By Cody Willard
By the time Churchill Capital Corp. IV finally announced last week that it would merge with Lucid Motors Inc. after weeks of speculation, investors “sold the news,” dumping its shares.
Some blamed the SPAC — special purpose acquisition company — for weakness in the entire SPAC cottage industry.
I’ve also been warning that valuations in the stock market have been way out of whack. But now, with some good stocks out there getting slammed along with the rest of the market, it’s time to dig into some of my favorite names and see if it is time to add to them.
I’m constantly scouring the world for the best ways to invest in the most obvious next trillion-dollar marketplace, what I call The Space Revolution. Recently, a handful of space-related companies have started coming public (or preparing to come public in declared mergers) via SPACs. Most of these companies look too risky or have questionable business plans and management teams.
Rocket Lab , on the other hand, is well-positioned. It is being brought public by a SPAC, Vector Acquisition Corp. /zigman2/quotes/222592018/composite VACQ +0.09% , in the second quarter. In the history of spaceflight, only two private companies have delivered regular and reliable access to orbit for real revenue. I’m sure most of you have heard of one of these companies, SpaceX. Well, Rocket Lab is the other.
Rocket Lab is building a vertically integrated platform (you know I love these) to enable the hundreds, and soon to be thousands, of companies building satellites a simple, fast, and cost-effective method of launching into orbit.
Here’s a video about the company:
Rocket Lab has scaled to a monthly launch cadence faster than any commercial launch provider in history. It took the company only six years.
During that time, Rocket Lab has launched 18 rockets into space, deploying 97 satellites and even recently demonstrated the ability to recover the first stage of the rocket for use on later missions. The company’s first rocket, Electron , is targeting the market that requires smaller payloads (up to 300 kilos), and customers requiring flexibility with launch timelines (currently 132 launch slots available every year).
One industry forecast projects 38,000 satellites will be built and launched from 2020-2029. Of those, 90% are expected to weigh less than 300 kilos.
Besides being first to market, another thing that sets Rocket Lab’s Electron rocket apart from its small-rocket competition is the company’s unique Kick Stage booster. Kick Stage is a “third stage” booster that enables the launch of multiple satellites for different customers on a rideshare rocket and delivery of those satellites to different orbits/planes.
Such flexibility for the customer is likely to help Rocket Lab capture a large percentage of the small-satellite market. Kick Stage technology is perhaps Rocket Lab’s biggest technological advantage.
One thing that Rocket Lab’s management team has learned while working with satellite customers is that small satellites are going to need to work together in constellations to form networks. Rocket Lab has recently introduced a new rocket, Neutron , which targets this larger payload market. Neutron, with an 8,000-kilo payload capacity, fills the current void between the small (under 300-kilo payload) rockets and the large Falcon 9 rockets being launched by SpaceX.
In addition to delivering satellite payloads, Neutron is being developed to carry both resupply cargo and even astronauts. Neutron is scheduled to make its first commercial launch in 2024.