Welcome to the universe of “power supremacy”

​$55 million orbiting the ground for 8 days, is space travel good business?

Welcome to the universe of "power supremacy"

The rich people’s space travel project has kicked off. It is no longer only astronauts (astronauts) who can enter space, but space tourists (space tourists) are here.The full text contains 4675 words, and it takes about 12 minutes to readAuthor | Jia YangFly into space! This is the dream of countless people when they were children. But for most people, this dream is quite expensive.Manned spaceflight has always had a strong political nature, and has since increased its scientific research attributes. In the past, only the power of the whole country could send a few astronauts who have been rigorously trained into space.The wealthy businessman Dennis Tito spent 20 million US dollars to buy a seat on the Russian Soyuz spacecraft in 2001 and became the first tourist to visit the International Space Station. He stayed in orbit on the earth for nearly 8 days and revolved around the earth. 128 laps. In the next 20 years, only 7 people followed suit. But in the next 12 months, this number is expected to double.There are several billionaires who are known as “mad men” who have gone further than Tito. They have established private space companies at the beginning of this century, and they want to participate in this game. To be successful in the field of space requires years or even decades of hard work and patience. This is the advantage of these wealthy people, regardless of cost and short-term returns.Just this year, “British Iron Man” Richard Branson’s Virgin Galactic and Amazon founder Bezos’s Blue Origin (Blue Origin) began to reap the rewards, and they held their first commercial space travel flights. . SpaceX’s boss, Musk, also booked a ferry ticket with Virgin Galactic. This is very subtle—SpaceX is already fully capable of doing “space tours”, and in fact has already launched manned projects, but currently focuses most of its energy on On government orders.

Welcome to the universe of "power supremacy"

This shows that there are differences in the commercial paths of the private aerospace “Big Three” space travel, but the basic problems they face are the same-high costs, huge risks, and it is difficult for the market to expand in a short period of time.

The new era has indeed arrived

Now it’s Jeff Bezos’ turn to fly to the edge of space. Blue Origin’s selected takeoff date is July 20th, which coincides with the 52nd anniversary of the Apollo 11 moon landing.

After Branson took the lead in Bezos’s smooth liftoff and returned on July 11, Blue Origin lost the first place and had to regain the technical concept, saying that Virgin Galactic was only a “suborbital”. Flight does not exceed the “Carmen Line” defined by the international scientific community-100 kilometers above sea level.

According to Blue Origin, its New Shepard (New Shepard) will be able to fly over the Carmen Line, a real space flight, implying that it has stronger technical capabilities.

But for passengers, the two projects have more in common. Both projects are like riding a giant roller coaster, experiencing weightlessness for a few minutes at the highest point, and viewing the panoramic view of the earth through the porthole with extraordinary curvature. They only fly to the edge of outer space. And did not reach the earth orbit-orbital flight requires more thrust to accelerate to the first cosmic speed, reaching an altitude of 400 kilometers, landing requires a stronger thermal protection system, so the cost is much higher.

Welcome to the universe of "power supremacy"

Manned spaceflight is not new, but these two flights have huge symbolic significance. In the context of the Cold War, astronauts were once portrayed as a special American masculinity related to patriotism and belief. When the space program shifted the focus to science, astronauts remained an elite force. The rich people’s space travel project has kicked off a prelude. It is no longer only astronauts (astronauts) who can enter space, but space tourists (spacetourists) are here.

For now, “space travel” is only for the rich a circle of industry.

Virgin Galactic has sold about 600 tickets to customers including Tom Hanks, Justin Bieber, and Lady Gaga, with ticket prices ranging from US$200,000 to US$250,000. After the official operation in 2022, it will further increase. high price. Blue Origin is expected to announce the operating price after Bezos takes off, but the first flight ticket was auctioned at a price of 28 million U.S. dollars, and there were 7,600 bidders worldwide.

In this unconfirmed space suborbital travel market, surveys show that the potential market has a total population of approximately 2.4 million people, with a per capita net worth of more than US$5 million. Virgin Galactic’s prospectus also mentioned that more than 90% of the bookers have a personal net worth of more than US$1 million, and about 70% of the bookers have a personal net worth of less than US$20 million.

But only in this market, can the space tourism industry become a stable business?

Virgin Galactic’s latest financial report in May showed that cash on hand at the end of the first quarter was approximately US$617 million, and a single-quarter loss of US$55.9 million was a slight decrease from the previous quarter’s loss of US$59.5 million.

Virgin Galactic estimates in its financial report that it will enter regular commercial operations as early as 2022 and will eventually conduct 400 flights a year. By 2025, the cumulative revenue of space travel will reach $1 billion. And this can’t cover Virgin Galactic’s over $1 billion in research and development expenses in the past 17 years. The growth of the entire market is not exponential. According to a report by Industry ARC, the space tourism market is expected to reach US$1.3 billion by 2025, with a compound annual growth rate of 12.4% during the period.

But to become a commercial company, not just a rich toy, Branson, Bezos and Musk need more than just providing sub-orbital driving services for the super rich .

Judging from the plans announced by each, Virgin Galactic is the only company in the Big Three that focuses on “travel”.

First of all, it hit it off with New Mexico, where the launch site is located, and hopes to create a theme park-like territorial domain. Taxpayers in New Mexico have spent $220 million to build a US spaceport in the desert.

Second, Branson’s can use its high-altitude aircraft to provide supersonic flight for corporate executives who are not sensitive to price. According to the investors of Virgin Galactic, this is a very profitable business. It can reduce the 10-hour intercontinental flight to 90 minutes. It may take 5-10 years to verify this technology. Once successful, it will divide the airline 300. More than 100 million U.S. dollars in revenue.

The goals of Blue Origin and SpaceX are much greater, and the business models and technical capabilities required to operate these businesses are also very different. For them, space tourism is only part of their commercial aviation business.

Blue Origin describes its vision on its official website as “To achieve a future where millions of people live and work in space for the benefit of the earth. To protect the earth, Blue Origin believes that humans need to expand, explore, and find new energy and materials.” Resources and transfer industries that put pressure on the planet to space. We are committed to developing partially and fully reusable launch vehicles that are safe and low-cost, and can meet the needs of all civilian, commercial and defense customers.” In the first vision, aerospace flight is a new mode of transportation that carries cargo and supporting industries, and is not limited to suborbital businesses.

Welcome to the universe of "power supremacy"
Bezos, the picture comes from Visual China  

The commercial crew plan and the return to the moon plan led by the US government encourage private forces to enter the space field. Private startups such as Blue Origin and SpaceX have ushered in huge opportunities. Government orders are their core focus.

Manufacturing reusable rockets, thereby reducing costs, is one of the frontiers of competition. Blue Origin was one step faster at this point, achieving the rocket’s vertical landing and recovery one month earlier than SpaceX. Blue Origin received more than $25 million in orders from NASA in the 2010s, but as the commercial crew program continues, NASA’s manned flights to and from the International Space Station have been ordered by its competitors, SpaceX and Boeing. Carve up. In late April this year, Blue Origin lost to SpaceX in the final bid for the lander of the Artemis manned lunar project. The order is worth US$2.9 billion.

Welcome to the universe of "power supremacy"
SpaceX successfully launched NASA’s manned project, the picture comes from Visual China  

This makes Blue Origin eagerly seek other customers to develop business, and space tourism is one of them.

SpaceX, which regards colonizing Mars as a mission, also has two space tourism projects of its own, which are more expensive than competitors’ suborbital flights, and will enter space and orbit the earth. At the point of time, SpaceX failed to compete with Blue Origin and Virgin Galactic.

The first plan was funded by billionaire Jared Isaacman and took off as early as September 2021. Another plan is to be carried out in 2022, organized by Axiom Space, with $55 million per person, and will stay on the space station for eight days.

SpaceX has now become a major supplier to NASA. For it, sending paying customers to space is an intermediate step. Space tourism may provide a source of revenue to support the development of larger, Mars-centric interstellar spacecraft systems. After completing the latest round of financing in April this year, SpaceX’s valuation rose to 74 billion U.S. dollars from 46 billion U.S. dollars in August last year.

Based on the concept of “space travel”, many other startup companies have designed other service projects.

The manned space flight company Space Perspective is planning to use a high-tech version of the hot air balloon to send passengers to the edge of space.

Orbital Assembly plans to open a luxury space hotel floating in the orbit of the earth in 2027, including a restaurant, gym, earth observation lounge and bar. According to reports, a three-and-a-half-day accommodation is expected to cost US$5 million.

Taking the universe as a gamble

“When I was a kid, I looked up at the stars with dreams. Now, I sit on a spaceship and look down on the earth. I want to tell the next generation of dreamers : If we can do it, boldly imagine what you want to do.”

When Branson recorded this video in the weightless state of the space plane, Virgin Galactic had not been commercialized for 17 years, but in the past year, it had successfully capitalized.

Welcome to the universe of "power supremacy"
Branson Live Screenshot  

Investors’ enthusiasm for space technology is greater than ever.

Many executives, analysts and investors said that there are two reasons for this boom. Technological progress has reduced the cost of space services, which is similar to the development of consumer electronics and smart car industries; while private companies are focusing on machine learning and artificial intelligence. The demand for satellite data in services such as cloud computing, and the demand for bandwidth such as video have stimulated a large number of civil transmission needs.

All areas of commercial aerospace, from launch, satellite communications, space tourism, satellite broadband, human life support, supply chain and even asteroid mining, are all being pursued. A report from the analysis company Bryce Space & Technology in 2019 shows that most of the funds are focused on businesses in the “ecological construction” category, which are currently the most profitable businesses, such as satellite communications and data analysis.

According to data from the space analytics company BryceTech, space startups raised more than $7 billion in 2020, twice the amount it was two years ago. This year’s boom continues. Satellite Internet company Astranis completed a financing of US$280 million in April, and Axiom Space, which aims to build the first commercial space station, raised US$130 million in February.

Virgin Galactic is one of the most representative cases of capital fanaticism.

In October 2019, Virgin Galactic used the SPAC shell company of former Facebook executive Chamath Palihapitiya to go public, becoming the first and only commercial space travel company to be listed on the New York Stock Exchange. Virgin Galactic has since ignited the cosmic frenzy of the open market. Virgin Galactic’s share price was brought to new highs all the way in the GameStop trend, and it was once again speculated before the launch of the project.

Welcome to the universe of "power supremacy"
Virgin Galactic share price  

Space-themed funds have also been born one after another. For example, Wall Street star fund manager Catherine Wood launched the Ark Space Exploration ETF (ARKX).

Prior to this, space companies were either the businesses of large conglomerates such as Boeing and Lockheed Martin, or the private companies of billionaires. Crucially, it turns out that investors cannot easily withdraw from space startups, which makes investing in space companies more risky. Virgin Galactic’s SPAC model paved the way for a new ecosystem.

A recent report by IHS Markit pointed out that a space-related SPAC transaction worth $10 billion is in preparation. Those seeking to go public include launch companies Rocket Lab and Astra, satellite data analysis companies BlackSky and Spire Global, and provide “last mile” for spacecraft. Delivery” Momentus.

SPAC has become synonymous with crazy speculation to a certain extent. Conquering space is essentially a speculative effort. In the eyes of some investors, lofty goals may have to go through some form of bubble and irrational prosperity before they can be reached. As venture capitalist Bill Janeway said, without SPAC, we cannot spell Space.

But the supervision has taken note of the risks. The new chairman of the US Securities and Exchange Commission (SEC), Gary Gensler, is reviewing SPACs, and some transactions may fail.

Sentiment in the secondary market, which focuses on short-term benefits, fluctuates sharply. With Virgin Galactic as the weather vane, the enthusiasm of stock market capital is weakening. Branson and Pali Hapitia recently sold most of their holdings.

“A lot of people have real enthusiasm for this industry, but some of them are just afraid of being late.” McNeill, co-head of Morgan Stanley Technology Equity Capital Markets, said that some noble efforts may take many years to pay off, and some funds may It will take 50 years to exit, and this new economy requires patient investors.

Morgan Stanley predicts that by 2040, the global aerospace industry may generate more than $1 trillion in revenue. This figure is almost the gross domestic product (GDP) of South Korea in one year. As launches become more sophisticated, cheaper, easier, and faster, it will allow the rest of the ecosystem, from satellites to services, to develop into a broader market.

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