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Tensions With Russia Will Boost Private Space Companies

Tensions With Russia Will Boost Private Space Companies

The Russian Soyuz rockets have helped define human history.

They launched the first earthlings to space. The cargo included tortoises, worms and flies.

The rockets flew them around the moon and brought them safely back to earth.

More famously they helped put the first man in space, Yuri Gagarin.

Despite some of their early failures, the Soyuz rockets became the most popular over the years.

For a long time, the only country that had better rockets was the United States.

But long, drawn-out political battles over space funding limited their viability.

On the other hand, the Soyuz was cheap and reliable.

So, despite being old and unsophisticated, the world came to depend on them.

That was the case until the war in Ukraine.

It’s clear that things won’t soon go back to the way they were.

But this isn’t a real disruption to the space industry.

The Soyuz Is No Longer on Top

Most countries stepped up sanctions against Russia in response to the war.

The tensions from these sanctions extended to the Russian space agency as well.

Some of the incidents from the past few weeks include:

  • Russia threatening to abandon an American astronaut aboard the International Space Station.
  • The European Space Agency suspending its Mars mission with Russia.
  • Russia terminating a launch deal with a U.K.-based satellite communications company.

It’s true that countries like the U.S. still depend on Russian Soyuz rockets to get people to space and back.

But they now rely on private companies for nonhuman cargo and other space services.

Additionally, SpaceX and Boeing are currently developing rockets rated for human flight.

And as the chart below shows, they’re able to do it for the same cost as the Soyuz, if not cheaper.

Russia’s Space Age Is Coming to an End

The U.K.-based satellite company that lost its deal with the Russian space agency is OneWeb.

It plans on bringing satellite-based internet services to the public by the end of 2022.

After the falling-out with the Russians, it brought its business over to SpaceX.

This is the future that we can look forward to.

Without Russia, companies and governments will flock to private companies.

And the list of private companies with an interest in space is booming.

They include traditional players like Northrop Grumman and Lockheed Martin as well as new entrants, like billionaire Jeff Bezos’s Blue Origin.

Bank of America expects the space services market to grow 2.7X by 2030.

A great way to capitalize on this trend is to invest in the SPDR S&P Kensho Final Frontiers ETF (NYSE: ROKT).

The ETF focuses on space launch companies as well as tech developers with applications in space.

But if you’re looking for individual names in space, check out Ian King’s New Era Fortunes service.

Regards,

text

Andrew Prince

Research Analyst, Strategic Fortunes

Morning Movers


 

From open till noon Eastern time.

Allego N.V. (NYSE: ALLG) offers charging solutions for electric cars, motors, buses and trucks in Europe. This stock went public on the New York Stock Exchange last week via a SPAC deal and is up 104% today thanks to increased social media attention.

 

Cenntro Electric Group Ltd. (Nasdaq: CENN) manufactures electric light and medium-duty commercial vehicles. It has no company specific news to report; rather, it is up 28% thanks to a rally in electric vehicle stocks today.

 

ZTE Corp. (OTC: ZTCOY) is a Chinese telecommunications equipment maker that is up 22% today. The stock soared after U.S. courts allowed the company to end its five-year probationary period after it violated U.S. sanctions against Iran.

 

Clear Secure Inc. (NYSE: YOU) provides a member-centric secure identity platform using biometric data to automate identity verification at airports. The stock is up 22% after the company beat analyst estimates for the fourth quarter thanks to increased travel volumes.

 

Zentek Ltd. (Nasdaq: ZTEK) researches and develops graphene and related nanomaterials. It is up 21% on its second day of trading on the Nasdaq after an uplisting from over-the-counter-markets.

 

Iqiyi Inc. (Nasdaq: IQ) provides online entertainment and streaming services in China. It is one of the many Chinese stocks that is up 21% today on positive sentiment from the news on ZTE and the news of share buybacks from Xiaomi.

 

GameStop Corp. (NYSE: GME), the meme stock and specialty retailer of video games and video game-related products, is up 19% today. Meme traders piled into the stock once more on the news that the company’s chairman, Ryan Cohen, bought more shares of GameStop.

 

Full Truck Alliance Co. Ltd. (NYSE: YMM) operates a digital freight platform that connects shippers with truckers to facilitate shipments across China. It is another Chinese stock that is up 16%, continuing on its rally from Tuesday as positive news out of various Chinese companies raises investor confidence.

 

AMC Entertainment Holdings Inc. (NYSE: AMC) owns and operates movie theaters in America. It has no news to report; rather, it is one of the meme stocks that is up 14% today thanks to the move in GameStop.

 

Oric Pharmaceuticals Inc. (Nasdaq: ORIC) discovers and develops therapies for treatment of cancers. The stock is up 13%, regaining some ground after a sharp drop Tuesday when it halted Phase 1 development of its lead candidate for metastatic prostate cancer and solid tumors.

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