Space Stocks Rally on new space eTF by ARK

Virgin Galactic (NYSE: SPCE) stock jumped 22% yesterday after Cathie Wood’s Ark Investor announced that is looking to introduce a space ETF. The ARK Space Exploration ETF will be called ARKX and is looking to add global companies and U.S companies that are engaged in innovation and space exploration. Another beneficiary of the news is Maxar Technologies (NYSE: MAXR) which is up 19.57%, Stable Road Acquisition (NASDAQ: SRAC) up 22% and SPAC New Providence Acquisition (NASDAQ: NPA) also climbed 13%. Ark’s plans to launch this ETF gave rise to a number of stocks along with more attention from investors that blindly follow Cathie Woods. This article aims to spread the knowledge on the new “action” that is heating up in the space sector.

Summary

  • Space Stocks jumped after Cathie Woods Ark’s Investment Manager announced the launch of the new space sector ETF. SPCE +22%, MAXR +19.57%, SRAC +22%, ETF UFO +6.5%.
  • Hot IPOs are trending after the attention has risen such as Voyage and SpaceX. Voyage had made some deals this year with key players in the space sector hardware technologies. The IPO will happen by the end of 2021. SpaceX has not announced a date yet.
  • Virgin Galactic is at the center of attention when it comes to space exploration and seems to be getting investors’ interest even more after the news surrounding ARK’s space ETF.

What will the ARKX ETF focus on

The Space Exploration ETF would focus on companies that are “leading, enabling, or benefitting from technologically enabled products and/or services that occur beyond the surface of the Earth,” the filing said.

Categories of ARKX ETF

The new ETF is looking to cover four categories of the space sector in the ETF. First, are the orbital aerospace companies that launch services such as rockets and satellites. Second, is the suborbital aerospace companies that are involved in the development of drones and flying EVs. Third, enabling technologies companies which include the work of artificial intelligence and robotics. Last, Aerospace companies that are involved in the manufacturing, designing of aircraft, spacecraft and rockets.

Surprisingly, all possible candidates that could be added to the portfolio were up as well as the procure space ETF (NASDAQ: UFO) being up 6.3% the next day.

Hot space sector IPOs

The Launch Company

According to Seeking Alpha space investing could be a major theme in 2021. Other space exploration companies are on the hot list of IPOs such as SpaceX and Voyage Space. Voyage Space Holdings launched a couple of acquisitions this year. The first deal was with The Launch Company that is focusing on lowering the costs of access to space through process and automation. The company is also working on technologies that will make launching a rocket a routine.

Pioneer Astronautics

The second deal was with Pioneer Astronautics. The company researches and develops new technologies to advance humanity’s reach into space in order to improve life on Earth. Earlier this year, Pioneer Astronautics was one of the four companies selected by NASA’s Artemis program to help mature companies for sustainable exploration of the moon. Under the contract, the company will build and demonstrate hardware to produce oxygen and steel from lunar regolith or moon dust.

X.O Markets-Nanoracks

Moreover, Voyage Space Holdings added to its portfolio a new acquisition of a majority stake in X.O markets. X.O Markets is the owner of Nanoracks which is a private space services company. It builds tools that allow for the re-purposing of in-space hardware and turns it into agile space stations. Nanoracks includes the Bishop Airlock that was installed on the International Space Station. The company is also considering the fact of going public through a SPAC deal or an IPO.

Voyage is planning to go public at the end of 2021 in what will likely be a very high-profile IPO for the year. According to Seeking Alpha “While the company doesn’t have launch capabilities yet, it will be a trading peer with SpaceX (SPACE) if that IPO fires off as well”.

Space X

Space X is a privately held company also known as Space Exploration Technologies founded by Tesla’s owner Elon Musk. The company is manufacturing aerospace and space transportation services. The goal of the company is to reduce the costs of space transportation to enable the colonization of Mars. Furthermore, it was the first private company to successfully launch and return a spacecraft from Earth orbit. However, there is no official date or even an approximate date to expect an IPO.

About Virgin Galactic

Virgin Galactic is an American company involved in spaceflights under the Virgin Group. The company is developing spacecraft and is looking to provide spaceflights to space tourists and suborbital launches for space science exploration. The stock’s price rallied after the news; however, it was already rallying from before regarding updates on testing and review of its rocket monitor.

The company says that after the corrective work that has been implemented on the rockets, it is now in a position to confirm the pre-flight timeline for the next test flight. They will publish the dates that the test flight will take place. These are good news, for those who do not know, because the company had a previous test flight date that was canceled in December. It caused a slight drop to the stock.

It is expected that the stock will fly up once the test flight date is public and especially if the test flight goes well. On the other hand, we can expect a drop if things do not go as planned.

Virgin Galactic is the center of attention when it comes to the space exploration sector and it seems to be growing investors’ interest after ARK’s new ETF will be launched.

Maxar Technologies

Maxar Technologies is a space technology company specializing in the manufacturing of communicating, Earth observation, radar and on-orbit servicing satellites and related services. During this year, the company took full ownership of 3D analytics company Vricon. This is a joint venture that has been helped by the Swedish aerospace group Saab. Maxar is funding the transaction with $150 million in new debt via its senior secured notes. Maxar brought Vricon into its portfolio since it plans to begin launching its next-generation WorldView Legion imagery satellites with SpaceX next year. This will allow the company to create photo-realistic, 3D accurate data models overnight.

Since we at FDGT had already expressed our strong focus on 3D Printing innovation, the deal with Maxar and 3D analytics makes it even more interesting and it will surely bring innovation one step ahead.

Disclaimer – I/we have no position in any stock mentioned. I wrote this article myself, and it expresses my personal opinions. I am not receiving any compensation for it, other than FDGT Academy. I do not have or had in the past any business relationship with any company that is mentioned in the above article.

Natalia C. - Junior Analyst at FDGT Academy

Natalia C. - Junior Analyst at FDGT Academy

I am a stock analyst/investor with prior experience and knowledge to BSc Accounting and Finance. After completing my degree and exposure to the accounting firms I decided that the direction I should choose is towards the Investment world. I completed my masters in Investment Management where it gave me solid fundamentals to build my career on. I have examined a lot of different aspects of investment, from REITS, derivatives, currencies, bonds, equity and hedge funds. I never stopped learning about the market which is why I can analyze and write articles for FDGT community always personally opinionated. My passion are green energy and electric vehicles stocks as a whole. I also had my share of analyzing the work form home stocks that are coming to take over in the upcoming years.