What previously seemed like science fiction and the prediction of futurologists is now becoming much more of a reality – you do not have to be a professional astronaut to be able to fly into space.
Billionaire Richard Branson, founder of Virgin Galactic (SPCE), successfully flew to the edge of space on in 2021. His flight took about an hour, included several minutes of weightlessness, and reached an altitude of 90km. In the same year, Jeff Bezos, successfully flew into space in the New Shepard spacecraft built by his company Blue Origin. Billionaire private space travel enthusiasts also include SpaceX founder Elon Musk. Last year, his Falcon 9 rocket began transporting astronauts to the ISS in the Dragon spacecraft. Musk himself has not yet flown into space but has booked a ticket on Virgin Galactic flights.
So with space tourism now being seen as a reality, what space related companies should invest keep an eye out for?
The top companies to invest in
- Virgin Galactic
Virgin Galactic went public in October 2019 and was the first space company to do so. The flotation took place via the SPAC merger. At the time of publication, its shares are trading on the NYSE at almost $7.5 (£6) each.
Virgin Galactic is a three-stage growth company. In the first phase, it will gain revenue from ticket sales for private flights, and from microgravity research, space infrastructure and services. In the second phase, Virgin Galactic plans to offer long-haul (hypersonic and supersonic) flights and tap into a staggering $900 billion (£713bn) aviation market. In the long term, the company wants to enable customers to buy real estate in space and use space resources and energy.
- Blue Origin
Jeff Bezos founded Blue Origin in 2000. He financed the company by selling $1 billion (£79m) in Amazon (NASDAQ: AMZN) shares a year. Since 2015, Blue Origin has flown 15 test flights. Apart from an emergency landing on the booster on the first launch, all flights have been successful.
If Blue Origin continues to conduct more successful tester flights then an IPO launch could very well happen in the near future.
Elon Musk’s company is actively developing two space projects: Starlink and Starship. If all goes well financially, Starlink will go public.
Although the last two test flights organised by SpaceX have not been very successful, the company has seen them as steps forward and may launch the next Starship prototype in the coming weeks.
- ETF ARKX
The ARK ETF Space Exploration & Innovation ETF opened on the 30th of March 2021. Companies have been added to the ETF that are not only directly related to the space exploration industry, but also those that will use technologies developed for space to improve life on Earth.
Switzerland’s largest financial holding company, UBS, estimates the current potential of the space tourism market at $4 billion (£3.2bn). Northern Sky Research (NSR), in its “Space Tourism and Travel Markets” report, says that an estimated 57,000 passengers will fly into space by 2031. Revenues from these space tourists and orbital travel will account for most of the industry’s total combined revenues of $20.3 billion (£16.07bn).
UBS expects several major space tourism trips to be organised during the 2022. There are already plenty of people wishing to fly. Among the first to go into space will be 600 people who have already paid the full price for their tickets – $250,000 (£197,958), including Leonardo DiCaprio and Justin Bieber. Virgin said it expects to increase the waiting list to 1,000 people by the time flights resume. With the flight plan in place and the VSS Unity (4 passengers once a month) and VSS Imagine (6 passengers twice a month) fully loaded, Virgin Galactic could carry 16 customers a month, or 192 people a year.
The profits of Bezos, Musk and Branson’s companies will increase at a cosmic rate as the industry grows in popularity. Investors in the stock market can also make good money on this. The obvious advantage of the space industry is the early stage of its development, which can provide super-profits with a well-chosen securities strategy.