Connect with us

Aerospace

Satellite veterans warn of space SPAC downside

Avatar

Published

on

TAMPA, Fla. — The frenzy of activity swirling around SPACs is pushing space into a new era of risk-taking, according to two satellite industry veterans. 

The past decade’s flow of private capital into megaconstellations and launch startups was a sedate “tea party” in comparison to what’s happening now, Iridium Communications CEO Matt Desch told SpaceNews in an interview.

Space ventures have been rushing in the last six months to take advantage of increasing investor appetite for SPACs, or special-purpose acquisition companies. Often referred to as “blank check” companies, SPACs offer space ventures a significant — and relatively quick — cash injection as they are fast-tracked to the public markets.

Since the start of the year, Astra, BlackSky, Rocket Lab and Spire have announced plans for a SPAC merger, raising more than $2 billion in total.

“It looks like an all-out, mind-bending party going on right now,” said Desch, who took Iridium public in 2009 via a SPAC merger with GHL Acquisition Corp. 

Four years later, inflight connectivity provider Row 44 went public through a SPAC merger with Global Eagle Acquisition. Italian rocket builder Avio SpA followed a similar route to public markets, completing its listing in 2017. 

Suborbital spaceflight venture Virgin Galactic sparked the current space SPAC wave with its 2019 merger with Social Capital Hedosophia. In late 2020, space logistics startup Momentus and satellite-to-device specialist AST & Science announced SPAC deals. 

Space-based data ventures Spire and BlackSky and launch providers Astra and Rocket Lab all announced SPAC mergers between Feb. 2 and March 1.

Virgin Orbit, the spinoff of Virgin Galactic that is developing the LauncherOne small launch vehicle, is reportedly getting ready to join the party. Canadian space technology company MDA, meanwhile, is poised to file for an initial public offering (IPO) of stock, the more conventional path to public markets. 

While the SPAC spree is good news for early investors positioned to profit as these companies go public with multibillion-dollar valuations, Desch is not the only industry veteran questioning whether the trend is as good a deal for the businesses themselves and the wider industry.

In a separate interview, Viasat CEO Mark Dankberg compared the rush of companies going public with sky-high valuations despite little or no revenue to the dot-com bubble at the turn of the century. 

“I think it’s very dangerous,” Dankberg told SpaceNews

Future positivity

SPACs allow companies to make far bolder five-year revenue forecasts than those going through the more traditional route to becoming a public company.

Desch said relatively relaxed disclosure rules compared to conventional IPOs are helping fuel the excitement around these companies, which might make double-digits today but believe they can surpass a billion dollars by 2026.

The trend is also riding a wave of optimism in the space sector amid technology breakthroughs and stellar forecasts from established banks such as Morgan Stanley, which predicts the global space industry could be generating more than $1 trillion in revenues in 2040, up from about $350 billion in 2020.

Other analysts have poured cold water on these projections.

Mark Boggett, CEO of venture capital firm Seraphim Capital that is poised to benefit from the SPAC spending spree due to early investments in Spire and AST & Science, supports Morgan Stanley’s forecast. 

Boggett said the $1 trillion figure holds without too much stretching of credibility when space is viewed as a “digital platform in the sky,” rather than simply as satellites and rockets.

“This ‘space’ digital infrastructure, consisting of thousands of satellites will deliver capabilities that will define societal change over the forthcoming decades,” Boggett told SpaceNews via email, pointing to applications ranging from drone delivery services to tracking livestock for ensuring food security.

“Taking the big picture of how space is underpinning a whole range of megatrends I can get very comfortable talking of a market measured in $trillions,” he added.

Risky business

The SPAC trend also comes as equity markets are abuzz from social media-driven activity around stocks such as GameStop, which could spill over into space as the industry increasingly opens up to new types of investors.

Stimulus checks that were part of the $1.9 trillion relief bill signed into law March 11 by U.S. President Joe Biden could further fuel a rally in long shot stocks and speculative behavior.

“I wouldn’t be surprised if these $1,400 stimulus checks get invested into a lot of SPAC stocks,” Desch quipped.

Surging retail investor activity, such as the Reddit-orchestrated GameStop short squeeze that temporarily drove shares of the struggling video game retailer to stratospheric heights, creates new issues for the market. Desch pointed to rampant investor exuberance he has seen sweeping across online message boards that discuss stocks.

“You’ve got all these small-time investors just making up stuff — there are no fundamentals, no discussions of those sort of things,” he warned.

“It’s raw speculation.”

Desch also sees similarities to the dot-com bubble, when investors — many buying stocks for the first time — flocked to recently formed wireless and internet-based businesses of the 1990s, confident that stock prices would only go up.

Revenues took a back seat as these early internet ventures focused on building a big base of users. For a while, investors were willing to tolerate huge losses, confident that these companies would eventually find their way to profitability.

“Investors would drive up the price of stocks because [the businesses] were spending money, not because they were making money,” Dankberg said. 

Telecom companies that would take on more debt to build more infrastructure saw their stock prices rise. Meanwhile, businesses that were not participating in the frenzy saw their stock prices languish, increasing the likelihood of being bought by another company with a more relaxed attitude to debt.

It put companies in a position of either being sold or joining in the fray, according to Dankberg.

“I think you’re seeing a fair amount of that now,” he added.

When good times come to an end

The dot-com bubble ultimately burst, crashing stock markets as many early internet businesses collapsed. Between 1995 and its March 2000 peak, the Nasdaq rose 400%. But by October 2002, the bull market had given back all its gain. 

Desch said: “All of a sudden it got so overheated, so much money spent on so many nonrevenue companies, and those nonrevenue companies couldn’t survive.”

Iridium was a product of the 1990s, joining in the rush and excitement before its first iteration via Motorola collapsed — along with similar LEO satellite ventures Globalstar, ICO Global and Teledesic that contributed to a 10-year investment drought for the sector. 

Post-bankruptcy Iridium later went public for the second time via a SPAC merger in 2009.

NSR analyst Claude Rouseau outlined how Iridium’s recurring revenue, and corresponding valuation, put it in a very different position from today’s SPACs in a forthcoming SpaceNews commentary. 

“The recent spree of space SPACs are marked by unrealistic projections,” Rouseau wrote.

“Not counting Iridium, the average space SPAC has a $1.8 billion enterprise valuation built on assumptions it can grow [an average of] $29 million in revenue to $3.85 billion within five years. 

“Virgin Galactic’s market capitalization as of early March was $8.7 billion. Compared to the Iridium situation, the average enterprise value of current space SPACs is three times higher, the market cap is 1.6 times higher, and revenues are 10 times lower.”

Complicating the picture, it is also worth noting that the failures that space has already endured have yet to create the kind of domino effect that could lead to a crash.

“OneWeb should have been a big note of caution,” Desch said of the LEO broadband operator’s March 2020 bankruptcy filing, but its story became complicated when the British government and Bharti Global, the Indian telecom company, brought it out of Chapter 11 just eight months later.

However, space SPAC advocates say the significant capital the deals bring will propel the industry into a new growth stage, enabling businesses to focus on scaling operations without being distracted by incremental funding needs. 

Mike Collett, managing partner at venture capital firm Promus Ventures, which invested in Spire and Rocket Lab, said: “With a public stock and lots of cash, these new public companies can use their paper to acquire other companies, use the public markets to access more cash through secondaries, and pump more gas into their model to attract more talent and grow faster. 

“All of this is a huge competitive advantage. The public equity market will ultimately decide the fate of these public enterprise values, but those that execute will be rewarded handsomely.”

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://spacenews.com/satellite-veterans-warn-of-space-spac-downside/

Aerospace

Virgin Galactic unveils new spaceship for its growing fleet

Avatar

Published

on

Virgin Galactic has unveiled the company’s first SpaceShip III in its growing fleet, VSS Imagine.

The spaceship showcases Virgin Galactic’s innovation in design and astronaut experience. Imagine also demonstrates progress toward efficient design and production, as Virgin Galactic works to scale the business for the long-term.

VSS Imagine will commence ground testing, with glide flights planned for this summer from Spaceport America in New Mexico.

The livery design, finished entirely with a mirror-like material, reflects the surrounding environment, constantly changing colour and appearance as it travels from earth to sky to space.

Leveraging a modular design, the SpaceShip III class of vehicles are built to enable improved performance in terms of maintenance access and flight rate. This third generation of spaceship will lay the foundation for the design and manufacture of future vehicles.

As VSS Imagine begins ground testing, manufacturing will progress on VSS Inspire, the second SpaceShip III vehicle within the Virgin Galactic fleet. The introduction of the SpaceShip III class of vehicles is an important milestone in Virgin Galactic’s multi-year effort that targets flying 400 flights per year, per spaceport.

VSS Imagine is unveiled ahead of VSS Unity’s next test flight, which is planned for May 2021.

Michael Colglazier, CEO of Virgin Galactic, commented: “Today we unveiled our SpaceShip III class of vehicles, marking the beginning of the Virgin Galactic fleet. VSS Imagine and Inspire are stunning ships that will take our future astronauts on an incredible voyage to space, and their names reflect the aspirational nature of human spaceflight. Congratulations to our dedicated team who worked so brilliantly to achieve this milestone.”

Richard Branson, founder of Virgin, added: “Virgin Galactic spaceships are built specifically to deliver a new, transforming perspective to the thousands of people who will soon be able to experience the wonder of space for themselves. As a SpaceShip III class of vehicle, Imagine is not just beautiful to look at, but represents Virgin Galactic’s growing fleet of spaceships. All great achievements, creations and changes start with an idea. Our hope is for all those who travel to space to return with fresh perspectives and new ideas that will bring positive change to our planet.”

www.virgingalactic.com

Tags

Share This Article

Subscribe to our FREE Newsletter

Related Articles

Most recent Articles

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://www.aero-mag.com/virgin-galactic-unveils-new-spaceship-for-its-growing-fleet/

Continue Reading

Aerospace

Hexcel joins ASCEND project

Avatar

Published

on

Hexcel joins ASCEND project

Hexcel has announced its role within the recently launched UK-based project called ASCEND (Aerospace and Automotive Supply Chain Enabled Development) that will focus on developing high-rate manufacturing and processing technologies that will accelerate the development of new, lightweight advanced composite materials.

The composites company will join lead partner GKN Aerospace and 13 other project stakeholders in a collaboration across the UK supply chain to develop the technologies and automation equipment required to manufacture lightweight, more fuel-efficient structures for sustainable air mobility, aerospace, and automotive industries.

Hexcel will contribute to the ASCEND project framework, developing a new HexPly fast cure prepreg system that will significantly reduce component processing times compared to existing aerospace prepregs.

In addition to its new fast curing prepreg technology, Hexcel’s range of Liquid Composite Moulding (LCM) products will be incorporated into the ASCEND project work packages. The project will use both HiTape advanced unidirectional dry carbon reinforcements and HiMax multiaxial non-crimp fabrics reinforcements.

The ASCEND project will allow Hexcel to collaborate with Tier 1 companies, engineers, tooling specialists, and production equipment OEMs to deliver both prepreg and liquid composite moulding solutions that meet both the performance targets and satisfy the processing requirements for high-rate automated manufacture.

The technical integration enabled by the ASCEND project partnerships will ensure a complete understanding of customer performance and processing needs, coupled with the opportunity to industrialize new technologies utilizing the extensive capabilities of GKN’s Global Technology Centre in Bristol.

Paul Mackenzie, senior vice president and chief technology officer at Hexcel, said “We are  proud to be part of the ASCEND program, and we look forward to working with other leading companies as we develop processes and materials that help to make the next generation of sustainable air mobility, aerospace, and automotive vehicles possible. This project offers the perfect platform for Hexcel to collaborate and further develop our HexPly, HiMax, and HiTape technologies.”

The ASCEND partners working alongside Hexcel include Assyst Bulmer, Airborne, Cobham Mission Systems Wimborne, Cygnet Texkimp, DES Composites, FAR-UK, Hive Composites, LMAT, Loop Technology, McLaren Automotive, The National Composites Centre, Solvay Composite Technologies, Rafinex, and Sigmatex (UK).

Together, the group looks forward to delivering the material and automation innovations that will power more sustainable mobility solutions of the future.

www.hexcel.com

Tags

Share This Article

Subscribe to our FREE Newsletter

Related Articles

Most recent Articles

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://www.aero-mag.com/hexcel-joins-ascend-project/

Continue Reading

Aerospace

Boeing Commercial Airplanes extends landing gear kits contract with Magellan

Avatar

Published

on

Boeing Commercial Airplanes division has extended its component supply contract with Canada-based supplier Magellan Aerospace.

Under this long-term contract, Magellan will continue to supply landing gear kits and structural components for Boeing platforms such as the 737, 767, and 777.

The contract extension also shows that Magellan meets Boeing Commercial Airplanes’ cost, quality and performance requirements.

Magellan business development, marketing and contract vice-president Haydn Martin said: “Securing this major business extension for key Boeing platforms is foundational for our New York and Kitchener facilities as the aerospace industry works to recover from the impact of the global pandemic.

“The confidence that Boeing has placed in Magellan is significant and demonstrates our ability to offer our customers comprehensive and reliable solutions.”

For Boeing, the company is using a vertical integration strategy that leverages global resources in Ontario, New York City, and India.

It has also made significant investments across all its facilities regarding manufacturing technology and the workforce to enhance its competitiveness worldwide.

Magellan will deliver these kits and hardware from its facilities in Kitchener, Ontario and New York City, New York. The company will also produce an extra supply of kits to reduce production risk.

Deliveries will be made directly to Boeing’s assembly facilities in Renton and Everett, Washington, US.

Last month, Magellan signed a five-year renewal agreement with Avio Aero to supply magnesium and aluminium castings.

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://www.aerospace-technology.com/news/boeing-commercial-aircraft-magellan/

Continue Reading

Aerospace

ZeroAvia raises new funding for hydrogen-electric engine development

Avatar

Published

on

Zero-emission aviation firm ZeroAvia has raised $24.3m in new funding to support the development of a 2MW hydrogen-electric engine.

Hong Kong-based venture capital firm Horizons Ventures, an existing investor, led the latest funding round and was joined by new investor British Airways.

Other investors, including Breakthrough Energy Ventures, Ecosystem Integrity Fund, Summa Equity, Shell Ventures, and SYSTEMIQ, also joined the financing.

The financing takes the company’s total private investment to more than $53m while the total funding raised is close to $74m since its formation.

ZeroAvia’s funding comes a few months after the UK Government, through the Department for Business Energy & Industrial Strategy (BEIS), the Aerospace Technology Institute (ATI), and Innovate UK, announced a $16.3m (£12.3m) grant to deliver a 19-seat hydrogen-electric powered aircraft in the market by 2023.

The new funding will accelerate the hydrogen-electric powertrain development for a ten to 20-seater regional aircraft.

ZeroAvia aims to commercialise the engine as early as 2024. The company aims to enter the more than 50-seater commercial aircraft segment by 2026.

The funding will also de-risk the company ambition to power a 100-seat single-aisle aircraft by 2030.

ZeroAvia CEO and founder Val Miftakhov said: “This new funding, in conjunction with our other recent milestones, will significantly accelerate our path to zero-emission solutions for larger regional aircraft at a commercial scale.

“With many airlines lining up and ready to make the shift to zero-emissions, we expect to see wide-scale adoption of this technology.”

Coinsmart. Beste Bitcoin-Börse in Europa
Source: https://www.aerospace-technology.com/news/zeroavia-electric-raising-funds/

Continue Reading
Esports4 days ago

Dota 2 Patch 7.29 Will Reveal a New Hero

Esports4 days ago

Best Warzone guns: the weapons you need to use in Black Ops Cold War Season 2

Blockchain4 days ago

Evil Geniuses Partner With Cryptocurrency Exchange Platform Coinbase

Fintech3 days ago

Novatti’s Ripple partnership live to The Philippines

Blockchain5 days ago

Unternehmen gründen Crypto Council: Fidelity und Coinbase mit dabei

Fintech5 days ago

Standard Chartered turbocharges digital payments proposition with investment and the merger of CurrencyFair with Assembly Payments

Esports4 days ago

Overwatch Archives event 2021: new challenges, skins, and more

Blockchain5 days ago

Bitcoin Preis Update: BTC fällt unter 59.500 USD

Cyber Security4 days ago

Fintechs are ransomware targets. Here are 9 ways to prevent it.

Esports5 days ago

100 Thieves reveal NFTs in Enter Infinity Collection

Blockchain4 days ago

Krypto-News Roundup 8. April

Esports4 days ago

indiefoxx was just banned from Twitch again, but why?

Blockchain4 days ago

Ripple Klage: CEO zeigt sich nach Anhörung positiv

Blockchain3 days ago

DFB bringt digitale Sammelkarten auf die Blockchain

Esports2 days ago

Dota 2 Dawnbreaker Hero Guide

Esports5 days ago

Call of Duty League Stage 2 Major Preview and Predictions

Esports5 days ago

Astralis vs Gambit Esports: ESL Pro League betting analysis

Blockchain4 days ago

Krypto News Roundup 7. April 2021

Esports2 days ago

Dallas Empire escape with a win against Minnesota at the Stage 2 Major

Esports4 days ago

PUBG Mobile Esports Expands With New Regions & More in 2021

Trending