Investing in Space: Deutsche Bank draws investors, companies for NYC for summit – CNBC

A view from the Deutsche Bank Center in New York City on Nov. 15, 2023.

Michael Sheetz | CNBC

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Overview: View from the Summit

Yesterday Deutsche Bank held a Space Summit conference here in New York City. On the sidelines, CNBC filmed interviews with more than a half dozen senior executives from Rocket Lab to Mynaric and more.

Lots of great content to come from those interviews in the future, but for now here are some takeaways from my final conversation of the day. We interviewed Deutsche Managing Director for Investment Banking Vaibhav Lohiya, the bank’s space ringmaster, who shared his thoughts from the day’s meetings and panels.

 “I think the sentiment – reflected not only in conversations I’ve had here, but also the general investment that I’ve seen coming into the space sector in the last two years or so – is one of caution. That is, one of selecting companies that are essentially the top of their sub-vertical. Investors want to invest in space, but investors understand that this is a long investment cycle,” Lohiya said.

 In general, the space sector is “much more rationalized” than bubble times of two or three years ago, Lohiya noted. His hope is that the relative pullback represents a “much more sound approach to investment” rather than an overcorrection to risk aversion. 

 Lohiya said the space sector is different than other fast-growing American industries, such as electric vehicles, clean energy or fintech.

 “All of these sectors have high growth that we’re seeing in the macro-economy today, but they are essentially replacement technologies,” Lohiya said. “When you look at the space sector, there is a portion of it that enhances efficiencies in the way we do things on Earth … but in addition, there’s this whole aspect of exploration, of essentially a new frontier.”

 2023’s been a tough year for space stocks – with only a handful positive year-to-date. Every single de-SPAC stock is trading below its debut price. 

 But Lohiya pointed to Deutsche’s Space Summit attendance as representative of continued investor enthusiasm for the sector. The roughly 230 attendees in New York on Wednesday were double what the bank initially expected. Around half of those at the summit were investors, he said. 

 There’s no doubt of a liquidity crunch that reaches beyond the space sector. But the space industry, at least gauging from Deutsche’s summit, continues to bring investors to the table.

Programming note: Investing in Space will be on hiatus next week for the Thanksgiving holiday. Watch for the next edition on Nov. 30.

What’s up

• FAA clears second Starship launch: Following the completion of the U.S. Fish and Wildlife Service’s environmental review, the regulator issued SpaceX with a modified license to launch the second Starship flight. The company plans to attempt the launch on Saturday. – CNBC
• The on-again, off-again, who-knows-when Starlink IPO: Ron Baron, a major SpaceX shareholder, last week said that he doesn’t expect the company to take the Starlink business public until “2027 or so.” And yet, a report this week said SpaceX has begun moving the Starlink unit’s assets to a whole owned subsidiary that would be spun off for an IPO as soon as next year. SpaceX’s CEO denied that 2024 report, calling it “false,” but without specifying what, or how much, of the report was inaccurate.  – CNBC / Reuters
• Iridium and Qualcomm end partnership in a shift to the satellite direct-to-device market, as the semiconductor giant says smartphone makers “have not included the technology in their devices.” Iridium CEO Matt Desch said the company still believes “the direction of the industry is clear toward increased satellite connectivity in consumer devices.” – CNBC
• SpaceX workplace injuries reveal lax approach to safety, deflected corporate responsibility: An in-depth investigation found the company failed to report annual statistics to regulators in multiple years, with multiple locations reporting injury rates far above the industry’s average. – Reuters
• ULA sale process reportedly down to three potential buyers: The joint venture’s ownership, Boeing and Lockheed Martin, are apparently close to selecting one of the three potential offers, one of which is from Blue Origin. – Ars Technica
• NASA pauses Mars sample return program as it assesses the rising costs of the effort. A review is underway to asses the program’s architecture and attempt to save costs. – SpacePolicyOnline
• Japanese ispace to launch second lunar landing attempt in late 2024, flying on SpaceX’s Falcon 9 rocket. The company’s Mission 2 will feature a “micro rover” to explore the moon’s surface after landing. – ispace
• EchoStar’s JUPITER 3 satellite begins testing, keeping the massive spacecraft on track to begin delivering service in the coming months and boosting the company’s coverage of the Americas. – EchoStar

Industry maneuvers

• Japan establishing new $6.6 billion fund for space sector development, as the country’s leadership aims to enhance its capabilities. “We believe it is a necessary fund to speed up our country’s space development so we don’t lag behind the increasingly intensifying international competition.” – The Japan Times
• Firefly brings latest round of fundraising to $300 million, a process the company initiated about a year ago. The company’s latest tranche brings its valuation to $1.5 billion pre-money, the company said, and adds Japanese investor Mitsui to its backers. – Firefly
• Astranis adds second Philippines internet satellite and moves up launch, with the first of the pair of satellites to fly in the first quarter and the second flying later next year. – Astranis / Astranis
• Momentus raises $6.5 million after stock sale, with an unnamed individual investor purchasing about 2.9 million shares. – Momentus

Market movers

• Terran Orbital cut 2023 revenue outlook almost in half for Q3 report, saying the delayed payments from customer Rivada led to the reduction, from its previous estimate of more than $250 million in annual revenue, to “in excess of $130 million.” For the quarter, Terran had a net loss of $26.7 million, slightly lower than a year prior, and brought in $43.9 million in revenue, a quarterly record, with $38.7 million in cash on hand and about $313 million in gross debt obligations. Rivada makes up $2.4 billion of Terran’s $2.6 billion backlog. – Terran Orbital
• AST SpaceMobile emphasizes capital needs in Q3 results: The company said it has the funding needed to get its first five commercial satellites operational in orbit, with launches expected in the first quarter, but aims to close new investment before the end of the year. The company reported a net loss of $20.9 million for the quarter, about double the net loss from a year ago, with no revenue and about $133 million in cash at the end of the quarter.  – AST SpaceMobile
• Momentus is running low on cash after Q3, with the space transportation company reporting just $339,000 in revenue against a net loss of $15.2 million for the quarter and less than $10 million in cash remaining. Momentus emphasized it’s raised about 16.9 million in gross proceeds the past two months but continues to assess “all viable strategic options.” – Momentus

Boldly going

• Bob Cabana’s retirement leads to promotions for Jim Free and Cathy Koerner at NASA. Cabana, retiring from his role as associate administrator after nearly 40 years at NASA, will leave the agency at the end of the year. Free steps into Cabana’s role as the third highest-ranking official at NASA, and Koerner succeeds Free as associate administrator for NASA’s Exploration Systems Development Mission Directorate. – NASA / NASA
• Hamid Akhavan named Dish Network CEO earlier than planned, with previous Dish chief executive Erik Calrson having joined mortgage brokerage RE/MAX Holdings as CEO. Akhavan is set to be CEO of the combined Dish and EchoStar companies when the merger closes. – Via Satellite
• Janice Starzyk and Gabriel Swiney join the Office of Space Commerce, with Starzyk named deputy director and Swiney as director of the office’s Space Advocacy Division. Previously, Starzyk was Virgin Orbit’s Vice President of Government Operations and Swiney a NASA senior policy advisor. – NOAA
• Denton Gibson named launch director for NASA’s Launch Services Program, or LSP, following the retirement of former director Omar Baez. Gibson has been with NASA’s LSP since 2004. – NASA
• Luigi Brambilla named to Virgin Galactic board of directors, filling the seat left vacant by the passing of Evan Lovell. Brambilla joins the company with a career as an executive across multiple of Branson’s Virgin Group businesses. – Virgin Galactic

On the horizon

• Nov. 17: SpaceX Falcon 9 launches Starlink satellites from Florida.
• Nov. 18: SpaceX Starship launches second test flight from Texas.
• Nov. 18: SpaceX Falcon 9 launches Starlink satellites from California.
• Nov. 20: SpaceX Falcon 9 launches Starlink satellites from Florida.