but Rocket Lab has shared some pictures of part of the Neutron tank dome:
https://twitter.com/Peter_J_Beck/status/1605781729163108352
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Looks like Rocket Lab just had their first hot fire of Archimedes engine components:
https://twitter.com/rocketlab/status/1612627192181305345
Rocket Lab’s Virginia launch seems to be scheduled for January 22nd:
https://www.reddit.com/r/RocketLab/comments/107glxh/new_flight_window_january_22nd/
Meanwhile, Rocket Lab competitor Virgin Orbit just failed their mission today. The second stage failed to reach orbit and fell back to Earth. Space is hard!
https://arstechnica.com/science/2023/01/virgin-orbits-launcherone-rocket-suffers-anomaly-fails-to-reach-orbit/
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Looks like Rocket Lab just had their first hot fire of Archimedes engine components:
https://twitter.com/rocketlab/status/1612627192181305345
Their tweet sucks. Are we looking at an injector at low power?
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Their tweet sucks. Are we looking at an injector at low power?
Honestly, I have no idea. The tweet says "dev hardware", whatever that means. Whatever it is, it's obviously only a small portion of the overall engine.
In other news, ABL's first launch has failed. Space remains hard.
https://spacenews.com/first-abl-space-systems-launch-fails/
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Their tweet sucks. Are we looking at an injector at low power?
Honestly, I have no idea. The tweet says "dev hardware", whatever that means. Whatever it is, it's obviously only a small portion of the overall engine.
One of the replies on twitter guessed it was without the combustion chamber and nozzle. Guess you might do this if you were less interested in actual thrust data and more just wanted to see up stream systems function. I will give them the benefit of the doubt as the largest rocket I ever made used structural cardboard.
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Their tweet sucks. Are we looking at an injector at low power?
Honestly, I have no idea. The tweet says "dev hardware", whatever that means. Whatever it is, it's obviously only a small portion of the overall engine.
In other news, ABL's first launch has failed. Space remains hard.
https://spacenews.com/first-abl-space-systems-launch-fails/
Yea the idealist in me hates to see any launch fail (except maybe one from N. Korea), but the RKLB investor wants them all to burn haha.
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Yea the idealist in me hates to see any launch fail (except maybe one from N. Korea), but the RKLB investor wants them all to burn haha.
By all accounts, Virgin Orbit is on the verge of bankruptcy:
https://arstechnica.com/science/2023/01/even-before-mondays-launch-failure-virgin-orbits-finances-were-dismal/
Between them and Astra, I wonder which company will implode first? Arguably, Astra is already in the process of imploding, given that they canceled their rocket program.
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With Astra and Virgin Orbit on the ropes, at this point is it safe to say that Rocket Lab is on the verge of winning the small launch market? Nobody else seems close to having a viable Electron-class launcher. Firefly Alpha, Terran One, and RS1 might yet pan out but those rockets are a size up, and priced accordingly.
Furthermore, with a rocket like Electron needing 16 launches per year to be profitable, it seems unlikely that any other company is going to step in and try to take Electron's market share. The cost of developing a competitor to Electron is simply too high, the return on investment too low, and just getting to a break-even point seems almost insurmountable. Astra and Virgin Orbit have spent well over a billion dollars developing their rockets, and they aren't even close to being able to successfully launch 16 rockets in a year. Honestly, I think the most probable outcome is that both of those companies will go bankrupt before they manage to launch another 16 rockets, combined. I just can't see how anyone can build a competitor for Electron at this point.
That being said, although Electron's market share seems very safe, it's never going to be particularly profitable, nor is it going to make Rocket Lab into a company worth tens of billions of dollars. Nevertheless, Electron gives Rocket Lab plenty of experience, launch heritage, and industry connections which is invaluable.
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I don't know anything about this company, but I clicked on the thread and checked out the financials. Compared to the previous year: Revenue up 300%+, Positive GM of 12% compared to -2%, and Operating Expenses only increased 46% for that 300% Revenue growth.
Like I said, I don't know anything about the company or how it can continue to improve its numbers, but that's certainly a positive move.
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Rocket Lab has posted some more progress on the Neutron tank:
https://mobile.twitter.com/Peter_J_Beck/status/1615511198879059968
That’s a lot of carbon fiber!
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Amidst a general decision to sell most of my stocks (a little too much market timing, maybe!), sold about half of my RKLB position yesterday.
Still viewing long term as positive and price as not crazy, but after multiple dramatic up and down swings between $3.70 and 7.10 (mostly 3.70 and 5.xx), the price of 5.xx a couple days ago made me consider selling some in hopes of buying cheaper later. By the time I sold yesterday, price had fallen to 4.80ish, which substantially increased my realized loss compared to my overall buyin price of 5.50ish.
Realized losses in $700 neighborhood.
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Rocket Lab’s Q4 2022 earnings call is scheduled for February 28th:
https://finance.yahoo.com/news/rocket-lab-announces-date-fourth-211500026.html
I’m not expecting that much from this call but will be good to see what progress they have made.
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Amidst a general decision to sell most of my stocks (a little too much market timing, maybe!), sold about half of my RKLB position yesterday.
Still viewing long term as positive and price as not crazy, but after multiple dramatic up and down swings between $3.70 and 7.10 (mostly 3.70 and 5.xx), the price of 5.xx a couple days ago made me consider selling some in hopes of buying cheaper later. By the time I sold yesterday, price had fallen to 4.80ish, which substantially increased my realized loss compared to my overall buyin price of 5.50ish.
Realized losses in $700 neighborhood.
This feels like a terrible stock to swing trade. This is either a 10-year win or its a loss, but in the short term I don't see how we get past rocket lab's insane swings.
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Amidst a general decision to sell most of my stocks (a little too much market timing, maybe!), sold about half of my RKLB position yesterday.
Still viewing long term as positive and price as not crazy, but after multiple dramatic up and down swings between $3.70 and 7.10 (mostly 3.70 and 5.xx), the price of 5.xx a couple days ago made me consider selling some in hopes of buying cheaper later. By the time I sold yesterday, price had fallen to 4.80ish, which substantially increased my realized loss compared to my overall buyin price of 5.50ish.
Realized losses in $700 neighborhood.
This feels like a terrible stock to swing trade. This is either a 10-year win or its a loss, but in the short term I don't see how we get past rocket lab's insane swings.
You’re probably right!
To me it seems like if I buy some in the $3.xx’s and sell in the $5.xx’s I’d make a profit, and if I keep some I’m still in for the long haul, just at a lower net basis. In other words the swings are an opportunity. Maybe the long term value is a fail safe in case shorter moves go wrong?
In any case, I’ve never really traded or long term held an individual stock before, so probably I’ll just find the pitfalls by stepping in them. Hopefully my learning adventure is free education for wiser readers.
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Rocket Lab's first launch from the United States has successfully reached orbit! Fantastic news!
https://www.space.com/rocket-lab-1st-us-electron-launch
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Rocket Lab's first launch from the United States has successfully reached orbit! Fantastic news!
https://www.space.com/rocket-lab-1st-us-electron-launch
I am really excited by all the things Rocket Lab is doing! Here's to 2023 and far, far beyond!
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If your goal is to build a position, you deal with the volatility by dollar-value-averaging into it. Buy $1,000 worth today. One month from now, add enough to make your stake worth $2,000. If it goes on a run, that may mean you have to sell a small portion for one of the months. But you'll make it back up with buying more at a lower price when it comes available.
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If your goal is to build a position, you deal with the volatility by dollar-value-averaging into it. Buy $1,000 worth today. One month from now, add enough to make your stake worth $2,000. If it goes on a run, that may mean you have to sell a small portion for one of the months. But you'll make it back up with buying more at a lower price when it comes available.
This would work so long as the price moves up and down, but if it trends up your position will gradually decrease?
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If your goal is to build a position, you deal with the volatility by dollar-value-averaging into it. Buy $1,000 worth today. One month from now, add enough to make your stake worth $2,000. If it goes on a run, that may mean you have to sell a small portion for one of the months. But you'll make it back up with buying more at a lower price when it comes available.
This would work so long as the price moves up and down, but if it trends up your position will gradually decrease?
I think in the scenario tt is talking about the goal would be your position is worth $1,000 more each month and buy or sell enough stock each month to make the happen.
If the stock trends up, you'll be investing less and less each month and eventually selling some each month (but the value of your position will also be increasing each month).
Of course if it trends down you end up spending more and more money buying shares each month.
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So the target position increases by 1k$ each month - buy or sell to hit that.
Going to have to play with some data on this one.
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Ars Technica has a good article about Rocket Lab’s first US launch:
Rocket Lab’s first US launch: Big for the company and the site (https://arstechnica.com/science/2023/01/rocket-labs-first-us-launch-big-for-the-company-and-the-site/)
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Ars Technica has a good article about Rocket Lab’s first US launch:
Rocket Lab’s first US launch: Big for the company and the site (https://arstechnica.com/science/2023/01/rocket-labs-first-us-launch-big-for-the-company-and-the-site/)
Damn, I got lost in all the postponed launches, so I forgot to look east the other day. I could have seen it from my house! I'll have to watch my stocks go up instead I guess (I hope..)
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Anyone have a guess why RKLB popped yesterday while indexes were sharply down?
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This interview has some glowing praise for Rocket lab and talks about many of the spaceX competitors
https://www.youtube.com/watch?v=yOeLsdFyQSw
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This interview has some glowing praise for Rocket lab and talks about many of the spaceX competitors
https://www.youtube.com/watch?v=yOeLsdFyQSw
Don't click this link like I did. It's an Elon Musk deepfake crypto ad and we shouldn't be supporting traffic to it.
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This interview has some glowing praise for Rocket lab and talks about many of the spaceX competitors
https://www.youtube.com/watch?v=yOeLsdFyQSw
Don't click this link like I did. It's an Elon Musk deepfake crypto ad and we shouldn't be supporting traffic to it.
What are you talking about? its a direct link to a clip from the Lex Fridman Podcast where he interviews Tim Dodd who is the host of the Everyday Astronaut YouTube channel, where he teaches about rocket engines and all things space travel.
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Yeah that link is legit, not sure what you’re talking about LightStache.
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This interview has some glowing praise for Rocket lab and talks about many of the spaceX competitors
https://www.youtube.com/watch?v=yOeLsdFyQSw
Don't click this link like I did. It's an Elon Musk deepfake crypto ad and we shouldn't be supporting traffic to it.
It is not. Lex Friedman is better described as the highest IQ interviewer I've seen. The first question is about competitors to SpaceX, where RocketLab is mentioned. Elon Musk doesn't appear in the video at all, so I think you didn't visit the same video.
I wonder if some cache temporarily went wrong and presented you with something other than the YouTube video. The video id on YouTube appears after a "v=" in the URL, and this one starts with "yO" and ends with "Sw". If this happens again, compare the video id where you wind up to the one in this thread.
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This interview has some glowing praise for Rocket lab and talks about many of the spaceX competitors
https://www.youtube.com/watch?v=yOeLsdFyQSw
Don't click this link like I did. It's an Elon Musk deepfake crypto ad and we shouldn't be supporting traffic to it.
It is not. Lex Friedman is better described as the highest IQ interviewer I've seen. The first question is about competitors to SpaceX, where RocketLab is mentioned. Elon Musk doesn't appear in the video at all, so I think you didn't visit the same video.
I wonder if some cache temporarily went wrong and presented you with something other than the YouTube video. The video id on YouTube appears after a "v=" in the URL, and this one starts with "yO" and ends with "Sw". If this happens again, compare the video id where you wind up to the one in this thread.
Oh yea, I just followed it again and it worked fine. This was the scam I was seeing when I clicked on the link yesterday:
https://petapixel.com/2022/06/13/a-deep-faked-elon-musk-is-scamming-people-on-youtube/ (https://petapixel.com/2022/06/13/a-deep-faked-elon-musk-is-scamming-people-on-youtube/)
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Sorry if i came off as rude there
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This interview has some glowing praise for Rocket lab and talks about many of the spaceX competitors
https://www.youtube.com/watch?v=yOeLsdFyQSw
Don't click this link like I did. It's an Elon Musk deepfake crypto ad and we shouldn't be supporting traffic to it.
It is not. Lex Friedman is better described as the highest IQ interviewer I've seen. The first question is about competitors to SpaceX, where RocketLab is mentioned. Elon Musk doesn't appear in the video at all, so I think you didn't visit the same video.
I wonder if some cache temporarily went wrong and presented you with something other than the YouTube video. The video id on YouTube appears after a "v=" in the URL, and this one starts with "yO" and ends with "Sw". If this happens again, compare the video id where you wind up to the one in this thread.
Oh yea, I just followed it again and it worked fine. This was the scam I was seeing when I clicked on the link yesterday:
https://petapixel.com/2022/06/13/a-deep-faked-elon-musk-is-scamming-people-on-youtube/ (https://petapixel.com/2022/06/13/a-deep-faked-elon-musk-is-scamming-people-on-youtube/)
@LightStache, you got Musk-rolled. ;)
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With Astra and Virgin Orbit on the ropes, at this point is it safe to say that Rocket Lab is on the verge of winning the small launch market? Nobody else seems close to having a viable Electron-class launcher. Firefly Alpha, Terran One, and RS1 might yet pan out but those rockets are a size up, and priced accordingly.
Furthermore, with a rocket like Electron needing 16 launches per year to be profitable, it seems unlikely that any other company is going to step in and try to take Electron's market share. The cost of developing a competitor to Electron is simply too high, the return on investment too low, and just getting to a break-even point seems almost insurmountable. Astra and Virgin Orbit have spent well over a billion dollars developing their rockets, and they aren't even close to being able to successfully launch 16 rockets in a year. Honestly, I think the most probable outcome is that both of those companies will go bankrupt before they manage to launch another 16 rockets, combined. I just can't see how anyone can build a competitor for Electron at this point.
While this may sound a bit over-the top, I believe Starship to be the biggest potential threat to Electron's economic viability. If SpaceX can come even close to their cost and reuse goals, it's going to be cheaper to launch a fully reusable Starship one more time than it is to build and launch an Electron.
There is the counter argument that a number of customers are willing to pay more for some of their launches if it means there are 2 viable competitors in the market - they don't want a SpaceX monopoly.
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While this may sound a bit over-the top, I believe Starship to be the biggest potential threat to Electron's economic viability. If SpaceX can come even close to their cost and reuse goals, it's going to be cheaper to launch a fully reusable Starship one more time than it is to build and launch an Electron.
There is the counter argument that a number of customers are willing to pay more for some of their launches if it means there are 2 viable competitors in the market - they don't want a SpaceX monopoly.
Agreed about the monopoly thing. Nobody wants a SpaceX monopoly! I doubt even SpaceX would want that, as it would invite unwanted governmental scrutiny.
I am highly skeptical about Elon Musk’s claims about Starship launch costs. First, SpaceX has spent billions developing Starship. They need to earn back this initial investment by charging more for launches. Secondly, regardless of how much Starship’s internal launch costs are, SpaceX is still going to charge as much as the market will allow.
Therefore, there’s no way that we see Starship launches for $10M until one, SpaceX recoups Starship development costs and two, another company comes out with a Starship competitor with equally low internal launch costs and sparks a price war on launch costs. I am confident that there’s just no way that the above will come true in this decade. So don’t expect to see $10M Starship launches anytime soon.
That being said, SpaceX has already established themselves as Rocket Lab’s strongest competitor in the small launch market, by virtue of their “Transporter” rideshare missions on the Falcon 9. SpaceX is launching more smallsats than Rocket Lab. Check out this article:
https://spacenews.com/small-launch-industry-warns-of-bloodletting/
If we talk about 50 kilograms, 100 kilograms, this kind of satellite size, this is the size of the Transporter missions. The reference price is the Transporter price. With that price, nobody will make money.
I think the fact is that Transporter missions have suppressed prices in the market. I think the fact is they’ve taken a lot of volume off of the market. That’s a reset that really wasn’t there in the model even only a few years ago.
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That quote from Adam Spice is chilling (to me as a RKLB shareholder). Very good to have relatively open discussion though.
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Rocket Lab just announced some new spacecraft components for sale:
https://www.businesswire.com/news/home/20230208005931/en/Rocket-Lab-Increases-Space-Systems-Offerings-with-New-Products-for-Small-Satellites
Good to see them expanding their product portfolio. But I would really like to see some more launches this year. They said 14 launches were expected this year but we are clearly behind that launch cadence!
In other news the DOD is changing their procurement process for launches, making it less selective and easier for additional launch providers to participate in the bidding process. It used to be that any DOD launch provider needed to be capable of launching any DOD mission. Now, the DOD is willing to do business with launch providers who are only capable of launching some of their payloads. This is great news for Neutron in particular:
https://twitter.com/SciGuySpace/status/1626400068868661249
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Good news! Rocket Lab is preparing all three of their launch pads for upcoming launches. Rockets will be on the pads soon!
https://twitter.com/Peter_J_Beck/status/1628165082101485573?t=SB9SPiMto5QQ-MEgJyqIgA
Meanwhile, Relativity Space continues to surpass Rocket Lab with their progress on the Terran R engine. Their first full test article engine buildout is almost complete. This test article engine will be used to test the "powerpack". The second test article engine they build will be used for hot fire testing.
https://twitter.com/thetimellis/status/1626699544665927680
https://twitter.com/thetimellis/status/1625987160821350400
Rocket Lab has built something that looks like the above for Archimedes, but that is just a mock-up and not a functional test article:
https://twitter.com/Peter_J_Beck/status/1590811859665686528
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Lots of new Rocket Lab news came out today with the Q4 2022 earnings report (https://investors.rocketlabusa.com/financials/quarterly-results/default.aspx)! CNBC summary (https://www.cnbc.com/2023/02/28/rocket-lab-rklb-q4-2022-earnings.html).
Rocket Lab has signed a four-launch contract with Capella Space (https://news.satnews.com/2023/02/28/rocket-lab-signs-multi-launch-agreement-to-deploy-capella-space-satellite-constellation/) to launch Earth observation satellites. Launches for this contract start in Q3 2023. This is addition to the existing Capella Space mission scheduled for this month.
Rocket Lab plans to launch two missions in March 2023 (https://twitter.com/RocketLab/status/1630692958906511362). One for Capella Space and one for BlackSky. BlackSky is launching from New Zealand and Capella Space is launching from Virginia. It's great to see parallel launch campaigns and the new US launch pad getting some action!
Rocket Lab has established an Australian subsidiary (https://www.businesswire.com/news/home/20230228006278/en/Rocket-Lab-Establishes-Australian-Subsidiary-to-Support-Rapidly-Growing-National-Space-Sector) to take advantage of Australian government incentives for their country's space industry.
In their Q4 2022 earnings report webcast (https://www.youtube.com/watch?v=VaPGgKw4WNs), Rocket Lab had some interesting things to say:
1. [18:03 (https://www.youtube.com/watch?v=VaPGgKw4WNs&t=1083s)] Rocket Lab thinks they might be able to make Electron first stage waterproof and just recover it from the ocean every time. They are going to do another ocean recovery with additional waterproofing modifications. If they can stick to marine recovery, it will introduce additional savings to the recovery process and also they will improve from 50% of missions being recoverable to 60-70%.
2. [20:15 (https://youtu.be/VaPGgKw4WNs?t=1215)] The first Neutron development building has been completed, which will be used for stage assembly and integration. Work has commenced on the Neutron launch pad as well.
On the financial side, Rocket Lab's order backlog decreased again. They went from $546M at the end of Q1 2022, to $531.4M in Q2, to $520.6M in Q3, and to $503.6M in Q4. This is the third straight quarter that the order backlog has decreased. Overall, I suspect that this could be connected to the economic downturn over the course of 2022. Hopefully we will see some positive changes in the order backlog soon!
Rocket Lab had a GAAP Operating loss of $135.2M in 2022, up from $102M in 2021. Rocket Lab currently has about $484.3M of funds on hand, meaning they have about three years of funding remaining at the current burn rate.
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In other news, Relativity Space has set March 8th, 2023 as the date of their first launch:
https://spacenews.com/relativity-space-sets-date-for-first-terran-1-launch/
Very excited to see what happens with them! The progress they've been making on the Terran R engine has been very impressive.
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I don't always buy options and shares based on interweb advice...but when I do I never expect to see that money again.
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A lot of announcements!
To your point, the biggest concern is the decreasing backlog. Space is a massive market and there aren't a ton of successful players in it at this point. And, of course, the recent market downturn isn't great for RKLB. I'm still in the accumulation phase for RKLB stock at the moment and still well within my 10-year time horizon for significant returns. Still, I am hoping to see an increase in revenue this year as the markets start to pick back up and maybe even flirting with profitability in 2024. That'll be when I really start to get nervous - if I've 4 years in to this investment and they still are struggling to find enough diversification and market to become profitable.
I think they are well positioned to get there overall, they just need more launches. If there isn't a market for more small launches there may not be a path to profitability in the current environment. What I really want is updates on Neutron. I would like to see some meaningful progress there in the coming year.
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Do we know what the optimal back log is? Clearly greater than zero is good but I have trouble with the idea that "always increasing" is the desired state.
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Do we know what the optimal back log is? Clearly greater than zero is good but I have trouble with the idea that "always increasing" is the desired state.
This seems like a good question. My gut instinct response is that looking at backlogs are informative in the specific context of high growth companies (or companies trying to achieve high growth). If you're trying to grow production rapidly, and spending a lot of money to do it, the argument for what spending all that money is a good idea that the market is currently are supply limited rather than demand limited so increasing your capacity to supply your good or service will translate 1:1 into increased an increase in revenue.
An increasing backlog suggests that there is a lot more steady state demand for your product or service than you can currently supply and further investment in growing production/cadence is likely to translate directly in more long term revenue.
A stable or slowly declining backlog suggests that steady state supply and demand are pretty well matched, so spending a lot more money to speed up production/cadence will increase revenue in the short term as you chew through your backlog but may leave you with expensive excess capacity in the long term.
A declining backlog can have lots of causes (like a recession) but rapidly declining could also be a warning signal that the productive capacity has overshot long term demand and annual revenue is likely to drop once the backlog clears.
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Do we know what the optimal back log is? Clearly greater than zero is good but I have trouble with the idea that "always increasing" is the desired state.
This seems like a good question. My gut instinct response is that looking at backlogs are informative in the specific context of high growth companies (or companies trying to achieve high growth). If you're trying to grow production rapidly, and spending a lot of money to do it, the argument for what spending all that money is a good idea that the market is currently are supply limited rather than demand limited so increasing your capacity to supply your good or service will translate 1:1 into increased an increase in revenue.
An increasing backlog suggests that there is a lot more steady state demand for your product or service than you can currently supply and further investment in growing production/cadence is likely to translate directly in more long term revenue.
A stable or slowly declining backlog suggests that steady state supply and demand are pretty well matched, so spending a lot more money to speed up production/cadence will increase revenue in the short term as you chew through your backlog but may leave you with expensive excess capacity in the long term.
A declining backlog can have lots of causes (like a recession) but rapidly declining could also be a warning signal that the productive capacity has overshot long term demand and annual revenue is likely to drop once the backlog clears.
Yes.
I think this could get real complicated real quick. Potentially interesting (but not so much I would go back to school to study business :-) )
Back log and back log rate are both of consequence, and probably both require context.
Here with launches we are doing small sample size statistics, one launch is a large percent of the total, one can of soup for Campbells is nothing.
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What I really want is updates on Neutron. I would like to see some meaningful progress there in the coming year.
Rocket Lab did provide updates on Neutron. During their earnings call they shared that the first Neutron development building has been completed, which will be used for stage assembly and integration. Work has commenced on the Neutron launch pad as well. Finally, they said that they have been able to acquire manufacturing hardware for Neutron and that supply chain issues were not a problem. Rocket Lab has also shared progress of the Neutron fuel tanks and engine test stand on Twitter.
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I think this could get real complicated real quick. Potentially interesting (but not so much I would go back to school to study business :-) )
Agreed on both points.
Here with launches we are doing small sample size statistics, one launch is a large percent of the total, one can of soup for Campbells is nothing.
Also agreed but with the proviso that a single launch is not AS big a percentage of the total as my initial gut check would have suggested.
It sounds like the average electron launch is only bringing in about $7M of revenue. So if the $500M backlog is all for electron launches that suggests a backlog of 70+ launches or ~8 years as rocketlab's historical launch cadence.
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To your point, the biggest concern is the decreasing backlog.
Good news on that front. More news just came out about the changes (https://twitter.com/SciGuySpace/status/1626400068868661249) the US military has been making to their launch provider bidding process. The US military is about to put about $10B+ of launch contracts up for grabs, and they have specifically modified their bidding process to support companies like Rocket Lab:
https://arstechnica.com/science/2023/03/the-gold-rush-for-the-next-round-of-military-launch-contracts-has-started/
Another article, this could be well over 50 missions:
https://spacenews.com/space-force-looks-to-energize-industry-with-next-round-of-launch-contracts/
Rocket Lab is almost guaranteed to get a slice of this pie! When it comes to space, the US government is known for spreading their contracts around in order to nurture young technology companies.
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Virgin Orbit is furloughing nearly all its employees and pausing operations for a week as it looks for a funding lifeline. This looks grim:
https://www.cnbc.com/2023/03/15/virgin-orbit-pauses-operations-furloughs-staff.html
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Rocket Lab had their second successful launch from Virginia!
https://investors.rocketlabusa.com/news/news-details/2023/Rocket-Lab-Successfully-Launches-34th-Electron-Rocket-Second-Mission-from-Virginia/default.aspx
I'm looking forward to the day when these launches are so routine, they're not even noteworthy anymore.
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Relativity’s first launch has ended in failure. The first stage performed well, passing through max q and successfully performing stage separation, but something went wrong with the second stage and the rocket failed to reach orbit:
https://spacenews.com/relativity-launches-first-terran-1/
Space remains hard. I’m sure Relativity will have another go at it soon! I’m curious to see which of Firefly, ABL, and Relativity will reach orbit first. At this point, all three companies have attempted launches and failed, but success is just around the corner!
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Getting safely off the pad and clearing the tower on the first launch attempt for a new rocket built by a new company is a win in my book. It appears that the first stage and stage separation happened flawlessly, and they actually got into space (if not into orbit.) It will be interesting to find out why the second stage failed to perform.
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I heard yesterday that Rocket Lab had purchased SolAero Technologies last year. What I also didn't know is that SolAero solar power technology powers ~50% of all satellites. 50%!
Also the US Defense Dept are contracting a lot of small launches. This will be great news for RKLB
Bought some this morning. :-)
Fun to be in the space business.
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Rocket Lab shared some new numbers for Neutron today. Rocket Lab is targeting a launch price of $50-55M for Neutron:
https://www.cnbc.com/2023/03/24/rocket-lab-neutron-launch-price-challenges-spacex.html
This is compared to $67M for Falcon 9. Rocket Lab plans to fly each Neutron booster about 10-20 times, and have profit margins of 50%, implying a Neutron launch cost of $20-25M.
Rocket Lab also apparently signed a deal with a large mega constellation customer to provide thousands of 12Nms reaction wheels per year:
https://techcrunch.com/2023/03/24/rocket-lab-reveals-big-supplier-deal-with-mystery-mega-constellation-customer/
Small tidbits of information have been leaking out about that deal over the last few months, so this isn’t entirely new information. Rocket Lab had to construct a new reaction wheel production facility just for that single customer. Hopefully we’ll learn more specifics about that deal soon.
Some people speculate the customer could be Amazon and the deal could be worth billions of dollars:
https://www.reddit.com/r/wallstreetbets/comments/10xlhxa/rklb_hidden_message_in_new_pr_big_announcement/
Each reaction wheel sells for $100-120K, depending on radiation hardening:
https://www.rocketlabusa.com/assets/Uploads/Rocket-Lab-12-Nms-RW4-RW5-reaction-wheel-datasheet.pdf
To put this into context, the contract could easy be as big or bigger than Globalstar. For example, 5,000 reaction wheels at $70K each is $350M! Unfortunately, at this point we don’t have enough specifics about the deal other than “thousands of reaction wheels per year”.
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Rocket Lab shared some new numbers for Neutron today. Rocket Lab is targeting a launch price of $50-55M for Neutron:
https://www.cnbc.com/2023/03/24/rocket-lab-neutron-launch-price-challenges-spacex.html
...
Looked like a v well received presentation. They seem on track for the Neutron, and I really like the point that they are getting into space management, and being a one stop shop for the end to end business of advising, procuring, launching and managing of satellites. From that article:
<< “A lot of the companies that we’re [launching to orbit on Electron] now are very unnatural owners of space assets,” >> and
<<Rocket Lab aims to create an “end-to-end platform for customers” who need space-based services. Spice said the company wants to be operating satellites and “delivering data to our customers and developing a recurring revenue stream from that,” essentially eliminating the need for other companies to build and operate their own satellites.>>
These guys at RKLB really seem to have their s**t together, IMHO.
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I'm looking forward to the day when these launches are so routine, they're not even noteworthy anymore.
Rocket Lab just launched again (https://www.nasaspaceflight.com/2023/03/the-beat-goes-on/). Second time this month! The booster was recovered from the ocean this time, and was equipped with “additional waterproofing”. Rocket Lab thinks they can just recover the boosters from the ocean and refurbish them, like what SpaceX does with Falcon 9 fairings.
This isn’t the first time that rockets have been fished out of the ocean and refurbished—it was done for the Space Shuttle. However, the practice was questionable, as the cost of refurbishing boosters from the ocean was similar to constructing new boosters. Hopefully it will work out better for Rocket Lab.
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Thanks for all the updates @Herbert Derp
Looks like an exciting times ahead. In regards to Relativity - looking like they might be close to a successful launch - is their rocket a competitor for Neutron? Or a different payload weight?
If you don’t mind - could you please share your thoughts on how you see Rocket Lab’s future in a scenario where Neutron fails?
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Thanks for all the updates @Herbert Derp
Looks like an exciting times ahead. In regards to Relativity - looking like they might be close to a successful launch - is their rocket a competitor for Neutron? Or a different payload weight?
If you don’t mind - could you please share your thoughts on how you see Rocket Lab’s future in a scenario where Neutron fails?
Relativity’s Terran R is a competitor to Neutron and Falcon 9. The Terran R has significantly more payload capacity (20,000 kg to LEO) than Neutron (13,000 kg to LEO). That said, the rocket that Relativity just launched is the smaller Terran 1 (non-reusable, 1,500 kg to LEO), which in my opinion is not really a competitor to anything.
Terran 1 primarily serves as a technology development platform for Terran R which is still several years out. Terran R is expected to have its first launch around the same time as Neutron, which seems to be around 2025. It is not clear to me that Relativity will continue to fly Terran 1 after Terran R is finished. Relativity claims there is a business case for the Terran 1 but I am skeptical. They might just be saying that so as not to spook their investors. The best comparison would be to SpaceX’s Falcon 1 which was quickly abandoned in favor of Falcon 9.
If Neutron failed, it would be bad for Rocket Lab as their launch business is not really viable with just Electron. Electron will never be a big money maker. Like Falcon 1 and Terran 1, Electron serves as a crucial technology development platform but will always be low-demand, low-revenue, low-volume, and marginally profitable at best. However, Rocket Lab actually gets most of their revenue from their space systems business (satellite components), not launch, so it wouldn’t be the end of the world for them. Rocket Lab would just transition to another satellite company like York Space or Terran Orbital.
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Speaking of imploding competitors, Astra’s current problem right now is to figure out how to not get delisted from the Nasdaq (https://www.cnbc.com/2023/03/16/astra-plan-to-avoid-nasdaq-stock-delisting.html). That and not running out of money. Astra will announce (https://investor.astra.com/news-releases/news-release-details/astra-report-fourth-quarter-2022-financial-results-march-30th/) their Q4 2022 financials later this week on March 30th. That should give us more clarity on how close they are to running out of money, and I expect it to paint a grim picture. With a market cap of just $112M and in this high-interest financial environment, their options to raise additional capital have dwindled to almost nothing.
With Richard Branson unwilling to provide further funding, Virgin Orbit is in the process of raising $200M (https://www.cnbc.com/2023/03/22/virgin-orbit-nears-funding-deal.html) from a sucker by the name of Matthew Brown. What Brown attempts to achieve other than losing $200M is anyone’s guess. Virgin Orbit’s technology is at a developmental dead-end and is not financially viable. Launching rockets from planes has turned out to be a dumb idea because the size of the rocket is limited to the size of the plane, and the market has shown that small rockets are not financially viable on their own. Small rockets need to be a stepping stone to large rockets, but Virgin Orbit’s unfortunate choice of technology means they can never build a large rocket. Virgin Orbit is clearly a failing business!
It should go without saying at this point, but space is hard!
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Any chance VO could pivot to making a weapons system? I have heard nothing about this and not sure it would make any sense, but could be a option for the new investor to insist the company move towards. A very long range B52 launched missile could have utility.
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Loving RocketLab. I found this video tour of Rocketlab's facilities (although a year old now) amazing. It's not CGI or vapourware. Really good engineering.
And NZ has been at the forefront of carbonfibre technology for a long time with their foiling America's Cup racing yachts. The ability of 3D printed engines to make shapes impossible before additive manufacturing is also wondrous to me.
https://youtu.be/KKHiPf8cEFk (https://youtu.be/KKHiPf8cEFk)
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Speaking of imploding competitors,
...
With Richard Branson unwilling to provide further funding, Virgin Orbit is in the process of raising $200M (https://www.cnbc.com/2023/03/22/virgin-orbit-nears-funding-deal.html) from a sucker by the name of Matthew Brown. What Brown attempts to achieve other than losing $200M is anyone’s guess. Virgin Orbit’s technology is at a developmental dead-end and is not financially viable. Launching rockets from planes has turned out to be a dumb idea because the size of the rocket is limited to the size of the plane, and the market has shown that small rockets are not financially viable on their own. Small rockets need to be a stepping stone to large rockets, but Virgin Orbit’s unfortunate choice of technology means they can never build a large rocket. Virgin Orbit is clearly a failing business!
It should go without saying at this point, but space is hard!
Looks like the deals with Matthew Brown fell through over the weekend, Virgin Orbit employees remain furloughed without pay.
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Any chance VO could pivot to making a weapons system? I have heard nothing about this and not sure it would make any sense, but could be a option for the new investor to insist the company move towards. A very long range B52 launched missile could have utility.
I doubt it. For a weapons system you want solid fuel rockets because the rocket has to always be “ready to go” at a moments notice. Liquid fueled rockets like what all the commercial space companies use may be more economical, but they take hours to prepare for launch.
Looks like the deals with Matthew Brown fell through over the weekend, Virgin Orbit employees remain furloughed without pay.
Ouch! Here’s the news article:
https://www.cnbc.com/2023/03/27/virgin-orbit-extends-unpaid-pause-as-deal-collapses-talks-continue.html
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Looks like this truly is the end for Virgin Orbit. After failing to secure funding, the company will cease operations and lay off nearly their entire workforce!
https://www.cnbc.com/2023/03/30/virgin-orbit-funding-ceasing-operations-layoffs.html
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Space nerd perspective on the Virgin Orbit issue(s).
https://forum.nasaspaceflight.com/index.php?topic=58469.msg2469037
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And just like that, Relativity has cancelled Terran 1. I was not expecting this, but it makes sense given the difficulty of tech startups to raise funding in this financial environment. At this rate, we won’t see any more launches from Relativity any time soon, similar to Astra. Also, the design of Terran R has changed to what is essentially a Falcon 9 clone and the second stage will not be reusable.
https://spacenews.com/relativity-shelves-terran-1-after-one-launch-redesigns-terran-r/
This makes Terran R more similar to Neutron, and seems to validate Rocket Lab’s choice of not pursuing second stage reuse on Neutron. In any case, Relativity definitely seems to have scaled back their ambitions. They will have to make their current cash last as long as possible because it won’t be so easy to raise more.
It also makes you wonder about the financial viability of rockets like Terran 1. ABL Space Systems and Firefly are also working on rockets in this class, without a plan to build a Falcon 9 class rocket. If a space company isn’t working on a reusable Falcon 9 class rocket, they might not be competitive in the launch market.
Relativity is now targeting 2026 for the first launch of the Terran R. This means that it is much more likely that Neutron will fly before Terran R or any of the other Falcon 9 competitors.
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Starship is finally due to launch in just a few days! It could be as early as this coming Monday the 17th of April! I’m expecting some scrubs so I think it is doubtful that it will actually launch on Monday but we shall see. No matter what happens, next week is going to be huge for human spaceflight. Keep your eyes peeled!
https://arstechnica.com/science/2023/04/green-light-go-spacex-receives-a-launch-license-from-the-faa-for-starship/
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It's certainly possible they'll scrub, but I'm gonna get up so early on Monday in case they don't.
Would be so fun to see the rocket go up if it succeeds (and it really could explore even if it doesn't scrub. Starship has been tested, but the design has changed a lot since then. And the Superheavy first stage has never flown before. So we'll see.)
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T-minus six minutes to the first Starship launch attempt! There are 941,000 people watching the YouTube stream. I’ve never seen this many people on a livestream before! Wow!
Edit:
And it’s scrubbed! Better luck next time!
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Rocket Lab just introduced a new constellation class star tracker:
https://www.rocketlabusa.com/updates/rocket-lab-launches-new-constellation-class-star-tracker/
I wonder if they will also be selling these to that same customer who is buying thousands of constellation class reaction wheels per year?
In other news, Rocket Lab has repurposed Electron to act as a “test launcher” for hypersonic weapons for the US military! The first launch is scheduled for later this year. I was not expecting that!
Since Electron is a fragile liquid-fueled rocket that is slow to prep for launch, it seems unlikely that it will be used as a true weapons platform, but it should be an economical way to test hypersonic weapon prototypes such as hypersonic glide vehicles. A ballistic missile launched hypersonic weapons system would use a solid-fueled launcher that is hardened against EMP blasts and robust enough to launch immediately under all weather conditions. Such a launcher would be far more expensive than Electron.
https://investors.rocketlabusa.com/news/news-details/2023/Rocket-Lab-Introduces-Suborbital-Testbed-Rocket-Selected-for-Hypersonic-Test-Flights/default.aspx
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"test launcher": I wonder if this is related to being at the Wallops cite as I think they do sounding rocket tests from there. Is a really good idea to do testing with liquid as I expect you can adjust the thrust/speed profile a lot easier than casing a solid motor to give you what you want. Iterate with the liquids then manufacture with solids.
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I watched the Starship launch live! It did not disappoint! Looking forward to the next launch in a few months.
In any case, it’s becoming clear that Starship won’t be mature enough for full and rapid reuse for at least another few years. This should give Neutron some more breathing room.
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Watched it live as well. It was pretty awesome. It seemed slow in comparison to smaller rockets - must be the weight plus optical illusion as the rocket size is so much bigger.
Interesting that you reference Neutron - aren’t these completely different category rockets that won’t compete with each other?
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Starship is much bigger, but Neutron and Starship are both designed to launch satellite megaconstellations. They will be competitors in that space.
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In other news, Rocket Lab has announced that they plan to refly their first Rutherford engine in Q3 of this year. This is a significant milestone for Electron reusability.
https://spacenews.com/rocket-lab-to-refly-electron-engine/
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Watched it live as well. It was pretty awesome. It seemed slow in comparison to smaller rockets - must be the weight plus optical illusion as the rocket size is so much bigger.
The optical illusion factor is real. Large rockets moving the same speed as small rockets take longer to move a single body length up into the sky.
But superheavy was also flying with between two and six rocket engines out of commission, so the thrust to weight ratio at the start sucked even more than it normally does at the start of a launch (but thankfully not quite as much bad as Astra's TWR 1 launch a few months ago).
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to me it's another reminder that launching rockets off the planet is really hard.
I like Rocketlabs simplicity, focus, and execution record, and that they are NOT trying to get NASA to pay for a rocket that theoretically can "go to Mars in the thousands".
A nice sized rocket to reliably launch 98% of payloads into orbit, plus the moon, sounds perfect to me.
Oh, another plus: RKLB is not run by a meglomaniacal fantasist asshole constantly distracted by a zillion other things.
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I watched replays of the SpaceX launch a few times. The goal was just to clear the launch tower, so the other milestones are a bonus. They throttled down and up the engines, went through "max Q", but did not get stage separation. Below is the launch replay with a time offset that starts at T minus 11 sec.
https://www.youtube.com/watch?v=-1wcilQ58hI&t=2693s
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Just noticed an article from last week (hence, out of date opening sentence) by Tim Fernholz at the Space Business newsletter. He asserts that the industry is hungry for mid-sized rockets, discusses competitors and timelines. Speaking well of Rocket Labs' track record, he mentions Neutron as a possible leader in this area. Full text pasted below link.
https://qz.com/emails/space-business/1850352835/space-business-lab-rats
"How do you have a space renaissance without rockets?
All eyes will be on today’s attempt to fly SpaceX’s next-generation Starship rocket, but the bigger near-term problem is with the current generation of launch vehicle development. The issues aren’t just with the new rocket firms fighting their way to orbit, but aerospace giants as well: It’s not clear when United Launch Alliance’s Vulcan will be ready, and now Europe’s latest rocket, Ariane 6, is so delayed that it will have to hire SpaceX’s Falcon 9 rocket to launch its next set of Galileo navigation satellites.
Indeed, if you’re a Western company and want to launch anything weighing more than 500 kg or benefit from the efficiency of sharing a launch vehicle with multiple customers, you have to go to Elon Musk’s space firm.
This isn’t the ideal situation for driving down the cost of going to space—SpaceX will happily grow its margins and its volume picking up more business, just as it did with rival satellite operator OneWeb when Russia stopped letting Western firms launch on its Soyuz rockets.
The demand for medium-lift rockets, which generally carry between two and 20 metric tons of payload to low-earth orbit, is so clear that many start-ups with plans to deploy and operate smaller rockets are pivoting to bigger ones.
Astra, which scrapped a smaller design after a failed mission for NASA, is working on a vehicle that could carry 600 kg to orbit. Relativity Space tested its smaller Terran 1 rocket for the first time in March; after it failed to reach orbit, the company decided to take those learnings and focus on a larger, reusable vehicle called Terran R. This is exactly what SpaceX did nearly 15 years ago—abandon its small Falcon 1 rocket to build the Falcon 9.
The most interesting of these efforts is from Rocket Lab, the only winner thus far in the race to operate small rockets. Despite a regular flight cadence with its smaller Electron rocket, the company has made clear that its future is in developing a larger, reusable vehicle called Neutron capable of launching 13,000 kg to low-earth orbit. That vehicle could head for orbit as soon as next year. One key sign of the desire for bigger vehicles comes from the US military, one of the biggest spenders on rocket launch, which changed its bidding process to allow new entrants like Rocket Lab.
What makes Neutron promising is Rocket Lab’s record of execution, which includes Electron and two recent announcements. First is that the company will fly one of its rocket engines on an Electron rocket after recovering it from a previously-flown vehicle and refurbishing it. That kind of practice bodes well for scaling up. The second is that the company will use a version of its current rocket dubbed HASTE (Hypersonic Accelerator Suborbital Test Electron) to test hypersonic vehicles for the US military. “HASTE is not the promise of a future capability—it’s a completed launch vehicle ready for flight now,” Rocket Lab executive Brian Rogers said in a statement.
Starship is exciting, but even with a successful test flight today, it’s hard to see the vehicle coming into full service for years. Serious testing likely to be focused on NASA’s Artemis program, which aims to use the huge spacecraft as a lunar lander. The rest of the world needs a completed launch vehicle ready for flight now."
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Ars Technica writes that RocketLab has distinguished itself by executing where competitors have been failing, discusses Neutron as well as Electron.
https://arstechnica.com/science/2023/05/rocket-lab-hitting-its-stride-with-high-cadence-new-venture-for-electron/
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Nice 15% bump in the share price in the past few days - from circa $3.90-$4.00 jump to $4.65. More successful launches. Plus more NASA contracts transferred to RocketLab. (esp nice they'll launch from launch pad #1 in NZ). Great news.
Long RKLB
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Nice 15% bump in the share price in the past few days - from circa $3.90-$4.00 jump to $4.65. More successful launches. Plus more NASA contracts transferred to RocketLab. (esp nice they'll launch from launch pad #1 in NZ). Great news.
Long RKLB
I loaded up on shares a week ago so those are in the green. Unfortunately, my average cost basis is still over $5.00 since my first few shares were purchased back when it was still a SPAC at $12.08 per share. It's still a very minor position in the grand scheme of my portfolio.
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Here’s the CNBC article for Rocket Lab’s recent earnings results:
https://www.cnbc.com/2023/05/09/rocket-lab-rklb-q1-2023-results.html
I like that the cadence of launches is picking up. Rocket Lab really is the only New Space company besides SpaceX that is routinely and reliably sending stuff into orbit—and I expect it to remain this way for quite some time. I also like that Rocket Lab is signing customers who are ready to launch right away. For NASA’s “swarm” satellites, they plan to launch within three months of contract signing. This is in contrast to seemingly endless delays with customers in the past.
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It has just been announced that Rocket Lab is buying Virgin Orbit’s rocket factory in California. Rocket Lab bid $16.1 million for the lease on Virgin Orbit’s main production facility in Long Beach, California, along with machinery and equipment there. Rocket Lab has its headquarters and a production facility just a couple blocks away in Long Beach.
This looks like a big win for Rocket Lab! They just got a new manufacturing facility in a convenient location. It shows that Rocket Lab is eager to ramp up production of its products and is still willing to make big investments in new infrastructure with an eye towards future growth.
https://spacenews.com/three-companies-to-buy-most-virgin-orbit-assets/
TechCrunch had the following to say in their article:
https://techcrunch.com/2023/05/23/virgin-orbits-launch-business-sold-for-parts-to-vast-stratolaunch-and-rocket-lab/
Rocket Lab already has a massive footprint in Long Beach, and it will only benefit from the additional square footage and machines, like 3D printers and specialty tank welding machines.
“The combination of [Virgin’s] assets with Rocket Lab’s existing production, manufacturing, and test capabilities is expected to advance the production of Rocket Lab’s larger launch vehicle, Neutron,” Rocket Lab said in a statement. “Rocket Lab will not be integrating Virgin Orbit’s launch system within its existing launch services.”
Peter Beck says that the new facility will accelerate and reduce the cost of the Neutron program:
https://twitter.com/Peter_J_Beck/status/1661156741793579009
Virgin Orbit built a fantastic production facility with the very best equipment. We're fortunate to have nearly completed the acquisition of this facility and equipment to help advance Neutron’s future production and reduce the overall cost of the program significantly.
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Rocket Lab just successfully launched the last batch of the TROPICS cyclone tracking satellites for NASA:
https://www.nasaspaceflight.com/2023/05/coming-to-a-storm-near-you/
This brings them to five launches in the first five months of the year. Rocket Lab is comfortably hitting a monthly launch cadence and is ahead of the three launches they had this time last year. Business is picking up! Looking to see even more launches as part of the HASTE program!
https://en.m.wikipedia.org/wiki/List_of_Electron_launches
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According to Michael Sheetz and Jefferies, the value of the Virgin Orbit facility and equipment that Rocket Lab purchased was $100M: $80M of equipment and $20M of real estate. Not a bad deal for $16M!
https://twitter.com/thesheetztweetz/status/1663948612684873731
Rocket Lab is apparently selling their helicopter for $11.6M. If so, this would fund most of the Virgin Orbit purchase!
https://twitter.com/trancsitu/status/1656054276865822722
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Finally, some more progress on Archimedes! Now at least we have something that is starting to look like an engine:
https://twitter.com/rocketlab/status/1666250770298322944
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Finally, some more progress on Archimedes! Now at least we have something that is starting to look like an engine:
https://twitter.com/rocketlab/status/1666250770298322944
Ha I was expecting to see feedlines and turbines and all that "engine" stuff. Cool pic though. What do you call that AM robotic arm thingamajig?
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report that Kathy Wood bought more RKLB on Tuesday, nice continued bump in the stock price.
And yeah, what a great deal from Virgin Orbit's fire sale!
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big bump up today. Now $6 a share. sweet. A nice sign the stock price is stabilizing / trending upwards.
A successful build/launch for the Varda space microFab company https://varda.com/ (https://varda.com/) was a plus, and the realisation slowly dawning in the market that there's really no-one else performing in this 'space' but SpaceX and RocketLab?
Still, long RKLB, so far so good.
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Rocket Lab’s first HASTE mission was a success:
https://spacenews.com/rocket-lab-launches-first-suborbital-version-of-electron/
Looking forward to more of these launches in the future!
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big bump up today. Now $6 a share. sweet. A nice sign the stock price is stabilizing / trending upwards.
A successful build/launch for the Varda space microFab company https://varda.com/ (https://varda.com/) was a plus, and the realisation slowly dawning in the market that there's really no-one else performing in this 'space' but SpaceX and RocketLab?
Still, long RKLB, so far so good.
It was a nice bump!
Earlier, figuring that a general downturn was coming at some point, I told myself that if RKLB got above the $5.50 level of my net cost to date, I'd lighten up a little and then buy more later at a hopefully better price. After it went above $5.50 last week I followed my plan, selling half. But if it never drops again, I'll never get to buy more. :(
In recent months, it seemed weird that news for the company was usually good, but the the stock price was low and volatile. It seemed like investors were reading bad news about other rocket stocks or something. Are they now becoming more optimistic due to the wider market going up, or actually recognizing RocketLab's advantages?
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Rocket Lab’s first HASTE mission was a success:
https://spacenews.com/rocket-lab-launches-first-suborbital-version-of-electron/
Looking forward to more of these launches in the future!
Interesting article, especially where it mentioned the greater secrecy surrounding the HASTE launch. Maybe we'll see (or not see, so to speak) more of these media blackout missions with the increasing defense contracts. Less fun as a viewer, but probably good as an investor. :)
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big bump up today. Now $6 a share. sweet. A nice sign the stock price is stabilizing / trending upwards.
A successful build/launch for the Varda space microFab company https://varda.com/ (https://varda.com/) was a plus, and the realisation slowly dawning in the market that there's really no-one else performing in this 'space' but SpaceX and RocketLab?
Still, long RKLB, so far so good.
It was a nice bump!
Earlier, figuring that a general downturn was coming at some point, I told myself that if RKLB got above the $5.50 level of my net cost to date, I'd lighten up a little and then buy more later at a hopefully better price. After it went above $5.50 last week I followed my plan, selling half. But if it never drops again, I'll never get to buy more. :(
In recent months, it seemed weird that news for the company was usually good, but the the stock price was low and volatile. It seemed like investors were reading bad news about other rocket stocks or something. Are they now becoming more optimistic due to the wider market going up, or actually recognizing RocketLab's advantages?
especially frustrating when that BS pseudo-space company Virgin Galactic gets a bump for doing squat. Sigh.
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Anyone selling covered call options for RKLB? Interest has suddenly jumped, so can get e.g. $0.25 for oct 20, $10 call. But I'm nervous it's possible we'd get a few more of these "hype jumps" of 10% (3-4 to be exact), and I'd loose my shares! Of course I'd get a nice profit on the sale, but the taxes stink, and STCG on the options income? Ugh. Not sure it's worth if for a few hundred bucks..
Maybe I'm just to nervous and/or dumb to mess with options, specifically covered calls. Every time I check it just looks like collecting pocket change for some potentially nasty tax consequences and loosing out on the stock rising..?
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…snip….
Maybe I'm just to nervous and/or dumb to mess with options, specifically covered calls. Every time I check it just looks like collecting pocket change for some potentially nasty tax consequences and loosing out on the stock rising..?
Precisely. Very well said.
You should be on the rewrite team for the next edition of Characteristics and Risks of Standardized Options, also known as the options disclosure document (ODD).
No snark intended.
Unless you absolutely want to sell a stock, you shouldn’t use call options to sell. They are useful as a “paid” , automated limit sell order.
Disclosure: I use naked (Cash backed) puts to buy stocks. I can’t bear paying market price, a limit order doesn’t pay anything, a put separates in time my order and it’s execution, and it feels sportier to use an option. Has it worked out? Not really, my last one was RKLB at 4, I made a half buck, but RKLB is up two bucks and rising fast. The good news is I used my rotting cash to do something.
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Rocket Lab just scooped up a bunch of new launch contracts, including some satellites that were supposed to launch with Virgin Orbit.
One launch for NASA:
https://www.businesswire.com/news/home/20230509006091/en/Rocket-Lab-to-Launch-Small-Satellite-Swarm-for-NASA
Two launches for NorthStar (former Virgin Orbit customer):
https://spacenews.com/northstar-pivots-to-rocket-lab-following-virgin-orbits-collapse/
Two launches for Synspective:
https://www.rocketlabusa.com/updates/rocket-lab-signs-multi-launch-deal-to-further-deploy-synspective-constellation/
It is great to see former customers of Astra and Virgin Orbit coming over to Rocket Lab! It shows that Rocket Lab can deliver the goods, while those companies cannot!
Rocket Lab’s next launch a few days from now is going to include ocean recovery of the Electron booster, which has been modified with additional waterproofing:
https://spacenews.com/rocket-lab-takes-another-step-towards-reusability-on-next-electron-launch/
I’m very interested to see how this waterproofing strategy works out for Rocket Lab. It would be amazing if they can actually relaunch a booster that was fished out of the ocean!
Meanwhile, Astra is running out of money:
https://parabolicarc.com/2023/05/17/astra-space-revenue-cash-reserves-dwindle/
In their last earnings report, Astra reported a loss of $44.9M and ZERO revenue. They ended Q1 2023 with just $62.7M in funds remaining and expressed “substantial doubt” about the company’s survival.
The Company believes that its current level of cash and cash equivalents and marketable securities are not sufficient to fund commercial scale production and sale of its services and products. These conditions raise substantial doubt regarding its ability to continue as a going concern for a period of at least one year from the date of issuance of these unaudited condensed consolidated financial statements.
Now, they are doing a 15-1 reverse stock split and are attempting to raise $65M by issuing new shares:
https://spacenews.com/astra-to-raise-up-to-65-million-in-stock-sale/
With a market cap of just $101.36M, that $65M capital raise represents a 40% dilution for existing shareholders. I sense that bankruptcy is drawing near for Astra.
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especially frustrating when that BS pseudo-space company Virgin Galactic gets a bump for doing squat. Sigh.
In Virgin Galactic’s defense, they did manage to complete their first commercial flight a few weeks ago:
https://spacenews.com/virgin-galactic-completes-first-commercial-spaceshiptwo-suborbital-flight/
That said, Virgin Galactic still has antiquated semi-obsolete technology that amounts to a technological dead end. Plus, the company moves at such a glacial pace. SpaceShipOne first flew in 2003, and the technology hasn’t really changed since then!
Check out this article from 2009:
https://www.telegraph.co.uk/travel/travelnews/6761213/Richard-Branson-unveils-Virgin-Galactics-spaceship-Enterprise.html
If SpaceShipTwo had flown thirteen years ago as planned, maybe Virgin Galactic would have gone somewhere. At this point, the company is a joke! These guys have literally been fiddling around with the same rich person toy spaceplane technology for the last 20 years, and time is passing them by. They are clearly going nowhere.
It’s even worse when you consider how Virgin Galactic can ever hope to make back the ridiculous amount of R&D that they wasted over the last decade plus. The minuscule space tourism market just isn’t going to make them back their money!
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Virgin Galactic (SPCE) 1 year return -45%
Rocket Lab (RKLB) 1 year return +62%
I suspect when RKLB is 3 years old, it will not have -40%/year performance like Virgin Galactic stock.
https://www.morningstar.com/stocks/xnys/spce/trailing-returns
https://www.morningstar.com/stocks/xnas/rklb/trailing-returns
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I decided to put some numbers on Virgin Galactic’s “business model”.
Virgin Galactic tickets are $450K per passenger (https://www.space.com/virgin-galactic-raises-space-ticket-price). SpaceShipTwo can hold 6 passengers (https://en.m.wikipedia.org/wiki/SpaceShipTwo), which means revenue per launch is just $2.7M, about one third the revenue of an Electron launch. The company plans to fly once per month (https://spacenews.com/virgin-galactic-completes-first-commercial-spaceshiptwo-suborbital-flight/). At 12 flights per year, that’s an annual revenue of $32.4M! Virgin Galactic has spent over a billion dollars on R&D over the last decade plus. Do you think they are ever going to make that money back?
By the way, just last quarter the company reported a net loss of $159M (https://www.cnbc.com/2023/05/09/virgin-galactic-q1-earnings-report.html)!
These numbers are just soooo bad, I can’t even…
(https://img.buzzfeed.com/buzzfeed-static/static/2015-03/22/19/enhanced/webdr07/anigif_original-31889-1427065876-14.gif)
But all joking aside, maybe Virgin Galactic can scale up their business and increase launch cadence? Well, good luck finding more people willing to pay $450,000 for what amounts to an amusement park ride. Virgin Galactic claims their long term goal is 400 flights per year (https://techcrunch.com/2022/07/06/virgin-galactic-aims-for-400-flights-a-year-with-two-new-motherships/). Never going to happen, the market doesn’t exist! Not with the meager capabilities of this hardware, and not at these ticket prices!
But wait, perhaps SpaceShipTwo is a stepping stone to greater things? SpaceShipThree could accommodate more passengers and do Earth to Earth or Earth to space station travel. But when will Virgin Galactic be able to produce such a spaceplane, 2040? Actually, SpaceShipThree (https://www.foxnews.com/science/virgin-galactic-unveils-new-spaceshipthree-space-plane) is just a minor improvement over SpaceShipTwo, won’t be capable of anything like that, and it still isn’t ready despite being announced two years ago. Looks like we’ll have to wait until at least SpaceShipFour for anything resembling a commercially viable product.
Virgin Galactic’s moronic business plan reminds me of that scene (https://youtu.be/xyyqoHCkw9I) from Austin Powers.
Sir Peter Beck: With this investment of 10+ years of R&D and hundreds of millions of dollars to create a rocket company, we could make billions! Sir Richard Branson: Why make billions when we could make... millions?
(https://upload.wikimedia.org/wikipedia/en/1/16/Drevil_million_dollars.jpg)
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I decided to put some numbers on Virgin Galactic’s “business model”.
Virgin Galactic tickets are $450K per passenger. SpaceShipTwo can hold 6 passengers, which means revenue per launch is just $2.7M, about one third the revenue of an Electron launch. The company plans to fly once per month. At 12 flights per year, that’s an annual revenue of $32.4M! Virgin Galactic has spent over a billion dollars on R&D over the last decade plus. Do you think they are ever going to make that money back?
But maybe they can scale up their business and increase launch cadence? Well, good luck finding more people willing to pay $450,000 for what amounts to an amusement park ride. And when will SpaceShipThree be ready, 2040?
By the way, last quarter the company reported a net loss of $159M!
These numbers are just soooo bad, I can’t even…
(https://img.buzzfeed.com/buzzfeed-static/static/2015-03/22/19/enhanced/webdr07/anigif_original-31889-1427065876-14.gif)
It's OK though, because the state of New Mexico spent $250-300 million to build them a spaceport but only collect about ~$1 million a year in rent. So that will totally pay itself off in just 300 years or so.
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Rocket Lab just completed another successful launch and ocean recovery! Seven satellites deployed into orbit. Let’s see how this “waterproofing” works out!
https://www.space.com/rocket-lab-electron-launch-recovery-july-2023
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Even going from 450k to 50k it would seem a stretch to sell that many rides.
Has VG said anything about transitioning to long distance rapid 'airline' like travel? ultra short duration flights between major city pairs might be lucrative. But Concord never made a profit and airlines are commercial plane makers are not know for being high margin business.
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Even going from 450k to 50k it would seem a stretch to sell that many rides.
Has VG said anything about transitioning to long distance rapid 'airline' like travel? ultra short duration flights between major city pairs might be lucrative. But Concord never made a profit and airlines are commercial plane makers are not know for being high margin business.
As far as I know, they have no plans to build spaceplanes with those capabilities, and their existing technology isn’t suitable for the kind of larger, long-distance spaceplanes that you would need for this purpose. Just redesigning SpaceShipTwo to make it fly higher and dock with the International Space Station is probably beyond Virgin Galactic’s technical capabilities. Their design just isn’t meant to handle reentry velocities from those altitudes. New Shepard on the other hand could probably be evolved to fly higher and dock with commercial space stations.
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...
As far as I know, they have no plans to build spaceplanes with those capabilities, and their existing technology isn’t suitable for the kind of larger, long-distance spaceplanes that you would need for this purpose. Just redesigning SpaceShipTwo to make it fly higher and dock with the International Space Station is probably beyond Virgin Galactic’s technical capabilities. Their design just isn’t meant to handle reentry velocities from those altitudes. New Shepard on the other hand could probably be evolved to dock with commercial space stations.
thanks. Sub-orbital long distance ballistic shots are an easier incremental improvement vs going full orbit. Was thinking private jet type service between London & New York in <1hr. Is still a tiny market with huge problems; I expect regulators will would be interested in how VG stored countless tons of high explosives for the solid rocket component at JFK or LaGuardia.
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RKLB hit $8.05 (https://www.google.com/search?q=rklb) today! Not clear what that’s in response to, could be broader market dynamics or maybe people think that Rocket Lab’s upcoming earnings report on August 8th is going to be really good.
In any case, it is becoming much more obvious that Rocket Lab is a legitimate company with a bright future, whereas the other publicly traded rocket companies turned out to be pretenders. Perhaps this is why the stock is up 100% since May 2023.
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RKLB hit $8.05 (https://www.google.com/search?q=rklb) today! Not clear what that’s in response to, could be broader market dynamics or maybe people think that Rocket Lab’s upcoming earnings report on August 8th is going to be really good.
In any case, it is becoming much more obvious that Rocket Lab is a legitimate company with a bright future, whereas the other publicly traded rocket companies turned out to be pretenders. Perhaps this is why the stock is up 100% since May 2023.
It really feels like Rocket Lab is artificially low because of the general failure of the space market - most space companies are not going to survive for much longer and it really feels like they're getting caught up in that. Here's hoping market sentiment is starting to turn, I still believe this is a $100 stock in the next 8 years.
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RKLB hit $8.05 (https://www.google.com/search?q=rklb) today! Not clear what that’s in response to, could be broader market dynamics or maybe people think that Rocket Lab’s upcoming earnings report on August 8th is going to be really good.
In any case, it is becoming much more obvious that Rocket Lab is a legitimate company with a bright future, whereas the other publicly traded rocket companies turned out to be pretenders. Perhaps this is why the stock is up 100% since May 2023.
It really feels like Rocket Lab is artificially low because of the general failure of the space market - most space companies are not going to survive for much longer and it really feels like they're getting caught up in that. Here's hoping market sentiment is starting to turn, I still believe this is a $100 stock in the next 8 years.
Wow, I hadn't imagined $100!
I have trouble deciding exactly what a reasonable estimate is for the size of the market that RocketLab can address and SpaceX can't. Add in a discount for the possibility of some legit competition (Relativity Space, maybe?) instead of none, and I end up with much lower imagined values, like peaks of $30 or $50 before 2030 if things go well.
I want to keep some long term, and if I knew this was the lowest it'd ever be, would want more now than I have. But I'm uncertain enough about the next 2-3 years for the market as a whole to be unure this is the lowest ever. Anyway, I'd promised myself that around $7 to $8, I'd sell some so that my remaining risk in the overall adventure was low, even though that also risks less gain in the future.
So I sold part of my stake today. Remaining shares have market value between 1% and 2% of portfolio's investable assets. Sorry for the personal sidetrack.
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I get to $100 because I believe Rocket Lab's long-term goal is to be more than just rocket launches, they are working towards supporting "Space" in general, rockets are a part of the overall infrastructure they are developing and supporting. Space is getting bigger and more interesting. NASA and others are working on Moon and Mars missions (and maybe even bases/people?). That could create a lot of support for Space as a sector from the general public. Additionally, with the ability to reliably get into space via Rocket Lab and SpaceX, more companies are going to make the investments. And as things like Starlink becomes more embedded as global internet infrastructure, Space is going to get more and more important politically. And none of this is even taking into consideration the military uses of space.
Rocket Lab will have large rockets in the next few years to go up against SpaceX, additionally their acquisitions make them interesting players in general space infrastructure development and general space support. I think by 2040 they'll not only be one of the top players launching multiple rockets per month across the globe, they'll also be developing infrastructure and providing technological support for all these other pieces of space. "The Amazon of Space" is way too aggressive, but that's where my mind is at. They certainly don't seem content to only provide space ships long term and all their revenue estimates for the next few years assume that launches are going to be the main source of revenue (unless I missed something big).
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Astra just laid off 25% (70) of their employees and shifted another 50 engineers from their rocket program to their satellite engine program:
https://spacenews.com/astra-lays-off-reassigns-employees-as-it-refocuses-on-satellite-propulsion/
Astra doesn’t earn any revenue from satellite engines either. They claim that Rocket 4 will be delayed, but not cancelled. They didn’t give any estimate on how long the delay would be. I can’t imagine that Astra can continue much longer under these circumstances, it looks like bankruptcy is coming any day now.
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More garage sale items for Rocketlab perhaps?
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More garage sale items for Rocketlab perhaps?
Its not nice to refer to engineers that way :-)
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Rocket Lab published their Q2 2023 earnings results yesterday:
https://www.cnbc.com/2023/08/08/rocket-lab-rklb-q2-earnings-report.html
Notably, they signed launch contracts for 10 launches last quarter, including five with returning customer BlackSky. It is great to see Rocket Lab getting all of these contracts, and it is becoming apparent that Rocket Lab has a monopoly on small launch. The other companies who attempted small launch have failed (Virgin Orbit and Astra) and I don’t think anyone else is going to step up to replace them. The cost/benefit/risk of creating an Electron competitor just doesn’t make much sense. This makes Electron the king of the hill!
In the earnings call, Peter Beck mentioned that the next steps for Electron reuse are to first refly an engine and then refly an entire booster. CFO Adam Spice also then went on to mention that the company plans to get the total internal cost of Electron down to $3-3.5M per launch, including recovery and refurbishment of boosters. This would be great for margins, given that Rocket Lab is currently charging customers $7.5M per Electron launch. They also mentioned that Rocket Lab’s factory is currently capable of producing one Electron per week.
On the space systems side, Adam Spice mentioned that Rocket Lab is still on track to achieve 30% non-GAAP gross margins on the SolAero business within the two year post acquisition timeframe that they had originally planned. This is great news to hear, because solar panels are a major source of revenue for Rocket Lab.
On the Neutron side, Rocket Lab continues to make progress with Archimedes, Neutron fuel tanks, and Neutron launch infrastructure, and plans to do a test firing of a complete Archimedes prototype engine by the end of this year. They also mentioned that the acquisition of Virgin Orbit’s facility and tooling will help them to scale up production of Electron and Neutron, especially for rocket engines. That said, it doesn’t seem like the facility is going to help much in terms of R&D.
With all of these steps towards greater margins, we should hopefully see Rocket Lab start to become profitable once Neutron R&D spending comes down, and Neutron starts bringing in revenue of its own. There are exciting times ahead for Rocket Lab!
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This dog will be belly up within 3 years. I call first dibs on the office furniture.
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I have continued buying into RKLB after my initial terrible timing with ill-gotten GME money, because I always heard that you should grasp hard at falling knives and reinforce failure. By now I have something like 250 shares (and growing) at a cost basis around $6.60 per share (and falling).
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Nice article and including quotes from interview with Rocket Lab's CEO in Ars Technica. (https://arstechnica.com/space/2023/08/rocket-lab-pivoting-to-downrange-neutron-landings-to-meet-customer-demand/)
Some new to me information:
Walked back their RTLS-only plan for Neutron which would have limited the rocket to living 8 tons to low earth orbit. They now anticipate a significant fraction of the time Neutron land on a barge downrange (like Falcon 9 often does today) to increase their payload to orbit to 13 tons.
He sounds somewhat less optimistic about a first flight for Neutron in 2024 than I've read in the past: "The schedule says we can get there," he said. "The rubber is going to hit the road in the next six months after we get some of these big tests under our belt. We are certainly going to try to have something on the launch pad in 2024, but you know, it’s a rocket program."
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In other news, SpaceX is expanding its rideshare program to more orbits:
https://spacenews.com/spacex-to-offer-mid-inclination-smallsat-rideshare-launches/
This will likely take business away from Rocket Lab, unfortunately.
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A new interview with Chris Kemp just got posted on Ars Technica:
https://arstechnica.com/space/2023/08/chris-kemp-unplugged-astras-ceo-dishes-on-the-space-companys-struggles/
Chris is ever the optimist, but he seems to admit that Astra is one launch failure away from cancelling their rocket business. That means Rocket 4 needs to work on the first try, which seems almost impossible given Astra’s track record.
At this point, there are two ways for the launch business at Astra to fail. We can either have a launch failure again, or we can fail to launch.
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Lightning Round: Buying Rocket Lab is like sending money up in smoke, says Jim Cramer(CNBC)
https://www.youtube.com/watch?v=Yt1VXmn_6Eo
thought i'd post it here if any of you all are interested......but seems that cramer isn't interested in startups?
Analyst reports in tdameritrade are pretty favorable.....as a potential investor......where would you go (or do you go?) for the info on rklb? Seems like this would be a pretty good entry point - if in fact they are going to turn around and start posting profits....
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Lightning Round: Buying Rocket Lab is like sending money up in smoke, says Jim Cramer(CNBC)
https://www.youtube.com/watch?v=Yt1VXmn_6Eo
thought i'd post it here if any of you all are interested......but seems that cramer isn't interested in startups?
Analyst reports in tdameritrade are pretty favorable.....as a potential investor......where would you go (or do you go?) for the info on rklb? Seems like this would be a pretty good entry point - if in fact they are going to turn around and start posting profits....
Cramer saying don't invest in Rocket labs is the best endorsement for them possible. The mans a fraud and a failure. Rocket Labs looks good now!!
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Lightning Round: Buying Rocket Lab is like sending money up in smoke, says Jim Cramer(CNBC)
https://www.youtube.com/watch?v=Yt1VXmn_6Eo
thought i'd post it here if any of you all are interested......but seems that cramer isn't interested in startups?
Analyst reports in tdameritrade are pretty favorable.....as a potential investor......where would you go (or do you go?) for the info on rklb? Seems like this would be a pretty good entry point - if in fact they are going to turn around and start posting profits....
Jim Cramer doesn’t bother me. The part I’d view as more important is the question of whether they should be profitable yet.
You said “turn around”. Afaik they’re not a previously profitable mature company that needs to revise its operation and return to profitability. They’re a growth company following the general pattern of spending money to develop and expand, intending to lay the foundation for later profits.
We are getting closer to where the business might pay for its own growth efforts but they didn’t fail in some way by being unprofitable to date. Afaik they they had an ambitious five year plan with targets for performance in technical development and business growth. These implied an arguably reasonable shot at long term profits. Afaik they have, unlike most competitors, mostly hit these targets.
PS. In down markets current profits are popular, in up markets future profits more highly valued. Cramer is more follower than leader. Him disliking RKLB might be more a reflection of the recent market decline than the company’s prospects.
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Lightning Round: Buying Rocket Lab is like sending money up in smoke, says Jim Cramer(CNBC)
https://www.youtube.com/watch?v=Yt1VXmn_6Eo
thought i'd post it here if any of you all are interested......but seems that cramer isn't interested in startups?
Analyst reports in tdameritrade are pretty favorable.....as a potential investor......where would you go (or do you go?) for the info on rklb? Seems like this would be a pretty good entry point - if in fact they are going to turn around and start posting profits....
Jim Cramer doesn’t bother me. The part I’d view as more important is the question of whether they should be profitable yet.
You said “turn around”. Afaik they’re not a previously profitable mature company that needs to revise its operation and return to profitability. They’re a growth company following the general pattern of spending money to develop and expand, intending to lay the foundation for later profits.
We are getting closer to where the business might pay for its own growth efforts but they didn’t fail in some way by being unprofitable to date. Afaik they they had an ambitious five year plan with targets for performance in technical development and business growth. These implied an arguably reasonable shot at long term profits. Afaik they have, unlike most competitors, mostly hit these targets.
PS. In down markets current profits are popular, in up markets future profits more highly valued. Cramer is more follower than leader. Him disliking RKLB might be more a reflection of the recent market decline than the company’s prospects.
I think that last part is the key here, Cramer is only looking at the very short term and is only concerned with what the general market sentiments are, so something like RKLB that isn't expect to post profits for years (but is generating meaningful, growing revenue and has a plan to profitability in the next few years) isn't interesting to him. The long term opportunity is incredible, but the short term opportunity sucks. He wants to tell his followers about something that will make them money in a month, not in 5 years. Not that he actually succeeds in that goal, but that's his schtick.
Also, did you hear his callers? "I bought 2 shares of..." these aren't meaningful investors and they aren't having real conversations about these stocks. I doubt Cramer has even meaningfully looked at most of these stocks. These people aren't reading filings and tracking these organizations over time, they're buying to flip or because Cramer told them to buy.
Additionally, with Cramer (and others, but he is a really good example of this) his money isn't made from investing, it's made from providing an entertaining TV show about investing. It is hard for me to take him seriously.
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Thanks for the responses. Does seem a bit speculative and that there isn't really hard "evidence" either way - good prespects that may or may not be realized....The ongoing work with NASA is pretty compelling, other side is seems SEC says more insiders selling than buying....
Since it was down quite a bit today, picked up a few shares with pocket change that was jingling around in various account, 192 shares total, so really not much at all. Have a small limit order for 200 more in an IRA rollover account that was getting about 5% on the MM. That may or may not execute today, will see how things goes. I just did a good for today order.....seems the price is popping up rather than to my limit there!
Seems like buying 2000 would be a real "position" for me, and one where if they do succeed as planned, I'd get a real payout for it. But maybe I'm just too cautious - and a token amount may be all I do....
Can I still join the club?
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well - this was unexpected!
I was keeping an eye on my limit order and did not see the price dip down so I figure it just wasn't meant to be - but I got a partial execution that occurred 4 seconds before market close. My price was 5.61, but looks like close price was 5.65. I'm confused on how these things happen, frankly. Especially for such a low volume order.
So now I have 320 shares. :)
eta: some orders were at 5.62 earlier in the day.....
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Thanks for the responses. Does seem a bit speculative and that there isn't really hard "evidence" either way - good prespects that may or may not be realized....The ongoing work with NASA is pretty compelling, other side is seems SEC says more insiders selling than buying....
Since it was down quite a bit today, picked up a few shares with pocket change that was jingling around in various account, 192 shares total, so really not much at all. Have a small limit order for 200 more in an IRA rollover account that was getting about 5% on the MM. That may or may not execute today, will see how things goes. I just did a good for today order.....seems the price is popping up rather than to my limit there!
Seems like buying 2000 would be a real "position" for me, and one where if they do succeed as planned, I'd get a real payout for it. But maybe I'm just too cautious - and a token amount may be all I do....
Can I still join the club?
Welcome to the club :)
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Rocket Lab has successfully reflown their first Rutherford engine:
https://arstechnica.com/space/2023/08/rocket-lab-joins-spacex-in-re-flying-a-rocket-engine-to-space/
Next step is apparently to refly nine engines:
https://twitter.com/Peter_J_Beck/status/1694824384689525164?s=46
Here’s a photo of the reused engine:
https://twitter.com/RocketLab/status/1694445669002740176?t=2iYiea0tNBbKKeTM1BP3og&s=19
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Tough day. But I guess these things can happen in space industry. Share price down to about 4$ pre-market. Rough month - 50% down from 8$ a month ago.
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Crazy how a company that is consistently launching successfully has one miss and the price drops so much.
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It's not only that RocketLab had a launch failure, but Firefly* had a successful launch a few days ago. This is technically their second time reaching orbit but the first time they didn't quite make it to the INTENDED orbit.
Firefly is still behind Rocket Lab, but having a third viable looking new-space company putting satellites into orbit starts to weaken the hope launch customers were going to have a vested interest in Rocket Lab's success to avoid a de facto SpaceX monopoly on commercial launch.
*Which I think is only the third new space company to successfully put satellites into orbit.
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Things are looking really dire for Astra:
https://finance.yahoo.com/news/astra-space-exploring-options-including-235119400.html
At the time of posting this, ASTR stock is below $1.00 per share and the market cap is just $18.37M. This is the end of the line. Astra should be joining Virgin Orbit any day now.
*Which I think is only the third new space company to successfully put satellites into orbit.
Fourth. Rocket Lab, Virgin Orbit, Astra, and Firefly have all put satellites into orbit. There’s also the Chinese companies i-Space and Galactic Energy.
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Astra just defaulted on some of their debt:
https://www.cnbc.com/2023/11/03/astra-defaults-on-debt-agreement-may-not-be-able-to-raise-needed-cash.html
The company won’t last much longer. I wonder what they will say on their earnings call in November 13? And which companies are going to buy their assets?
By the way, it’s not even clear if Astra can spin off Apollo Fusion as a separate company. Astra badly bungled the acquisition and almost all of the former Apollo Fusion employees have left the company:
https://techcrunch.com/2023/08/28/astras-apollo-fusion-acquisition-followed-by-delays-and-desertion/
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Cramer saying don't invest in Rocket labs is the best endorsement for them possible. The mans a fraud and a failure. Rocket Labs looks good now!!
The ETF attempting to short Jim Cramer (SJIM) is down 6.4% since its inception in March.
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Cramer saying don't invest in Rocket labs is the best endorsement for them possible. The mans a fraud and a failure. Rocket Labs looks good now!!
The ETF attempting to short Jim Cramer (SJIM) is down 6.4% since its inception in March.
It's been about 2.5 months since Cramer's comment. The closest data from Morningstar is 3 month performance, where SJIM beat RKLB by over 40%.
SJIM +6.78%
RKLB -34.42%
https://www.morningstar.com/etfs/bats/sjim/performance
https://www.morningstar.com/stocks/xnas/rklb/trailing-returns
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Next Rocket lab launch:
Electron : QPS-SAR 5 "The Moon God Awakens" LC-1 28 Nov 2023
per:
https://forum.nasaspaceflight.com/index.php?topic=59494.msg2544088#msg2544088
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Customers pay to launch satellites into orbit, which Bryce Tech measures with kg launched into orbit. This year, SpaceX launched 381,278 kg versus 416 kg for Rocket Lab, a roughly 900x difference.
https://finance.yahoo.com/news/spacex-tender-offer-values-startup-225853647.html
(Source is 2023 Q3 report at [PDF] https://brycetech.com/briefing )
SpaceX is valued at $175 billion in private markets. If you only looked at kilograms launhed into orbit, that would value Rocket Lab at $200 million. I doubt SpaceX is 10x undervalued... so is Rocket Lab's $2.2 billion market cap overvalued?
https://twitter.com/elonmusk/status/1732393496428896557
https://finance.yahoo.com/quote/RKLB?p=RKLB
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Customers pay to launch satellites into orbit, which Bryce Tech measures with kg launched into orbit. This year, SpaceX launched 381,278 kg versus 416 kg for Rocket Lab, a roughly 900x difference.
https://finance.yahoo.com/news/spacex-tender-offer-values-startup-225853647.html
(Source is 2023 Q3 report at [PDF] https://brycetech.com/briefing )
SpaceX is valued at $175 billion in private markets. If you only looked at kilograms launhed into orbit, that would value Rocket Lab at $200 million. I doubt SpaceX is 10x undervalued... so is Rocket Lab's $2.2 billion market cap overvalued?
https://twitter.com/elonmusk/status/1732393496428896557
https://finance.yahoo.com/quote/RKLB?p=RKLB
Is Rocket Lab's only source of revenue launches? How many launches do they need in a year to be profitable as a company? What is the state of progress on their large rocket project?
Could the answers to any of these questions contribute to their market cap?
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Good question about Rocket Lab's other sources of revenue. Their latest quarterly report shows:
Space Systems revenue between $48.5 million to $52.5 million.
Launch Services revenue of approximately $16.5 million.
(I assume it would have been higher if not for the Sept 19 failure)
Your question about profitability assumes there's a direct relationship between number of launches and profitability. I'm not sure about that.
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With S&P 500 near record highs (4700+) and RKLB near record lows (under $4.35) today, is RKLB the best relative value it’s ever been?
Its new Electron launch went well. CEO Beck says the problem from last time is solved, but also was tricky because the simple problems have already been solved during the numerous previous launches. Does that mean investors are underestimating the company’s value?
https://spaceflightnow.com/2023/12/14/live-coverage-rocket-labs-prepares-return-to-flight-electron-launch/
Or is the low price correctly reflecting other information? Does Firefly’s progress shift the value proposition? Is there new information suggesting the future profit potential is lower than hoped?
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It's a bit cheesy but I really enjoyed reading the Ars Technica US launch company power rankinngs this year.
Rocket Lab is up 1 (displacing ULA who only managed to launch three rockets all year, still no Vulcan).
Firefly is up 2 and is probably a better comparator for Rocket Lab to measure themselves against than Astra, which was dropped from the list entirely this year.
https://arstechnica.com/space/2023/12/top-us-launch-companies-of-2023-the-ars-technica-power-ranking/
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Well this is some good news. 500M+ contract for multiple vehicles and launch. Even with the afterhours bump I am still slightly underwater, but I am increasingly glad I have been building my position for the last two years.
The rockets are flashy, but what I like seeing is consistent demand for the diversified space services the company offers.
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Damn good news. Yeah, that was a really important contract!!
In recent news, Rocket Lab has returned to flight, which didn’t really have any impact on the stock price because Electron will never be a money maker.
https://www.space.com/rocket-lab-return-to-flight-moon-god-awakens-launch
But what made the stock jump 22.8% today was the news that Rocket Lab landed a $515M contract with the SDA (US Space Force) to build 18 satellites!
https://spacenews.com/rocket-lab-wins-515-million-contract-to-build-18-satellites-for-u-s-government-agency/
This is a bigger and more comprehensive contract than the Globalstar contract, which was $143M for 17 partial satellites.
https://spacenews.com/globalstar-selects-mda-and-rocket-lab-for-new-satellites/
It has been so long since the Globalstar contract that I was beginning to doubt Rocket Lab’s ability to land these important contracts. To put things into perspective, how many Electron launches does it take to equal just this one SDA contract? At $7.5M per launch, it would take 69 Electron launches to equal the $515M SDA contract revenue, which is more than the 41 Electrons that Rocket Lab has launched in Electron’s entire six years of operation! Plus, Electron is break even on profitability, whereas these satellites should have a higher profit margin. So now you see why the market completely ignores Electron.
Satellites are Rocket Lab’s actual business! In other words, Rocket Lab is a satellite (“space systems”) company that also happens to build and launch rockets. At some point, hopefully once Neutron is operational, there should be some sort of synergy between Rocket Lab’s launch and space systems businesses, which in theory should give them an advantage over other companies, especially if they decide to build out their own satellite constellation.
In other news, Firefly Alpha failed again. This makes three failures in four launches, not the best track record! Reminds me of Astra. Space is hard!
https://spacenews.com/firefly-alpha-upper-stage-malfunction-puts-payload-into-wrong-orbit/
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But what made the stock jump 22.8% today was the news that Rocket Lab landed a $515M contract with the SDA (US Space Force) to build 18 satellites.
https://spacenews.com/rocket-lab-wins-515-million-contract-to-build-18-satellites-for-u-s-government-agency/
Did you notice the market priced in a contract for a half billion... by adding a half billion to $RKLB's market cap? I didn't realize the market took things so literally ...
https://finance.yahoo.com/quote/RKLB?p=RKLB
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Any reason for the RKLB drop yesterday?
Edit ; never mind, I searched and
https://www.fool.com/investing/2024/02/01/why-rocket-lab-stock-cratered-today/
Offering of convertible notes estimated dilution 16%
Preannounced earnings “miss“
Any other theories, preferably involving Taylor Swift and/or the Illuminati?
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Yes, the stock went down because Rocket Lab is raising money and diluting their shares:
https://www.spacedaily.com/m/reports/Rocket_Lab_Launches_275_Million_Convertible_Note_Offering_for_2029_Maturity_999.html
The good news is that these funds should keep Rocket Lab going for about two years or so. Hopefully they will start to be profitable by then!
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I took advantage of the dilution to add shares...U?
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No.
I couldn’t tell that it added value compared to my expectations. I hadn’t thought enough about dilution from fundraising needs and was caught by surprise; felt sad, couldn’t clearly decide to buy or sell, did nothing.
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I took advantage of the dilution to add shares...U?
I didn’t buy any shares, since I already have quite a few as it stands.
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Listened to the latest investor call:
https://investors.rocketlabusa.com/events-and-presentations/events/event-details/2024/Fourth-Quarter-2023-Financial-Results-Update-and-Conference-Call/default.aspx
Things are really starting to come together! I am excited about the future of this company!
A few takeaways:
* 22 Electron missions are booked for 2024. Contracts for 25 Electron launches (18 Electron, 7 HASTE) were signed in 2023. This is higher than the 16 launches per year that Rocket Lab says is necessary for Electron to be profitable. This is also much higher than the 10 Electron launches in 2023 which was still a record.
* The next step for Electron reuse is to launch an Electron with all 9 engines being reused from a previous flight. Also, the latest recovered Electron booster is in such good shape that Rocket Lab is evaluating whether it can be reflown entirely.
* With the help of the SDA space systems contract, Rocket Lab’s order backlog has topped $1B!
* The first reaction wheels for Rocket Lab’s mysterious megaconstellation customer should ship this year. This is a really big contract, and I strongly suspect it is for Amazon’s Project Kuiper.
* Rocket Lab is still on track to have a completed Neutron on the pad in December 2024, if “everything goes right.” It’s safe to say that everything won’t go right, so expect to see Neutron on the pad sometime in the first half of 2025.
* Total R&D spend for the Neutron program is estimated to be around $300M. This is on track for what Rocket Lab planned to spend at the start of the program.
* The first Archimedes is getting closer to completion, first engine should be on the test stand in April or May.
* Neutron launch pad is under construction. Canards and other subsystems are also well into development. A factory with automated fiber laying machine is being built in Maryland. Expect to see more completed parts of the Neutron rocket such as fairings, interstage, and tanks by Q2 2024.
* Rocket Lab has expanded their portfolio of spacecraft busses to four distinct products: Photon (the original), Lightning (larger, 12+ year lifespan spacecraft bus developed for MDA/Globalstar), Pioneer (more mobile “medium delta-V” Photon variant), and Explorer (deep space Photon variant).
* The reason for the capital raise and dilution is that Rocket Lab is getting ready to acquire another company! Rocket Lab made this crystal clear during the conference call, and said they already had enough cash to complete Neutron before the capital raise.
* Rocket Lab has reiterated that their ultimate goal is to build, launch, own, and operate their own satellite constellation for Space Services. Everything they are doing, in terms of building out satellite manufacturing, satellite operations, and launch capability is directed towards this ultimate goal. They have not revealed what type of constellation they want to build, and are focused on completing Neutron right now.
* Spending will peak this year, and cool down once Neutron is on the pad in early 2025. Once that happens, Rocket Lab should become a profitable company!
CNBC’s coverage here:
https://www.cnbc.com/2024/02/27/rocket-lab-rklb-q4-2023-results.html
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If anyone was thinking of investing in Rocket Lab, now could be a great time. The company is nearing a very important inflection point. Over the next 12-18 months, the following should happen:
1. Neutron should be complete, R&D spending will decrease, and Rocket Lab should become profitable.
2. Rocket Lab should sign some big contracts for Neutron launches, significantly boosting their order backlog. As of yet, there is not a single Neutron launch contract, because Rocket Lab refuses to sign any contracts before the rocket is ready. They don’t want to make concessions on the value of the contracts due to signing a contract without a functional rocket.
3. Rocket Lab should acquire one or more companies, increasing their vertical integration and growing the company even more.
4. Rocket Lab should finally reuse an Electron, further boosting the profitability of the Electron program.
Looking forward to the next 30 months, once Neutron is operational, we can expect that Rocket Lab will announce their own Space Services constellation and start putting up satellites. All the pieces are coming together to make this plan a reality, and when it happens, it will be huge. Unlike almost every other space company, Rocket Lab will be completely vertically integrated in terms of building, launching, and operating their satellites. This will make them highly competitive compared to other space services companies, many of which aren’t building their own satellites and rely on other companies to launch them. This is still a bit in the future, but I see all the pieces of the puzzle coming together in the next 18 months to make this dream a reality within the next 30 months.
Once the above happens, my opinion is that investors are really going to start waking up to see that Rocket Lab is a serious and successful space company, and the stock price should go up significantly.
Remember that Rocket Lab has a market cap of $2.29B and SpaceX has a valuation of $180B! That’s 80 times higher than Rocket Lab! Rocket Lab is making great strides to replicate SpaceX’s business model, more than almost any other company besides Blue Origin. If Rocket Lab can become worth just 1/10th of SpaceX, that represents an 8x increase from their current market cap.
What do you guys think?
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You started this thread in 2021 and it was right around that time I started investing into Rocket Lab...well the entity that would become rocket lab anyway.
At the time, I always considered this a 10+ year investment and as such I've been putting more money into Rocket Lab every month since 2021. All in, I'm down 14% on my investments into Rocket Lab.
And yet, I didn't plan on a 3-year investment, I planned on a 10 year investment. I bought in to the idea that this was a company that would develop and grow and that the prices I was (am) buying into would be the envy of my future self 10 years from now. And I still think that is the case. They are on a clear road to profitability when that is the number one driver of value. Based on their previous acquisitions, I fully trust them to purchase an organization that bolsters them even higher. They have all the right contracts in place and are on the cusp of a rocket that will compete effectively with SpaceX. They also own their own launch pads, they are building their own constellation of satellites, they are getting government contracts...everything I needed them to be doing 3 years from my first investment they are doing - and at a fantastic pace. If anything, they seem ahead of where I expected them to be at this time. They could be blowing it out of the water in another 2-3 years!
If anything I am more bullish on Rocket Lab than I was in 2021 and while I would love for their overall valuation to be higher, I am very happy with how they are setting themselves up for success long term. My hope is by the end of 2025 they are a $20/share company. My hope is by 2031, they are a $100/share company.
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What do you guys think?
I’m not as confident as you are, partly because:
1. I still have trouble getting a clear idea of likely market size
2. SpaceX’s successes are intimidating in that I suspect SpaceX has more ability to compete diectly with RKLB at some point than is usually imagined in this thread
3. Even so, SpaceX could easily be overvalued. The “compared to SpaceX” method may have a rickety overhyped base.
That said, I am encouraged by recent info:
4. Your remark that the dilution is for acquisition. I’d been thinking it was to complete existing plans, so I’d cautiously begun marking down my expected future value. I will stop that for now.
5. The general flow of news does suggest the company is achieving its goals on time, implying that its odds of achieving its mid-2020s goals have risen since my first purchases in the SPAC era.
6. Recent prices of $5.xx/share made me hesitate, but today’s price is a satisfyingly low $4.57/share.
So, overall:
7. With a low price compared to the starting point and especially compared to the rising overall market, this continues to be the best buying opportunity we’ve had.
8. The higher likelihood of success is shifting this from “fun game” to “has risks, but good enough to expand my stake”.
9. Today I’m selling other another security to free up cash for more RKLB. Let’s hope prices stay low for a few more days. :)
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RKLB has done nothing but burn through investors money faster than rocket fuel since flotation, but I guess we all have our vices.
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Here's a fun exercise I'll do over the weekend, how do their original financial predictions hold up?
https://s28.q4cdn.com/737637457/files/doc_presentations/2021/07/Rocket_Lab_-_Investor_Day_Slide_Deck.pdf
At a high level, they estimated to be at $267M in revenue in 2023 and they hit $244M. There's a $20M gap in there, but that seems extremely easy to overcome, especially since they had a few small hiccups this year.
Seriously, they are right on track and growing quickly year-over-year.
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Here's a fun exercise I'll do over the weekend, how do their original financial predictions hold up?
https://s28.q4cdn.com/737637457/files/doc_presentations/2021/07/Rocket_Lab_-_Investor_Day_Slide_Deck.pdf
At a high level, they estimated to be at $267M in revenue in 2023 and they hit $244M. There's a $20M gap in there, but that seems extremely easy to overcome, especially since they had a few small hiccups this year.
Seriously, they are right on track and growing quickly year-over-year.
They would have hit the revenue target if they didn’t have the launch failure and had the number of launches which was originally scheduled for 2023.
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RKLB has done nothing but burn through investors money faster than rocket fuel since flotation, but I guess we all have our vices.
Do you have a more specific reason why you think Rocket Lab is a bad investment? I welcome opposing viewpoints, but to say Rocket Lab is bad because they spent a lot of money is not a good argument. Many very successful companies burned money in their first decade. By all measures, Rocket Lab is very capital efficient when you compare them to their peers.
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RKLB has done nothing but burn through investors money faster than rocket fuel since flotation, but I guess we all have our vices.
Building reusable rockets and developing a workable space services business is “nothing”?
Um, startup companies spend money. It’s part of the business life cycle.
What would you call “something” in this context?
Are there any startup companies you respect, or do you think a society should stop building new businesses?
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9. Today I’m selling other another security to free up cash for more RKLB. Let’s hope prices stay low for a few more days. :)
Got lazy, waited too long - and got lucky; at $4.37, today's price is better than two weeks ago, while the S&P rose to record highs.
Loaded up today, more than doubling my stake. Now about 3% of investable assets.
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9. Today I’m selling other another security to free up cash for more RKLB. Let’s hope prices stay low for a few more days. :)
Got lazy, waited too long - and got lucky; at $4.37, today's price is better than two weeks ago, while the S&P rose to record highs.
Loaded up today, more than doubling my stake. Now about 3% of investable assets.
Just curious what everyone's initial and on-going portfolio % limits are for a stock like this? My limit for buying individual speculative stocks is 5% of NW (my NW is lower than my investible assets due to debt). I have no on-going upper limit that would cause me to sell before reaching my target price.
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My RKLB holding is around 20% of the portfolio. It is speculative investment but it is also asymmetric from upside/downside perspective. Market should be forward looking - however at this stage I assume there is zero potential Neutron success priced in. I like to pick up the stocks where many potential significant catalysts for the share price are not priced in. And I feel this is the case with RKLB. In terms of asymmetric risk - I would assign relatively small chance that I could loose all my invested capital. I am assuming small chance that RKLB goes bust. I would assign much higher chance that this can be a potential 1000% return in 10 years (20b $ market cap). And significantly higher chance that this is could be 500% return in 3 years (10b $ market cap). And a very high chance for 100% return within 1 year from now. Considering this - I am happy with my 20% allocation.
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I hope you're right, @time is money!
Bought a few more shares at today's price around $4.02, but spooked by why it keeps dropping. That and the for-me-large 3% (now 2.8%? I mean, 3.1%?) keep purchases limited.
Is it dropping because of new news? If so, what?
Or, because articles pointing out that losses have been slightly larger than predicted have been circulating? Can't find anything super recent, unsure of any correlations.
Bot-like articles discussing how recent earnings report had "11% larger losses" (an extra penny per share) compared to "expectations." Not sure if that penny represents a big trend. One article points out that RKLB has underperformed profit estimates (aka shown higher than expected losses) in 3 quarters out of the last 4. Given acquisitions and growth, not sure this is meaningful. Maybe the "stats" look bad while the underlying growth is good?
https://finance.yahoo.com/news/rocket-lab-usa-inc-rklb-223511559.html
Or, as in this slightly more analystic article, are RocketLab's falling cash reserves a legitimately worrying sign?
https://finance.yahoo.com/news/rocket-lab-usa-inc-rklb-213747433.html
Am I missing something? Worrying amounts of insider selling, for example?
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There isn’t any new news. It’s just stock prices moving around, I wouldn’t read too much into it.
Here’s a bullish article explaining how RKLB could be worth over $35 by 2030:
https://seekingalpha.com/article/4677230-rocket-lab-a-launchpad-for-high-returns
According to him, Electron was profitable last year!
As Rocket Lab is still in its early stages, it has been losing money since its inception. However, the recently posted 2023 annual report showed signs that the company is moving in the right direction. In 2023, Rocket Lab's revenues grew 16% YoY to $245.5 million, driven by an increase in launches from 9 to 10 in addition to 15% growth in the space systems segment. While that may seem like a modest increase, the company's margins improved substantially from 9% in 2022 to 21% in 2023.
So how did the company's margins more than doubled in a year? The main factor contributing to this margin expansion is improving launch economics. In 2023, Rocket Lab realized $71.8 million in launch services revenue from 10 launches, while its cost of revenue was $63.8 million. This means that the company realized around $7.1 million per launch while incurring $6.3 million in costs related to launches, which resulted in a gross margin of 11.2% for the launch services segment. This is the first time in Rocket Lab's history that its launch segment is profitable, as its margins have been negative over the years.
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Rocket Lab is getting ready to refly a first stage propellant tank from one of the boosters that was fished out of the ocean:
https://www.businesswire.com/news/home/20240410860946/en/Rocket-Lab-Returns-Previously-Flown-Electron-to-Production-Line-in-Preparation-for-First-Reflight
This contradicts what Rocket Lab said in the previous earnings call about the next step for reusability being to refly nine engines at once. Nevertheless, it is an important step forward! I will be very impressed if they can refly an Electron!
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Rocket Lab just launched their 50th Electron! They are the fastest commercial space company to launch 50 rockets to orbit, beating even SpaceX!
The first Archimedes engine is built and installed at the test stand. No hot fire yet, though.
https://spaceflightnow.com/2024/06/20/live-coverage-rocket-lab-to-launch-50th-electron-rocket/
https://x.com/RocketLab/status/1787590838178254925
Now is a good time to review where the competition is at.
As everyone knows, SpaceX successfully completed the 4th Starship test flight. Expect to see huge things from them in the future, the next flight is already pre-approved by the FAA and they want to try catching Super Heavy on the launch tower!
https://arstechnica.com/space/2024/06/spacexs-starship-took-a-beating-but-held-on-for-first-return-from-space/
https://arstechnica.com/space/2024/06/as-nasa-watches-starship-closely-heres-what-the-agency-wants-to-see-next/
Stoke Space just hot-fired their full-flow staged combustion methalox engine for the first time! This is amazing progress! Stoke Space is at the bleeding edge of rocket design, and they are actually building things that work.
Stoke Space is the only organization apart from SpaceX which is seriously trying to build a fully reusable rocket. Their Nova design is completely insane, the booster uses seven full-flow staged combustion methalox engines, and the second stage has a completely novel engine design that has never been built before. It is a hydrolox engine that uses a ring of nozzles in a circle around an actively cooled metallic heat shield. It behaves like an aerospike engine, but really it’s its own thing entirely. Did I mention Stoke Space has already hopped a prototype second stage that includes the novel engine design and heat shield? This is a company to watch!
Honestly, Rocket Lab seems to be behind where Stoke Space is with Nova. Stoke Space has hot-fired both their first and second stage engines, and hopped a second stage prototype. Rocket Lab has done none of this. Not to mention, Nova is a more advanced and future looking design than Neutron.
https://arstechnica.com/space/2024/06/stoke-space-ignites-its-ambitious-main-engine-for-the-first-time/
https://spacenews.com/stoke-space-flies-reusable-upper-stage-prototype/
Blue Origin put a full-sized mockup of a New Glenn on the launch pad. When we will see an actual completed rocket, who knows. At least their BE-4 engine finally launched something!
https://arstechnica.com/space/2024/02/big-year-ahead-says-jeff-bezos-as-new-glenn-rocket-rolls-to-launch-pad/
https://arstechnica.com/space/2024/01/after-its-impressive-first-flight-heres-whats-next-for-the-vulcan-rocket/
Relativity Space scrapped their medium lift rocket and redesigned the Terran R to be partially reusable and use traditional manufacturing techniques instead of 3D printing. At this point Terran R is literally a Falcon 9 clone. It may fly around 2027.
https://www.cnbc.com/2023/04/12/relativity-all-in-on-terran-r-rocket-shifting-3d-printing-approach.html
ULA is gearing up for their second Vulcan Centaur launch. But this isn’t a reusable rocket, so it’s basically obsolete and doesn’t matter. At least they are helping to test Blue Origin’s engines.
https://www.orlandosentinel.com/2024/06/24/united-launch-alliances-2nd-vulcan-rocket-arrives-to-cape-canaveral/
Firefly is getting ready to launch their fifth Alpha rocket from Wallops, where Rocket Lab also launches Electron. Firefly Alpha has failed on three of their first four flights, hopefully this one will go better. In any case, none of Firefly’s designs seem particularly innovative and I can’t see them surviving in this competitive space. A second bankruptcy seems likely.
https://spacenews.com/firefly-to-launch-alpha-from-wallops/
ABL still hasn’t done anything after their first launch failure over a year ago. Move along folks, nothing to see here. ABL is a weird company. Their rocket is small and boring. Nobody really knows what they are doing, maybe they ran out of money!
https://www.space.com/abl-launch-failure-fire-possible-cause
Astra went private at less than 1% of the company’s original value. They seem to have given up on rockets and are just building satellite engines. But they don’t make money doing that either. Not clear why this company is still in business!
https://arstechnica.com/space/2024/03/after-astra-loses-99-percent-of-its-value-founders-take-rocket-firm-private/
https://spacenews.com/astra-consolidates-facilities/
At this point, I think the only meaningful competition to Rocket Lab’s Neutron is from SpaceX and Stoke Space. Blue Origin and Relativity seem credible, but they are just building what amounts to more Falcon 9 clones and seem to be behind where Rocket Lab is with Neutron. ULA, Firefly, ABL, and Astra won’t amount to anything, in my opinion.
Is anyone else amazed at what Stoke Space has accomplished so far, and how bleeding edge their design is? Neutron looks kind of obsolete in comparison. Rocket Lab should worry about them, but good that Rocket Lab is diversified away from launch.
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Testing of Archimedes is underway! Hopefully hot fire soon!
https://x.com/Peter_J_Beck/status/1808635763195834536
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Just watched the new HBO documentary Wild Wild Space. Really enjoyed it. I definitely recommend anyone following Rocket Lab or commercial space industry in general to watch it. Without any spoilers and going much into details - I was quite shocked about Astra Space and Chris Kemp especially. Peter Beck on the other side - once again gives me the confidence that he is one of the best CEOs any investor can wish for.
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Just watched the new HBO documentary Wild Wild Space. Really enjoyed it. I definitely recommend anyone following Rocket Lab or commercial space industry in general to watch it. Without any spoilers and going much into details - I was quite shocked about Astra Space and Chris Kemp especially. Peter Beck on the other side - once again gives me the confidence that he is one of the best CEOs any investor can wish for.
That documentary is based on When the Heavens Went On Sale by Ashlee Vance, which I read. Some really interesting stories there! And yes, Chris Kemp doesn’t come off very good!
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Finally, Archimedes hot fire!
https://x.com/Peter_J_Beck/status/1820754090286289255
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no commentary on recent movement?
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no commentary on recent movement?
"Rocket Lab CEO: 'We have the right combination' to break SpaceX’s monopoly"
"Yet, despite those successes, Neutron presents the biggest opportunity to exert influence in the industry. If Rocket Lab successfully carries out the launch according to its timeline, it would mark the fastest time to market for a commercially developed medium-class launch vehicle."
https://finance.yahoo.com/news/rocket-lab-ceo-we-have-the-right-combination-to-break-spacexs-monopoly-194214038.html
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Wow, over my cost basis. Next stop: 100 bagger!
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I don’t see anything in the news that warrants such a run up in RKLB share price.
AST SpaceMobile (https://www.google.com/search?q=asts+stock), a company making Starlink-like satellites that can act as cell towers to normal smartphones, is up over 1,600% since May. It’s possible that investors are looking to RKLB as another such opportunity.
By the way, if you think ASTS is special, Starlink is also capable of communicating with normal smartphones, and Amazon’s Kuiper will almost certainly have similar capabilities. At 1,500 kg and with a communications array the size of a tennis court, AST SpaceMobile’s satellites may be larger and more powerful than Starlink, but Starlink outnumbers them by several orders of magnitude, and Starlink satellites are also getting much larger and more powerful.
The current generation of Starlink satellite is three times bigger (740 kg) than the original (260 kg). The next generation which is slated to launch on Starship will be twice the size (1,250 kg) of the current generation, and almost the size of AST SpaceMobile (1,500 kg). And again, these next generation Starlink satellites will outnumber AST SpaceMobile’s fleet by several orders of magnitude.
Nevertheless, looks like ASTS could be the first 10-bagger of the Space SPAC companies! After launching two satellites and securing deals with several major telecommunications providers, AST SpaceMobile has proven that they have the technology to compete directly with SpaceX’s Starlink, and the market has started to value them accordingly.
The last time RKLB pumped up like this was in July 2023, when it got to around $8 per share and promptly crashed. At that time, people blamed it on the WallStreetBets crowd getting overly excited.
It could be the same this time. Or maybe the market is finally waking up to the potential of Rocket Lab to be a serious competitor to SpaceX, and is valuing it accordingly? At the time of writing this, SpaceX is valued at $210B, Rocket Lab at $3.6B, and AST SpaceMobile at $10.4B. Who knows, maybe RKLB is the next ASTS?
Personally, I think the stock may collapse again like it did a year ago. Neutron hasn’t flown yet, and I don’t think the market is going to start valuing it in until the first Neutron is sitting on the pad.
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"Rocket Lab CEO: 'We have the right combination' to break SpaceX’s monopoly"
"Yet, despite those successes, Neutron presents the biggest opportunity to exert influence in the industry. If Rocket Lab successfully carries out the launch according to its timeline, it would mark the fastest time to market for a commercially developed medium-class launch vehicle."
https://finance.yahoo.com/news/rocket-lab-ceo-we-have-the-right-combination-to-break-spacexs-monopoly-194214038.html
By the way, Blue Origin’s maiden flight of New Glenn should be in a matter of months! Personally, I do think Blue Origin will be a bigger player than Rocket Lab, and New Glenn will get more business than Neutron.
https://www.nasaspaceflight.com/2024/08/blue-origin-launch-preps/
Interestingly, the payload for New Glenn’s first flight is two Rocket Lab spacecraft which are going to Mars! Flying an interplanetary spacecraft to Mars is not trivial, and Rocket Lab is doing it at a fraction of the cost of everyone who came before them. So Rocket Lab is still doing great, and demonstrating capabilities that few other companies can match.
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Couple great days indeed for Rocket Lab. Looks like the space sector is getting a bit of a traction in general. ASTS also Planet lab shares are up significantly in the past week. I remember July 23 run to 8$ and the crash back to 4s. I haven’t checked what was the volume back then but this run up has some really good volumes. As I had mentioned before - market should be forward looking. At this stage after successful Archimedes hot fire the success of Neutron is becoming more of a not too distant reality. When the price was 4$ I don’t think market was assigning any Neutron success in that valuation. Sure, as with everything concerning space - plenty still can go wrong but I am quite confident Neutron will be a success. At that point RKLB should be in a really good position to secure multi billion $ contracts. But even then - it’s not gonna be the end of story for Rocket Lab growth. Eventually they will be developing and launching their own constellations and this is where the profit margins are gonna be fat. Having said all that, my Rocket lab position had gone up to 50% of my portfolio. I sold 30% of it yesterday. It’s now 35% of my portfolio with average price of 3.8$. I might add back some if there is a bigger pull back after this run. If not remaining shares will hold for next 2 years and then re-view the thesis again. But most likely will sell next tranche when the price is 20$. That’s RKLB valuation of 10billion $.
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Guessing similar to @Herbert Derp. Sold just a quarter of shares, holding the rest.
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[/quote]
By the way, Blue Origin’s maiden flight of New Glenn should be in a matter of months! Personally, I do think Blue Origin will be a bigger player than Rocket Lab, and New Glenn will get more business than Neutron.
https://www.nasaspaceflight.com/2024/08/blue-origin-launch-preps/
Interestingly, the payload for New Glenn’s first flight is two Rocket Lab spacecraft which are going to Mars! Flying an interplanetary spacecraft to Mars is not trivial, and Rocket Lab is doing it at a fraction of the cost of everyone who came before them. So Rocket Lab is still doing great, and demonstrating capabilities that few other companies can match.
[/quote]
Unlikely Blue Origin’s New Glenn will meet October’s deadline after their rocket exploded yesterday during testing.
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Couple great days indeed for Rocket Lab. Looks like the space sector is getting a bit of a traction in general. ASTS also Planet lab shares are up significantly in the past week. I remember July 23 run to 8$ and the crash back to 4s. I haven’t checked what was the volume back then but this run up has some really good volumes. As I had mentioned before - market should be forward looking. At this stage after successful Archimedes hot fire the success of Neutron is becoming more of a not too distant reality. When the price was 4$ I don’t think market was assigning any Neutron success in that valuation. Sure, as with everything concerning space - plenty still can go wrong but I am quite confident Neutron will be a success. At that point RKLB should be in a really good position to secure multi billion $ contracts. But even then - it’s not gonna be the end of story for Rocket Lab growth. Eventually they will be developing and launching their own constellations and this is where the profit margins are gonna be fat. Having said all that, my Rocket lab position had gone up to 50% of my portfolio. I sold 30% of it yesterday. It’s now 35% of my portfolio with average price of 3.8$. I might add back some if there is a bigger pull back after this run. If not remaining shares will hold for next 2 years and then re-view the thesis again. But most likely will sell next tranche when the price is 20$. That’s RKLB valuation of 10billion $.
I'm not pumped about the WSB pump/dump going on with RKLB currently. Fully expecting a crash back down (again, as usual..) I'm up a bit now, but it's still such a small part that I'm not bothering selling. I'm too cowardly to invest more than ~$5-10k in one stock, so even now my RKLB holding is pretty small (1600 shares), barely 1% of my NW. Not worth fretting over. If it goes to zero I'm fine, but it's also unlikely to ever be a life-changing amount even if it goes up 10-20x. I'll hold through the inevitable drop again, for the long haul.
I had stopped accumulating shares since I'd reached my "comfort level", but this has maybe showed me there could be potential (and rest of my portfolio has grown, reducing my RKLB %). I might look to get a few more if it drops again.
This and ~120 GOOGL shares from 2016 are my only individual stocks.
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I am also not too excited about WSB pump and dump. However- it doesn’t look like we will crash again to 4s but who knows. If we do for no fundamental reason - will need to find a way to buy some of those share. I would like to believe 6-7$ is the new floor for the moment. How will stock react once we have Neutron on the pad? I would like to see 10$ per share once Neutron is on the pad.
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The WSB "pump and dump" hasn't been significant *yet*, just a little blip of volatility.
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So that was an exciting week!
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All I could determine as to the reasons for the huge price jump were some analysts raising their target price.
The good news, my April 2025 CALL @10 was bought. I wanted to sell just enough to cover my basis costs.
The bad news is I might have gotten 30 cents more :-)
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Rocket Lab have posted Archimedes hot fire video on X. It’s pretty exciting times. This will be an interesting week for the stock.
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Video of the hot fire if anyone’s interested:
https://www.reddit.com/r/RocketLab/comments/1frq20q/archimedes_testing_continues_at_stennis/
Was looking at some old posts, seems this one was fairly spot on! The price was $4.59 back then:
https://forum.mrmoneymustache.com/investor-alley/rocket-lab/msg3236577/#msg3236577
@alcon835, if you’re around, curious how your investment is doing?
Unfortunately, I had horrible timing on my investment and my cost basis is $12. So overall this has been a very bad investment for me. Kudos to those of you with lower cost bases!
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I am also not too excited about WSB pump and dump. However- it doesn’t look like we will crash again to 4s but who knows. If we do for no fundamental reason - will need to find a way to buy some of those share. I would like to believe 6-7$ is the new floor for the moment. How will stock react once we have Neutron on the pad? I would like to see 10$ per share once Neutron is on the pad.
I hope we can be at $15 by the time Neutron is on the pad!
Personally, I’m really excited about the increase in share price and what it means for Rocket Lab’s ability to raise capital and acquire other companies. If the share price goes up enough, Rocket Lab could turn into a giant snowball that starts absorbing lots of smaller companies.
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Wow, $12 is rough. My original purchase was at around $20, but I've been dollar cost averaging in so that's down to $5.50 or something.
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Personally, I’m really excited about the increase in share price and what it means for Rocket Lab’s ability to raise capital and acquire other companies. If the share price goes up enough, Rocket Lab could turn into a giant snowball that starts absorbing lots of smaller companies.
From this mid-August interview, it sounds like he's not interested in big spending, and already has what he needs within the company.
[Rocket Lab (RKLB) CEO Peter Beck] often reminds employees: “We have no money, so we have to think.”
...
Beck sees Neutron as “the last piece of the puzzle” in an ongoing quest to build out an end-to-end space company.
https://finance.yahoo.com/news/rocket-lab-ceo-we-have-the-right-combination-to-break-spacexs-monopoly-194214038.html
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From this mid-August interview, it sounds like he's not interested in big spending, and already has what he needs within the company
Adam and Peter have been talking about acquiring other companies for a while now, especially on the conference calls.
They’ve been super vague about what sort of companies they are interested in, but Peter has said the following:
- He’s interested in acquiring companies related to payloads and sensors.
- He wants to build, launch, own, and operate a commercial satellite constellation.
- Companies Rocket Lab tends to acquire are those Rocket Lab has worked closely with in the past, and who are “best in class”.
Personally, I think this means Rocket Lab might be interested in acquiring a company like BlackSky ($155M market cap). BlackSky builds, owns, and operates a constellation of Earth imaging satellites. They have worked very closely with Rocket Lab in the past and their satellites contain many Rocket Lab components and were launched by Rocket Lab. BlackSky ticks all the above boxes and has a market cap of less than the amount of capital that Rocket Lab raised.
In the Q2 2024 conference call, Peter did say that Rocket Lab was willing to raise even more capital if the right acquisition opportunity came along. The share price going up makes this much easier to do, which is why I’m excited.
From the Q4 2023 call:
Adam Spice: Turning to our recent fundraising of $355 million in convertible senior notes. With this financing, we believe we secured a large quantum of cost-effective and shareholder-friendly capital. The roughly $300 million of proceeds, net of our capped call and deal fees, positions the company to exercise inorganic adoptions to further vertically integrate our supply chain with the critical capabilities that are consistent with what we have done successfully in the past, which has enabled larger and more strategic program wins like the recent $0.5 billion SDA program.
Erik Rasmussen: Great. Maybe if I could just ask one more on the convert deal you announced, how did you arrive at this maybe versus other financing options you were contemplating? And then of the $300 million net proceeds, obviously, we mentioned M&A, what kind of assets could be interesting to bring in-house that would drive further your strategy?
Adam Spice: Yes, I’ll take the first one and I’ll pass off to Pete to kind of maybe provide a little more color on M&A targets as far as areas we might be looking at. But why convert I think, when we looked at all the different options and we did kind of exhaust all the different possibilities out there, it was the right vehicle to provide us the quantum of cash that we were looking to raise because we do see a lot of opportunities out there to grow inorganically and continue exploiting kind of M&A as a growth vehicle for us. And if you look at the flexibility that provides as well, there were no financial covenants related to it, it gives us a lot more freedom to run the business the way that we think it needs to be run. And from a cost to capital perspective, we just think it represented the lowest cost to capital versus some other kind of straight debt options and so forth.
So we ran kind of parallel processes, looking at different ways to bring capital into business, all the way from doing a straight equity offering to doing straight debt to then the convertible. And the convertible just came on top in almost every metric that we were looking to raise on. So to us, it became kind of a no-brainer as we learned more about each of those options as they would be presented to our business. So I would say we put some competitive tension in the process to make sure that we were picking the right product and ultimately felt comfortable that this indeed was the one.
Peter Beck: Yes. And on the assets for potential M&A targets. So, look, there’s a couple of things that we don’t have in [indiscernible] with respect to space systems. So there’s a potential for some tuck-ins. I would say we have a reasonable focus on payloads, I mean, as a prime now on the SDA mission, the only thing that we’re not really doing, the actual payloads and sensors, so I think that’s obviously an area of interest. And I’ll remind you that the end goal here is not just to be a bus provider or even a prime. It’s to ultimately have our own constellation in orbit providing services because that’s where we ultimately think this all goes. So, as I mentioned before, everything we do is within that kind of vision. And the same with any kind of M&A target, especially in the payload area.
From the Q1 2024 call:
Adam Spice: As discussed on our February earnings call, we generated $355 million in a convertible senior notes offering, which was coupled with two deployments of $43.2 million supporting our convertible capped call and equipment facility loan repayments, as well as $11.2 million in debt issuance cost, yielding $257.4 million of net financing. We exit Q1 with a strong position to exercise inorganic options to further vertically integrate our supply chain with the critical capabilities consistent with what we’ve done successfully in the past.
Adam Spice: Let’s say run rate or runway, I think that the — we raised a significant amount of capital, obviously, in this most recent transaction. And as we’ve stated, it was really all about providing inorganic growth optionality for us. And we do continue to see significant opportunities out there. I would say, the deal pipeline that we’re managing at this point is probably as full as it’s been in really the last couple of years as far as potential actionable targets for us. So I think the timing on raising that the funds was probably pretty ideal. If you look at the capital required to complete Neutron, we didn’t raise the money for that. We had liquidity for that. Given where we’re at in the program, we feel like we’re still very much on track to the $250 million to $300 million total spend to get Neutron to the pad.
And fortunately for us, not all of that spend has landed on our backs. We’ve had some support from various partners that have brought capital to the table as well. So I think that, again, we feel very good about our ability to scale our space systems business, continue to scale Electron, get Neutron to the pad with the capital that we had pre-convertible. And we continue to look for options to deploy that convertible proceeds to inorganic means. So yeah, and I think that right now, we feel really good about where we’re at from a liquidity perspective, and we really don’t see the need right now to think about anything beyond that.
Andres Sheppard: Got it. That makes sense. So it sounds, though, like you are potentially interested in continuing to grow inorganically and to that point, maybe remain active in the M&A market. But with that liquidity on hand, that’s certainly feasible, at least so far. So okay, that’s helpful.
Adam Spice: Yeah.
From the Q2 2024 call:
Anthony Valentini: Hey Guys, you got Anthony on for Noah tonight. Thanks for taking my question. I'm curious if you guys anticipate that you'll have to go back to the capital markets in order to fund some of these grander aspirations that you have.
Peter Beck: Well, I think it really depends. I think what we have right now, we're in an enviable position of the amount of cash and liquidity that we have to fund the business. I think that can, again, fund some of our M&A ambitions. I think that it really is going to depend on kind of the size, the opportunity that comes into focus. I think we're all, I think that right now we don't really say, hey, look, you know, let's not consider things that -- that are outside of our current ability to finance because I think, you know, for the right opportunity, the capital markets, are available, you know, again, but it has to be for the right opportunity. But right now we don't see anything that would cause us to go back to capital markets.
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Did people follow yesterday’s Starship launch? Have to say - it was absolutely amazing. The progress they have made is incredible. What does that mean for Rocket Lab? There are opinions that Starship success will make all other launch vehicles obsolete. I personally don’t agree with that. I don’t see space exploration being a monopoly. I am quite excited to see Starship success as it will bring more attention and traction to the whole space industry. And usually a rising tide lifts all boats.
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RL has a path that is proven to work that it can choose to follow or not - also SpaceX has outlined what paths did not work and why.
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Did people follow yesterday’s Starship launch? Have to say - it was absolutely amazing. The progress they have made is incredible. What does that mean for Rocket Lab? There are opinions that Starship success will make all other launch vehicles obsolete. I personally don’t agree with that. I don’t see space exploration being a monopoly. I am quite excited to see Starship success as it will bring more attention and traction to the whole space industry. And usually a rising tide lifts all boats.
My cost basis is $4.85 and RKLB is currently at $9.88. If I could sell it an invest in SpaceX I'd do it in a heartbeat. However, since SpaceX is not publicly traded RKLB is probably the best alternative.
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Did people follow yesterday’s Starship launch? Have to say - it was absolutely amazing. The progress they have made is incredible. What does that mean for Rocket Lab? There are opinions that Starship success will make all other launch vehicles obsolete. I personally don’t agree with that. I don’t see space exploration being a monopoly. I am quite excited to see Starship success as it will bring more attention and traction to the whole space industry. And usually a rising tide lifts all boats.
My cost basis is $4.85 and RKLB is currently at $9.88. If I could sell it an invest in SpaceX I'd do it in a heartbeat. However, since SpaceX is not publicly traded RKLB is probably the best alternative.
I believe there is only one private aerospace company worth about $200 billion: SpaceX. The shares don't trade on public markets, so the only valuation updates are from new investments ("funding rounds").
My third largest hedge fund investment is in "venture capital secondaries", which means they buy private shares from people who want to cash out - but have no market for their shares. This hedge fund holds an unknown aerospace company whose valuation keeps matching SpaceX's valuation. I assume they did this for legal reasons, as the identity of the unknown company seems comically obvious.
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Honestly even if SpaceX would be publicly traded I don’t think I would sell my Rocket Lab shares to buy SpaceX. In the next few (2-3) years I see more upside for Rocket Lab. Once Neutron is a success and starting to generate revenue winning billion $ government contracts - what would be the fair value of Rocket Lab? If space systems business keeping reasonable growth rate - I would think low valuation of 10 billion $, high valuation of 20 billion $. Let’s go with 20billion $ just because it’s much easier to see the valuation contrast vs SpaceX. For Rocket Lab to be valued at 20 billion - that’s around 4x from here. For SpaceX 4x from here means roughly 1 trillion $ valuation. Personally I do think Rocket Lab 20 billion $ valuation in the next few years is much more likely than SpaceX 1 trillion $ valuation.
Also if Starship cost per kg will really be as low as Elon is claiming. That will mean so much more businesses will be able to afford access to space. Will we then see huge demand growth for space systems? I guess we should and Rocket Lab will be in a good position to capture big part of that pie as well. Exciting times ahead!
@MustacheAndaHalf I hope the mysterious aerospace company is not Boeing 🤭
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Honestly even if SpaceX would be publicly traded I don’t think I would sell my Rocket Lab shares to buy SpaceX. In the next few (2-3) years I see more upside for Rocket Lab. Once Neutron is a success and starting to generate revenue winning billion $ government contracts - what would be the fair value of Rocket Lab? If space systems business keeping reasonable growth rate - I would think low valuation of 10 billion $, high valuation of 20 billion $. Let’s go with 20billion $ just because it’s much easier to see the valuation contrast vs SpaceX. For Rocket Lab to be valued at 20 billion - that’s around 4x from here. For SpaceX 4x from here means roughly 1 trillion $ valuation. Personally I do think Rocket Lab 20 billion $ valuation in the next few years is much more likely than SpaceX 1 trillion $ valuation.
Also if Starship cost per kg will really be as low as Elon is claiming. That will mean so much more businesses will be able to afford access to space. Will we then see huge demand growth for space systems? I guess we should and Rocket Lab will be in a good position to capture big part of that pie as well. Exciting times ahead!
@MustacheAndaHalf I hope the mysterious aerospace company is not Boeing 🤭
Boeing stock isn't private - it went public over 60 years ago. Venture Capital invests in private companies, to make profits when they go public (or are sold). So the private company is not Boeing. (Boeing has lost about a quarter of its market cap since 2022, which is further evidence it isn't Boeing stock)
Since 2022, the mysterious aerospace company doubled its valuation (and matched SpaceX's valuation). Since 2022, RocketLab (RKLB) went from $12.31/share to $11.32/share, for a loss of 8%. RocketLab has recovered well, but you are buying potential rather than past performance.
Back in Sept 2021, RocketLab's stock spiked to $18/share, or a roughly $9 billion valuation. It hovered around $15/sh ($7 billion) before falling back to earth. I would use those past numbers for estimates, rather than round numbers of tens of billions.
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Yes, I was just kidding about Boeing being the mysterious aerospace company.
I didn’t quite understand the logic about using past numbers for estimates though.
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Yes, I was just kidding about Boeing being the mysterious aerospace company.
I didn’t quite understand the logic about using past numbers for estimates though.
And I didn't understand the logic of "Let's go with 20billion $" for RocketLab valuation.
If space systems business keeping reasonable growth rate - I would think low valuation of 10 billion $, high valuation of 20 billion $. Let’s go with 20billion $ just because it’s much easier to see the valuation contrast vs SpaceX.
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You just took out 1 sentence out of the whole context which was: For Rocket Lab to be valued at 20 billion - that’s around 4x from here. For SpaceX 4x from here means roughly 1 trillion $ valuation. Personally I do think Rocket Lab 20 billion $ valuation in the next few years is much more likely than SpaceX 1 trillion $ valuation.
But it’s ok, we don’t necessarily need to understand each other.
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Elon Musk’s plan to “deregulate” the FAA must be bullish for the space industry because Rocket Lab stock just went up 10.50% post election, hitting $13.05.
I’m finally above my cost basis! It’s only been what, three years? Still not even close to beating the market on this one, sadly. Rocket Lab is the single worst investment of my life.
I’m sure a lot of you in this thread are beating the market right now, so great job on your investments!
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RKLB hit $15, closed at $14.78. Any thoughts?
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In other news, the launch industry continues to consolidate.
At this point, there are only three credible New Space launch companies: SpaceX, Rocket Lab, and Blue Origin.
Stoke Space has solid technology but they seem to be years away from launching anything into orbit.
We had big news on Relativity Space last week. Their 3D printing technology turned out to be nothing more than a gimmick and now they are running out of money:
https://www.msn.com/en-us/money/other/relativity-space-faces-cash-drain-exploring-options/ar-AA1tm2tA
Back in September, Relativity got caught trying to pass off an Ariane 6 fairing as their own:
https://arstechnica.com/space/2024/09/relativity-space-has-gone-from-printing-money-and-rockets-to-doing-what-exactly/
Word on the street is that Relativity is toast. People have started talking about Tim Ellis the same way they talked about Trevor Milton. I don’t think he is going to be able to raise the funds needed to keep the company alive.
Things are looking very bad for ABL Space Systems who have lost two rockets now without achieving any successful flights.
Firefly has a few successful launches but doesn’t seem to be going anywhere.
Astra is somehow still alive but seems to be nothing more than a hollowed out shell of a company at this point. I think the US military is keeping them alive because they want “responsive launch.”
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Any idea if SpinLaunch is still moving forward? I really liked the concept. They seemed to get a lot of hate online, like people expected the first outdoor tests to go perfectly.
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No thoughts, in it for the lolz. To the moon!
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Any idea if SpinLaunch is still moving forward? I really liked the concept. They seemed to get a lot of hate online, like people expected the first outdoor tests to go perfectly.
Nobody really cares about SpinLaunch because their technology flat out doesn’t work for most payloads. Maybe some day in the future when we have large space stations in orbit and need a cheap way to fling inert payloads of food and water into orbit to resupply them, SpinLaunch will make some sense. But they will always be stuck in a tiny niche because of physics.
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As if things couldn’t get any better, Rocket Lab stock is up 25% to $18.39 in after hours today!
This is the result of a very strong Q3 2024 earnings, where revenue is up 55% from a year ago. Rocket Lab also remains a fiscally disciplined and efficient company, beating analyst expectations on loss per share. Finally, the first Neutron launch contract has been signed. A “confidential commercial satellite constellation operator” signed for two missions in mid-2026.
https://www.cnbc.com/2024/11/12/rocket-lab-rklb-q3-strong-revenue-growth-first-neutron-deal.html
At this point, there are only three commercial launch companies that matter: SpaceX, Rocket Lab, and Blue Origin. I don’t see any other companies joining this club, the barrier to entry is simply too high.
Rocket Lab has distinguished itself from its peers, and despite being a smaller company than Blue Origin, is much more accomplished than them.
Apart from SpaceX, Rocket Lab is the only commercial New Space launch company to have achieved the items on the following list. Rocket Lab:
- is a fiscally disciplined and efficient company, with cash burn under control.
- has built a reliable orbital rocket.
- launches orbital rockets on a regular and rapid cadence.
- diversified their business into satellites and satellite components, and makes much more revenue from these businesses than from launch.
- has a credible plan to build their own satellite constellation and become a space services provider.
Not even Blue Origin can satisfy a single item on the above list! Other launch companies are not even trying to diversify their businesses away from launch, they are too busy burning away all their cash trying to build a rocket that can reliably reach orbit. They are all doomed. And Blue Origin would be doomed too, if it wasn’t for Jeff’s funding.
Rocket Lab is simply on a whole other level than their non-SpaceX competition. Rocket Lab has a diversified business with hundreds of millions of dollars of revenue from their satellite business. How much satellite revenue do the non-SpaceX launch competitors have? A big fat zero.
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But most likely will sell next tranche when the price is 20$. That’s RKLB valuation of 10billion $.
Are you still planning to sell that next tranche? ;)
From my perspective, we are still in early days. Neutron isn’t even on the pad. Rocket Lab is still worth less than 5% of what SpaceX is worth. Rocket Lab has not started its next company acquisition spree, which their increased valuation makes all the more easy. Rocket Lab’s satellite constellation is yet to be announced. The massive new space economy and broader ecosystem that Starship will create does not exist yet.
For what it’s worth, I believe Rocket Lab will acquire a constellation like BlackSky rather than build one from scratch. At Rocket Lab’s current $9B valuation, $200M BlackSky is pennies on the dollar and they can just snap it up.
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Any idea if SpinLaunch is still moving forward? I really liked the concept. They seemed to get a lot of hate online, like people expected the first outdoor tests to go perfectly.
By 'get a lof of hate', do you mean people pointing out that it doesn't work and their PR is full of shit?
https://www.youtube.com/watch?v=9ziGI0i9VbE
(and to be clear; that guy as a massive ahole for other reasons, but he does know physics).
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As if things couldn’t get any better, Rocket Lab stock is up 25% to $18.39 in after hours today!
massive wtf! Up 38% at open!
Sure earnings were good, but this does seem like a huge overreaction. I'm not planning on selling, still only a relatively small part of my portfolio. Of course regret not getting more at <$10, but there is still risk this could collapse again. I'd almost be surprised if it doesn't see significant drops one or more times before/at/after Neutron launch. They will probably announce an inevitable delay, and stock will drop 20% instantly..
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Good lord!
This is one of the few individual stocks I own, and it's a long-term position for me, but I am sorely tempted to cash out my cost basis amount and let the rest ride. Decisions...
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@Herbert Derp Yes, sold my next tranche today at $20.1. It looks like price had run up to 21$ or so since. I 100% agree with you, we are still in early days. The whole commercial space industry is in early days. We have probably just seen a quick sneak peek of what the industry will look like in 10 years from now. Early days indeed. But that also means there’s room for things to go wrong, Neutron can get delayed etc. Honestly at this point I think share price is running ahead of itself. Probably the first signed Neutron contracts helped the hype. But we are still years away from Neutron bringing in significant cash flow. Keep in mind that Neutron won’t be reusable for the first launches. If we have first launch mid 2025, next mid 2026, then next 2027 with caveat that there are no delays. Do we know when can we expect fully reusable vehicle? 2028? Coming back to my point that share price is running ahead of itself - yes, I was expecting 10 billion $ valuation, but not from the time I was posting it back in March 15. I was expecting RKLB could grow to 10billion $ company from there within 3 years not 8 months. Don’t get me wrong - exciting times, and I would be super happy to be proven wrong about selling the tranche today, but I like to stick to the plan. If we reached the target price in 8 months not 3 years, I still want to stick to the plan.
Even after de-risking, my RKLB position is still at 50% of my total portfolio. You mentioned it was your single worst investment. It was the same for me, my first purchase price was 12.40$. It was few years mostly downhill to 3.5$ or so. But over these 2-3 years I managed to build quite large position and it is clearly now my single best investment ever. I am sure it will be the same case for you and many others just not at this stage yet.
Also thanks for keeping this thread alive. Your Q3 recap is so on point. Could not agree more, each point you mentioned is spot on.
What a day for Rocketlab investors. What a few months even!
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Exciting! Up 50%, puts me at 3x my cost basis. I did better buying truckloads of RZV in 2020, but this was faster.
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Any idea if SpinLaunch is still moving forward? I really liked the concept. They seemed to get a lot of hate online, like people expected the first outdoor tests to go perfectly.
By 'get a lof of hate', do you mean people pointing out that it doesn't work and their PR is full of shit?
https://www.youtube.com/watch?v=9ziGI0i9VbE
(and to be clear; that guy as a massive ahole for other reasons, but he does know physics).
Yeah he is basically unwatchable, skipped forward a bit then stopped it. Think I saw that video some time ago. Cool thing about being FIREd is I can not give a duck about him or the topic to bother formulating my thoughts on it. I am not sure of the economics of it but I dont think the physics are as inherently impossible as his tone make out.
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RKLB hit $15, closed at $14.78. Any thoughts?
Wish I'd bought more around $4! And sold less at $9, then $11. Still, this year's earlier purchases & sales seem to have made up for the original losses from making the initial small "play" or "adventure" purchases at $10.80 as a SPAC.
With prices bobbling between $18 and $22 today, sold some more (averaging $20 almost to the penny). Sales today between 1.5% and 2% of financial assets; using $20 as the value, remaining RKLB shares are between 8% and 9% of financial assets. Done selling for now.
It's nice to the see market pricing the company closer to what its long term value seems to be. I can't tell at all though whether today's price is the lowest it'll ever be, or a top for the next year.
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Yeah he is basically unwatchable, skipped forward a bit then stopped it. Think I saw that video some time ago.
I knew this was a Thunderf00t video before I even clicked it. I closed the video as soon as I saw his name. Man, fuck that guy. His Starship livestreams are hilarious to watch, though!
Anyway, I don’t need to endure 18 minutes of Thunderf00t’s pompous drivel to write off SpinLaunch’s business case.
I don’t think SpinLaunch is impossible. I just think that due to the physics involved, it won’t work for any payload that isn’t (1) quite small and (2) an inert block of something that is immune to massive g-forces. So basically it only works to resupply people in orbit with basic necessities like food, water, and clothes.
Unfortunately for SpinLaunch, the market for such a resupply system currently doesn’t exist, and won’t exist for many years to come. And once that market does exist, you could just take that resupply stuff up on Starship or some other large rocket along with other heavy materials that have to get up into orbit anyway and aren’t compatible with SpinLaunch.
So there isn’t much purpose to SpinLaunch in my opinion. They are building something for a niche market that doesn’t currently exist, and which will probably be better served by other, more capable launch systems.
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Any idea if SpinLaunch is still moving forward? I really liked the concept. They seemed to get a lot of hate online, like people expected the first outdoor tests to go perfectly.
By 'get a lof of hate', do you mean people pointing out that it doesn't work and their PR is full of shit?
https://www.youtube.com/watch?v=9ziGI0i9VbE
(and to be clear; that guy as a massive ahole for other reasons, but he does know physics).
Yeah he is basically unwatchable, skipped forward a bit then stopped it. Think I saw that video some time ago. Cool thing about being FIREd is I can not give a duck about him or the topic to bother formulating my thoughts on it. I am not sure of the economics of it but I dont think the physics are as inherently impossible as his tone make out.
So you don't care to see if it's possible, but you think it is, based on his tone..? ooookay..? Pick any other spinlaunch debunk videos then, there are plenty. They did a faked "test" without vacuum, at barely speed of sound, and a projectile that wobble like crazy. Doesn't matter if you think it "could be possible", they haven't done anything close to that, and that was years ago.
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...
So you don't care to see if it's possible, but you think it is, based on his tone..? ooookay..? Pick any other spinlaunch debunk videos then, there are plenty. They did a faked "test" without vacuum, at barely speed of sound, and a projectile that wobble like crazy. Doesn't matter if you think it "could be possible", they haven't done anything close to that, and that was years ago.
This is what I am talking about. It was the first lager scale test - it did not work perfectly - wow - rarely does anything in aerospace work perfectly the first time. Yeah they had a break away membrane rather than fast open/close doors for the projectile and were not at full rpm or a higher level of vacuum, crazy how they had the option to not do a full up test with all the tech all at once the first time and the choose to test some parts without others. Test things in stages, learn what works, iterate? Would an aircraft first flight be seen as faked if they did not raise and lower the landing gear or kept the flaps in one fixed position?
He talked about heating in terms of fixed wing aircraft that deal with if for tens of minutes or hours, not single digit seconds. Put your hand in hot water for 2sec and 20min to see the difference. According to google some conventional rockets hit mach 25 around max q - wow how could they ever deal with the heat! Besides I am going to guess that the Venn diagram of things that can take 10,000g's and get a bit warm for a few minutes in launch has a good deal of overlap.
I worked with aircraft simulation for +20 years, I have never really like mach, it is mildly useful for somethings. It does not tell you how fast a thing is going, for that you need the reference speed of sound. Mach is a ratio that goes to one at some cool parts of The Right Stuff. Yeah I know aero coef treads get wiggly about around 1 and it is a useful modeling parameter.
If spin launch were building a conventional rocket and the first time they tried to launch anything it went to 30kft even without a payload and some stabilization imperfections I expect the internet would have been broadly more positive.
But yes they were building a system for a niche market that probably will not exist for many years and then other options may just be to economically established.
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massive wtf! Up 38% at open!
Sure earnings were good, but this does seem like a huge overreaction. I'm not planning on selling, still only a relatively small part of my portfolio. Of course regret not getting more at <$10, but there is still risk this could collapse again. I'd almost be surprised if it doesn't see significant drops one or more times before/at/after Neutron launch. They will probably announce an inevitable delay, and stock will drop 20% instantly..
100% agree. To those of you getting FOMO reading this thread, do not buy Rocket Lab right now! The stock is way too hot.
Remember, we are still in early days. Wait for the stock to cool down and then buy. Don’t be like me and jump the gun and end up with a cost basis that is way too high.
If our investment thesis is correct, investing in Rocket Lab in 2024 is similar to investing in Amazon in 2000. The stock is hot and there is a ton of hype. The industry is going to be huge and the company is in a key position to be a future winner. Patient investors stand to reap massive rewards. But it is still going to take years for the real growth to materialize.
Nevertheless, I am fairly confident that we have a winner on our hands with Rocket Lab.
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Firefly just raised $175M in a private fundraising round:
https://arstechnica.com/space/2024/11/firefly-aerospace-rakes-in-more-cash-as-competitors-struggle-for-footing/
Firefly is probably Rocket Lab’s most serious competitor after SpaceX and Blue Origin. We absolutely need to pay attention to what they are doing. But the fact is, they have yet to build a reliable orbital rocket that launches regularly and rapidly, nor have they had as much success as Rocket Lab in diversifying their business. Everything Firefly does, Rocket Lab does better.
On top of that, Firefly has already went bankrupt once and gone through at least three CEOs. One of their co-founders and primary investors was forced out of the company by the US government for being a Ukrainian. The company is a dumpster fire behind the scenes.
Anyway, it shows. Rocket Lab is currently worth $10B and Firefly is only worth $2B.
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100% agree. To those of you getting FOMO reading this thread, do not buy Rocket Lab right now! The stock is way too hot.
Remember, we are still in early days. Wait for the stock to cool down and then buy. Don’t be like me and jump the gun and end up with a cost basis that is way too high.
If our investment thesis is correct, investing in Rocket Lab in 2024 is similar to investing in Amazon in 2000. The stock is hot and there is a ton of hype. The industry is going to be huge and the company is in a key position to be a future winner. Patient investors stand to reap massive rewards. But it is still going to take years for the real growth to materialize.
Nevertheless, I am fairly confident that we have a winner on our hands with Rocket Lab.
Longtime reader, first time poster. Thanks to this thread and your in depth analysis, I’ve been dollar cost averaging since RocketLab went public via the SPAC. My DCA is ~6.50 with ~ 250 shares. This is all fun money but I’ve made 3k (on paper) in my Robin Hood account. So thank you! Only wish I could have put more in before it popped.
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Agree with the above. RKLB is already down 3% today from yesterday's highs. $20/share is not the new normal, no possible way. People are buying the hype and already folks are trying to sell out.
I've been dollar cost averaging from the SPAC days and have been up for awhile now (buying a ton at $4 is great now but sucked a lot a few years ago). I have no crystal ball, but I think sub $15 maybe even $10 is way more realistic until they have a successful Neutron launch and/or start to show actual profits.
Still, RKLB is exactly where we'd want them to be at this time - and much healthier company than we expected them to be by now in the SPAC days. And I agree that an acquisition of the right company goes a long way for them and their long-term value.
It's a great stock to be in and I'm so glad this thread dropped in the early days. I'm loving being invested in Space and hope to stay invested in RKLB for decades to come.
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ABL Space Systems just threw in the towel. Another Rocket Lab competitor bites the dust.
https://arstechnica.com/space/2024/11/citing-decreasing-launch-opportunities-abl-space-will-pivot-to-missile-defense/
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SpaceX now on its way to $250B valuation, up from $210B:
https://www.investopedia.com/elon-musk-spacex-plans-to-launch-tender-offer-that-could-value-it-at-usd250b-8746500
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By the way, you can listen to the Rocket Lab Q3 2024 conference call here:
https://www.youtube.com/live/KZgF4F6kO2k?t=2166
The transcript is here:
https://www.insidermonkey.com/blog/rocket-lab-usa-inc-nasdaqrklb-q3-2024-earnings-call-transcript-1390232/
Here are my notes:
- Peter Beck promises again that Rocket Lab is going to build its own rocket constellation. He says all the work they’ve been doing in launch and space systems is leading up to building, launching, operating, and selling space services from a constellation.
- Revenue is up 55% year over year. Expenses came in at the low end of expectations, slightly below analyst expectations.
- Backlog now sits at $1.05B. $721M space systems and $326M launch. 50% of backlog projected to convert to revenue within the next 12 months. This backlog does not include the contract for the two Neutron launches, they will be added to next quarter’s backlog.
- Rocket Lab is currently sitting on $508M in cash and marketable securities. This is more than enough to fund the company and they are continuing to look for opportunities to pursue inorganic growth by acquiring other companies, particularly in the “payload” area.
- Neutron is on track for a mid-2025 launch. Engine development and launch pad infrastructure buildout are going well. Tanks and fairings are coming together.
- Rocket Lab signed a contract for two Neutron launches at full price with more contracts to come from the same customer. Peter says the customer is a repeat customer who is building a large constellation and who doesn’t want to do business with their competitor. I am positive that the customer is Amazon, who is a repeat customer because of the large reaction wheel contract that is probably for Kuiper satellites. Furthermore, Amazon does not want to launch Kuiper on SpaceX because SpaceX directly competes with Starlink, so they are seeking contracts with other launch providers like Rocket Lab, ULA, Blue Origin, and ABL. Basically they are desperate for anyone but SpaceX to launch their satellites but will still resort to SpaceX if they have to due to the FCC use it or lose it deadline.
- Rocket Lab has been selected by NASA for a study on the Mars Sample Return mission and intends to make a very competitive bid on the mission.
- Frank Klein has been hired as Chief Operations Officer (COO), to help scale Rocket Lab’s manufacturing by applying automotive manufacturing techniques and methodology. Frank has 30 years of experience in auto manufacturing at Daimler, Mercedes Benz, and Rivian. He most recently served as COO at Rivian.
- Kenneth Possenriede, ex-CFO from Lockheed Martin has joined Rocket Lab’s board to help with the procurement of defense contracts.
- Rocket Lab has a $100M, zero margin contract inherited from SolAero that is taking some time to flush out of the balance sheet as the the contract is realized. New solar contracts are targeting 30% margins. This should be a big boost to Rocket Lab’s balance sheet once that single bad contract is done.
- Neutron will be targeting 1, 3, and 5 annual flights for the first 3 years. An analyst on the call pressured Peter that this seems slow and asked why can’t they scale faster. Peter doesn’t think they can scale faster than this, refuses to overpromise, and says Adam Spice asks him “every day” if they can find a way to scale faster. If Rocket Lab can achieve 1, 3, 5 for Neutron, they will beat Falcon 9 which was 2, 0, 2, 3 for its first four years. Honestly, even Starship has been flying a similar cadence. Rocket Lab wants paying customers from the second launch, and doesn’t want to keep launching empty rockets like SpaceX is doing with Starship.
- Peter is not concerned about the Elon and the Trump administration favoring SpaceX, he thinks that the Trump administration is the most pro-Space administration since the Apollo era, and “when Space wins, Rocket Lab wins.”
Overall, a really great conference call with great financial results and future outlook for the company!
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The consolidation continues. Lockheed Martin just completed their acquisition of Terran Orbital, one of Rocket Lab’s key space systems competitors:
https://spacenews.com/lockheed-martin-completes-acquisition-of-smallsat-manufacturer-terran-orbital/
Lockheed Martin is an OldSpace company. Not sure how Terran Orbital will thrive under OldSpace leadership. Lockheed Martin bought them at a big discount from their original SPAC price, so not sure they were thriving very much in the first place.
This leaves just York Space Systems and Redwire Corporation as Rocket Lab’s NewSpace pure-play space systems competitors. Personally, I think diversified companies like SpaceX and Rocket Lab that also have a space systems business will have more success than pure-play space systems companies. There is a certain synergy that comes out of also being a launch provider and constellation operator.
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Another +6%, and RocketLab's valuation becomes $10 billion. Quite the journey to $19/share.
The same President who created the Space Force will almost certainly provide favorable regulations for RocketLab. Since the election, the stock has nearly doubled. Is that excessively optimistic, or are other factors at play?
The December tender offer for SpaceX shares ($250B) represents a +19% increase from the June valuation ($210B). Meanwhile, $RKLB rose from $4.25/sh to $19.00/sh over the past 6 months (+347%). It seems like the two companies are receiving different boosts from the market.
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The same President who created the Space Force will almost certainly provide favorable regulations for RocketLab. Since the election, the stock has nearly doubled. Is that excessively optimistic, or are other factors at play?
The December tender offer for SpaceX shares ($250B) represents a +19% increase from the June valuation ($210B). Meanwhile, $RKLB rose from $4.25/sh to $19.00/sh over the past 6 months (+347%). It seems like the two companies are receiving different boosts from the market.
I think the incoming administration definitely provided a big boost to Rocket Lab stock due to the favorable future regulatory environment and governmental support for Space in general. But there is much more to this story.
I think the market is also realizing that Rocket Lab is the real deal. Their revenues are up 55% year over year, which means Rocket Lab is successfully executing on the plan of rapid revenue growth that they laid out in the investor presentation.
Secondly, it is becoming a lot more clear about who the winners are in this industry, now that Virgin Orbit went bankrupt and liquidated all assets, Astra ran out of money and went private on pennies to the dollar, Relativity has demonstrated they were all hype and are now running out of cash, and ABL has cancelled their launch program. These are all dead or dying zero revenue companies.
In the midst of all this failure, Rocket Lab is seeing 55% revenue growth year over year from diverse sources, sits comfortably on $508M in cash, and Electron is flying more frequently and reliably than ever before. The industry is consolidating into a small group of winners, which have a huge moat around them due to the immense barriers of entry to this industry.
Rocket Lab proving that they can execute is proof that they are one of the few winners in this industry, and the market is reacting accordingly. Since everyone already knew SpaceX was a winner, their valuation didn’t increase as much.
It’s also worth pointing out that Rocket Lab grew their revenue 55% year over year without making any major acquisitions over the last 12 months. At this time last year, Rocket Lab’s year over year revenue growth was inorganic; they were fresh off of an acquisition spree where they bought companies like SolAero. This time around, the year over year revenue growth is all organic growth, which makes a huge difference. It proves that the company can execute. Meanwhile, competitors are proving that they cannot execute.
If you’re looking for an analogy, the market’s treatment of Rocket Lab over the past six months is similar to what happened to Tesla in 2019 when they finally proved they could execute on the Model 3 production ramp.
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It’s just becoming so clear that almost all of the other NewSpace rocket startups are going to fail.
Some of them are failing so hard that it’s literally a joke. Virgin Galactic’s moronic business plan to launch a handful of rich customers on an expensive amusement park ride reminds me of that scene (https://youtu.be/xyyqoHCkw9I) from Austin Powers.
Sir Peter Beck: With this investment of 10+ years of R&D and hundreds of millions of dollars to create a rocket company, we could make billions! Sir Richard Branson: Why make billions when we could make... millions?
(https://upload.wikimedia.org/wikipedia/en/1/16/Drevil_million_dollars.jpg)
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I should have broken RocketLab's performance into phases, to calculate gains more precisely:
RocketLab's performance this year up to Nov 1, reaching $11.42/sh owing to its prior success
Post-election boost from Nov 1 to Nov 12, reaching $14.66/sh, a +28% gain
Quarterly earnings report, Nov 13 to now, reaching $19.00/sh, a +30% gain
It looks like the election and quarterly earnings played roughly equal roles in $RKLB's boost this month. As to $SPCE, it lost 2/3rds in the past 6 months, and 96% of its stock value in the past 5 years, leaving it with a market cap under $200M.
Blue Origin is still private, with inconsistent information about revenues - maybe billions ($4B? $5B?). They're rumored to be in talks to acquire a joint venture, which suggests they're doing well enough financially.
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As to $SPCE, it lost 2/3rds in the past 6 months, and 96% of its stock value in the past 5 years, leaving it with a market cap under $200M.
As of their Q3 2024 earnings, Virgin Galactic has $744M in cash and marketable securities. With a current market cap of $195M, this means that the market values their business at a whopping negative $549M! A bad joke of a company indeed! Why make billions when you can make… millions?
https://investors.virgingalactic.com/news/news-details/2024/Virgin-Galactic-Announces-Third-Quarter-2024-Financial-Results-And-Provides-Business-Update/default.aspx
Blue Origin is still private, with inconsistent information about revenues - maybe billions ($4B? $5B?). They're rumored to be in talks to acquire a joint venture, which suggests they're doing well enough financially.
I certainly wouldn’t characterize Blue Origin as “doing well enough financially.” Rather, the company has a unique financial situation. They benefit from Jeff Bezos’ infinite money glitch. He sells Amazon stocks to fund Blue Origin with $1B a year in free money. Jeff can easily keep doing this until he dies.
Unfortunately, infinite free money has made Blue Origin become bloated, inefficient, and lazy. A true sloth of a company. It doesn’t help that their company mascot is a turtle. In fact, Blue Origin was founded before SpaceX and has almost no commercial achievements to show for it. They have spent 24 years of R&D and countless billions, and have yet to launch a single thing into orbit.
In comparison, SpaceX and Rocket Lab are lean, efficient, fast-moving companies with proven track records of executing their business plans. If Blue Origin wants to truly compete with SpaceX and Rocket Lab, they need to make drastic changes to their company culture, which is extremely difficult for an organization of their size. In an attempt to fix Blue Orign’s broken culture, Jeff Bezos recently fired OldSpace CEO Bob Smith and replaced him with Dave Limp from Amazon.
Dave Limp was previously SVP of Devices at Amazon, which didn’t exactly have the best track record. The Kindle and Ring Doorbell were moderate successes, but the Fire Phone, Fire Tablet, and Amazon Echo are all considered to be failures. Echo and Alexa in particular had a reputation for being bloated and inefficient organizations that completely failed to produce profitable products. It isn’t even clear to me how a devices executive will succeed in aerospace. At least Bob Smith had a solid aerospace engineering background.
In comparison, Elon Musk and Peter Beck are both aerospace engineering prodigies, and basically serve as chief engineers for their companies. In my opinion, aerospace companies require CEOs with strong aerospace engineering backgrounds in order to be successful.
Despite all of the above, we still have to treat Blue Origin as a serious competitor to Rocket Lab. They have infinite free money and New Glenn development is ahead of Neutron, and will fly soon(ish), almost certainly before Neutron. They are also engaged in all sorts of serious R&D efforts including orbital space stations, lunar landers, and in-situ resource utilization from the Moon.
I wouldn’t be surprised if Blue Origin acquires ULA as well as the Starliner program from Boeing. ULA realizes they are toast and has been trying to sell themselves to another company, and Boeing realizes Starliner is a financial failure and wants nothing to do with it. Blue Origin should be able to salvage something from the corpses of these OldSpace programs.
Especially for Starliner, if Blue Origin acquires it from Boeing then they will be able to compete with SpaceX to send astronauts to the space station.
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It’s time to revisit my investment thesis. Many things have changed in the industry over the past few years, and the picture is becoming much clearer now.
A railroad to Space is currently being built, in the form of Starship. Starship will enable things that simply were not possible before. Governments will make serious efforts to build human outposts on the Moon and Mars. Large orbital space stations will be constructed, for space tourism and scientific research. Zero-g factories will be constructed in orbit, to enable the manufacturing of exotic materials that can’t be built on Earth. Orbital solar power plants will be built. Orbital propellant depots will be built to enable more efficient travel to other locations in the solar system. Our new railroad to Space will not just enable all of this new infrastructure, but a vast ecosystem of Space products and services to support it.
At the same time, satellites and spacecraft are becoming cheaper and easier to build. Probes to the Moon and Mars can be built and launched at a tiny fraction of previous prices. Countless probes will soon be sent all over the solar system. Extensive satellite constellations are being built for a variety of use cases, from everything from telecommunications to Earth imaging to missile defense. These constellations will not just be built over Earth, they will also be constructed over the Moon and Mars.
The Space economy consists of three layers, stacked on top of each other, with each inner layer enabling the outer layers on top of it.
The first layer is Launch, which consists of rockets that launch payloads into space. Launch is currently approximately a $10B market. Launch is the least valuable market, but also in many ways the most important, because it enables everything else. It is also the most difficult market to enter, because building rockets is really fucking hard. Building a successful orbital rocket requires technical aptitude that is greater than what is required for the other areas of the space industry, which is why almost every Launch company has failed horribly. They just didn’t have the technical acumen.
Furthermore, Launch companies are gatekeepers to the industry. As such, any company that does Launch will have intimate knowledge of the entire industry. They get to put their hands on all the payloads when the payloads are loaded into their rockets. And launch companies don’t just know the payloads, they know the orbital profiles too. They also understand the economics because Launch is such a big component of the cost of putting anything into space, and launch companies are involved in complex cost negotiations with anyone trying to put anything into space. As such, due to their position at the heart of the industry, successful Launch companies are super competent on a technical level, and know everything about the rest of the industry.
The second layer is Space Systems, which consists of satellites and spacecraft, and the sub-components used to build them such as solar panels, thrusters, reaction wheels, and star trackers. Space Systems is currently approximately a $20B market, twice that of launch. This market is much larger and more diverse than launch. The number of satellites being launched is increasing exponentially, and will continue to do so for many years to come. Finally, any company involved in the manufacture of satellites and satellite components has intimate knowledge about the economics of what it takes to build a profitable satellite and sell services from it.
The final layer is Space Services, which is currently a $320B market, a whopping 32 times the size of Launch and 16 times the size of Space Systems. This market encompasses the services which are sold from infrastructure in space. This encompasses businesses such as telecommunications, Earth imaging, and defense systems like hypersonic missile tracking. But you can’t sell services from space without the Space Systems infrastructure to host them, and the Launch services to put that infrastructure into orbit.
A small group of Space companies stand to benefit the most from the future Space economy. These companies are diversified across all three layers of the space industry, rather than concentrated within a single layer. This is because expertise in an inner layer gives synergies and advantages to the outer layers. The most obvious benefit is vertical integration. If you can launch your own satellites, it’s cheaper and more timely than hiring someone else to launch them. If you can build your own satellites, it’s cheaper than hiring someone else to build them. So on and so on.
A company who can put a rocket into orbit and deliver payloads to precise orbital profiles can easily master controlling the flight of satellites in orbit, and the navigation of spacecraft throughout the solar system. Due to the gatekeeper effect, any company involved in Launch has intimate knowledge about the economics of Space Systems and Space Services. And any company involved in Space Systems has even more intimate knowledge about the economics of Space Services, especially if they are a supplier of satellite components across the entire market, and build satellites for various customers. Simply put, a successful Space Systems company has intimate knowledge about how to build successful satellites, and you need successful satellites to offer competitive Space Services.
There is only one successful company who has diversified and vertically integrated across Launch, Space Systems, and Space Services: SpaceX. And there are only two other companies who have a credible chance to join SpaceX: Rocket Lab and Blue Origin. Of these two, only Rocket Lab has built a successful business vertically integrated across Launch and Space Services. Rocket Lab has a credible plan to enter the Space Services market, having succeeded in the previous two layers, it is only a matter of time. Furthermore, Peter Beck has promised repeatedly that Rocket Lab will build, launch, own, and operate their own constellation of satellites and sell Space Services from it, and that all the groundwork Rocket Lab has laid up until now is to prepare for this eventuality.
Blue Origin is very much a work in progress, as they have still yet to launch anything to orbit or launch any significant commercial products. However, Blue Origin has ample financial resources and is positioned for moderate success in the near future across all three layers of the industry. The only other company that even stands a chance of competing with SpaceX, Rocket Lab, and Blue Origin is Firefly Aerospace, but they are so far behind the other three companies.
Rocket Lab further distinguishes itself from Blue Origin because they have an aerospace engineering prodigy CEO who used to literally build rockets in his own backyard, whereas Blue Origin’s CEO was in charge of Kindles at Amazon. Furthermore, Rocket Lab has a strong track record of fiscal discipline, and have executed almost flawlessly despite raising a small fraction of the capital available to SpaceX and Blue Origin, which have almost unlimited capital. Blue Origin is a bloated and wasteful company that has invested vast sums of money into R&D with very little to show for it. Firefly on the other hand has gone bankrupt once already and is on its third CEO.
Next, the barrier to entry for the Space industry is extremely high. The chances of any other company joining SpaceX, Rocket Lab, and Blue Origin is low. Even Firefly has the odds against them. Simply put, building a successful Space company requires many years of R&D and hundreds of millions of dollars in capital. Many companies have tried to do what Rocket Lab does, but they all keep failing. Just look at Virgin Orbit, Astra, ABL, and Relativity if you want some examples. Space is hard!
It is important to point out that SpaceX won’t be a monopoly. Nobody wants a monopoly, not even SpaceX, as it will bring the ire of the government down upon them. Furthermore, Rocket Lab and Blue Origin are ready to raise hell if SpaceX starts behaving in an anticompetitive way. Aerospace companies love to file lawsuits.
Finally, consider the valuation of SpaceX. They are valued at $250B, whereas Rocket Lab is valued at a measly $10B. As SpaceX builds their railway to space and vastly expands the Space economy, I can easily see their valuation going to $1T and Rocket Lab going to $100B, which is a 10x opportunity from where we currently sit. And even then, Rocket Lab would still be worth only 10% of SpaceX. The notion that Rocket Lab needs to “catch up” to SpaceX in order to be successful is absurd. They only have to reach 10% of SpaceX’s valuation to have massive upside as an investment opportunity. If they reach 20% of SpaceX’s valuation, the upside is ludicrous.
Elon haters should relish the opportunity of investing in Rocket Lab. We all know that the incoming Trump administration’s promise to deregulate the space industry will only help both SpaceX and Rocket Lab. Now, imagine if another administration eventually comes into power that is more hostile to Elon Musk. Imagine if Elon Musk gets the Jack Ma treatment from the US government. If just 20% of SpaceX’s business is shifted to Rocket Lab, that represents $50B in value, or a whopping 500% increase from Rocket Lab’s current valuation. So basically, if SpaceX wins, Rocket Lab is going to be raised up with them. And if Elon Musk loses, Rocket Lab is going to benefit even more. This is important!
I can’t stress enough that Rocket Lab has a proven track record when it comes to execution. Electron would have succeeded on its first launch, if not for a software bug outside of Rocket Lab’s control. Rocket Lab was the fastest commercial company in history to reach the milestone of 50 successful orbital launches, beating even SpaceX. Rocket Lab has successfully diversified into Space Systems, with almost 70% of their revenue being Space Systems. Rocket Lab has hundreds of millions of dollars in revenue which is growing organically at a rate of 55% year over year. This is a real company with real execution. Peter Beck says that he wants everything that goes to space to have a Rocket Lab logo on it somewhere, and he isn’t kidding. For example, Rocket Lab currently manufactures about 50% of the solar panels that go into space.
In conclusion, a great railroad is being built to Space. A vast ecosystem of Space infrastructure and services is about to be created. Rocket Lab is in a key position to dominate this new Space economy, and is surrounded by a huge moat to ward off competitors. It seems undervalued compared to its rival SpaceX. And most importantly, it is the only such company that normal people can invest in; SpaceX, Blue Origin, and even Firefly are all private companies. Rocket Lab’s valuation is soaring, and they will use this public currency to continue acquiring smaller aerospace companies up and down the supply chain to further extend their dominance. As we move into the future, the Space industry will only expand in value while consolidating in players, and Rocket Lab is one of the winners of this new Space Race.
So, does my thesis make sense? Anything I missed? Anything you disagree with?
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I didn't realize how much Blue Origin was propped up by Bezo's wealth. The main risk they pose is inflating prices of companies that Rocket Lab wants to buy.
Jack Ma became too powerful and vocal for the Chinese Communist Party, of which he is (was?) a member. The United States doesn't shut down entire industries like China shut down tutoring companies. So I don't see the pathway where someone's bias shifts business from SpaceX to RocketLab.
The U.S. might one day have a base on the moon, or factories and space stations that you describe. But that misses a key question: when? If those things happen 50 years from now, will you still be holding the stock to benefit from it? You need to consider which of those developments is most likely to happen, and happen while you hold Rocket Lab stock.
There was a long gap from when the U.S. landed on the moon, and anyone returned there. It seems like a vanity project for countries to prove themselves - and that's just visiting the moon. I think a moon base happening within a reasonable time frame is the least likely prospect.
Starlink provided modems for people in the aftermath of a hurricane, when roads became impassable. While people were very happy with the product, those in big cities will probably not like the speed (25 to 100 Mbps) or cost ($120/month plus $349 for equipment). I'm less clear on which satellite services will grow the most over the next 10 years.
https://www.cnet.com/home/internet/starlink-internet-review/
I personally don't think exotic materials built in space will serve a commercial purpose. The materials would need to play a vital role in very expensive equipment. Maybe a semiconductor fab would justify that spending, since they cost billions to build and are no longer cutting edge within a few years.
I'm not aware of scientific advances that came about from the International Space Station. I'm sure advances were made, and then forgotten by most people. I think voter support won't be there, for funding another space station. Most likely, other countries will ask China for permission to do experiments on their space station.
NASA had a (government-run) monopoly on U.S. space travel for decades. I don't see the antipathy for having one main provider like SpaceX. People search with Google, visit Facebook and Instagram for social media, and order things from Amazon. People are pretty comfortable with companies that border on monopolies, so your discussion about not liking monopolies seems like thin ice for Rocket Lab to stand on. Better would be a niche it fills, that SpaceX doesn't. Or an area where business is booming to such an extent, Rocket Lab will always get its share of orders.
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There is a big difference between social media (near) monopolies and ones critical to national defense. I have been in meetings where military has straight up said they will not buy Boeing or Lockheed as the last aircraft the bought was from them and they need to alternate - in effect. The dod will not allow a monopoly with getting to space, dod has been burnt on only one supplier existing to many times.
Space factories: I think I had heard that the initial products would be for medicine, high value, low mass, for as far as for things that would be transported back down to Earth.
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There is a big difference between social media (near) monopolies and ones critical to national defense. I have been in meetings where military has straight up said they will not buy Boeing or Lockheed as the last aircraft the bought was from them and they need to alternate - in effect. The dod will not allow a monopoly with getting to space, dod has been burnt on only one supplier existing to many times.
Space factories: I think I had heard that the initial products would be for medicine, high value, low mass, for as far as for things that would be transported back down to Earth.
I agree. But this administration will be historically corrupt and an oligarchy on a level we have never seen before (or at least not since the robber barons). So it's hard to guess what might happen. Elon got his claws into government for one reason; to enrich himself and benefit his companies as much as possible. He could, and I don't doubt would; steer 100% of US space spending to spaceX, and bury competition in regulation, investigations and other delays. Which of course with the high capital spend rate, some simple lawsuits that effectively cause a few years of delay will be the end of any company in this space. So I'm not as optimistic that this admin would be good for RKLB. It could also be the end of it. The hope is that the actually sane people lower down in DOD etc will be enough of a break and argue that having more than a single monopoly company, run by a certified lunatic, is essential for the US national security. Who wins this fight will decide the fate of RKLB. Trump could in one of his unhinged rants send a tweet at 3 am that spaceX is now NASA, and RLKB shares drop 80%.
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There is a big difference between social media (near) monopolies and ones critical to national defense. I have been in meetings where military has straight up said they will not buy Boeing or Lockheed as the last aircraft the bought was from them and they need to alternate - in effect. The dod will not allow a monopoly with getting to space, dod has been burnt on only one supplier existing to many times.
Space factories: I think I had heard that the initial products would be for medicine, high value, low mass, for as far as for things that would be transported back down to Earth.
I agree. But this administration will be historically corrupt and an oligarchy on a level we have never seen before (or at least not since the robber barons). So it's hard to guess what might happen. Elon got his claws into government for one reason; to enrich himself and benefit his companies as much as possible. He could, and I don't doubt would; steer 100% of US space spending to spaceX, and bury competition in regulation, investigations and other delays. Which of course with the high capital spend rate, some simple lawsuits that effectively cause a few years of delay will be the end of any company in this space. So I'm not as optimistic that this admin would be good for RKLB. It could also be the end of it. The hope is that the actually sane people lower down in DOD etc will be enough of a break and argue that having more than a single monopoly company, run by a certified lunatic, is essential for the US national security. Who wins this fight will decide the fate of RKLB. Trump could in one of his unhinged rants send a tweet at 3 am that spaceX is now NASA, and RLKB shares drop 80%.
Fair. I guess we have to see how far the old "the president is bound to no law" thing goes... If only the dissolution of NASA were the worst possible outcome.
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Starlink provided modems for people in the aftermath of a hurricane, when roads became impassable. While people were very happy with the product, those in big cities will probably not like the speed (25 to 100 Mbps) or cost ($120/month plus $349 for equipment). I'm less clear on which satellite services will grow the most over the next 10 years.
https://www.cnet.com/home/internet/starlink-internet-review/
Amazon and AST SpaceMobile are both in the process of building large telecommunications constellations to rival Starlink.
There are a ton of Earth imaging companies who own constellations. Planet Labs is the biggest one.
The DOD is building a bunch of constellations for military purposes.
That’s just to make a few! And Starship is going to enable things that seem like dreams right now, like commercial space stations and government bases on the Moon. This industry is just getting started.
I personally don't think exotic materials built in space will serve a commercial purpose. The materials would need to play a vital role in very expensive equipment. Maybe a semiconductor fab would justify that spending, since they cost billions to build and are no longer cutting edge within a few years.
Varda Space Industries does this. They are manufacturing pharmaceuticals in space. Microgravity manufacturing will become a thing, in my opinion. And Rocket Lab has been building spacecraft for Varda, by the way. This collaboration shows how a company like Rocket Lab can benefit from the growth of the entire industry.
https://en.m.wikipedia.org/wiki/Varda_Space_Industries
https://www.space.com/varda-space-microgravity-pharmaceutical-production-success
https://www.rocketlabusa.com/updates/rocket-lab-completes-second-spacecraft-for-varda-space-industries-advancing-in-space-manufacturing/
Jack Ma became too powerful and vocal for the Chinese Communist Party, of which he is (was?) a member. The United States doesn't shut down entire industries like China shut down tutoring companies. So I don't see the pathway where someone's bias shifts business from SpaceX to RocketLab.
Elon Musk has become too political, and is overreaching in his pursuit of ever more power in my opinion. I think there is a very real risk for Elon and his companies that he will suffer the same fate of Jack Ma and get smacked down by the government. Especially a future administration which is politically opposed to Elon.
For example, we have already seen the following.
The authors of the Inflation Reduction Act tried to exclude Elon’s companies from receiving tax credits because they are not unionized:
https://www.businessinsider.com/elon-musk-tesla-union-bill-tax-incentive-unionized-ev-makers-2021-9
The FAA tried to keep Starship grounded for two months for frivolous reasons:
https://arstechnica.com/space/2024/09/spacex-says-regulators-will-keep-starship-grounded-until-at-least-november/
California regulators attempted to block Falcon 9 launches due to disagreements with Elon’s politics:
https://www.politico.com/news/2024/10/10/california-reject-musk-spacex-00183371
Elon’s political enemies are calling for the removal of his security clearance:
https://jalopnik.com/its-well-past-time-for-the-u-s-government-to-remove-el-1851650034
The fact is, Elon foolishly went into politics and made a bunch of political enemies. If these enemies return to power, they will come after him and his companies. If this outcome happens, Rocket Lab will be one of the major beneficiaries.
There is a big difference between social media (near) monopolies and ones critical to national defense. I have been in meetings where military has straight up said they will not buy Boeing or Lockheed as the last aircraft the bought was from them and they need to alternate - in effect. The dod will not allow a monopoly with getting to space, dod has been burnt on only one supplier existing to many times.
I agree. But this administration will be historically corrupt and an oligarchy on a level we have never seen before (or at least not since the robber barons). So it's hard to guess what might happen. Elon got his claws into government for one reason; to enrich himself and benefit his companies as much as possible. He could, and I don't doubt would; steer 100% of US space spending to spaceX, and bury competition in regulation, investigations and other delays. Which of course with the high capital spend rate, some simple lawsuits that effectively cause a few years of delay will be the end of any company in this space. So I'm not as optimistic that this admin would be good for RKLB. It could also be the end of it. The hope is that the actually sane people lower down in DOD etc will be enough of a break and argue that having more than a single monopoly company, run by a certified lunatic, is essential for the US national security. Who wins this fight will decide the fate of RKLB. Trump could in one of his unhinged rants send a tweet at 3 am that spaceX is now NASA, and RLKB shares drop 80%.
This is completely unjustified. Not going to happen. As AlanStache also points out, the US government isn’t so corrupt that they will pick favorites in this manner and intentionally engage in anticompetitive behavior against SpaceX’s competitors. History shows that NASA, the Department of Defense, and federal regulators are strongly opposed to monopolies. Especially NASA and the DOD, because they know monopolies ultimately make the country weaker and run contrary to their organizational goals.
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I personally don't think exotic materials built in space will serve a commercial purpose. The materials would need to play a vital role in very expensive equipment. Maybe a semiconductor fab would justify that spending, since they cost billions to build and are no longer cutting edge within a few years.
Varda Space Industries does this. They are manufacturing pharmaceuticals in space. Microgravity manufacturing will become a thing, in my opinion. And Rocket Lab has been building spacecraft for Varda, by the way. This collaboration shows how a company like Rocket Lab can benefit from the growth of the entire industry.
https://en.m.wikipedia.org/wiki/Varda_Space_Industries
https://www.space.com/varda-space-microgravity-pharmaceutical-production-success
https://www.rocketlabusa.com/updates/rocket-lab-completes-second-spacecraft-for-varda-space-industries-advancing-in-space-manufacturing/
Having visited those links, I'm convinced. Crystals that can't form properly in earth's gravity can be created in zero g. And one of those is an HIV/AIDS treatment that has already been created in less efficient manners.
President Biden invited every automaker to the White House to discuss the future of EVs... but he excluded Elon Musk (probably, as you mention, because it is non-union). When Tesla had its HQ in California, Elon Musk feuded with California's governor over Covid restrictions. I assumed President Biden would be the only one to target Elon Musk, but Gavin Newsom could very well be elected President at some point, and have the same sentiments about Musk. So it's possible Tesla and SpaceX have "Elon Musk risk" in a future administration.
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When Tesla had its HQ in California, Elon Musk feuded with California's governor over Covid restrictions. I assumed President Biden would be the only one to target Elon Musk, but Gavin Newsom could very well be elected President at some point, and have the same sentiments about Musk.
That’s not entirely accurate. Gavin Newsom is staunchly pro-business and has generally supported Elon Musk’s activities in California. Newsom even recently sided with Elon when other California officials were trying to block Falcon 9 launches due to political reasons.
During the 2020 lockdown restrictions incident at Elon’s California factory, Newsom lifted the lockdown restrictions for California factories around the same time that other states were sending factory workers back to work.
However, local leftist Alameda county officials overruled Newsom and attempted to block Elon from reopening his factory. At that point, Elon’s factory was the only major automotive factory in the entire United States that was under lockdown restrictions.
Elon defied the Alameda county orders and sent his employees back to work anyway. Presumably, Newsom sided with him behind the scenes because within a day, Alameda county backed down and allowed Elon’s factory to continue operating.
That factory lockdown fiasco is what led to the famous “F*ck Elon Musk.” “Message received” Twitter exchange, which has become symbolic of Elon’s decision to migrate his businesses from California to Texas.
https://www.theguardian.com/technology/2020/may/12/elon-musk-tesla-reopening-lockdown-timeline
https://inshorts.com/en/news/california-lawmaker-says-fck-elon-musk-on-his-threat-to-leave-state-he-replies-1589169070616
https://www.politico.com/news/2024/10/18/elon-newsom-musk-california-spacex-00184408
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California regulators attempted to block Falcon 9 launches due to disagreements with Elon’s politics:
https://www.politico.com/news/2024/10/10/california-reject-musk-spacex-00183371
I wrongly assumed this included Gavin Newsom. Newsom isn't on the Musk bandwagon, according to a quote from that article, but he believes SpaceX should be allowed to launch Falcon 9 on the merits (calling balls and strikes).
Elon’s political enemies are calling for the removal of his security clearance:
https://jalopnik.com/its-well-past-time-for-the-u-s-government-to-remove-el-1851650034
That's one journalist writing an opinion piece. It refers to a Wired article I can't read, but still we're talking journalists giving their opinion. I would not classify them as "political enemies", when they lack political power. Political enemies, as I see it, would be Democrats in Congress. I see this as overblown.
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That's one journalist writing an opinion piece. It refers to a Wired article I can't read, but still we're talking journalists giving their opinion. I would not classify them as "political enemies", when they lack political power. Political enemies, as I see it, would be Democrats in Congress. I see this as overblown.
That’s a valid point. Democrats in Congress are not demanding that Elon’s security clearance be revoked, they are calling for an “investigation”:
https://www.bbc.com/news/articles/cy0l3wl76gzo
By the way, I do think journalists have political power. The frivolous two-month Starship launch delay from the FAA was incited by this journalistic hit piece:
https://www.cnbc.com/2024/08/12/spacex-repeatedly-polluted-waters-in-texas-tceq-epa-found.html
It is interesting to note that the FAA’s reasons for the frivolous delays had nothing to do with water pollution, even though they announced the delays immediately following that article.
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That's one journalist writing an opinion piece. It refers to a Wired article I can't read, but still we're talking journalists giving their opinion. I would not classify them as "political enemies", when they lack political power. Political enemies, as I see it, would be Democrats in Congress. I see this as overblown.
By the way, I do think journalists have political power. The frivolous two-month Starship launch delay from the FAA was incited by this journalistic hit piece:
https://www.cnbc.com/2024/08/12/spacex-repeatedly-polluted-waters-in-texas-tceq-epa-found.html
It is interesting to note that the FAA’s reasons for the frivolous delays had nothing to do with water pollution, even though they announced the delays immediately following that article.
The article claims the delay wasn't caused by it:
"In a lengthy post on X, following publication of this story, SpaceX said regulators have told the company that it can continue with launch operations despite the violation notices."
From the article, the issue seems to be compliance with state and federal (environmental) laws:
"Aerospace companies, including SpaceX, generally need to be in compliance with state and federal laws to gain approval from the Federal Aviation Administration for future launches."
Journalists influence public opinion when a story is widespread. Most individual journalists don't have widespread influence in that manner. I also think with regard to Elon Musk, he is now a known quantity. An article attacking him probably won't get as much attention, because people already know what to expect. But this is speculative on my part - I don't have proof.
Despite that, Elon Musk's next job is to propose massive cuts to the Federal budget. There's a reason politicians avoid this, and I think he'll suffer a wave of criticism over whatever he proposes. Blowback on SpaceX could increase over the next few years. But there's also the prediction that Trump can't share the spotlight, and may kick out Elon Musk (who loves the spotlight) just as he kicked out Bannon. When people see someone get fired - get their comeuppance - they tend to be more sympathetic.
I think this has a much bigger impact on Tesla, which relies on retail customers, as opposed to SpaceX, which doesn't.
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Yeah, the CNBC article came out in August and then a few weeks later the FAA announced the additional two month delay to Starship. SpaceX protested very vocally and the FAA changed their tune.
Anyway, Elon has gone all in to politics and there is no going back for him. The feuding between Elon and the Democrats is only going to continue to escalate from here. When the Democrats come back into power, they are going to make life very difficult for Elon and his companies.
And if the Democrats can hurt Elon, it will most likely help Rocket Lab.
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Good discussion about recent space history and current trajectories.
https://www.youtube.com/watch?v=_igVSf6tyJs (https://www.youtube.com/watch?v=_igVSf6tyJs)
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This is completely unjustified. Not going to happen. As AlanStache also points out, the US government isn’t so corrupt that they will pick favorites in this manner and intentionally engage in anticompetitive behavior against SpaceX’s competitors. History shows that NASA, the Department of Defense, and federal regulators are strongly opposed to monopolies. Especially NASA and the DOD, because they know monopolies ultimately make the country weaker and run contrary to their organizational goals.
You seem to have a very naive view of the this extremely corrupt administration. I suggest you take a look at the recent appointments to various cabinet posts.. Not just the top level leaders, they are clearly aiming to install pliant stooges to the lower levels as well. As they learned in trump 1.0, these lower level bureaucrats are the ones who can muck up their plans by simply refusing to carry it out (as you point out). Project 2025 clearly identified this, and has plans to avoid that mistake again. Anyone standing in the way of for example an Elon-monopoly can be fired.
Sure, the "US government isn’t so corrupt that they will pick favorites" ... yet. You can't cite "history", when this is a historical anomaly when it comes to oligarchical power and corruption.
And these people don't care if they "make the country weaker" as long as they can enrich themselves, their buddies, and punish the "wrong people". In their mind that's probably the same as making it stronger. A fox news (weekend!) host as sec def, chosen simply because he's ranted against DEI and want to remove women (and probably gay people) from the military? That's a person who's opposed to monopoly because it's "bad for the country", lol yeah right.. Not holding my breath.
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I'm guessing that:
1. The civil servants/ long time procurement leaders within NASA and DOD will do what they can to preserve both competitors (SpaceX, RKLB) but there will times when the political administration overrules them.
2. The stock price for RKLB will reflect some of the political administration's decisions quickly even though the practical effects would take longer
3. At some point the market will mark down RKLB after realizing the possibility of Musk competitively influencing the US govt against RKLB
4. At some point Trump will fire or de-emphasize Musk to keep the spotlight on himself; after that, the market will mark up RKLB and mark down SpaceX
5. Of course, the cycle could then reverse.
My best guess is that 3 is followed by 4, but when would it be even if correct? Weeks for 3 and months for 4, or months for 3 and years for 4? Who knows? (ETA: After re-reading the description upthread that the Trump administration is the "most pro-space" and Peter Beck's confidence, maybe these guesses are silly anyway.)
With RKLB jumping again today, sold a few shares at $21.6x and offered a few more on limit order at just over $22.
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(ETA: After re-reading the description upthread that the Trump administration is the "most pro-space" and Peter Beck's confidence, maybe these guesses are silly anyway.)
Yeah, I am not cynical like Scandium. I’m optimistic like Peter Beck. The Trump administration will be one of the most pro-Space administrations since the Apollo era. Trump created the US Space Force. He loves Elon’s rockets and talks about them all the time. He is a huge supporter of Artemis and wants to send the US back to the Moon. As Peter says, “when Space wins, Rocket Lab wins.”
Also, now that Trump is back, I hope we can get Jim Bridenstine back as NASA administrator. Say what you will about Trump and Jim’s political views, but Jim Bridenstine was the best NASA administrator in my lifetime. Jim had a vision, and he got stuff done. Bill Nelson is so bleh.
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Electron is flying more often than ever before, and just launched twice within 24 hours:
https://spacenews.com/rocket-lab-launches-two-electrons-within-24-hours/
That makes 14 Electron launches so far this year, also a record. Previously the record was 10 launches in 2023.
RKLB stock reached over $25 today, closing at $24.06. I never expected such a rapid increase, and am positive there will be a correction once the market realizes how slow moving and prone to delay the space industry is.
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Here’s the latest example of Democrats going after Elon Musk’s companies:
https://finance.yahoo.com/news/california-pledges-ev-buyer-rebate-152405490.html
California Democrats are considering a new state EV tax credit which intentionally excludes Tesla and funnels money directly to their competitors. Imagine the benefit to Rocket Lab if the Democrats start targeting SpaceX like this!
And if you’re looking for another example of Democratic corruption against SpaceX, under the Biden administration, the FCC denied SpaceX $885M in Starlink subsidies from the $20B Rural Digital Opportunity Fund, which is supposed to subsidize rural broadband access.
https://techcrunch.com/2023/12/12/fcc-issues-final-denial-of-885m-starlink-subsidy/
These subsidies were denied despite Starlink being one of the only rural broadband providers which actually works, whereas the other telecommunications companies have done what amounts to nothing in comparison. A very clear case of governmental waste and corruption if you ask me.
Luckily, the Trump administration is going to put an end to this madness, at least as far as rural broadband subsidies go. I suspect they will either award SpaceX the subsidies they qualify for, or cancel the entire program and save the US taxpayer some money.
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There is some great Rocket Lab Space Systems news to report! Rocket Lab just got $23.9M in free money from the CHIPS act to boost manufacturing capacity of solar panels. Rocket Lab already manufactures about half of all solar panels that go to space, so boosting this business is another step in the right direction for them!
https://www.rocketlabusa.com/updates/rocket-lab-signs-23-9m-chips-incentives-award-to-boost-semiconductor-manufacturing-2/
Also, there are no news articles about this but Rocket Lab is developing an in-house Hall thruster. Search Google for “rocket lab ion thruster (https://www.google.com/search?q=rocket+lab+ion+thruster)” and you’ll find a ton of job postings.
Hall thrusters are a critical Space Systems satellite component used to slowly and efficiently reposition satellites using electricity and a small amount of inert propellant. For example, SpaceX uses Hall thrusters to raise their Starlink satellites into their target orbits. This is the same technology that Astra acquired from Apollo Fusion for $50M.
It is great that Rocket Lab is able to develop the technology organically in-house, rather than through acquisitions, and it shows how Rocket Lab is strategically positioned to be a major player in Space Systems. Rocket Lab doesn’t just have the cash to acquire suppliers, they also have the technical capability to become their own supplier, like SpaceX did before them.
Rocket Lab is building out a vertically integrated Space Systems business that goes up and down the Space Systems supply chain, and Hall thrusters are just another piece of that pie. One of Peter Beck’s mottos is that “everything that goes to space should have a Rocket Lab logo on it,” and this is another example of the truth behind that motto.
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RKLB hit an all-time high of $27.28 today. We are in uncharted territory. I’m not selling a single share, even though I fully expect the share price to crash in the near future. The trouble is, I thought we were due for a big correction at $10, and then at $15, and certainly at $20, now the price is $27. The correction is coming, but when?
In any case, my long term price target remains at $200. There are only three broadly diversified space companies that matter: SpaceX, Blue Origin, and Rocket Lab. SpaceX is worth $250B and has the potential to become a $1T company if they execute on their Starship vision of a fleet of hundreds of ships launching multiple times a day.
If SpaceX becomes a $1T company then I don’t see why Rocket Lab can’t be uplifted with them and become a $100B company, which takes their share price to $200.
A railroad to space is being built right now, that is going to bring an almost unfathomable amount of stuff into space in the near future. And Rocket Lab’s motto is everything that goes to space should have a Rocket Lab logo on it.
By the way, does anyone think we’re due for a capital raise? Rocket Lab could literally raise a billion dollars right now and it would only dilute their share price by 7%. This would make any financial problems disappear into thin air. Other space startups can only dream of this. But despite how tempting a capital raise might be, Rocket Lab has plenty of cash to execute their vision and remains fiscally disciplined, so I’m not sure they actually need to raise capital in the first place. It’s just so tempting at these valuations, that I can’t stop thinking they will go for it.
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And here is ~9% pull back. Not sure if that’s the correction, most likely no. Not selling any further shares at these levels. My RKLB investment is pretty much de-risked now and I am planning to sell my next tranche at 50$/share. That’s Rocket Lab valuation around $25B. I completely agree with @Herbert Derp that this is a $100B company in the making. What’s absolutely scary to realize is that it could reach those valuation levels quicker than I was initially estimating.
Honestly I wouldn’t mind <10% dilution for $1B+ capital raise at this stage. Knowing how “tight” Peter Beck and Adam Spice run the company they won’t go raising money just because they can. I wouldn’t be surprised that they are quite confident that Neutron test flight for mid next year is on track and would raise capital after successful test. As at that point surely they will start thinking more about their own constellation which will require $$$.
MSR contract should be announced in the next few weeks. What do people think are the chances of Rocket Lab being awarded the full contract? That would be huge.
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I've been following along with you @Herbert Derp in this thread since the beginning, and want to thank you for starting it. Feelings aren't worth much, but this company, and the chance to invest in its early years, feels like a once-in-a-decade-or-more opportunity. I'd definitely be curious to hear about any similar opportunities in the future.
This is the only individual stock of any substance that I own, and it's gone from about 2% of my holdings based on cost basis, to nearly 1% during the downturn, to now around 6.5%. I felt very comfortable with my exposure, both not regretting the paper losses early on, but also not adding to my holdings beyond a few shares here or there. I don't have any plans to sell in the near future, or price targets; honestly, the main thing I want to keep an eye on is Peter Beck, for any major shift away from the type of person I'd trust with what is still a bit of a gamble, at least compared to VT.
I think a capital raise could be great, both for the company, and for investors. It could add additional stability to the balance sheet, allow additional acquisitions of companies or technologies to further expansion, and maybe if we're lucky it could spark enough deflation in this current overenthusiastic (IMHO) bubble to allow those of us who want to add more to do so at an additional savings. But I think that, as important as space systems is to the future, they really need to stick the landing on Neutron, and worry a little about the potential for getting distracted at this moment. Yes, they need to keep laying the groundwork for success in steps 2 and 3 as you laid out above, but doing so will be hobbled if they don't have the launch platform to do it from, and have to rely on others.
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SpaceX is in discussions to sell insider shares that could boost the value of the company to around $350B:
https://finance.yahoo.com/news/spacex-discusses-tender-offer-roughly-230920967.html
SpaceX to $1T, Rocket Lab to $100B remains my prediction. Although Rocket Lab is a much smaller company than SpaceX and will almost certainly remain so, it seems to me that Rocket Lab is the better investment. I had the opportunity to invest in SpaceX and I still chose Rocket Lab.
You have to realize that Rocket Lab’s exploding market cap has the potential to turn the company into a sort of money snowball or self-fulfilling prophecy. Higher valuation equals easier to raise funds on the public market. It seems likely that Rocket Lab will permanently solve their money problem if their valuation keeps increasing. They may soon get to a point where it is easier for them to raise $1B than even Blue Origin, assuming Jeff is only willing to supply $1B per year.
The result is that Rocket Lab has the opportunity to join the infinite money club that SpaceX already belongs to. At that point, who can catch them? Aside from SpaceX and Blue Origin, none of Rocket Lab’s competitors can even dream of raising money on this scale.
Yet another reason why it is becoming clearer and clearer that SpaceX, Rocket Lab, and Blue Origin are the only three “full stack” space companies that matter.
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SpaceX is in discussions to sell insider shares that could boost the value of the company to around $350B:
https://finance.yahoo.com/news/spacex-discusses-tender-offer-roughly-230920967.html
Looks like SpaceX's valuation will increase +67% over the course of 6 months. That is stunning for a tiny company, let alone one the size of SpaceX.
I had the opportunity to invest in SpaceX and I still chose Rocket Lab.
Can you say anything about that opportunity? I'm curious if it was available from someone you know, from a broker, or from a hedge fund.
I invested in a hedge fund a few years ago that hid the name of this one investment. This large, private aerospace company they couldn't name kept pace with SpaceX's valuation. So I've got a very tiny percent of my NW in SpaceX through a hedge fund. But I could only invest in a hedge fund because I'm a "qualified investor" per SEC rules.
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Can you say anything about that opportunity? I'm curious if it was available from someone you know, from a broker, or from a hedge fund.
The opportunity was from a group of “small” investors who pool their funds together in order to participate in SpaceX funding rounds. They have also participated in funding rounds for X and Redwood Materials. I tried to PM you more details but seems you have PMs blocked.
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Can you say anything about that opportunity? I'm curious if it was available from someone you know, from a broker, or from a hedge fund.
The opportunity was from a group of “small” investors who pool their funds together in order to participate in SpaceX funding rounds. They have also participated in funding rounds for X and Redwood Materials. I tried to PM you more details but seems you have PMs blocked.
Wow, that's impressive. Personally, I'm too heavily invested in VC and other hedge funds already, so I don't plan on adding anytime soon. Actually, at a sudden $350 billion valuation, I would support my hedge fund selling shares (but they won't ask).
In the short term, I expect some of that valuation comes from Musk's position in the next administration, and Trump's glowing comments on SpaceX (and his creation of the "Space Force"). But if Musk steals the spotlight from Trump, he could be gone quite quickly. If that happens and sours the President on SpaceX, that could benefit Rocket Lab.
Thanks for reaching out - I've added you to my "Buddies list" so you can PM me now. Personally I prefer others making the choice of which private shares to buy, since I lack expertise. In VC funds, I've heard a tiny percent of the fund makes all the returns. Most of the stocks never pay back their investment, which makes diversification vital.
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Sent a PM. These guys have participated in multiple SpaceX funding rounds and will probably continue to do so in the future. It’s the best opportunity for smaller investors like us to invest in SpaceX that I know of.
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Seeing Isaacman nominated as the next director of NASA is definitely good news for commercial space generally including both Rocket Lab and SpaceX.
https://arstechnica.com/space/2024/12/jared-isaacman-entrepreneur-and-private-astronaut-is-trumps-choice-to-lead-nasa/
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Blue Origin says New Glenn is ready for liftoff, pending regulatory approval:
https://arstechnica.com/space/2024/12/intrigue-swirls-as-blue-origin-races-toward-year-end-deadline-for-new-glenn/
They hope to launch this month! Let’s see if they can pull this off!
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Rocket Lab has launched its 16th and final Electron mission for 2024:
https://www.rocketlabusa.com/updates/rocket-lab-successfully-deploys-satellite-for-synspective-caps-off-year-with-60-increase-in-launches-yoy/
This is up from 10 launches last year, and should be enough launches for Electron to achieve profitability.
Rocket Lab has posted pictures of progress on the Neutron launch pad. Looking good!
https://x.com/RocketLab/status/1868389536558157981?t=M9KWL0wcPv8cDNWRlucfjA
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New Glenn is on the pad! Static fire complete, launch imminent!
Edit: Launch date set for January 5th!
https://arstechnica.com/space/2024/12/blue-origin-hot-fires-new-glenn-rocket-setting-up-a-launch-early-next-year/
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SpaceX is in discussions to sell insider shares that could boost the value of the company to around $350B:
https://finance.yahoo.com/news/spacex-discusses-tender-offer-roughly-230920967.html
Looks like SpaceX's valuation will increase +67% over the course of 6 months. That is stunning for a tiny company, let alone one the size of SpaceX.
I had the opportunity to invest in SpaceX and I still chose Rocket Lab.
Can you say anything about that opportunity? I'm curious if it was available from someone you know, from a broker, or from a hedge fund.
I invested in a hedge fund a few years ago that hid the name of this one investment. This large, private aerospace company they couldn't name kept pace with SpaceX's valuation. So I've got a very tiny percent of my NW in SpaceX through a hedge fund. But I could only invest in a hedge fund because I'm a "qualified investor" per SEC rules.
What does that mean/entail?
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SpaceX is in discussions to sell insider shares that could boost the value of the company to around $350B:
https://finance.yahoo.com/news/spacex-discusses-tender-offer-roughly-230920967.html
Looks like SpaceX's valuation will increase +67% over the course of 6 months. That is stunning for a tiny company, let alone one the size of SpaceX.
I had the opportunity to invest in SpaceX and I still chose Rocket Lab.
Can you say anything about that opportunity? I'm curious if it was available from someone you know, from a broker, or from a hedge fund.
I invested in a hedge fund a few years ago that hid the name of this one investment. This large, private aerospace company they couldn't name kept pace with SpaceX's valuation. So I've got a very tiny percent of my NW in SpaceX through a hedge fund. But I could only invest in a hedge fund because I'm a "qualified investor" per SEC rules.
What does that mean/entail?
Net worth over $1 million, excluding primary residence (individually or with spouse or partner)
or
Income over $200,000 (individually) or $300,000 (with spouse or partner) in each of the prior two years, and reasonably expects the same for the current year.
https://www.investopedia.com/terms/a/accreditedinvestor.asp
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Oh snap, thats it? Somehow I assumed numbers were higher, or it would be like on YouTube where they send you a silver plaque when you pass the magic number.
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SpaceX is in discussions to sell insider shares that could boost the value of the company to around $350B:
https://finance.yahoo.com/news/spacex-discusses-tender-offer-roughly-230920967.html
Looks like SpaceX's valuation will increase +67% over the course of 6 months. That is stunning for a tiny company, let alone one the size of SpaceX.
I had the opportunity to invest in SpaceX and I still chose Rocket Lab.
Can you say anything about that opportunity? I'm curious if it was available from someone you know, from a broker, or from a hedge fund.
I invested in a hedge fund a few years ago that hid the name of this one investment. This large, private aerospace company they couldn't name kept pace with SpaceX's valuation. So I've got a very tiny percent of my NW in SpaceX through a hedge fund. But I could only invest in a hedge fund because I'm a "qualified investor" per SEC rules.
What does that mean/entail?
Net worth over $1 million, excluding primary residence (individually or with spouse or partner)
or
Income over $200,000 (individually) or $300,000 (with spouse or partner) in each of the prior two years, and reasonably expects the same for the current year.
https://www.investopedia.com/terms/a/accreditedinvestor.asp
wow! I'm qualified!
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Oh snap, thats it? Somehow I assumed numbers were higher, or it would be like on YouTube where they send you a silver plaque when you pass the magic number.
According to https://www.sec.gov/newsroom/speeches-statements/crenshaw-accredited-investor-2020-08-26
this is a 38 year old (at the time of the 2020 speech) definition ie 1982.
and "The most significant policy choice the Commission makes today is the decision not to index the wealth thresholds to inflation going forward. "
1983 $1,000,000 equals $3,270,593 in 2024 dollars. https://inflationdata.com/Inflation/Inflation_Calculators/Cumulative_Inflation_Calculator.aspx
Another commissioner on the same day noted that the accredited investor concepts conflated net worth to financial sophistication.
This prevents some people of lower net worth from participating in private markets.
https://www.sec.gov/newsroom/speeches-statements/peirce-accredited-investor-2020-08-26#_ftn2
Definitions:
https://www.sec.gov/resources-small-businesses/capital-raising-building-blocks/accredited-investors
Financial Criteria:
Net worth over $1 million, excluding primary residence (individually or with spouse or partner)
Diving down the rabbit hole:
The LAW (the US Code)
https://www.govinfo.gov/content/pkg/USCODE-2023-title15/pdf/USCODE-2023-title15-chap2A-subchapI-sec77b.pdf
"any net worth standard shall be $1,000,000, excluding the value of the primary residence of such natural person."
And it allows the SEC to Adjust as needed.
The Regulations (how the SEC, part of the Executive Branch, enforces the law).
https://www.ecfr.gov/current/title-17/chapter-II/part-230/subject-group-ECFR6e651a4c86c0174/section-230.501#p-230.501(a)
230.501(a)(5) Any natural person whose individual net worth, or joint net worth with that person's spouse or spousal equivalent, exceeds $1,000,000;
230.501(a)(5)i(A) The person's primary residence shall not be included as an asset;
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Besides the "qualified investor" threshold of $1M NW, there are a couple other levels: qualified clients require at least $2.2M NW, and qualified purchasers require $5M NW. I don't know the details, but some hedge funds require these additional criteria to invest with them.
"Definition of “Qualified Client” ... the dollar amount threshold of the net worth test from $2,100,000 to $2,200,000"
https://www.sec.gov/files/rules/final/2021/ia-5904-fact-sheet.pdf
"... for purposes of the '33 Act, "qualified purchaser" should be defined ... $5 million for individuals"
https://www.sec.gov/rules/proposed/s72301/borg1.htm
I've been investing in hedge funds through Long Angle, which has forums and investments.
"Additionally, we confirm that all members are either Qualified Clients or Qualified Purchasers, possessing $2.2M+ or $5M+ in investable assets, respectively."
https://www.longangle.com/faq
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Typically it means you either have a net worth of more than $1M excluding your home, or you have a track record of earning more than $200,000 a year as an individual. There are some other criteria that can also work but those are the big ones for qualified investor/accredited investor status.
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Thanks for reaching out - I've added you to my "Buddies list" so you can PM me now. Personally I prefer others making the choice of which private shares to buy, since I lack expertise. In VC funds, I've heard a tiny percent of the fund makes all the returns. Most of the stocks never pay back their investment, which makes diversification vital.
@MustacheAndaHalf Is there room on that buddies list for me? :)
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New Glenn has made it to orbit on its first flight! The booster landing was not successful. Huge achievement by Blue Origin!
https://arstechnica.com/space/2025/01/blue-origin-reaches-orbit-on-first-flight-of-its-titanic-new-glenn-rocket/
In other news, Stoke Space just raised $260M and hopes to fly their Nova rocket in 2025. These guys are the real deal! But most people think launching in 2025 is wildly optimistic, I am thinking 2026 or 2027 is much more realistic.
https://spacenews.com/stoke-space-raises-260-million/
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Bartlebooth - I don't recall interacting with you, so I'm not opening up messages to you. But if you create a thread in this forum asking a question, I'll see it and may reply there.
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Bartlebooth - I don't recall interacting with you, so I'm not opening up messages to you. But if you create a thread in this forum asking a question, I'll see it and may reply there.
OK...I even have a fairly relevant topic of conversation.
But really I'm just looking for the pointers on investing in SpaceX. A couple years ago I spent a few hours pursuing EquityZen and MicroVentures possibilities, but it didn't seem like they had much going for SpaceX. Now I am realizing that this is a more bespoke process and I am motivated to put in the legwork.
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If you want to invest in SpaceX directly, @Herbert Derp would know better.
I had the opportunity to invest in SpaceX and I still chose Rocket Lab.
Can you say anything about that opportunity? I'm curious if it was available from someone you know, from a broker, or from a hedge fund.
The opportunity was from a group of “small” investors who pool their funds together in order to participate in SpaceX funding rounds. They have also participated in funding rounds for X and Redwood Materials. I tried to PM you more details but seems you have PMs blocked.
I bought into a hedge fund, years ago, that included SpaceX as a very small holding. That group requires $2.2 million net worth to join, but you would also need a time machine to invest years ago. And you'd be better off using a time machine to buy Nvidia shares.
An analyst on CNBC mentioned SpaceX repeatedly, claiming nobody would catch them (much as Herbert Derp said above). The claim is that SpaceX would make access to space much cheaper once Starship exits the experimental stage. I wonder if that will put pressure on RocketLab if they compete with lower prices from SpaceX.
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If you want to invest in SpaceX directly, @Herbert Derp would know better.
Ah, I now see that I reversed the roles of you and @Herbert Derp in that side discussion. Thank you.
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Did someone put a rocket on this thing? Glad my next bit of spare money is going to BRK.B to get an insurance discount. I couldn't bring myself to buy at this price!
(BRKB RKLB IBKR: the tickers on my individual stocks have a common theme)
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Wow, RKLB cracked $30 briefly and finished today over $29.
Lots of news lately. Some of it is financial analysis classing RKLB as a large-cap stock now.
https://finance.yahoo.com/m/e7d2a6ed-bb58-3961-a3aa-6095cb8c62e4/rocket-space-stocks-fly-on.html
https://finance.yahoo.com/news/rocket-lab-launch-global-wildfire-213000671.html
https://finance.yahoo.com/news/why-rocket-lab-usa-inc-104445101.html
https://finance.yahoo.com/news/3-us-stocks-trading-estimated-100637161.html
https://finance.yahoo.com/news/rocket-lab-schedules-next-electron-213000400.html
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Rocket Lab is a subcontractor on this $1.45B hypersonic contract with the US military:
https://www.space.com/space-exploration/tech/rocket-lab-selected-to-launch-more-hypersonic-test-vehicles-for-us-military
No idea how much of that $1.45B is going to Rocket Lab. Probably a relatively small fraction.
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@Herbert Derp A bit off-ski the RKLB topic. But do you have an opinion on ASTS? They are raising $400m which sets them up in a solid financial position (around $1b cash) to build and launch the satellite constellation. I am considering to open a position on the back of this dilution. Appreciate if you could share your view on the company and their technology. Thanks in advance!
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ASTS has cool technology but they are a pure play telecommunications company. I think ASTS will find its niche in telecommunications alongside Starlink and Kuiper, and might capture a decent market share. They don’t have any particular advantage over SpaceX, though. But telecommunications is a big industry so there is plenty of space for ASTS, and their valuation seems justified.
For me personally I want to invest in a more diversified company which is why I picked Rocket Lab. I think there will be more growth opportunities for a well diversified company like Rocket Lab versus a company which is locked into a single niche.
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Thanks for your feedback. I opened ASTS position on the back of the price drop. I agree - Rocket Lab overall is a better long term investment. The ultimate publicity traded space company! However it’s safe to say the big $$$ are in space applications. Probably we won’t have a sight of RKLB space application for a good few years from now. With the current Rocket Lab valuation I think ASTS could outperform Rocket Lab in shortish term (1-3 years). Ofcourse depends on how timely ASTS will execute the production and constellation launch. Once they have proven their technology is superior and start generating revenue - share price should get re-rated significantly. For me investment in ASTS is some sort of diversification as RKLB now is 65% of my portfolio, ASTS is 7%. Yes, I know doesn’t look like a diverse portfolio and it’s not however I do run it quite concentrated on a few companies / sectors intentionally. Anyway, thanks again for your view, I don’t want to hijack Rocket Lab thread.
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Late last year my Coop building discussed ditching our individual cable internet packages and looking at a common StarLink subscription. "Fuck no I am not doing business with that man" was a sentiment expressed by a few households. A not-StarLink option might do well.
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I would like to add that telecommunications has a unique moat, in that the radio spectrum is allocated and licensed with the government. Once a telecommunications company is granted control over a spectrum in a certain country, no other company can take that spectrum. And there is a very finite amount of spectrum available. What this means is that the number of companies who will ever be able to operate a telecommunications satellite constellation is very limited!
So basically there’s going to be Starlink, AST, and Kuiper, and there’s not much room for other companies to build their own telecommunications constellations, at least in the United States.
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A new version of Archimedes is here! Rocket Lab has achieved 200kg mass reduction of the engine, and simplification across its components for reliability and improved manufacturability. Good to see this progress.
https://x.com/RocketLab/status/1885094267888296153
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So, at the risk of pulling this thread into the political realm, is anyone concerned that RKLB is going get crushed by SpaceX now that Elon is heavily influencing (running) the government? What protects RKLB from government favoritism when SpaceX and Rocketlab do similar things?
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So, at the risk of pulling this thread into the political realm, is anyone concerned that RKLB is going get crushed by SpaceX now that Elon is heavily influencing (running) the government? What protects RKLB from government favoritism when SpaceX and Rocketlab do similar things?
No. Lot of hassle to do that when SpaceX is on to bigger and better things anyways. And I am skeptical that these two much-hated people are into such pure corruption.
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Checking in on the party here after a lengthy break: I remain long $RKLB, currently 493 shares, but a covered call position on 300 of them. I was lucky to buy in when the price was lower, but cashed out some shares before the remarkable November bonanza. Earnings next week, lets see what they lead?!?
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So, at the risk of pulling this thread into the political realm, is anyone concerned that RKLB is going get crushed by SpaceX now that Elon is heavily influencing (running) the government? What protects RKLB from government favoritism when SpaceX and Rocketlab do similar things?
Rocketlab has private customers and I think it's well managed enough to survive on those, even if there's a period where the govt breaks or fails to renew current contracts. So I doubt it would be crushed.
Could stock price take a dip beyond the 25% of the past few weeks? Sure.
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So, at the risk of pulling this thread into the political realm, is anyone concerned that RKLB is going get crushed by SpaceX now that Elon is heavily influencing (running) the government? What protects RKLB from government favoritism when SpaceX and Rocketlab do similar things?
I'm going to seize on someone else bringing up politics to compare U.S. politics to Rocket Lab's stock price, which allows me to ask "What happens next?"
When Trump won the election, Rocket Lab surged during Nov 2024.. then went nowhere until Trump took office. It surged on Jan 20, but slowly fell after that.. another spike on Feb 10, and falling after that. It looks like Rocket Lab's price jumps depended on Donald "Space Force" Trump, and that optimism is fading. Is there another analysis of what happened - the surge of Jan and recent slide of $RKLB stock price?
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sure took a dive today.
I can't find news to indicate why - interest if other have opinoins?
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No idea why. I bought two shares on a long dated limit order in the low 20's. Looks like my 3-month pivot to BRK.B for new money was right! Now back to RKLB...
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To me it looks like a result of general market conditions - S&P 500 down as investors worry about the growing rift between Europe and USA (Trump's break with Zelensky), underlying tariff worries as Trump announces Tariffs Really Take Effect Tomorrow (today if you read this on March 4), etc. It seems that growth-oriented stocks like RKLB and ACHR suffer more in such dips.
I might be missing something though.
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To me it looks like a result of general market conditions - S&P 500 down as investors worry about the growing rift between Europe and USA (Trump's break with Zelensky), underlying tariff worries as Trump announces Tariffs Really Take Effect Tomorrow (today if you read this on March 4), etc. It seems that growth-oriented stocks like RKLB and ACHR suffer more in such dips.
I might be missing something though.
Seems very plausible and might be it. I have only a small protion and was sure kicking myself when it zoomed up, but I wasn't going to get more at those prices. Been looking for a good point to get some more so been paying attention to the daily flux - but yesterday was certainly anomalous being more than 8% drop. Down 3% more today so far.
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Rocket Lab’s acquisition snowball is rolling again!
Rocket Lab is acquiring space laser communications company Mynaric for $150M.
https://spacenews.com/rocket-lab-to-expand-into-laser-communications-with-mynaric-acquisition/
They are also acquiring satellite optical and infrared sensor company Geost for $275M.
https://spacenews.com/rocket-lab-to-acquire-satellite-payload-manufacturer-geost-for-275-million/
These acquisitions will enable Rocket Lab to bid more competitively on lucrative government contracts like Golden Dome, which incorporate space communication lasers and optical and infrared sensors to track hypersonic missiles.
There is more to come. In the Q1 2025 earnings call earlier this month, Adam Spice said Rocket Lab has half a dozen M&A deals in the pipeline. So that would be at least another four acquisitions if you count these two.
Next, we’ve also had an extremely active quarter pursuing new opportunities for space systems that further scales our vertical integration. We are pursuing several large government and commercial contracts that would see us building entire constellations of satellites, not just individual spacecraft. These are industry scaling and shaping constellation that would tap our full space systems value chain and realize significant value that reshapes our business. And on the M&A side, with a half dozen deals in the pipeline as we continue to expand our vertical integration. There’s high potential in all of this and we’ve expanded a lot as a company with our eyes set on Europe and international expansion as well as the deepening national security work that we’re taking on through Space Systems and Launch, the time is right for a new company structure that makes it simpler and more efficient to manage the business and our growth, particularly when it comes to U.S. Government classified programs.
https://www.insidermonkey.com/blog/rocket-lab-usa-inc-nasdaqrklb-q1-2025-earnings-call-transcript-1530270/
Notably, on the day of the $275M Geost announcement, Rocket Lab’s market cap increased by over $1.74B to $13.27B (13.14%). You can really see the power of the acquisition snowball in action. The market cap increased by 633% of the value of the acquisition! Rocket Lab is basically getting paid to acquire companies. The momentum is incredible!
Rocket Lab’s strategy here is to keep acquiring more of the satellite supply chain so that they can be more vertically integrated. For an example of why this is important, look at Rocket Lab’s $143M contract to build satellite busses for MDA. This contract was actually a subcontract of a larger $327M contract for Globalstar. If Rocket Lab had been more vertically integrated at that time, they could have won the entire contract and earned over double the revenue!
https://spacenews.com/globalstar-selects-mda-and-rocket-lab-for-new-satellites/
Overall, more vertical integration means more revenue per contract, more competitive bids due to increased capabilities and efficiency, and more contracts overall. It’s a win-win-win for Rocket Lab. Plus, they plan to have the capability of launching their own satellites and owning and operating their own constellation, making it a win-win-win-win. It’s no wonder the market is paying Rocket Lab to acquire more companies and execute this strategy. Does that give us yet another win?
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In other news, we finally got to see what Amazon’s Kuiper satellites look like. They have a boxy, traditional design which is much less efficient than the “flat” design that SpaceX uses for Starlink.
https://arstechnica.com/space/2025/05/we-finally-know-a-little-more-about-amazons-super-secret-satellites/
Meanwhile, Rocket Lab is gearing up to mass produce satellites using a Starlink-like “Flatellite” satellite bus. I can’t wait for the first Flatellites to make it into orbit!
https://www.rocketlabusa.com/updates/rocket-lab-announces-flatellite-a-new-satellite-designed-for-mass-manufacture-and-tailored-for-large-constellations/
Firefly and SpaceX just had more launch failures for their new rockets. Space remains hard. I think Firefly is in trouble, four of the first six Firefly Alpha launches have now failed. They really need a win. SpaceX can afford to keep blowing up rockets, Firefly can’t.
https://www.space.com/space-exploration/launches-spacecraft/firefly-aerospaces-alpha-rocket-fails-during-6th-ever-launch-falls-into-the-sea-near-antarctica
https://spacenews.com/starship-breaks-up-on-reentry-after-loss-of-attitude-control/
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Elon Musk and Donald Trump got into a feud today and they both threatened to cancel SpaceX’s contracts with the US government. Rocket Lab stock is up 5.67% after hours on the news.
SpaceX losing government contracts can only be good news for Rocket Lab!
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Yes, looks like the gloves are off. Definitely positive for Rocket Lab and other SpaceX alternative companies. Those who were worried that SpaceX would be getting all the best pieces of the pie due to Musk and Trump being buddies - can sleep peacefully now. ASTS up as well on the back of the ongoing circus. Isaacman is a collateral damage in all this mess though. Let’s see who takes the NASA admin chair.
What do people here think - will we see Neutron’s maiden launch this year? Even though Rocket Lab has said it’s on track for second half 2025, I would be very pleasantly surprised if there’s no delay. My gut feeling is Q1 2026 is probably more likely.
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"SpaceX is one of the nation's largest federal contractors, securing $3.8 billion over hundreds of government contracts in fiscal year 2024 alone, The New York Times reported."
https://www.cnbc.com/2025/06/05/trump-musk-crazy-government-contracts.html
I saw a claim online that SpaceX's valuation could be cut in half. (Which would turn 0.3% of my NW into half that, for full disclosure) Looking at the data, I don't see how that adds up:
Launch revenue grew to $4.2B in 2024, up from $3.5B in 2023
Starlink revenue grew to $8.2B in 2024, up from $4.2B in 2023
Starlink customers grew to 4.6M, up from 2.3M
Other revenue was $720M last year
https://payloadspace.com/estimating-spacexs-2024-revenue/
Dividing, I get 29% of SpaceX revenue from government contracts, which suggests losing 1/3rd of its valuation rather than a half. But notice Starlink revenue is both faster growing and much larger. SpaceX's valuation might disproportionally depend on Starlink for growth, which would mean the valuation cut is even smaller.
I recently discovered the website "Forge Global", which allows SEC qualified investors to buy private shares - like in SpaceX. The company's valuation has been floating around the $400 billion mark, but doesn't have an update since the Musk-Trump falling out. It's possible the uncertainty causes buyers and sellers to pause, to recalculate the value of SpaceX. But I imagine within the next week there should be an update.
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An assumption on my part: Rocket lab's current revenue of about $0.4 billion limits how much it can grow to accommodate $3.8 billion in new government contracts. Could Rocket Lab more than double of $3.8 billion of contracts were on the line? (Which is also risky - if Musk and Trump make up, those contracts could quickly dwindle, inflicting significant losses on unused capacity).
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"SpaceX is one of the nation's largest federal contractors, securing $3.8 billion over hundreds of government contracts in fiscal year 2024 alone, The New York Times reported."
https://www.cnbc.com/2025/06/05/trump-musk-crazy-government-contracts.html
I saw a claim online that SpaceX's valuation could be cut in half. (Which would turn 0.3% of my NW into half that, for full disclosure) Looking at the data, I don't see how that adds up:
Launch revenue grew to $4.2B in 2024, up from $3.5B in 2023
Starlink revenue grew to $8.2B in 2024, up from $4.2B in 2023
Starlink customers grew to 4.6M, up from 2.3M
Other revenue was $720M last year
https://payloadspace.com/estimating-spacexs-2024-revenue/
Dividing, I get 29% of SpaceX revenue from government contracts, which suggests losing 1/3rd of its valuation rather than a half. But notice Starlink revenue is both faster growing and much larger. SpaceX's valuation might disproportionally depend on Starlink for growth, which would mean the valuation cut is even smaller.
I recently discovered the website "Forge Global", which allows SEC qualified investors to buy private shares - like in SpaceX. The company's valuation has been floating around the $400 billion mark, but doesn't have an update since the Musk-Trump falling out. It's possible the uncertainty causes buyers and sellers to pause, to recalculate the value of SpaceX. But I imagine within the next week there should be an update.
...
An assumption on my part: Rocket lab's current revenue of about $0.4 billion limits how much it can grow to accommodate $3.8 billion in new government contracts. Could Rocket Lab more than double of $3.8 billion of contracts were on the line? (Which is also risky - if Musk and Trump make up, those contracts could quickly dwindle, inflicting significant losses on unused capacity).
One thing to add into the equation is national security concerns. Adam Kinzinger has long questioned musks access to info via spacex and government contracts. if the trump breakup endures, and I think it will given the epstein tweets musk made, and other countries become concerned around security issues, spacex may be edged out by more politically neutral companies providing similar services.
I think it is astounding the market edge musk had with spacex and telsa that he is carelessly throwing away so he exercise his "free speech" on the platform formerly knows as twitter.
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One thing to add into the equation is national security concerns. Adam Kinzinger has long questioned musks access to info via spacex and government contracts. if the trump breakup endures, and I think it will given the epstein tweets musk made, and other countries become concerned around security issues, spacex may be edged out by more politically neutral companies providing similar services.
I think it is astounding the market edge musk had with spacex and telsa that he is carelessly throwing away so he exercise his "free speech" on the platform formerly knows as twitter.
Musk made a big bet that government corruption would work in his favor. But corruption goes both ways. Musk bought the election, but politicians don't stay bought. Contracts can be awarded unfairly, and they can taken away just as unfairly.
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"SpaceX is one of the nation's largest federal contractors, securing $3.8 billion over hundreds of government contracts in fiscal year 2024 alone, The New York Times reported."
https://www.cnbc.com/2025/06/05/trump-musk-crazy-government-contracts.html
I saw a claim online that SpaceX's valuation could be cut in half. (Which would turn 0.3% of my NW into half that, for full disclosure) Looking at the data, I don't see how that adds up:
Launch revenue grew to $4.2B in 2024, up from $3.5B in 2023
Starlink revenue grew to $8.2B in 2024, up from $4.2B in 2023
Starlink customers grew to 4.6M, up from 2.3M
Other revenue was $720M last year
https://payloadspace.com/estimating-spacexs-2024-revenue/
Dividing, I get 29% of SpaceX revenue from government contracts, which suggests losing 1/3rd of its valuation rather than a half. But notice Starlink revenue is both faster growing and much larger. SpaceX's valuation might disproportionally depend on Starlink for growth, which would mean the valuation cut is even smaller.
I recently discovered the website "Forge Global", which allows SEC qualified investors to buy private shares - like in SpaceX. The company's valuation has been floating around the $400 billion mark, but doesn't have an update since the Musk-Trump falling out. It's possible the uncertainty causes buyers and sellers to pause, to recalculate the value of SpaceX. But I imagine within the next week there should be an update.
...
An assumption on my part: Rocket lab's current revenue of about $0.4 billion limits how much it can grow to accommodate $3.8 billion in new government contracts. Could Rocket Lab more than double of $3.8 billion of contracts were on the line? (Which is also risky - if Musk and Trump make up, those contracts could quickly dwindle, inflicting significant losses on unused capacity).
It looks like you view the launch contracts as govt, and the Starlink customers as private. Could some of the Starlink revenue be from the US govt too?