Aussie space company NewSat slipped into administration without making a launch.

There's no denying the romance of space and perhaps this is why so many investors, customers and journalists got caught up in the dream of launching Australia's first privately owned satellite.

But they will be rueing the day they got involved with NewSat, after the Australian space company slipped into administration earlier this month without ever having launched a satellite into orbit. Its plan to launch five satellites by 2020 now seems nothing more than a pipe dream. The company's downfall is a cautionary tale for investors, because all of the warning signs were there.

The story began about five years ago, with chief executive and founder Adrian Ballintine, a master salesman who was able to persuade the market that NewSat could launch its own satellite. He did this despite NewSat having a market capitalisation of around A$100 million, a fraction of the multiple hundreds of millions of dollars generally required to get a satellite into space.

Ballintine was talking big numbers. Demand for satellite capacity was growing rapidly and NewSat said its first satellite, Jabiru-1, would generate revenue of US$3 billion over its 15-year lifespan by selling satellite capacity, particularly to military users. Imagine how much revenue five satellites would generate?

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He was adept at attracting luminaries who could add credibility to the venture. Microsoft co-founder Paul Allen was once a business partner and former Australian Prime Minister Bob Hawke signed on as a consultant to NewSat in 2011 and 2012, providing opportunities for gladhanding and happy snaps.

Australia's ambassador to the United States, Kim Beazley, hosted high-ranking US military officials, defence and aerospace executives at a function in Washington DC to extol Australia's emerging role in satellite communications. NewSat featured prominently.

It wasn't just Australians who got on board. In 2012, Ballintine arranged nearly US$400 million in funding from the US and French governments' export credit agencies. It qualified for funding because it was planning to use American and French suppliers to build and launch the satellites. About then things started to go off the rails.

The US and French government funding was contingent on NewSat raising A$200 million in equity from investors. But investors were starting to grow wary as Jabiru-1's launch date was continually pushed back.

Advisers Lazard and Morgan Stanley walked away from the capital raising, leaving the project in limbo.

But Ballintine is nothing if not persistent and persuasive. He renegotiated the funding deals with the export funding agencies, announcing about a year ago that the project was back on track.

That's what the outside world was being told, but inside the company it appears some directors were becoming nervous. The first hint was when two of the company's independent directors, the well-regarded Andrew Plympton and Brendan Fleiter, resigned.

It transpired that they were concerned about spending and governance within the company and had hired former BHP Billiton finance vice-president Brendan Rudd to investigate.

The company had spent almost A$1 million flying its executives around the world in luxury as they tried to raise money from investors to keep the space dream alive. According to reports, trips were made in first-class airline cabins, with luxury hotels and Champagne. Rudd identified numerous A$10,000 dinners and a lack of control in spending. His report also revealed more than A$342,000 in payments to Gold Coast-based Cresta Motor Yachts for "executive marketing" of its satellite projects. Ballintine is part-owner of the yacht company.

When the Sydney Morning Herald revealed details of the report in February, investors lost patience and the end was nigh.

Earlier this month the company was put into administration after breaching several banking covenants with its key funders and it has filed for bankruptcy in the US.

Shares in the company are suspended from trade and are probably worthless, leaving investors with nothing but dashed hope.

Hindsight is, of course, a wonderful thing, but there were lots of warning signs for investors who weren't swept up by Ballintine's grand vision or captivated by the romance of space.

As far back as 2011 NewSat did what's called a 50 for 1 share consolidation to improve its trading price. This means that 50 shares would become one share, in theory worth about 50 times the value of the original shares. This meant that instead of having 8.8 billion "penny dreadful" shares, the company had a much more respectable 176 million.

More warning signs were to come: revised earnings forecasts, pushbacks on its satellite launch date, the resignation of senior executives after only short tenures, directors quitting and failed capital raisings.

If investors haven't already had enough bad news, they have been lumped with a A$558,000 tax bill arising from a A$1.2 million bonus awarded to Ballintine last year, on top of his A$1.07 million annual salary.