Feb 17 (Lagos) - Investors in New
York and around the world are getting increasingly interested in Space
companies. Space is the hottest sector on the stock market but has it’s making
almost a decade earlier. In 2011 the NASA ended its space shuttle program and
passed the baton to private companies to carry astronauts into Space.
The Private sector saw companies
such as SpaceX and Virgin Galactic Holdings take that baton and innovate
quickly so that the space sector is not left behind. Now NASA sends astronauts
into space in space pods built by SpaceX and Boeing. While Virgin Galactic is
more focused on space tourism. SpaceX is backed by Tesla's Elon Musk and Virgin
Galactic by Sir Richard Branson of Virgin Group.
Virgin Galactic Holdings did its
IPO in October 2019 and while shares fell initially, they have more than
doubled the IPO Price since then. On Friday itself the shares jumped more than
21%. This is the hottest stock in the market and most discussed stock as well
at the moment. The company offers the rich a wealthy an opportunity to visit
Space on a 90-minute flight which includes 6 minutes of weight-lessness in
Space on a reusable spacecraft. The tickets were sold for USD 250,000 each and
they are currently sold out. They plan to open bookings when the spaceflights
start later this year and prices are expected to increase sharply. Over the
long term the prices are expected to reduce once space travel becomes a
novelty.
The company hopes to see floating
hotels in Space one day where tourists will be able to visit for holidays. Sir
Richard Branson is himself expected to be on the first flight later this year
and there are other celebrities on the list such as super-star Leonardo Di
Caprio and singer Justin Bieber. If one can afford it, Space is now on your
doorstep. Boeing is one the investors in Virgin Galactic with a USD 20 million
investment.
SpaceX which is backed by Tesla's
Elon Musk is still a private company but there are rumors of a IPO soon. The
Company along with Boeing has already sent astronauts into Space and the
International Space Station for NASA. Mr. Elon Musk has also spoken about
creating a human colony on Mars, a distant planet not yet been visited by
humans but explored by various NASA missions.
Maxar Technologies provides space
technology solutions to commercial companies and governments. Shares of the Company
have risen 500% over the past one year in New York.
Companies such as Virgin Galactic
and SpaceX also promise to greatly reduce air travel times on Earth with point
to point flights. They are talking about doing New York to Shanghai flights in
40 minutes in the coming future. Virgin Galactic has already signed agreements
to set up spaceports in Dubai and Italy in addition to its main spaceport in
New Mexico where the company is based.
Space - Defense.
Space tourism is not the only
agenda that these companies are pursuing.
On Dec 21 2019, US President
Donald Trump created the US space force and pledged USD 1.4 trillion towards
the newly created branch of the country's defense forces. The only other
countries that have space defense capabilities are Russia, China and India. The
USA, Russia and China are the only three countries to have sent humans into
space and India is hoping to join the elite group by 2022.
India's Prime
Minister Modi made a starting announcement at a news conference in 2019 that
the country had shot down a satellite in Space putting the country in an elite
group of 4 countries with that capability. However, India's space program
budget is a paltry USD 4 billion which is dwarfed by funding that developed
countries put into their space programs. In fact, many of the space scientist
working at NASA are poached from India's space agency known as the ISRO. India
remains the only country out of the developed world to have such advanced space
technology.
The race to meet various
government's space program requirements is leading to new investments and
investors are not ignoring what all is going on in the sector. This decade is
likely to see research and development into Space which will be more than what
was achieved in the previous 3 decades. USA has a mars mission to send humans
on the red planet by 2033. India has a human space mission set for 2022. NASA
already has missions studying the Sun's atmosphere and other missions studying
planets such as Venus. China has various space cities within most of their
major cities and is planning to launch a third space station by 2022. Russia is
planning to turn an abandoned space station into a luxury hotel in space.
There are big things going on in
space and many of those are being done by private companies. We can expect more
private space focused companies to list on stock markets following the sky-high
demand for shares of Virgin Galactic Holdings.
Critics point out that the gains
in the stock market valuation of such companies are far-fetched as these
companies do not actually make any money. They expect the shares to decline
soon given the fact that these companies are futuristic with no current
revenues and huge risks that exist in the space domain.
Whether their predictions will
come true or not remains to be seen but one thing is certain that space
exploration and travel is soon going to become a reality albeit for the super
rich and wealthy for now.