Rocket Lab (RKLB) - Finally a decent space company that we can invest in?

[Herbert Derp]

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.

[Herbert Derp]

New news! Apple has been confirmed as the primary customer 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) 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 for iPhones across the world.

[markbike528CBX]

Firefly Alfa launch attempt tomorrow .

Details
https://everydayastronaut.com/flta002-to-the-black-alpha/

[maizefolk]

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

[Herbert Derp]

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.

[vand]

In response to last week's news, Deutsche Bank just raised 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.

[MustacheAndaHalf]

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.

[Herbert Derp]

Last week, Rocket Lab gave their 2022 Investor Day & Neutron Update. 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] Rocket Lab plans to test-fire the Archimedes pre-burner by the end of this year.
* [1:19:48] 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] 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] Rocket Lab has partnered with the NASA Stennis Space Center Engine Test Facility to test the Archimedes engine.
* [1:13:00] The Neutron fairing design has changed from four "petals" to two. This was a very predictable change, IMO.
* [1:14:55] 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 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.

[Herbert Derp]

Astra's 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.

[BicycleB]

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.

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.

[Herbert Derp]

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/

[MustacheAndaHalf]

Last week, Rocket Lab gave their 2022 Investor Day & Neutron Update. 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.

[MustacheAndaHalf]

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)?

[Herbert Derp]

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?

[BicycleB]

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.)

[AlanStache]

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

[talltexan]

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.

[BicycleB]

^ @talltexan, lol!

That launch site has awfully high water around it. Can that place flood??

***

Undaunted, picked up another nibble or two of RKLB.

[AlanStache]

That launch site has awfully high water around it. Can that place flood??

we will find out this weekend

[maizefolk]

Firefly has successfully launched satellites into orbit 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.

[Herbert Derp]

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.

[Herbert Derp]

Cathie Wood is still at it. She picked up 200k shares of RKLB on 10/3 and 82k shares on 10/4. I wonder how much longer her buying spree will continue?

[Scandium]

Cathie Wood is still at it. She picked up 200k shares of RKLB on 10/3 and 82k shares on 10/4. I wonder how much longer her buying spree will continue?

Considering her record; is this the time to sell all RKLB?? ;)

[Herbert Derp]

Rocket Lab just had another successful launch! Named "It Argos Up From Here", this was Rocket Lab's eighth launch this year, and 31st launch in total. Rocket Lab has now deployed 151 satellites into orbit, and has a 90% mission success rate with Electron (28 out of 31).

Cathie Wood is still at it! Yesterday, she bought another 94,000 shares.

[Herbert Derp]

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
3. Moon mission
4. Further progress towards Electron booster recovery and reuse
5. Announcement of location for Neutron rocket factory
6. Launch of ARKX Space Exploration ETF
7. Free publicity for space industry from SpaceX

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.

[PDXTabs]

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
3. Moon mission
4. Further progress towards Electron booster recovery and reuse
5. Announcement of location for Neutron rocket factory
6. Launch of ARKX Space Exploration ETF
7. Free publicity for space industry from SpaceX

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.

[Herbert Derp]

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.

[Herbert Derp]

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 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

10/06/2022: York Space wins $200 million Space Development Agency contract for 12 satellites

[BicycleB]

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.

[MustacheAndaHalf]

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

[Herbert Derp]

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/

[Herbert Derp]

Credit Suisse just initiated coverage 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 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 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.

[markbike528CBX]

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

[MustacheAndaHalf]

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.

[Herbert Derp]

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 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", although, it’s worth pointing out that York Space also made a similar agreement with Rocket Lab.

[MustacheAndaHalf]

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.

[BicycleB]

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!

***

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.

[Herbert Derp]

Good job on the cost basis, @BicycleB! I wish my cost basis was that low!

[MustacheAndaHalf]

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.

[BicycleB]

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.

[Herbert Derp]

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

[MustacheAndaHalf]

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.

[BicycleB]

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.

[BicycleB]

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

[BicycleB]

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!

[maizefolk]

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.

[MustacheAndaHalf]

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.

[maizefolk]

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...

[PDXTabs]

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 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. 🚀🚀🚀

[Herbert Derp]

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?