It is widely recognized that 2019 has been a record year for private investments in space companies, surpassing $5.8B across 198 investments. We expect 2020 to score historical IPOs from companies which have been growing in the last 10 years and are prospected to become profitable in the short term.
Companies are expected to be taking tourists to space in the near future. Without proper technology advances, however, this won’t be affordable for the average consumer. In order to accomplish that, the cost of the single launch should decrease by 90%.
Investors are becoming more and more interested in space companies, betting on the possibility that Blue Origin, Space X and Virgin Galactic will approach the space, given that the target for 2019 was almost reached.
SpaceX
SpaceX is one of the world’s most valuable private companies, being worth more than $33.3bn. Such a major valuation allows the company to access an incredible amount of funding from private sources, raising capital when needed and maintaining the privilege to select investors.
Elon Musk showed some aversion to the public stock market, keeping SpaceX private since its foundation in 2002. However, in a long time from now, shareholders expect the company to list its stock publicly. This is expected to happen when the company has the technology to fly regularly to Mars.
On Feb 6, SpaceX announced that Starlink satellite business may undergo an IPO as a separate division in the foreseeable future. Starlink is a SpaceX’s single project to build an interlinked network of 12,000 satellites that will grant high-speed internet all over the world.
For this purpose, SpaceX has been steadily raising capital: the forecasted cost for the network is around $10bn and last year SpaceX raised over $1.3bn in new funding.
Once solved the technological challenges, there is much potential for growth. As an example of that, SpaceX's CEO declared that the company could generate revenues of approximately $30bn per year in the future.
Blue Origin
Blue Origin, the aerospace manufacturer founded by Jeff Bezos, has been mainly funded by his own personal funds so far. The New York Times reports he’s been selling more than $1bn worth of his own Amazon stocks every year since 2017 to finance the business, and that figure is expected to more than double in the next few years.
On total he sold $2bn worth of shares in 2017 and $2.8bn in 2019, but the most recent sale represents a turning point: during the first week of February 2020, he sold around $3.5bn worth of Amazon shares, which represents 3% of his total stake in the company.
According to reports, Blue Origin rockets will likely bring people into space in 12 months, for 200,000$ a trip, later than predicted in 2019, after the launch in may, when markets started to speculate that this would happen by the end of 2019. During an interview with CNBC in November, CEO Bob Smith declared that although the system was working very well, further analysis was necessary to be ready to go in 2020.
Elon Musk and Jeff Bezos are now competing, they both aim to provide a network of internet-satellites, and they both want to make space tourism available. And they both want to be the first.
Virgin Galactic
Richard Branson’s Virgin Galactic entered the NYSE on October 28th, 2019, as SPCE, at a valuation of more than $1bn, following its merger with publicly-listed holding firm Social Capital Hedosophia.
The first public-traded space company is now worth more than $2bn and the stock price has been going up recently. Its first mover advantage has been the topic of much discussion recently, on whether it will grant profits in the future or not.
The firm was supposed to send tourists to space by summer: 600 reservations have already been made, at 250,000$ each, for a 90 minute trip. But the CEO George Whitesides hesitated when asked if Virgin Galactic would be ready on time. In a corporate presentation previously released, commercial operation was scheduled to June 2020. Based on that, they forecasted a 580% revenue increase, from $31MM to $210MM in 2020-2021, together with positive EBITDA by 2021.
The current situation of the company seems much less mature than the typical publicly-traded company. Without generating revenue, net income is gained on marketable securities inherited with the merger. If the EBITDA profitability is postponed, Virgin Galactic will possibly need to undergo a follow-on to generate capital, bringing the stock price closer to its initial value and diluting original shareholders.
Investors are currently waiting for the Feb. 25 earnings report to compare it with the projections.
Clearness is expected to be made on liquidity and plans for new capital raising.
Silvia Guggiana
Companies are expected to be taking tourists to space in the near future. Without proper technology advances, however, this won’t be affordable for the average consumer. In order to accomplish that, the cost of the single launch should decrease by 90%.
Investors are becoming more and more interested in space companies, betting on the possibility that Blue Origin, Space X and Virgin Galactic will approach the space, given that the target for 2019 was almost reached.
SpaceX
SpaceX is one of the world’s most valuable private companies, being worth more than $33.3bn. Such a major valuation allows the company to access an incredible amount of funding from private sources, raising capital when needed and maintaining the privilege to select investors.
Elon Musk showed some aversion to the public stock market, keeping SpaceX private since its foundation in 2002. However, in a long time from now, shareholders expect the company to list its stock publicly. This is expected to happen when the company has the technology to fly regularly to Mars.
On Feb 6, SpaceX announced that Starlink satellite business may undergo an IPO as a separate division in the foreseeable future. Starlink is a SpaceX’s single project to build an interlinked network of 12,000 satellites that will grant high-speed internet all over the world.
For this purpose, SpaceX has been steadily raising capital: the forecasted cost for the network is around $10bn and last year SpaceX raised over $1.3bn in new funding.
Once solved the technological challenges, there is much potential for growth. As an example of that, SpaceX's CEO declared that the company could generate revenues of approximately $30bn per year in the future.
Blue Origin
Blue Origin, the aerospace manufacturer founded by Jeff Bezos, has been mainly funded by his own personal funds so far. The New York Times reports he’s been selling more than $1bn worth of his own Amazon stocks every year since 2017 to finance the business, and that figure is expected to more than double in the next few years.
On total he sold $2bn worth of shares in 2017 and $2.8bn in 2019, but the most recent sale represents a turning point: during the first week of February 2020, he sold around $3.5bn worth of Amazon shares, which represents 3% of his total stake in the company.
According to reports, Blue Origin rockets will likely bring people into space in 12 months, for 200,000$ a trip, later than predicted in 2019, after the launch in may, when markets started to speculate that this would happen by the end of 2019. During an interview with CNBC in November, CEO Bob Smith declared that although the system was working very well, further analysis was necessary to be ready to go in 2020.
Elon Musk and Jeff Bezos are now competing, they both aim to provide a network of internet-satellites, and they both want to make space tourism available. And they both want to be the first.
Virgin Galactic
Richard Branson’s Virgin Galactic entered the NYSE on October 28th, 2019, as SPCE, at a valuation of more than $1bn, following its merger with publicly-listed holding firm Social Capital Hedosophia.
The first public-traded space company is now worth more than $2bn and the stock price has been going up recently. Its first mover advantage has been the topic of much discussion recently, on whether it will grant profits in the future or not.
The firm was supposed to send tourists to space by summer: 600 reservations have already been made, at 250,000$ each, for a 90 minute trip. But the CEO George Whitesides hesitated when asked if Virgin Galactic would be ready on time. In a corporate presentation previously released, commercial operation was scheduled to June 2020. Based on that, they forecasted a 580% revenue increase, from $31MM to $210MM in 2020-2021, together with positive EBITDA by 2021.
The current situation of the company seems much less mature than the typical publicly-traded company. Without generating revenue, net income is gained on marketable securities inherited with the merger. If the EBITDA profitability is postponed, Virgin Galactic will possibly need to undergo a follow-on to generate capital, bringing the stock price closer to its initial value and diluting original shareholders.
Investors are currently waiting for the Feb. 25 earnings report to compare it with the projections.
Clearness is expected to be made on liquidity and plans for new capital raising.
Silvia Guggiana