Futuristic Space Gambits -- Low Stock Market Interest

A SpaceX Falcon 9 rocket about to launch the company’s Crew Dragon spacecraft is seen before the Demo-2 mission with NASA astronauts Robert Behnken and Douglas Hurley onboard.

NASA/Joel Kowsky

"From commercial space launches related to satellites and space tourism, or even more futuristic things like asteroid mining -- a lot of it is a completely unproven industry, and it is not clear how much demand there is."

Jay Jacobs, head, research and strategy, Global X Management Co.

 

"It would be a tent-pole IPO [should Musk take his space  venture public]. It is that single asset that can focus people's attention and make them understand what is space investing about."

"It isn't about going to Mars or tourism, but getting hardware to space that is current updated technology."

"You can think of space stocks in the last two years as kind of the dotcom bubble. There is an initial burst of enthusiasm, then interest dies off and then a couple of years later you realize that maybe a lot of the seeds died but the ones that survived have become systematically important."

Nicholas Colas, co-founder, DataTrek Research 

"When you see a company worth half a trillion dollars entering the markets, that is bound to attract some attention for other stocks in that market."

"There is still a public misconception of what space is, how space affects us, and there is this massive educational curve that we still haven't seen investors truly grasp."

Andrew Chanin, chief executive, ProcureAM

Virgin Galactic’s spacecraft Unity reaches space for the first time.

Source: Virgin Galactic

 

Space exploration, space travel, space tourism, space opportunities for mineral exploitation. All of it eliciting great interest and excitement in the public imagination. It's exciting, it's romantic, it's challenging and demonstrably feasible. Exhibitions so far by private companies operated by charismatic celebrities, public figures of renown, whose wealth is such that they are enabled to dabble professionally in the arcane stuff of science fiction brought to life.

 

Space, and travel, and mineral extraction, all topics of huge public interest and certainly allying with the interests of governments some of which are themselves entering the same heavenly realm of pushing new frontiers of space exploration -- merging that with the benefits they envision will accrue to them through the prospect of the increasing militarization and intelligence-gathering via communication satellites, all point to an exciting, if fraught future.

 

So who is putting their investment dollar where their excited fascination leads them? Aside, that is, from those of the ilk of Elon Musk, Jeff Bezos and Richard Branson. The futuristic allure of these visionaries' enterprises has attracted plenty of public attention, particularly after their space travel businesses got off to a much-heralded start when Virgin Galactic and Blue Origin made their maiden tourist flights to great acclaim and great visuals.

 

And has that translated into elevated space stocks? Not so that anyone in the business of monitoring the situation has yet noticed. The initial space-focused euphoria appears not to have elicited much in the way of investment in the stock market. The tourism flights by Richard Branson's publicly traded Virgin Galactic Holdings Inc., and Jeff Bezos's privately held Blue Origin, and yes, Musk's SpaceX, appears to have failed in overcoming doubts in viewing these ventures as true-blue business -- or a billionaires' playground. 

Blue Origin’s New Shepard rocket booster lands after its eleventh successful mission.

Blue Origin

Space tourism is in the category of an unproven industry. Other than Virgin Galactic not many public companies are in existence as yet, and exchange-traded funds still lack one dedicated to space. Companies trading on exchanges look for attraction with the aid of a charismatic front-runner to help focus the attention of the market. Word is that should Elon Musk's Space Exploration Technology Corp. turn public, the issue of a charismatic cheerleader would be solved.

Electric Vehicle makers got a big boost when Tesla Inc. realized runaway success as a company and a stock, last year. Musk is credited by many with having led the automotive industry forward to its electric future. Space stocks could use the boost that would accrue if Musk took his space-oriented vision public. He has publicly spoken of possibly turning carbon dioxide into spacecraft fuel, building massive rockets, heading for Mars within a decade.

His 1,700 satellite network identifies him as a private, world-class player in space communications, drawing the ire of China for crowding its own plans, a challenge China fails to appreciate. Commercial uses for space travel loom large in the future, to include applications in military and defence, telecommunications, mining, weather tracking -- and deep space exploration.

Investors for the time being, fail to be impressed. The Procure Space ETF, trading under UFO, gained a mere 6 percent for 2021, badly trailing the 28 percent leap in the S&P 500 index. And how did Virgin Galactic fare? a 45 percent tumble through delays to starting commercial launches. The company isn't expecting, according to analysts, to derive an annual net profit for the next three years.

Blue Origin launches a New Shepard rocket from its facility in Texas.

Blue Origin | gif by @thesheetztweetz