Rocket Lab shares climbed 12.5% to US$6.56 on Saturday on news the twin spacecraft designed and manufactured for Nasa’s Escapade mission to Mars are now packed and ready to ship.
“This is a big deal for Rocket Lab in many ways,” Devon Funds said in a client note this morning.
“Rocket Lab will be aiming to show Nasa and the world that it can produce much bigger spacecraft that are capable of a journey throughout the solar system.”
The Rocket Lab-deigned and built satellites, known as Blue and Gold, are making their way from Rocket Lab’s base in Long Beach to Nasa’s launchpad at Cape Canaveral - where they will be loaded onto the Blue Origin New Glenn rocket that will propel them to Mars (the October launch will be the New Glenn’s maiden flight).
The 4000km, 55-hour journey from California to Florida was “a bit shorter than the trip it faces after that”, Devon Funds said.
That will be a 370 million km, 11-month trip to Mars.
The objective of the Escape and Plasma Acceleration and Dynamics Explorers (Escapade) mission is to study the interaction between solar winds and the Martian atmosphere.
“This is all part of the push to see whether humans can actually live there,” Devon Funds said.
The wealth manager’s enthusiasm is tempered by the fact Rocket Lab hasn’t put a value on its Escapade contract - though it is known that it’s one of Nasa’s new generation of cost-effective missions. The total budget for Escapade has been estimated at US$79m ($130m), including US$55m to the Jeff Bezos-founded Blue Origin.
But the news underlined the growth of Rocket Lab’s space systems business, a strong point in its quarterly result. And while Blue and Gold were assembled at Long Beach, Rocket Lab has also opened a plant to make reaction wheels - a key satellite competent - in Auckland.
Rocket Lab shares, which dipped as low as US$3.47 earlier this year after news its Neutron launch was delayed from year’s end to mid-2025, is up 37.5% since it delivered its second-quarter result on August 8, lifting its market cap to US$3.26 billion.
The result meant a big jump in revenue, and confirmation Rocket Lab was on track to meet Neutron’s revised launch date.
Founder and chief executive Sir Peter Beck owns 10.5% of the firm, after selling down from 11.3% in September last year to capitalise his charitable foundation; the transaction netted him US$20.23m.
This month’s surge means his stake is now about US$347m ($574m).
More broadly, Sharesies says “over 20,000″ Kiwis now own Rocket Lab shares through its platform.
The fractional ownership platform has seen a 10% increase in the number of people buying shares in Rocket Lab as well as a 10% increase in the volume of shares being bought,” a spokeswoman said.
“But also a material - as a percentage - number of people appearing to take the opportunity to sell, resulting in 4x the value of sells we typically see week-to-week.”
Despite finally breaking out of the sub-US$5 orbit where it’s mostly been languishing since mid-2022, the Kiwi-American’s shares are still well shy of when it listed on the Nasdaq in August 2021 (US$10) or the September 2021 lift-off when it briefly topped US$20.
Separately, Rocket Lab said in an NZ Companies Office filing that it has divested its Sikorsky-S92 and a Bell 429 helicopters after calling time on its ambitious programme of catching Electron rocket boosters as they fell from space in favour of “more financially viable” retrieval after splashdown.
Neutron will land under its own power. One helicopter - presumably the Bell 429, given the price point - was sold for $6.3m, with the firm realising a $1.8m gain. The other was listed as held for sale with a carrying value of $14.3m.
Although it managed to grapple onto an Electron under parachute only briefly, in May 2022, before the pilot was forced to let it go, the Sikorsky found fame when Beck pressed it into service for Cyclone Gabrielle missions in February last year (see There’s a starman, freighting in supplies).
On August 8, Rocket Lab reported June-quarter revenue that jumped 70% to US$106.2m versus the year-ago quarter.
The increase came from more launches, but also “significant growth” in its systems business, which is set to hit headlines this year when two Rocket Lab-designed and built spacecraft go into orbit around Mars as part of Nasa’s Escapade mission to study the red planet’s atmosphere (Rocket Lab hasn’t put a value on its Escapade contract).
Its net loss narrowed to US$85.9m from the year-ago US$91.5m.
The firm, which staged a US$355m convertible note offering in February, finished the quarter with US$546.8m in cash and equivalents.
Rocket Lab has long forecast it won’t hit profit until after the launch of its much-larger, crew-capable Neutron rocket, which will cost customers US$50-US$55m a launch, versus about US$7.5m for the Electron today.
In May, the company said Neutron’s first launch from the under-construction Launch Complex 3 in Virginia, scheduled by the end of this year, would be mid-2025. The firm stuck by that revised date with today’s quarterly result.
The company said there had been a successful “hot fire” of Neutron’s Archimedes engine at Nasa’s Stennis Space Centre in Mississippi this month (which close followers of the company would have already seen on founder and chief executive Peter Beck’s social media).
Archimedes has been breathing fire! Started at low power and now cranking it up. pic.twitter.com/mPUlezBYRF
— Peter Beck (@Peter_J_Beck) August 6, 2024
Rocket Lab also said today it has begun installation of the largest automated fibre placement (AFP) machine of its kind into the company’s Neutron rocket production line in Maryland. The AFP machine will enable Rocket Lab to automate production of the largest carbon composite rocket structures in history, the company says.
With its first-quarter result, Rocket Lab said its backlog had topped US$1b for the first time.
On August 8, it said it now has US$1.07b of orders in its pipeline.
The firm, which staged its 50th Electron launch on June 20, continues its drive to increase the frequency of Electron launches from Launch Complex 1 at Mahia Penninsula and Launch Complex 2 in Virginia. Its 51st launch was on August 3, with its 52nd launch from the same location just eight days later on August 11.
Towards the end of the June quarter, Rocket Lab announced more federal funding from a US Government perhaps mindful of developing too great a dependence on Elon Musk’s SpaceX - for which Rocket Lab has emerged as the most serious rival (according to an investor presentation released this morning, the Kiwi-American firm’s Electron rocket accounts for 64% of non-SpaceX US orbital launches so far this year).
Rocket Lab said its satellite solar panel plant in New Mexico had received US$23.9m in funding under the Chips and Science Act of 2022 - popularly known as the Chips Act and designed to boost semiconductor manufacturing in the US.
New Mexico’s state government contributed a further US$25.5m.
And in flight configuration. https://t.co/IdxIO499ng
— Peter Beck (@Peter_J_Beck) August 8, 2024
New Mexico is home to SolAero, maker of the solar panels that power Nasa’s James Webb Space Telescope, which was bought by Rocket Lab for US$80m in 2022. The Chips Act and state government funding will go towards developing radiation-hardened solar cells - a project Rocket Lab says will create 100 local jobs (the firm now employs 1800 worldwide, including 750 in New Zealand).
Earlier, Rocket Lab received a US$23.35m grant from the US Air Force’s new Space Force division for work on the Neutron’s upper stage.
It has also received about US$45m in subsidies and tax breaks from Virginia towards Neutron’s assembly plant, mission control and launchpad, which are all under construction at Nasa’s Wallops Island spaceport in the eastern seaboard state.
In the June quarter, Rocket Lab expanded the slate of work for its fully owned subsidiary Rocket Lab National Security, as it was awarded a US$32m ($53m) contract to contribute to the Tactically Responsive Space Mission known as Victus Haze in a push to give the US military’s Space Force wing the ability to rapidly respond to threats from space.
Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.
Economists expect the recovery continued during the first quarter of the year.