The New Space Race Just Got Cheaper
This Will Be a Game Changer
Space just got a lot cheaper.
Tuesday morning, after its third try, SpaceX launched a Falcon 9 rocket, which blasted a satellite into geostationary transfer orbit.
But that's not even the exciting part. Not only did SpaceX safely and successfully put a very expensive piece of equipment into space, but it achieved this difficult task at a cost of only $60 million. That's $200 million less than its competitors.
Popular Mechanics reported:
"At approximately 5:41 pm Eastern, SpaceX's Falcon 9 left the launch pad at Cape Canaveral carrying a 6400-pound communications sat for the operator of the world's second-largest sat fleet, Luxembourg-based SES. All eyes were on the upper stage, which failed to perform as needed during a demonstration launch in late September. For the rocket to deliver its cargo to high orbit, the second stage had to reignite in space. This time around it succeeded: The upper stage reignited as planned.
This marks an important milestone for the company, which had never before delivered cargo to this pivotal orbit. Even more important, it marks a new level of affordability for accessing space. Monday's launch will cost SES about $60 million. That's $200 million less than proven European provider Arianespace charges. Still, while today's launch is impressive, but it will take years before SpaceX can be considered to have a safety record comparable to longer-standing providers."
SpaceX – owned by Elon Musk of Tesla Motors and PayPal fame – is a game changer. The company cut 66% of the cost of sending a payload into space, and this means more stuff can be sent into space.
Everyone's wish list just got a lot bigger. And there is a lot of demand for satellites coming from Southeast Asia and Indo-China.
Orbital Takes Off
On October 7th, 2013, my colleague Jason Stutman told you about Orbital Sciences Corporation (NYSE: ORB). ORB is a company that makes spacecraft, booster engines, satellites, and the like. It is one of a handful of pure plays on the new space race – at least until SpaceX goes public.
The satellite that SpaceX put into orbit was built by Orbital Sciences. The stock has moved from $12.70 to $24.40 this year. Though I wouldn't buy right here, as I expect a "sell the news" type of scenario, I would look to buy the dip, as the lower cost of launches will spur more satellite sales.
If you are interested in investing in the new space race, I would encourage you to join us at Technology & Opportunity. Our January issue will give you the run-down on who will profit from space and how to play this coming revolution.
All the best,
Since 1995, Christian DeHaemer has specialized in frontier market opportunities. He has traveled extensively and invested in places as varied as Cuba, Mongolia, and Kenya. Chris believes the best way to make money is to get there first with the most. Christian is the founder of Crisis & Opportunity and Managing Director of Wealth Daily. He is also a contributor for Energy & Capital. For more on Christian, see his editor's page.