The Looming Constraint of the Space Industry
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What is the main topic discussed in this episode?
Space stocks get thrown a curveball. Motley Fool Hidden Gems Investing starts now. Welcome to Motley Fool Hidden Gems Investing. I'm your host, Tyler Crow, and today I'm joined by longtime Fool Contributors Matt Frankel and Lou Whitney. Guys, we're gonna get into space stocks today. We're gonna talk about potential dividend cuts as well as going to the mailbag. But as we said, starting at the top, let's get into space here. Space stocks have been front and center for investors as of late. It's gathered a ton of attention, especially after the uh SpaceX IPO back in May. But I I would say the enthusiasm for space started far before that, just in a to a lesser degree. Now, Lou, I'm gonna steal one of your go-to lines here, but space is hard.
And while there's a lot of promise here, the timeline when those things may materialize can come into question from time to time. So and that was really laid bare recently when there was a somewhat, I wouldn't say shocking, but surprising announcement. that SpaceX actually plans to retire its Falcon 9 rocket in 2028. This has been the workhorse, I you could say, of the space launch industry. Lou, guys, is the industry really ready to lose this vehicle in 2028? Like I know there's a lot of stuff coming, but we haven't really seen a lot of progress yet.
Well there's I think a big caveat on that decision, because that is assuming that SpaceX's internal successor, the Starship, is ready to take over. If it's not, there's no reason why they can't c continue it. But to SpaceX eyes, the s the Starship is a much larger vehicle, so it's capable of bringing a lot more into orbit. So your uh your per ton launch process Price goes down. So it's just like, you know, it's it's more efficient to to to have 30 people on a bus versus 30 people driving a car. So I think that that is the plan. And if it happens, it'll mean that Starship is going to script. If it if Starship something goes wrong or it's not ready for prime time, I don't think you'll see the Falcon 9 retired as planned.
So I do think there's at least some wiggle there, and it's kind of upside, not down. Downside, at least in their head, but it is a huge thing for people trying to book now, looking to 2028, because you're kind of booking into an unknown.
Yeah, Matt, uh one of the things that's interesting about this too is we're talking about shuttering a vehicle when I some of the I the successors of it. We've talked about like New Glen, for example. They had their accident uh where the basically the launch plaid blew up. Neutron rocket has been slower to develop. Part of me wonders is like is is saying that it's going to shut down in twenty twenty eight just kind of a feigned uh response to the market.
Yeah, I mean i it just see it th there are it there's some caveats. Like th you know, Elon Musk set some targets for that to happen. I mean like like Lou said, that assumes that the starship is gonna be up and running and and taking over and it assumes that they don't need it really. Uh if they need it, it's there. It could continue. But I mean customers can't book the you know, space flights. And it comes at really a terrible time. Like you said, the the new Glen rocket, uh it's been Down since May. Uh Vulcan was grounded in February. Uh and and it comes at a time when, you know, lo you know, launch demand is really heating up. From uh Space Development Agency, one of their program managers, said recently that thousands of satellites are scheduled to launch by twenty thirty and there simply aren't enough vehicles to launch them.
And that's given what exists in the market now. Uh so it's not a great time to remove one of the the main you know The main player.
Immediately as an investor, we think like how does who benefits who loses out here? Like you said, we have uh the obvious candidates are the publicly traded companies because they very much in the forefront of like investors uh mind. You know, Rocket Lab with its neutron rockets, SpaceX, probably to a lesser degree Voyager and Fireflight, uh some recent IPOs as well.
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Chapters
5 chapters
1
What is the main topic discussed in this episode?
0:02–4:33
2
What is the current outlook for SpaceX’s plan to retire the Falcon 9 by 2028?
4:33–10:31
3
Which companies could replace Falcon 9 as the workhorse for launch demand?
10:31–15:04
4
How might delays or success of Starship impact the launch market?
15:04–19:16
5
Who are the likely winners and losers in the near‑term space launch ecosystem?
19:16–22:55