Sometime in early 2031, America plans to shut down the International Space Station (ISS), deorbit the station, and cause it to (mostly) burn up in Earth's atmosphere before crashing into the ocean. The question now is, what will replace the ISS?
- The Blue Origin-led consortium including Sierra Space, Boeing (NYSE: BA), and Redwire plans to build Orbital Reef, a "mixed-use space business park" that will support different kinds of human spaceflight activity.
- Northrop Grumman(NYSE: NOC), going solo on a plan to convert Cygnus spacecraft into a space station, won $125.6 million in funding from NASA.
- And Lockheed Martin(NYSE: LMT), in cooperation with privately held Voyager Space, won a NASA contract worth $160 million to design their Starlab space station.
Additionally, privately held Axiom Space is well along on its plan to train private astronauts aboard ISS, then attach its own modules to the space station, and later detach four of those modules to form its own private space station before ISS takes its swan dive. Axiom has already conducted two missions aboard ISS, and signed contracts for two more.
On top of all that, earlier this year a fifth space company, California's Vast Space, announced plans to launch the first module of its own space station to orbit in 2025.
All of which seemed to add up to an embarrassment of riches for NASA. Space was positively filling up with companies ready, willing, and (hopefully) able to replace ISS with private space stations that could perform ISS's mission well before the latter plunged into the sea.
Except that now things seem to be rolling into reverse.
NASA's incredible shrinking space race
In back-to-back announcements this week, it was reported that two of the three marquee space companies that won NASA contracts to design private space stations are on the ropes and potentially dropping out of the competition.
Blue Origin may be the first to fall. Last week, CNBC reported that Jeff Bezos' space company has a "rocky" relationship with primary partner Sierra Space, and on Monday, Reuters confirmed Blue Origin's plans to "break up" with Sierra. Granted, Blue Origin might continue to work on Orbital Reef with its other partners. But both news outlets say the company is more interested in concentrating on its multibillion-dollar project to build a moon lander for NASA than on the long-shot space station project.
No sooner had this Blue news broken than Ars Technica reported that Northrop Grumman is also "dropping out of the competition" to build a replacement space station for NASA. (More on that in a moment.)
And so all of a sudden, it seems NASA has a lot fewer horses to bet on in this space race.
Launching a space shuffle
Or not. The closer I look at the story, the more I think this apparent shakeout of companies exiting the race to build space stations is actually a shake-up -- resulting in a more certain outcome after the shuffling is complete.
Beginning with the obvious, whatever happens with the higher-profile teams, Vast Space and Axiom Space both seem intent on forging ahead with their plans to build independent space stations. As private companies, it's hard to know whether they have the funds to accomplish this without NASA support. On the plus side, though, this need for funds may encourage Vast, or Axiom -- or both -- to pursue an initial public offering (IPO) to raise the money needed, giving outside investors like you and me a chance to participate in their success.
Meanwhile, among the more immediate opportunities for investment -- Lockheed Martin, Northrop Grumman, and Boeing -- this week's shakeout actually makes it clearer which companies to bet on.
Start with Lockheed. In August, Reuters reported that Airbus is replacing Lockheed Martin on the Voyager Space team. While Lockheed might play some role in this alliance, it won't be a leading role. Furthermore, Ars reports that Northrop -- while no longer seeking a leading role of its own -- is now teaming up with Voyager to help build the latter's space station.
That leaves Boeing to account for. If Blue Origin proceeds with its space station plans in Sierra Space's absence, then Boeing may still have a role to play there. On the other hand, if the Blue Origin team falls apart, and Boeing still wants to play a part in building a new space station (which it should -- it was the lead contractor on ISS, after all), then it's entirely possible Boeing could migrate over to Voyager's coalition as well.
At that point, the choice for investors will be easy: Wait for Vast or Axiom to announce an IPO, and buy into it. Or invest in literally any of the publicly traded firms still in the race -- which is to say Airbus, Northrop Grumman, and perhaps Boeing.
Since they're all on the same team, your chances of investing in a winner should increase dramatically.
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