Originally published as a niche paid invesment report but I decided to publish it for free.
The purpose of this short investment report is to give you insights of current possibilities of investing in space industry. In coming months and years this industry will become more popular and could potentially become a new ,,bubble” like DOTCOMS in 2001 did, giving early adopters insane profits...
As we know the official IPO of SpaceX is far from now. Elon Musk said that:
,,No near term plans to IPO @spacex. Only possible in very long term when Mars Colonial Transporter is flying regularly."
Way to invest in Spacex is to buy shares of other companies owned by Elon Musk because they are all connected. Look, if SpaceX will land on Mars investors will go apeshit on other shares because they will buy anything signed by Elon Musk!
Just a minute ago while I am writing this ebook the SpaceX rocket has exploded on launchpad! And you guessed what happened? At this moment (1st of September 2016 11AM New York Time) shares of Tesla Motors are dropping by 5% and shares of another Elon Musks company Solar City by 7%! This is how this connection works. And I am sure it will work the other way around in case of any tremendous success. So if anything really good will happen to SpaceX we will get amazing return on Tesla Motors and Solar City. And we can be sure that SpaceX will do what Elon Musk is saying about. There is another lesson from this case. If SpaceX fails in short term (eg. blown rockets…) than we can BUY THE DIPS on Tesla Motors and Solar City. Connection. Remember that. *At the time of publishing Solar City was still a separate entity.
Is SpaceX profitable yet?
Long story short, yes it is. One Falcon 9 is now estimated to cost around 60-70 million dollars to launch and company earns around 12 million on each first start of a new rocket. But used rockets could generate around 40 million of profits with each start. Cost of Falcon Heavy will be over 100 millions but it is not yet ready so we can only speculate. But there are profits already for sure and the big NASA contracts are worth billions.
So you might wonder why the hell the only profitable company from Elon Musk portfolio is not in a public market? Well you can check the Elons letter in the beginning of this ebook. It is logical when company has enough money for development and R&D then there is no need to go public. So we can understand Elon saying that he wants to establish connection between the Earth and Mars and create at least one base on it before company will release it’s shares to wide public. You might say it will be too late to get any profits because all insiders would cash out. I think it will not be too late in any case because exploring space creates endless possibilities and buying shares in IPO and right after will be still the best deal of our lives.
But this ebook is about how to create possibilities even years before IPO of SpaceX. You must think of it as of really long term investment but with amazing risk/reward opportunity. It will require patience but if you are reading this you are aware of potential outcome of SpaceX becoming a global leader in space industry. Dot com bubble will be like a joke compared to what will happen to this industry after SpaceX will establish a connection with Mars and set up bases…
If you want to get some investment exposure to SpaceX than buy shares of Tesla Motors and Solar City because they are all owned by Elon Musk and anything big that happens to single one creates impact for other ones. Keep in mind that this is a very long term investment (10 years +).
Way to invest is by buying shares of companies that have invested in SpaceX so SpaceX success will drive them higher.
One of them is Google which had invested together with Fidelity around 1 billion USD:
,,SpaceX announced it raised $1.0 billion in financing from two new investors, Google Inc. (NASDAQ/GOOG) and Fidelity Investments. Collectively, the two companies own roughly 10% of SpaceX.
According to the company’s web site, SpaceX is profitable and cash flow–positive. It also has nearly 50 launches on its manifest, representing close to $5.0 billion in contracts. That is the information investors love to hear. Unfortunately, SpaceX isn’t desperate for money just yet.’’
Read here more on SpaceX probability of going public this year:
Any company that had invested in SpaceX will benefit if SpaceX will succeed so we can use it as an investment proxy to benefit too.
Invest in companies that operates in space industry and are listed publicly already. SpaceX success will help them and will drive their prices higher as whole industry sentiment will get better.
Here is the list of them:
Orbital Sciences Corporation (NYSE/ORB),
Alliant Techsystems Inc. (NYSE/ATK),
Lockheed Martin Corporation (NYSE/LMT),
The Boeing Company (NYSE/BA),
AeroVironment, Inc. (NASDAQ/AVAV)
There is also one that is listed on Israeli stock exchange:
Space-Communication Ltd. - SCC (TLV)
And bunch of companies not yet listed but worth waiting for their IPO:
SPACE EXPLORATION TECHNOLOGIES CORP.
Aerojet Rocketdyne, Inc.
BABCOCK & WILCOX TECHNICAL SERVICES Y-12, LLC
ITT Defense Electronics & Services
Thales Air Defence Limited
Ils International Launch Services, Inc.
Dassault Falcon Jet Corp.
Carbon fibre producers!
Why? Because rocket bodies are made of it!
It’s worth to read any news, they are important:
Japanese materials maker Toray Industries has agreed to supply carbon fiber to U.S. startup SpaceX for use in the bodies of rockets and space vehicles.
The multiyear deal with Tesla founder Elon Musk’s 14-year-old venture is estimated to be worth 200 billion yen to 300 billion yen ($1.99 billion to $2.98 billion) in total. The two sides are aiming to finalize the agreement this fall after hammering out prices, time frames and other terms.
SpaceX aims to hold down expenses by re-using rockets and spacecraft. Originally, the company made rockets mostly out of aluminum to keep costs low, using carbon fiber only for a few parts, such as connecting joints.
The U.S. company said in a statement, “Toray is one of a number of suppliers we work with to meet our carbon fiber needs for Falcon rocket and Dragon spacecraft production, and we haven’t announced any new agreements at this time. As our business continues to grow, the amount of carbon fiber we use may continue to grow.”
Comparing it to the situation with ion lithium batteries, Elon said that Tesla demand for them equals output of world yearly production by building GIGA FACTORY they are going to double yearly output of production. Now think that this is likely going to happen to carbon fibre production when SpaceX will start to using it at huge scale for rockets.
Other carbon fibre producers:
Cytec Industries Inc
SGL Carbon SE
If space industry is going to grow then they will be buying carbon fibre with hands and feet and all carbon fibre producers pushing they stock prices higher and higher.
How to buy
Saxo Trader is one of the options to buy all above listed stocks:
Basically this is an investment branch of Danish bank which offers very convenient trading platform and it’s free. To open an account you need 10 000$ but after one month you can withdraw all of it and account stays free. You must only do at least one transaction per six months for this account to stay free. Otherwise they will charge you 200$.
But opening an investment account in any of your bank will give you similar options.
It is also wise to have it opened already because when SpaceX IPO will be finally announced there will be hard to get the shares and people will be subscribing to buy them ASAP. Therefore anybody without ready account will be on lost position...