SPACE captures investors' imagination & money   


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.

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