The Billion Dollar Business of Space

In 2021, the entire planet watched in amazement as the space tourism industry took off. For the first time in history, private citizens participated in recreational visits to space, and it appears that this won’t be a once-in-a-lifetime experience.

Some of the most innovative minds in the business world suggest that commercial space flight will eventually be commonplace, and one of the original space tourists is already preparing for his next trip.

Billionaires In Space

Virgin Galactic’s Richard Branson and his five passengers started the trend with a 90-minute flight that took them roughly 50 miles into the atmosphere.

Blue Origin’s Jeff Bezos, better known as the founder of Amazon, went up ten days later with three passengers. That trip, though just ten minutes long, took the group much higher. Bezos and fellow space tourists reached the point where Earth’s atmosphere ends, and space officially begins.

Elon Musk, founder of SpaceX and Tesla, didn’t go to space himself. However, his company successfully launched Shift4 Payments’ Jared Isaacman into orbit through the Inspiration 4 mission. Isaacman and his all-civilian three-person crew spent three days in space, traveling higher than the International Space Station.

Isaacman, a skilled pilot, is already planning his next trip. The Polaris Dawn mission is scheduled for late 2022. In a recent interview on the FYI – For Your Innovation podcast, which is produced by the team at ARK Invest, Isaacman discussed what motivates him to pursue space travel and why he believes space exploration will be one of the biggest business opportunities this century.

Space Innovation Creates New Business 

Jared Isaacman has always been the sort to seek out challenges, but he never expected to be an astronaut. After all, the average person has a better chance of being struck by lighting than joining a NASA space flight. Instead, he completed some of the most demanding flights possible within the earth’s atmosphere – air shows, defense department training, and record-breaking trips around the world.

Isaacman originally thought that the extent of his participation in space tourism would be a financial investment in SpaceX. Instead, he was asked to develop and participate in the Inspiration 4 mission.

From the start, Isaacman was concerned with the expense of such an endeavor when there are so many problems facing people on the ground. That prompted him to introduce a charitable component to the mission – a partnership with St. Jude’s Children’s Research Hospital. To date, this partnership has resulted in contributions of more than $240 million to the cause.

While training for space flight, Isaacman learned as much about building a successful business as he did about orbiting the Earth. Some of the principles he took away from SpaceX and is now working to incorporate into Shift4 Payments’ culture include:

• Get Flat/Stay Flat – Fewer layers can streamline decision-making, along with just about everything else
• The Best Part Is No Part – Whether building a machine or writing an email, less is always more
• Powerful Procedures – Relearning tasks again and again is a waste of time – clear procedures ensure efficiency and allow businesses to execute with urgency

Through his SpaceX mission, Isaacman gained a clear understanding of how the space industry will grow. He said, “Every single thing that SpaceX builds along the way can be monetized and opens up new [business] opportunities.”

With Isaacman’s help, SpaceX is now working on the Polaris Program. It will include up to three manned space missions, and Isaacman expects to return for at least one of them – Polaris Dawn.

The goals of the Polaris Program start with the basics – the intrinsic motivation to explore the unexplored. Isaacman referenced SpaceX’s observation that the world is a more interesting place when people can journey among the stars.

In addition, the Polaris Program will develop technologies that bring the cost of spaceflight down. It will test the current capabilities of a private space program, improve reusable rocket technology, and begin to build the future of space exploration and space tourism.

What might that mean for the relationship between people and space? Isaacman said the list of possibilities is “probably ten miles long.” Some of the changes he expects to see in the future include humans living and working in the lower part of the Earth’s atmosphere, manufacturing taking place above the surface of the planet, and someday, a colony on Mars.

How To Invest In Space Travel And Exploration

Of the three companies that put billionaires in space, only Virgin Galactic stock is available to buy. For the moment, SpaceX is not publicly traded, and neither is Blue Origin. Of course, Tesla and Amazon are.

However, even without SpaceX and Blue Origin, it is possible to add space travel and exploration stock to your portfolio. These are the most promising space-related companies available for trading today:

• Shift4 Payments – The biggest drivers of growth in the space industry are likely to be satellite-delivered internet and satellite broadband. That’s the market that SpaceX’s Starlink aims to capture. Who has been tapped to handle related payment services? None other than Jared Isaacman’s Shift4 Payments.
• Trimble – This company is combining new technology and space exploration to connect the digital and physical world. It offers digital imaging, modeling, and analysis so that clients can maximize the use of their physical assets.
• BlackSky Technology – There are endless use cases for satellite imagery, from domestic intelligence activities to commercial commodities and insurance. BlackSky can scan any area on the planet and return images in 90 minutes or less, making it a valuable partner in both the public and private sectors.

Aside from individual stocks, a handful of exchange-traded funds (ETFs) are dedicated to space-related advances. Examples include the Procure Space ETF (UFO), the SPDR S&P Kensho Final Frontiers ETF (ROKT), and the ARK Space Exploration & Innovation ETF (ARKX).

Is Cathie Wood’s ARK Space Exploration & Innovation ETF A Buy?

When Cathie Wood founded ARK Invest in 2014, she did so with a singular objective: to identify the industries of the future and invest in the innovative companies that will disrupt business as usual.

The ARK Invest family of funds focuses on a number of areas, including autonomous technology, robotics, the genomic revolution, next-generation internet, fintech innovation, mobility-as-a-service, 3D printing, and cryptocurrency.

In 2018, Wood added a new ETF to the ARK Invest menu: the Space Exploration & Innovation ETF. Its goal is to be a part of the new era of space exploration by investing in reusable rockets, orbital and suborbital aerospace technology, aerial drones, and enabling technology. The fund’s top five holdings include:

• Trimble
• Kratos Defense & Security
• Aerovironment
• The 3D Printing ETF
• L3Harris Technologies

Investors who want exposure to the next phase of space exploration and prefer the ETF advantage of instant diversification may find that the ARK Space Exploration & Innovation ETF is a buy.

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