The ups and downs of capitalism in space
Two stories today illustrate how allowing freedom and capitalism to rule in the development of America’s aerospace industry carries with it the potential for wonderful achievements as well as depressing failures.
First the potential failure. Despite having successfully flown several missions demonstrating its orbital tug and service module for cubesats, the company Momentus has been forced to lay off 30% of its staff because of dwindling cash reserves.
Momentus reported a record quarterly revenue of $1.7 million in the second quarter, the first time it reported revenues of more than $1 million in a quarter. However, the company reported a net loss of $18.8 million and ended the quarter with $21.6 million of cash and equivalents on hand.
The company is presently scrambling to find new sources of investment capital, as it does not expect its income to grow sufficiently in the next year to keep itself above water, even though it should successfully fly more flights of its Vigoride orbital tug as well as a new service module version.
Next we have the potential achievement: The financial status of the startup satellite company Terran Orbital appears healthy and strong, mostly because of a $2.6 billion contract to build 300 satellites for the wireless communications company Rivada Space Networks. The first $180 million payment under that contract is expected this year.
At the same time, there are storm clouds in the distance, as there remain unanswered questions about whether Rivada has the resources sufficient to fulfill the contract.
During Terran Orbital’s Aug. 15 earnings call, H.C. Wainwright & Co analyst Scott Buck said Rivada’s vagueness about its plans for financing the constellation has caused “investor hesitation around the contract.”
Terran Orbital has already a number of successes building satellites for others, with its most significant achievement the CAPSTONE lunar orbiter it built for NASA. If the Rivada contract falls through I suspect the company will still be able to garner plenty of customers to survive.
For Momentus the situation is more dire, especially because it already faces strong competition from a number of other orbital tug companies.
On Christmas Eve 1968 three Americans became the first humans to visit another world. What they did to celebrate was unexpected and profound, and will be remembered throughout all human history. Genesis: the Story of Apollo 8, Robert Zimmerman's classic history of humanity's first journey to another world, tells that story, and it is now available as both an ebook and an audiobook, both with a foreword by Valerie Anders and a new introduction by Robert Zimmerman.
The print edition can be purchased at Amazon or from any other book seller. If you want an autographed copy the price is $60 for the hardback and $45 for the paperback, plus $8 shipping for each. Go here for purchasing details. The ebook is available everywhere for $5.99 (before discount) at amazon, or direct from my ebook publisher, ebookit. If you buy it from ebookit you don't support the big tech companies and the author gets a bigger cut much sooner.
The audiobook is also available at all these vendors, and is also free with a 30-day trial membership to Audible.
"Not simply about one mission, [Genesis] is also the history of America's quest for the moon... Zimmerman has done a masterful job of tying disparate events together into a solid account of one of America's greatest human triumphs."--San Antonio Express-News
Two stories today illustrate how allowing freedom and capitalism to rule in the development of America’s aerospace industry carries with it the potential for wonderful achievements as well as depressing failures.
First the potential failure. Despite having successfully flown several missions demonstrating its orbital tug and service module for cubesats, the company Momentus has been forced to lay off 30% of its staff because of dwindling cash reserves.
Momentus reported a record quarterly revenue of $1.7 million in the second quarter, the first time it reported revenues of more than $1 million in a quarter. However, the company reported a net loss of $18.8 million and ended the quarter with $21.6 million of cash and equivalents on hand.
The company is presently scrambling to find new sources of investment capital, as it does not expect its income to grow sufficiently in the next year to keep itself above water, even though it should successfully fly more flights of its Vigoride orbital tug as well as a new service module version.
Next we have the potential achievement: The financial status of the startup satellite company Terran Orbital appears healthy and strong, mostly because of a $2.6 billion contract to build 300 satellites for the wireless communications company Rivada Space Networks. The first $180 million payment under that contract is expected this year.
At the same time, there are storm clouds in the distance, as there remain unanswered questions about whether Rivada has the resources sufficient to fulfill the contract.
During Terran Orbital’s Aug. 15 earnings call, H.C. Wainwright & Co analyst Scott Buck said Rivada’s vagueness about its plans for financing the constellation has caused “investor hesitation around the contract.”
Terran Orbital has already a number of successes building satellites for others, with its most significant achievement the CAPSTONE lunar orbiter it built for NASA. If the Rivada contract falls through I suspect the company will still be able to garner plenty of customers to survive.
For Momentus the situation is more dire, especially because it already faces strong competition from a number of other orbital tug companies.
On Christmas Eve 1968 three Americans became the first humans to visit another world. What they did to celebrate was unexpected and profound, and will be remembered throughout all human history. Genesis: the Story of Apollo 8, Robert Zimmerman's classic history of humanity's first journey to another world, tells that story, and it is now available as both an ebook and an audiobook, both with a foreword by Valerie Anders and a new introduction by Robert Zimmerman.
The print edition can be purchased at Amazon or from any other book seller. If you want an autographed copy the price is $60 for the hardback and $45 for the paperback, plus $8 shipping for each. Go here for purchasing details. The ebook is available everywhere for $5.99 (before discount) at amazon, or direct from my ebook publisher, ebookit. If you buy it from ebookit you don't support the big tech companies and the author gets a bigger cut much sooner.
The audiobook is also available at all these vendors, and is also free with a 30-day trial membership to Audible.
"Not simply about one mission, [Genesis] is also the history of America's quest for the moon... Zimmerman has done a masterful job of tying disparate events together into a solid account of one of America's greatest human triumphs."--San Antonio Express-News
I believe you meant “reign”.
Paul: I did. Typo fixed. Thank you.
So capitalism and business in space is no different from capitalism and business period. Some succeed and some fail as the customers gets to cast their votes. May not be perfect, but it’s a lot better than any alternative.
Paul and Bob, the correct phrase is “rein in”, as in how you use reins to control horses. “You need to rein in your horse.”
Steve Golson: Assuming you are correct, using “rein in” would only make the sentence confusing. I have changed the word to “rule”, which solves the problem entirely.
Thank you all!
Robert, I just ran across this article and thought you would be interested:
https://arstechnica.com/space/2023/07/a-nearly-20-year-ban-on-human-spaceflight-regulations-is-set-to-expire/
Tldr; if congress doesn’t renew their moratorium, the FAA and others will seek to add red tape for human rated rocket design and operations.
Bill B: Thank you. I have been objecting to the provision of the law that is about expire since a year before it was passed by Congress in 2004, anticipating quite accurately this day. Then, the commercial companies and their investors were all for it, because they claimed it gave them “stability” and a good legal regimen to work with. See these two Space Watch columns I did for UPI:
https://behindtheblack.com/space-watch/private-space-more-rules/
https://behindtheblack.com/space-watch/congress-restricts-private-space/
As Ben Franklin said quite correctly, “Those who would give up essential Liberty, to purchase a little temporary Safety, deserve neither Liberty nor Safety.” The space industry did this in 2004, and is about to reap the whirlwind now.
I’m not quite sure that we are getting the free market capitalism that many of us think we are.
Three years ago, commercial space companies were doing fairly well, but this year they are having a hard time of it. There has been evidence that the U.S. government has made the markets somewhat less free than in recent years, causing problems with overregulation and other interferences with our free market capitalist space industry.
Edward: You make an excellent point, that fits with the troubles I’ve documented imposed on SpaceX since the Biden administration took power. This needs a bit more looking into.
The New Space Massacre….rated R
“EBITDA….moan…EBITDA!”
The VCs aren’t coming for you Barbara.
“Ragh!! Solomon Grundy not born last Monday…me need see financial solvency–rah!”
Aaiiee! We are undone!