How to Invest in Space Exploration
An alternative investment for investors in our present age can be defined as an investment that can hopefully maintain or gain value despite the economic and political climate. I found two industries that have the potential to meet this requirement, space exploration and communication networks.
Space exploration in America has been allowed to become privatized, and a new and cheaper way to utilize the achievements discovered in rocket technology has emerged. Space Exploration Technologies Corp., affectionately known as SpaceX, has patented a vehicle called the Falcon 9 rocket that can launch satellites and deliver goods to locations that orbit around the Earth. Adding to SpaceX's accomplishments in the production of this vehicle is that there are parts of the rocket that are reusable. And here's the best part, the company's goal is to create financial gains!
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I find it interesting that just when space exploration shows the potential to become extremely profitable, the profitable aspect becomes privatized. This, after decades of research in space exploration has been funded by taxpayers. To illustrate the potential profitability of SpaceX even more, SpaceX has already been contracted by NASA to deliver supplies to the orbiting International Space Station.
There may be a way to benefit from the privatization of space exploration and get a return from our tax dollars spent developing the research. It appears that we can now know what is being launched and for who. This information can be very useful when making investments in these sectors of the market.
The reason I started today's piece with the two subjects, space exploration and communication networks, is because there is a new relationship between these two industries that I just recognized. They are very dependent upon each other for growth. This gives us an opportunity to invest in the companies pursuing this growth. SpaceX is privately held, but in my research I uncovered some interesting facts.
SpaceX Falcon rocket lifts off from Space Launch Complex 4E at Vandenberg Air Force Base, California, U.S.A., January 14, 2017. REUTERS/Gene Blevins
A SpaceX Falcon 9 rocket was launched on Saturday in California, returning the company to flight for the first time since a fiery launchpad explosion in September. The 230-foot (70-meter) rocket was launched from Vandenberg Air Force Base to deliver 10 satellites into orbit for Iridium Communications Inc., reports Reuters news service. "It's a clean sweep, 10 for 10," SpaceX launch commentator John Insprucker said after the satellites were released.
The first point of interest is that SpaceX successfully launched an unmanned vehicle, with reusable parts, into space carrying 10 satellites that were successfully deployed. The name of the company that owns the satellites is Iridium Communications Inc. (IRDM) a publicly traded firm on the NASDAQ. I believe a communications company that successfully launched 10 new satellites into orbit around the Earth, has the potential to increase their revenues and profits.
Iridium Communications Inc. (IRDM)
The opportunity to invest in IRDM does exist, and we have evidence that the company has made a significant move to increase their bottom line, launching 10 satellites. This is an excerpt from the company's profile:
"Iridium Communications, Inc. provides mobile voice and data communications services to businesses, the U.S. and foreign governments, non-governmental organizations and consumers using a constellation of low-earth orbiting satellites. Its satellite network provides communications services to regions where existing wireless or wireline networks do not exist or are limited, including remote land areas, open ocean, the polar regions and regions where the telecommunications infrastructure has been affected by political conflicts or natural disasters. The company was founded on November 2, 2007 and is headquartered in McLean, VA. USA."
Without even looking at the research available it is easy to surmise the potential benefits of 10 new functioning satellites at IRDM's disposal. The research available confirms my speculative interest, 6 analysts polled by Reuters rate the stock as an 'Outperform.'
Even though SpaceX is held privately, I have been following them for quite some time. Through my research I discovered that Alphabet Inc. (GOOGL) has invested about US $1 billion into the firm, and that was before a successful launch had been achieved. The particulars of this infusion of capital from GOOGL to SpaceX are not readily available. I think it can be reasonably safe to assume that if Spacex creates gains, then GOOGL will be a benefactor of those gains as well. This provides a potential opportunity to participate in SpaceX's success through an investment in GOOGL.
The opportunities don't end there with GOOGL and IRDM. Saturday's successful launch cleared a backlog of more than 70 planned missions, worth more than $10 billion, involving SpaceX Falcon rockets, reported SpaceX. Saturday's launch was the first in a seven-flight contract with Iridium worth $468.1 million, says company spokeswoman Diane Hockenberry. SpaceX is also planning to launch 27 rockets in 2017, more than triple the eight flights of 2016, according to a report on Friday in the Wall Street Journal.
Now that we have made the connection between successful rocket launches with potential gains of communications entities, we can monitor them both as investment opportunities, for those seeking Alternative Investments.