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

[time is money]

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.

[BicycleB]

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?

[Herbert Derp]

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.

[Herbert Derp]

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!

[Herbert Derp]

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.

[Herbert Derp]

Testing of Archimedes is underway! Hopefully hot fire soon!

https://x.com/Peter_J_Beck/status/1808635763195834536

[time is money]

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.

[Herbert Derp]

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!

[Herbert Derp]

Finally, Archimedes hot fire!

https://x.com/Peter_J_Beck/status/1820754090286289255

[mistymoney]

no commentary on recent movement?

[MustacheAndaHalf]

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

[Radagast]

Wow, over my cost basis. Next stop: 100 bagger!

[Herbert Derp]

I don’t see anything in the news that warrants such a run up in RKLB share price.

AST SpaceMobile, 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.

[Herbert Derp]

"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.

[time is money]

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 $.

[BicycleB]

Guessing similar to @Herbert Derp. Sold just a quarter of shares, holding the rest.

[time is money]

[/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.

[Scandium]

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.

[time is money]

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.

[LightStache]

The WSB "pump and dump" hasn't been significant *yet*, just a little blip of volatility.

[shipright]

So that was an exciting week!

[markbike528CBX]

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 :-)

[time is money]

Rocket Lab have posted Archimedes hot fire video on X. It’s pretty exciting times. This will be an interesting week for the stock.

[Herbert Derp]

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!

[Herbert Derp]

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.

[Radagast]

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.

[MustacheAndaHalf]

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

[Herbert Derp]

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.

[time is money]

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.

[AlanStache]

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. 

[Michael in ABQ]

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.

[MustacheAndaHalf]

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.

[time is money]

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 🤭

[MustacheAndaHalf]

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.

[time is money]

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.

[MustacheAndaHalf]

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.

[time is money]

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.

[Herbert Derp]

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!

[Herbert Derp]

RKLB hit $15, closed at $14.78. Any thoughts?

[Herbert Derp]

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.”

[AlanStache]

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. 

[Radagast]

No thoughts, in it for the lolz. To the moon!

[Herbert Derp]

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.

[Herbert Derp]

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.

[Herbert Derp]

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.

[Scandium]

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).

[Scandium]

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..

[PathtoFIRE]

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...

[time is money]

@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!

[Radagast]

Exciting! Up 50%, puts me at 3x my cost basis. I did better buying truckloads of RZV in 2020, but this was faster.