By Jackie Wattles, CNN Business
In the minutes after Astra – a US-based startup launched its rocket from a remote site in Alaska on Tuesday afternoon, investors seemed ready to believe the company had, once again, failed to keep the mission on track.
Astra confirmed on Twitter that the rocket was in orbit, but it was not immediately clear if its payload – a group of small satellites for a variety of customers – had deployed to orbit safely.
During a webcast of the launch, Astra product manager Carolina Grossman warned that the company would not know immediately if the satellites were deploying safely, as the rocket was unable to send ground readings within minutes of reaching orbit. .
After the launch, 30 minutes of silence passed. Astra’s stock lost more than 10% of its value and trading was briefly halted.
But then another update came: “We can confirm today the successful deployment of the satellites on Spaceflight’s Astra-1 mission,” the company wrote on Twitter. But the company’s shares did not immediately reverse. Twenty minutes after confirming the success, its stock price was still down more than 3%.
The test highlights just how volatile it can be to invest in a rocket business, especially when they choose to fire a rocket during trading hours.
Astra in particular has been on a wild ride in recent months. The company had five failures trying to put a rocket into orbit before its first success in November 2021. This caused a massive spike in trading, sending the stock price up more than 30%. But then, in February, he failed again.
Now, the company’s stock is consistently below the $4 per share mark, a far cry from its peak of over $16 per share.
Astra is one of dozens of companies planning to use relatively small and lightweight rockets to make frequent trips into space to drop off satellites – not to be confused with the much larger rockets launched by SpaceX from Elon Musk, or the suborbital space tourism rocket developed by Jeff Bezos’ company, Blue Origin.
Astra, Rocket Lab and California-based Virgin Orbit are among the only startups that have now proven their rockets can get the job done.
And all of these companies have now gone public through SPAC, or “Special Purpose Acquisition Company,” which serve as investment placeholders on the stock market as fund backers search for an acquisition target. The target company then takes over the SPAC trading symbol, allowing it to go public with little of the financial disclosure or scrutiny that accompanies traditional IPOs.
That’s not to say Astra and the others can’t or won’t succeed. But the company faces fierce competition.
When asked in a business Q&A posted online how Astra plans to stand out in such a crowded industry, Adam London, Founder and Chief Technology Officer of Astra, said that “Rockets are typically handicrafts and artisanal. You do one at a time, and they are very complicated. But when you really get down to it, they don’t need to be that complicated, especially when you’re not transporting people or critical national assets, and they definitely don’t have to work 100% of the time.
In other words, Astra plans to mass-produce rockets to make them cheaper, but it doesn’t put too much emphasis on a flawless success rate.
And that means his stock will likely continue to be a wild ride for the foreseeable future.
But that’s not necessarily a bad thing, said Micah Walter-Range, president of space consultancy Caelus Partners.
“The stock market fluctuations related to the Astra launch can be seen as a positive sign as investors monitor the company’s progress and actively engage in the space industry,” he said by email. “Market movements also indicate that this is still an emerging industry, and we look forward to the day when launches are viewed in the same way as airline flights, where investors are watching for general trends. but not each individual flight.”
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