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Here’s what we learned from Morgan Stanley’s annual space summit as investor interest booms


SpaceX’s Crew Dragon Endeavour seen docked with the International Space Station on July 1, 2020.

NASA

Morgan Stanley held its annual space summit just about this 12 months as a result of coronavirus pandemic, however analyst Adam Jonas informed CNBC that a whole lot of traders and observers participated within the occasion on Tuesday as interest within the space trade booms.

Jonas, recognized on Wall Street for his early calls on Tesla, has been trying on the fast-growing space trade.

Here’s what space traders learned at Morgan Stanley’s third space summit:

  • The occasion featured 20 space corporations, together with: HawkEye 360, MDA, PredaSAR, Planet Labs, Spire Global, Blue Origin, Virgin Galactic, Telesat, ViaSat, SES, Virgin Orbit, ABL Launch Systems and Rocket Lab.
  • Government representatives additionally spoke – together with from the U.S. Space Force and Department of Commerce – as nationwide safety stays a crucial piece of the space economic system.
  • Industry executives view SpaceX’s dominance and development as a “net positive” for the trade.
  • SPAC’s, or particular function acquisition corporations, had been a well-liked dialogue level and are considered favorably as a means for space corporations to entry the general public markets.
  • The launch window for Virgin Galactic’s subsequent spaceflight check opens on Dec. 11 and runs via Dec. 24, with climate in New Mexico the one obstacle to launching the flight at the start of the window.

SpaceX a ‘net-positive’ for the trade’s development

While Elon Musk’s SpaceX was not amongst these on the agenda regardless of an invite from Morgan Stanley, Jonas famous that the occasion occurred as the corporate ready for a high-altitude flight check of its Starship prototype rocket. He described SpaceX as “the apex player” in the rising space trade, with the corporate not essentially needing the additional publicity of a Wall Street occasion – highlighted by SpaceX’s close to $2 billion fundraise in August.

For the opposite space corporations in search of development within the trade, Jonas stated occasion attendees acknowledged that SpaceX is each consuming up share of {the marketplace} whereas additionally fanning the flames of extra development, with helpful ripple results.

“SpaceX is a net positive because it’s growing the pie and showing investors what is possible,” Jonas stated.

Jonas additionally stated that Morgan Stanley despatched an observer to South Padre Island in Texas, to observe SpaceX’s Starship SN8 check flight. He believes that SpaceX’s improvement of Starship will proceed to be one of many prime objects to observe in 2021.

Starship prototype rocket SN8 fires two Raptor engines as it makes an attempt to land after its high-altitude check flight on Dec. 9, 2020.

SpaceX

Jeff Bezos’ space enterprise Blue Origin was notably represented on the summit by the corporate’s vice chairman Clay Mowry, who highlighted 2021 as an enormous 12 months for the corporate. According to Jonas, Mowry stated that Blue Origin now has about 3,500 complete workers,.

“The fact that [Blue Origin] was on the agenda and willing to engage is maybe symbolic of where they are in the company’s operating and growth trajectory,” Jonas stated.

Blue Origin is making ready for milestones subsequent 12 months in every of its 4 main packages: Test flights by tourism rocket New Shepard, heavy raise rocket New Glenn’s first launch, starting deliveries of flight-ready BE-Four engines, and a possible main NASA award for its crewed lunar lander system.

The ‘SPAC phenomenon’

Jonas highlighted SPAC’s, or particular function acquisition corporations, as a well-liked dialogue level on the summit. Two space corporations have gone the SPAC path to entry the general public markets, with Sir Richard Branson’s tourism firm Virgin Galactic debuting in late 2019 and space transportation specialist Momentus making ready to go public early subsequent 12 months via a cope with Stable Road Capital.

“The SPAC phenomenon is actually very well aligned with the horizon and nature of space investing … It’s a venture capitalist mindset,” Jonas stated.

He described the SPAC strategy as a “democratization of venture capital and private equity,” which is now “coinciding with a major inflection of interest in space investing across all of our clients – both institutional and retail. “

“It’s the final frontier of investing and the human species at the same time,” Jonas added.

Weather the variable for Virgin Galactic’s subsequent check

Virgin Galactic CEO Michael Colglazier and CFO Jon Campagna additionally spoke on the summit, with the corporate’s subsequent spaceflight check the main matter of debate. Virgin Galactic’s launch window opens on Friday, Dec. 11 and runs via Dec. 24, with Colglazier saying the climate at Spaceport America in New Mexico is the one obstacle to launching the flight at the start of the window, in response to Jonas.

Colglazier additionally gave extra context on the summit to how Virgin Galactic desires to succeed in its aim of flying 400 flights per 12 months per spaceport. It’s a aim that Colglazier beforehand stated would see the corporate herald as a lot as $1 billion in annual income per spaceport.

“They want to get to doing two flights a day, times 200 days … so that’s 400 engines,” Jonas stated. “And [Virgin Galactic] described the [engine manufacturing] as a slow moving assembly line, so there could be quite a very different paradigm when manufacturing engines of that quantity.”

Jonas summarized Colglazier’s message as: Once Virgin Galactic finishes its marketing campaign of three check flights, the ultimate of which can fly Branson, then the corporate might want to transition right into a interval of scaling its manufacturing and operations.

“At a high level, 2021 is going to be a year where you’re going to see both the hype/excitement as well as the realization of the industrial/commercial plan,” Jonas stated.

Colglazier didn’t give an replace on the timing of Branson’s flight, which Virgin Galactic in November stated was deliberate for the primary quarter. However, Jonas famous that Colglazier stated COVID-19 shutdown orders in New Mexico price the corporate a couple of month of time between the timing of the primary and second of the three upcoming check flights.

“I think the Branson flight is really, really important. I think we might be underestimating how important,” Jonas added. “It’s going to be very important to making it look real and then kicking off a wave of private astronauts that want to do this before anyone else does.”

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