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Virgin Galactic Stock Takes Off Before SpaceX and Blue Origin

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When I was a kid, I wanted to be an astronaut. I watched every NASA launch and clipped every newspaper article I could find about space shuttle flights and astronomy discoveries.

Clearly, Elon Musk achieved my dreams and then some. Did you know he founded SpaceX in 2002, before Tesla (TSLA - Free Report) ? Yep, Tesla was actually founded by two auto engineers in 2003 and Musk, through his early series A investment, earned founder status and took over quickly.

SpaceX was the first private company able to compete on NASA's playground and it still astounds me that Boeing (BA - Free Report) or Lockheed Martin (LMT - Free Report) didn't plan to be first in some key areas of space rocketry. That is the power of a visionary disruptor like Musk.

Among the top "firsts by SpaceX" are (1) launch a liquid-fueled rocket into orbit with the Falcon 1 in 2008; (2) launch, orbit, and successfully recover a spacecraft with Dragon in 2010; and (3) send a cargo flight to the International Space Station (ISS).

I took this list from the new book by SpaceX mission manager Andrew Rader. In 2019 he published Beyond The Known: How Exploration Created the Modern World and Will Take Us to the Stars. Here's what he wrote on page 248...

"With its ability to make regular supply flights to the Space Station and return, SpaceX's Dragon capsule offers the only means of returning science cargo to Earth. As of January 2019, SpaceX has flown more than sixty successful launches and soon plans to fly astronauts under a NASA commercial crew contract."

Rader goes on to talk about the significance of the Falcon reusable rocket family which also marks a series of firsts (listed here courtesy of Wikipedia): the first propulsive landing for an orbital rocket (Falcon 9 in 2015), the first reuse of an orbital rocket (Falcon 9 in 2017), and the first private company to launch an object into orbit around the sun (Falcon Heavy's payload of a Tesla Roadster in 2018).

Instead of one booster of nine engines like Falcon 9, Falcon Heavy uses three boosters for twenty-seven total.

In the video that accompanies this article, I address the question of whether and when SpaceX will become a publicly-traded company that you and I can invest in.

Who Can Compete with SpaceX?

Speaking of space companies the average Joe or Sue can invest in, the video opens discussing Richard Branson's foray into aerospace with his newly public Virgin Galactic (SPCE - Free Report) .

This venture is nearly as thrilling Musk's because of Branson's focus on eventual passenger travel to the ISS and beyond -- and his alternative method for getting a spaceship safely airborne and out of Earth's gravity and atmosphere, the biggest challenges in space rocketry.

Branson's innovation was an air-launched suborbital "spaceplane" (like the NASA Shuttle) that is hauled to an altitude of about 50,000 feet by a large carrier airplane and released. The spaceship then fires its rocket motor to catapult it to at least 50 miles above Earth, high enough for passengers to see the curvature of the planet.

Of course he didn't come up with these space-age ideas and designs all by himself. From Wikipedia...

The Spaceship Company (TSC) is a British/American spacecraft manufacturing company that was founded by Burt Rutan and Richard Branson in mid-2005 and was jointly owned by Virgin Group (70%) and Scaled Composites (30%) until 2012 when Virgin Galactic became the sole owner. TSC was formed to own the technology created by Scaled for Virgin Galactic's Virgin SpaceShip program. This includes developments on the care-free reentry system and cantilevered-hybrid rocket motor, licensed from Paul Allen and Burt Rutan's Mojave Aerospace. The company is manufacturing Virgin Galactic's spacecraft and will sell spacecraft to other buyers. The suborbital launch system offered will include the SpaceShipTwo spacecraft and the White Knight Two carrier aircraft.

From Weird Planes to White Knights

So this story is also exciting for me personally because of another fascination of my childhood: the experimental aircraft designs of the maverick Rutan brothers. Since my dad and older brothers were professional and aerobatic pilots, we often ventured to the annual Experimental Aircraft Association (EAA) Fly-In at Oshkosh, Wisconsin.

The Rutans designed these radical airplanes with engines in the back that used the propeller to push the craft. They also featured a flight control surface in front of the fuselage called a canard. And two models, the VariEze and Long-EZ, were sold as homebuilt kits! Every time I saw one on the front of the flying magazines, I was captivated by its out-of-this-world look.

The Rutan boys also designed and flew the Voyager aircraft that traversed non-stop around the globe in 1986 without refueling, in 9 days. Actually it was Dick Rutan and Jeana Yeager who piloted that record flight, while Burt Rutan was the main designer.

But I didn't make the connection between those "spaceships" of my youth and Richard Branson until my oldest brother Rory and I were talking about Musk's SpaceX technologies over the holidays. That's when he told me that Virgin Galactic's designs came from Scaled Composites, which is now owned by Northrop Grumman (NOC - Free Report) .

Burt Rutan started Scaled Composites in 1982 and after several changes of ownership -- Beech Aircraft used Rutan designs for the Beechcraft Starship, a twin-turboprop business aircraft that was not commercially successful -- Rutan gathered new investors to launch SpaceShipOne, an experimental air-launched rocket-powered aircraft with sub-orbital spaceflight capability at speeds of up to 900 meters per second (3,000 feet/sec), using a hybrid rocket motor.

Rutan's ideas about the project began as early as 1994 but he didn't begin working full-time on it until 2001. By beautiful coincidence (or clever mission planning) the vehicle first achieved supersonic flight on December 17, 2003 -- the one-hundredth anniversary of the Wright brothers' historic first powered flight.

SpaceShipOne completed the first crewed private spaceflight in 2004. That same year, it won the $10 million Ansari X Prize and was immediately retired from active service.

Its mother ship was named "White Knight." Both craft were developed and flown by Mojave Aerospace Ventures, which was a joint venture between Scaled Composites and Paul Allen, who provided funding of approximately $25 million.

The WhiteKnight "Stratolaunch System" employs aircraft with the world's largest wingspan and twin fuselages, and the first model held SpaceShipOne in a piggyback configuration on top of the wing spar between them.

The WhiteKnightTwo models carry SpaceShipTwo passenger rockets under their twin fuselages. WhiteKnightTwo is a custom-built, four-engine, dual-fuselage jet aircraft, designed to carry SpaceShipTwo up to an altitude of 50,000 feet. You can see a great clip of the "drop and launch" on the Virgin Galactic website.

What About Jeff Bezos and Blue Origin?

In the video attached to this article, I couldn't resist showing off the latest handy work of the Amazon (AMZN - Free Report) founder's space company, Blue Origin.

Did anyone really think that Bezos was going to let Musk have all the fun in successfully designing reusable rocket technology for space travel?

New Shepard is a vertical-takeoff, vertical-landing (VTVL), human-rated rocket that is being developed by Blue Origin as a commercial system for suborbital space cargo, travel and tourism.

The rocket borrows its name from the first American astronaut in space, Alan Shepard, one of the original NASA Mercury Seven astronauts, who ascended to space on a suborbital trajectory similar to New Shepard's designs and objectives.

Prototype engine and vehicle flights began in 2006, while full-scale engine development started in the early 2010s and was complete by 2015. Uncrewed flight testing of the complete New Shepard vehicle (propulsion module and space capsule) began in 2015.

On December 11, 2019 the Blue Origin team launched their 12th flight for the New Shepard system without a crew but with a capsule full of payloads from over a dozen commercial, scientific, NASA research, and educational projects. This mission also marked their 100th customer, with everything from university medical research to small business materials testing.

Of 12 launches, they have re-used the same booster rocket at least 5 times, twice. They also have 12 successful crew capsule landings and 3 successful escape tests as they prepare for eventual crewed flight. With veteran reusable boosters, NS-12 successfully reached over 350K feet (~66 miles) above Earth. And, from mission control in the West Texas desert, they accomplished their 12th powered vertical landing with the rocket.

Blue Origin folks will also be quick to tell you that their rockets are ascending to true outer space, defined as at least 100 kilometers (62 miles) above Earth.

The video clip of that mission is a blast to watch because they equip the viewing screen with not only live altitude and speed readings but a vertical tracker and "key" to mission checkpoints, like the separation of capsule and booster and the apogee (peak altitude after engines are turned off, and thus a speed of zero MPH).

And then on the way down, we get to see and understand the functions of various fins, stabilizers and drag brakes before final touchdown. The descent and landing are simply amazing, especially with the commentary guide from Blue Origin team members Ariane Cornell and Caitlin Dietrich. The payload capsule lands later in the desert with the help of 3 parachutes and retro-rockets for a soft touchdown.

Here's what I texted my brother Rory after I saw it the first time in late December...

"Jeff Bezos Blue Origin. Amazing video capture here w altitude and speed. Goes to 350K feet, and comes back just under 1K MPH for reentry. Hits atmosphere under 300K ft and accelerated to 2,500 MPH. Drag fins slow down before drag brake rocket. Sonic boom at 6K feet and 400 MPH!"

But I actually got that last part wrong. Upon another viewing this week, I hear that the sonic boom "crack" doesn't occur until just above 2,000 feet and 350 MPH. I don't know what the two smaller "snaps" were at 6K feet, but guessing they had something to do with the drag brakes that really slow the ship down fast.

The homepage of BlueOrigin.com currently has the 50-minute launch video from Dec 11 and it includes all the "pre-game" stuff before the countdown, including payload customer visits, snapshots of BO facilities in Texas and Alabama, the obligatory "holds" in the countdown sequence, and a slice of Jeff's recent keynote where he explains that Earth has become small compared to the size of humanity and that we need to think long-term about our future in the stars...

"Blue's vision is a future where millions of people are living and working in space. In order to preserve Earth, our home, for our grandchildren’s grandchildren, we must go to space to tap its unlimited resources and energy. If we can lower the cost of access to space with reusable launch vehicles, we can all enable this dynamic future for humanity."

Galactic MVP (Mission, Vision, Purpose)

Not only do I want you to check out the New Shepard launch and reentry/landing, I highly recommend visiting the websites for SpaceX and Virgin Galactic where their homepages have some stunning visuals of their spacecraft in action.

As you might imagine, any space program will have its share of failures and tragedies. My generation remembers where they were on January 28, 1986 when the Space Shuttle Challenger broke apart 73 seconds into its flight, killing all seven crew members, including a civilian school teacher.

On October 31, 2014, during a test flight, the first SpaceShipTwo VSS Enterprise broke up in flight and crashed in the Mojave desert. A preliminary investigation suggested that the craft's descent device deployed too early. One pilot was killed and the other was treated for a serious shoulder injury after parachuting from the stricken spacecraft.

Richard Branson has stated that Virgin Galactic was “in the best position in the world” to provide rocket-powered, point-to-point 3,000 mph air travel on Earth. And while he suggested in October 2017 that he could travel to space aboard SpaceShipTwo within six months, it was not until December 2018 that VSS Unity achieved the project's first suborbital space flight, reaching an altitude of 51 miles, officially entering outer space by US standards.

But Richard's long-range commitment to safe, reliable and affordable spaceflight is as clear as Elon's and Jeff's. The homepage of VirginGalactic.com has their Purpose, Mission, and Vision statements that will likely endure beyond many other risk-inherent launches. As George Whitesides, CEO of Virgin Galactic and The Spaceship Company, has said...

"Space is not only important for the future of transportation, it's important for the future of imagination."

Kevin Cook is a Senior Stock Strategist for Zacks Investment Research where he runs the TAZR Trader and Healthcare Innovators portfolios.

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