Rocket Lab to the Mooooon...Literally

I have $6,440 invested in Rocket Lab stock and I’m buying $1,500 more today. I’ll likely bring my total investment up to $12,000 over the coming months. It’s market capitalization is currently under $2 billion and management believes they have an eventual total addressable market opportunity (TAM) of $330 billion.

I have the order in and it will fill some time between 9:30am and 10:00am EST this morning

I’m comfortable with the risk and will completely ignore the short-term fluctuations. In my opinion, this is the only way to invest in companies with as much upside potential and as much risk as Rocket Lab.

This investment will either be very rewarding for me or turn into a total loss.

Here’s more detail on my investment and how I think about potential returns.

The rest of today’s essay will be a quick primer on Rocket Lab and why I think this week’s successful NASA CAPSTONE moon mission launch is such a huge milestone.

So what would you say you do?

Rocket Lab is an end-to-end space company meaning it offers spacecraft design, components, manufacturing, launch services, and on-orbit management solutions to enable government agencies, commercial space companies, and private contractors to do stuff in space.

This all sounds cool, but are they actually doing stuff?

Yes, lots of stuff.

After this week’s launch, they have successfully completed 27 launches and deployed 147 satellites to space making their rocket named “Electron” the 2nd most frequently launched U.S. Rocket to SpaceX’s “Falcon 9”.

Additionally, Rocket Lab has provided components for more than 1,700 satellites currently in orbit with 500 more scheduled to be launched.

As of May 16, 2022 Rocket Lab had a backlog (pre-orders) of $551 million showing demand for future launches. This is a proven launch provider, with real revenue, and strong demand.

Rocket Lab’s Electron rocket is dedicated to launching small satellites with a payload capacity of 300 kg.

The team is currently developing Neutron, a large class rocket with a payload capacity up to 13 tons, over 30 times more capacity than Electron. Neutron is expected to be completed in 2024 or 2025. Once complete, Founder and CEO Peter Beck believes Rocket Lab will be capable of launching roughly 90% of all payloads going to space over the next decade.

He’s not saying they WILL launch 90% of the missions, but rather with both Electron and Neutron, they’ll have the capacity to be able to win those launches from customers.

Why the NASA CAPSTONE launch this week is such a big deal

Okay, take a sip of coffee and buckle up

CAPSTONE is an acronym for Cislunar Autonomous Positioning System Technology Operations and Navigation Experiment.

In case you are not an astronaut, that’s a fancy way of saying NASA is using this mission to test a never before used orbit (Near rectilinear halo orbit or NRHO) for its Gateway space station that will eventually support the Artemis program which is designed to put the next man and first woman on the moon (Everday Astronaut)

This specific orbit is so important because of #science.

Okay really, according to Everyday Astronaut, this NRHO has the “unique ability to maintain a sightline with the earth at all times” and because of its gravitational characteristics, it requires less energy to enter and exit than other orbits which makes it the most suitable orbit for NASA’s Gateway space station to serve as a transfer spot for astronauts on long missions to the moon.

Rocket Lab founder and CEO Peter Beck had this to say about the launch

Lunar Photon is fascinating

Rocket Lab’s Lunar Photon that’s used to propel CAPSTONE was essentially custom-built for this mission with the goal of eventually being able to reach Venus and Mars. To save weight, it uses electrically powered turbopumps that have solar-powered batteries that fully recharge during the mission. This extends range and reduces weight significantly.

Stay up to date on the mission

The launch was successful, but this mission is far from complete. The best way to stay up to date is on Rocket Lab’s IR site (link), through its Twitter feed (link), and through Everyday Astronaut (link)

Rocket Lab’s Electron rocket, Lunar Photon, and HyerCurie engine have met and exceeded expectations for this mission. It’s a huge milestone for Rocket Lab and will surely set them up to compete for more contracts from NASA, the DoD, and any customer seriously considering operating in space.

I truly have no idea what happens with Rocket Lab’s share price over the next year, but I’m very optimistic about the next decade. I’ll keep my position sized appropriately according to my risk tolerance, but that’s the time frame I want to invest with.

Thank you!!

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