SPCE - Is SpaceX Killing the Small-Rocket Market?
In a vividly titled piece that got no small amount of attention among space investors earlier this month, SpaceNews warned of a coming "bloodletting" in the space industry. Demand for space launch continues to grow despite the lingering effects of the pandemic, and despite the looming recession. And yet companies that specialize in launching small satellites in particular are "struggling to make money," warns SpaceNews, and not all of these companies will survive.
2021 gave investors several new ways to invest in space, as multiple so-called " space SPACs " went public in reverse mergers through special-purpose acquisition companies . Following in the footsteps of space tourism trailblazer Virgin Galactic (NYSE: SPCE) , small-rocket specialists Virgin Orbit (NASDAQ: VORB) , Rocket Lab (NASDAQ: RKLB) , and Astra Space all conducted IPOs to raucous applause.
Investors bet that as the price of space launches decreased, demand for space launch services would increase -- and they were right to do so. Market researchers generally agree that the size of the worldwide space launch market approached $17 billion in 2022, and will grow close to 15% annually -- several times faster than global GDP -- over the next five years. As Arianespace Vega head Marino Fragnito told attendees at the SmallSat Symposium in Mountain View, California, on Feb. 7, over his 30 years in the space industry he has "never seen so much business" as today. "I have never seen so much demand for launches," he added.
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Is SpaceX Killing the Small-Rocket Market?