Posted by: Dr Churchill | July 11, 2021

Space Flight Comes of Age…

As of January 2021, people from 37 countries have traveled in space, and so far upwards of 613 people have reached Earth orbit, with 556 to have reached the altitude of space according to the FAI definition of the boundary of space, and 562 people to have reached the altitude of space according to the American definition.

Now, my friend Richard Branson also flew into near earth (loss of gravity), space… and another friend Jeff Bejos gearing up to fly in a week or so later, and travel up to fifty miles high…

And since Richard has now come back down into Earth after his journey of 50 vertical miles upwards — this new trend of tourists traveling into our upper atmosphere, comes about as Richard joined the crew of Virgin Galactic’s Unity 22 mission lifting-off today from the company’s spaceport in Truth or Consequences, N.M., venturing into the stratosphere a mere nine days before Jeff Bezos is scheduled to make his own foray into the upper echelons of our atmosphere — both promoting their respective Space companies.

https://www.wsj.com/articles/richard-bransons-virgin-galactic-set-for-travel-to-space-in-sunday-flight-11626002209

And although neither Richard nor Jeff, shall go beyond the “Kármán Line”, a point 62 miles above the Earth that’s widely considered the official beginning of space, this voyage will mark a milestone in this new era of billionaire-fueled spaceflight that seeks to popularize space tourism, space industry and related economic development … along the way helping also lift up the fortunes of their Space Companies to a new height and giving a tidy profit to their investors and their pocketbooks as they probably need some more green-dough to feed their goats.

Virgin Atlantic's Richard Branson In Dubai - Day 2
Richard Branson’s longtime dreams of spaceflight are nearly a reality. GETTY IMAGES

This latest of Richards’ publicity stunts is on line with the efforts of the past several months, where ambitious billionaires and optimistic venture capitalists are pumping huge sums of money into companies aiming to do business in the near earth space and beyond.

Indeed from an economic and business liquidity standpoint, this is a new Gold Rush, because literally hundreds of Special Purpose Finance vehicles commonly known as SPACs have mushroomed in our midst and have successfully raised hundreds of millions and inseveral cases tens of billions of dollars over the past two years.

Seems like its every kid-rocketeer and their mothers are flocking to the space industry, since the SPACs are now emerging as a popular new path to the public market for start-up companies in search of funding or Space related activities.

Of course any real rewards from Space Exploration and development — are still several years away but that has not stopped the fervently courageous, early and tenacious, Space Promoters like my good friend Richard Branson from tethering their fortunes to Space and using their own journey into our simple near Earth, gravity-less upper atmosphere, for the sort of financial uptick for his company that lacks the necessary maturity and financial projections “gravitas” that would attract investors to a traditional IPO, or for that matter be permitted to even apply for the SEC filings that would open up the road to an old school Initial Public Offering on the New York Stock Exchange, on the NASDAQ, or the London Stock Exchange and beyond.

So as usual the ultra-promoter and London neighbor of mine Richard helms the SPACs’ charge into space equities development. And thus it is of little surprise that the trend which began with Richard Branson’s October 2019, Virgin Galactic’s going up on the “public markets” seeking liquidity, by merging with a SPAC backed by Chamath Palihapitiya — this new finance trend is giving the space tourism startup a valuation of more than a $12 billion, that today after Richard’s latest stunt foray into near earth space, will continue its valuation stratospheric journey upwards.

As a matter of fact, the Virgin Galactic stock has proven rather volatile upwards in the nearly two years since its one billion SPAC junior IPO offering — the overall trend has been always up, up and away.

And thus today, after Richards’ stunt into near Earth space in the upper atmosphere — has brought the Virgin Galactic company’s valuation to a new market cap of more than $18 billion USD.

No bad for a couple minutes of flotation, that You could also get to enjoy by ponying up approximately $250 K.

In that line of thought the economic rebound has also helped to bring this week, a couple of lesser blank-check mergers from two other companies with their eyes on the skies: Namely, Planet Labs, which sells proprietary data collected from its network of imaging satellites, agreed to go public at a $2.8 billion valuation, and “Satellogic”, another imaging company that offers “satellites-as-a-service” which clients can direct to observe areas of the Earth that are of particular interest, signed on for an $850 million SPAC transaction.

And in a subsequent “Monkey-see-Monkey-do”, imitation is flattery game — at least a half-dozen other high-profile space startups have also lined up SPAC mergers since last October, combining to raise billions of dollars. Small-satellite launch startup Rocket Lab landed a $4.1 billion valuation in its blank-check deal. Satellite data startup “Spire Global” raised $475 million to fuel its competition with companies like “Planet Labs”.

As of now Richard who is regaining his sea legs, might have to prepare to take yet another trip into gravity-less near Earth space, because he has another space SPAC in the works, this year since his satellite launch provider Virgin Orbit is in talks with other fundraisers for another Space SPAC “junior ipo”, that could come at a $3 billion valuation and raise some much needed liquidity to put fuel in his engines and some lift under his wings.

Of course, all these deals have obvious benefits for the companies involved, their employees, the Founders as well for their Venture investors — but they could also be a good sign for the space development community as a whole.

Because many of my Space companies like the venerable “Space Wi-Fi” or the “Space Tug Co”, or the “Satellite Tow Truck” and the Earth longtitudinal Satellite connectivity Low Earth orbit mini-satelite swarm that I pioneered more than a couple of decades ago — never had the financial support of such access to easy money that could allow for a perfect lift-off.

And thus a lack of substantial liquidity and manifest “exits” has been the longtime quandary for all Innovators, Founders and Entrepreneurs, as well as Venture and Private Equity investors in space startups, because even if you think a company could change the world — it can be a tough sell, for a venture capital fund to commit serious and top-shelf capital, if there is little prospect for a timely exit.

Today this all has been changing as these blank-check SPAC “mergers” could help create a positive feedback loop, that would allow us to make money and still take bold risks into the Real Space out there, which is the Innovation for outer space that starts from the inner space of the few inches of gray brain matter, residing fully inside our cranium.

Of course, the rapid rise of SPACs has already proven transitory, because the space industry has a history with SPACs that dates back even farther than Virgin Galactic’s deal in 2019, since way back in 2009, a satellite communications company called Iridium went public by combining with a SPAC sponsored by Greenhill & Co as the New Iridium picked up the pieces from the old Iridium that had gone spectacularly bust and thus the new concern was able to stave off the debt and erase the old sins by coming up as the New Entity that served us well in all of our satellite provided voice and data military telecommunications and beyond. Ineed the Iridium Sat-phone has always been my default tool of survival in the most hair raising “expeditions” missions and adventures that I am not even allowed to talk about.

Yet, in economic terms, the SPACs have been active far more recently, and far more globally, as in 2017, when the Italian rocket-builder Avio completed a blank-check merger.

There are some ways in which the space industry and the blank-check deal are a perfect match. After all, SPACs allow companies to make the sort of forward-looking financial projections (for now, at least) that aren’t allowed in classic IPOs, and yet those forward-looking statements, projections and ebulient blue-sky promises, are often the only thing a company that wants to launch rockets into space will have to go on.

And because the past year or two of SPAC activity in the Space industry, remains a historical outlier — it is certain that at least some blank-check vehicles will continue to emerge in the foreseeable future.

Then again — the future is not the past, and maybe smart and innovative space startups with big league Promoters like Richard at the helm, will remain a long-term SPAC target for expedition, fundraising and profit building as good Capitalist tools for Civilizational development outside of our little green-blue rock hurling through Space at an extraordinary speed and weird trajectory…

But there have also been recent reminders of the risk that comes with investing in space, as the planned SPAC merger for space transportation startup “Momentus” has been complicated by U.S. government worries about foreign ownership, leading to the resignation of Mikhail Kokorich, the company’s Russian CEO, leading the board to announce earlier this month, that Momentus will go “public” with a downward revised deal agreement, that knocked $500 million off its valuation.  

Then, there’s the saga of OneWeb, a British satellite internet provider aiming to compete with the likes of SpaceX and Amazon in the realm of ubiquitous connectivity. Despite having raised more than $4 billion in private funding — OneWeb was forced to file for bankruptcy last March, to wash off the debt like old-Iridium had done, and this allowed them to emerge again out of the docket, late last year with $1 billion in new backing from the U.K. government and India’s Bharti Enterprises.

The take aways lesson here is that Space is as it always have been a rather perilous journey and not one geared for the faint of heart…

And if you don’t believe me and you all doe-eyed about it — go ask old Icarus and Daedalus for witness testimony on that.

Yours,

Dr Churchill

PS:

Because as it turns out, the business of leaving our planet can be difficult, which makes it all the more impressive that companies like Virgin Galactic, SpaceX, Planet Labs and Rocket Lab are so far succeeding in their quests to explore the skies.

And when you see footage of Branson and the rest of the Virgin crew taking off from the New Mexico desert today — please remember, that it wouldn’t have happened without SPACs offering what I have termed since I coined the concept of the “junior-ipo” for the financing of these well-worth-the-risk ventures…

PPS:

As for my friends who dont have the spare $250 K to be found in the coin jar, or amongst the cushions of their couch — you can always experience gravity-less human flight at your local entertainment center where for about $25 you can fly in within the air tunnel-well for about ten minutes longer than Richard’s gravity less experience in near earth space.

Sadly, you never leave the Earth in this low rent scheme, unless some serious mind altering substances are involved in your flight journey as I hear people tend to eat some tiny mushrooms a half hour ahead of flight…

As they always say in aviation “Remove Before Flight” — the brain function — that is.

Who would have thought that in Seattle?

Right?


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