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.
The support of my readers through the years has given me the freedom and ability to analyze objectively the ongoing renaissance in space, as well as the cultural changes -- for good or ill -- that are happening across America. Four years ago, just before the 2020 election I wrote that Joe Biden's mental health was suspect. Only in this year has the propaganda mainstream media decided to recognize that basic fact.
Fourteen years ago I wrote that SLS and Orion were a bad ideas, a waste of money, would be years behind schedule, and better replaced by commercial private enterprise. Even today NASA and Congress refuse to recognize this reality.
In 2020 when the world panicked over COVID I wrote that the panic was unnecessary, that the virus was apparently simply a variation of the flu, that masks were not simply pointless but if worn incorrectly were a health threat, that the lockdowns were a disaster and did nothing to stop the spread of COVID. Only in the past year have some of our so-called experts in the health field have begun to recognize these facts.
Your help allows me to do this kind of intelligent analysis. I take no advertising or sponsors, so my reporting isn't influenced by donations by established space or drug companies. Instead, I rely entirely on donations and subscriptions from my readers, which gives me the freedom to write what I think, unencumbered by outside influences.
Please consider supporting my work here at Behind the Black.
You can support me either by giving a one-time contribution or a regular subscription. There are five ways of doing so:
1. Zelle: This is the only internet method that charges no fees. All you have to do is use the Zelle link at your internet bank and give my name and email address (zimmerman at nasw dot org). What you donate is what I get.
2. Patreon: Go to my website there and pick one of five monthly subscription amounts, or by making a one-time donation.
3. A Paypal Donation:
5. Donate by check, payable to Robert Zimmerman and mailed to
Behind The Black
c/o Robert Zimmerman
P.O.Box 1262
Cortaro, AZ 85652
You can also support me by buying one of my books, as noted in the boxes interspersed throughout the webpage or shown in the menu above. And if you buy the books through the ebookit links, I get a larger cut and I get it sooner.
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.
The support of my readers through the years has given me the freedom and ability to analyze objectively the ongoing renaissance in space, as well as the cultural changes -- for good or ill -- that are happening across America. Four years ago, just before the 2020 election I wrote that Joe Biden's mental health was suspect. Only in this year has the propaganda mainstream media decided to recognize that basic fact.
Fourteen years ago I wrote that SLS and Orion were a bad ideas, a waste of money, would be years behind schedule, and better replaced by commercial private enterprise. Even today NASA and Congress refuse to recognize this reality.
In 2020 when the world panicked over COVID I wrote that the panic was unnecessary, that the virus was apparently simply a variation of the flu, that masks were not simply pointless but if worn incorrectly were a health threat, that the lockdowns were a disaster and did nothing to stop the spread of COVID. Only in the past year have some of our so-called experts in the health field have begun to recognize these facts.
Your help allows me to do this kind of intelligent analysis. I take no advertising or sponsors, so my reporting isn't influenced by donations by established space or drug companies. Instead, I rely entirely on donations and subscriptions from my readers, which gives me the freedom to write what I think, unencumbered by outside influences.
Please consider supporting my work here at Behind the Black.
You can support me either by giving a one-time contribution or a regular subscription. There are five ways of doing so:
1. Zelle: This is the only internet method that charges no fees. All you have to do is use the Zelle link at your internet bank and give my name and email address (zimmerman at nasw dot org). What you donate is what I get.
2. Patreon: Go to my website there and pick one of five monthly subscription amounts, or by making a one-time donation.
3. A Paypal Donation:
5. Donate by check, payable to Robert Zimmerman and mailed to
Behind The Black
c/o Robert Zimmerman
P.O.Box 1262
Cortaro, AZ 85652
You can also support me by buying one of my books, as noted in the boxes interspersed throughout the webpage or shown in the menu above. And if you buy the books through the ebookit links, I get a larger cut and I get it sooner.
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!