The Space Economy is Hitting an Inflection Point with Andrew Chanin

Morgan Stanley believes the space economy will be worth more than $1 trillion dollars by 2040. Bank of America Merrill Lynch believes it will reach $2.7 trillion by 2045.  

If those estimates are even directionally-correct, outer space will soon become one of the biggest investment opportunities of our lifetime.  And it's more than just a science-fiction dream. The commercialization of space is already well-underway. The Federal Communications Commission (FCC) recently granted SpaceX the right to launch 7,500 of its next-gen satellites, and it's working through a backlog of nearly 40,000 more applications. That would represent a quadrupling of the total number of satellites currently in orbit; as the whole sector is hitting an inflection point.  

What's the best way to invest in this trend? Will satellite internet really account for half of the overall space market by 2040? Will we see a renewed "militarization of space", with demand for military intel vaulting defense contractors even higher? Will launch providers appeal to a new wave of commercial customers? And how should investors think of the newly-public "SPAC" companies who raised funding in 2021?  

To help us answer those questions, 7investing CEO recently spoke with Procure Asset Management's co-founder Andrew Chanin. Andrew is a favorite guest of our 7investing show, and Procure's ETF with the ticker "UFO" offers pure-play exposure to the space economy.  

In the first part of the discussion, Andrew describes the role of private companies in the militarization of space. Elon Musk's SpaceX played an important role in enabling satellite communications for Ukraine during its conflict with Russia. Other satellite operators are similarly assisting in military operations.  

One of those companies, Maxar Technologies (NYSE: MAXR) was recently acquired at a 129% premium to its equity valuation -- which demonstrates how important military intelligence has become and the potential opportunity it offers to investors. Andrew goes on to discuss the implications of the Chinese spy balloon and how geopolitical tensions are escalating between the US, China, and Taiwan.  

In the next segment, Simon and Andrew discuss how the FCC recently approved 7,500 of SpaceX's next-gen satellites for satellite-based internet. Other commercial enterprises are also interested in proving high-speed internet connectivity to enable new technologies -- such as 5G or the Internet of Things. This has led to a frenzy of applications for spectrum rights, as satellite internet will be one of the largest contributors to the future commercial space economy.  

The two go on to discuss the role of consolidation, startups, and skilled labor in the space. Simon points out that Rocket Lab (Nasdaq: RKLB) is investing in infrastructure that would enable an order-of-magnitude increase in its current launch capacity, while Andrew discusses how many companies are actually collaborating to achieve common goals and milestone. 

At the conclusion of the conversation, the two discuss additional M&A opportunities.

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