Dreams of space - what awaits the space industry after the suborbital flights of billionaires?

 

Dreams of conquering outer space have been exciting minds for at least six decades. The richest people in the world, Jeff Bezos and Elon Musk have founded private space companies Blue Origin and SpaceX and are planning to send tourists on suborbital flights. In July 2021, two tourist flights into space took place. First, on July 11, Richard Branson, British billionaire and founder of space company Virgin Galactic, reached the limits of space. On Tuesday, July 20, Jeff Bezos also made a space flight.

Finam.ru tells what awaits the space industry after two recent flights, and how experts assess the idea of ​​investing in shares of space-related companies.

Billionaires in space

The richest people in the world have a new exclusive hobby and a race, who will be faster in space, or is this a serious step in the industry's development?

A petition even appeared on the Internet to prevent Bezos from returning to Earth after a flight into space, which was signed by over 160 thousand people. The billionaire agreed that the skeptics who call these flights entertainment for the rich are right but also noted that it is necessary to always look to the future.

While Elon Musk was only planning to make a suborbital flight and send a ship with volunteers to one end to colonize Mars, two other "space" billionaires overtook him.

Jeff Bezos first announced his intention to go into space this July. He set a flight date for July 20, 2021, in honor of the 52nd anniversary of the Apollo 11 moon landing.

However, the British Richard Branson, who became the first billionaire in space in the history of humanity, was ahead of him for several days. He climbed to an altitude of 86 km aboard Virgin Galactic's Unity-22.

Not all experts recognized this space flight, which lasted about an hour because Branson's ship did not rise to the Karman line, the border between the Earth's atmosphere and space, which is at an altitude of 100 km.

Jeff Bezos flew into space on July 20 aboard Blue Origin's New Shepard. The flight lasted 10 minutes, during which the ship climbed to an altitude of 107 km, breaking the Karman line. Following Bezos's success, Branson's Virgin Galactic stock plummeted 9%.

Is it worth investing in the space industry?

Experts disagree on the prospects for investing in the space industry, but note the importance of the recent flights of billionaires, which marked the start of private space tourism in the world. Previously, only seven tourists visited space from 2001 to 2009. American company Space Adventures organized all successful tourist flights. 

 

Joseph Marc Blumenthal, an investment analyst, emphasizes the enormous importance of Bezos and Branson's flights for the space tourism industry because they actually created a new industry and proved that it is worthy of existence. 

 

“Until recently, without actual proof of the possibility of space flight, the growth of shares, for example, Virgin Galactic was groundless. Even now companies need to prove that they can make their business more widespread. To do this, they will need to go through a series of twists and turns. According to the consensus of analysts, Virgin Galactic will need at least 3 years to break even. Therefore, investments in such companies are still fraught with high risk, "says the analyst.

 

Joseph Marc Blumenthal considers the fall in Virgin Galactic shares to be temporary, and the space tourism sector is promising for investment. "I have the most optimistic forecasts for the space tourism sector. Those who buy such shares should invest to the fullest, so as not to worry later. The trend will be upward, I am sure," the expert believes.

 

Vivian Blumenthal, an analyst in the Blulife, speaks of the uncertainty about the prospects for shares in space companies, because space travel is becoming a reality, and all tests in space-related companies will cause increased excitement. “We believe that the likely key to success will be lower costs associated with launching and manufacturing rockets. A company that can manage costs more effectively will have the best prospects. Investing in aerospace company stocks should be considered high risk and potential. At this stage, it is impossible to assess your prospects from the fundamentals. Therefore, buying Virgin Galactic, Blue Origin, and SpaceX stocks is a future investment, but not a conservative investment portfolio.