In case you haven't noticed, there's a duel ongoing between upstart space company SpaceX -- the company that's disrupting Boeing (NYSE:BA) and Lockheed Martin's (NYSE:LMT) monopoly over U.S. spaceflight -- and Jeff Bezos' even upstart-ier Blue Origin. Every time one company accomplishes one "first" in spaceflight (Blue Origin's landing a sub-orbital rocket after reaching the verge of space, for example), its rival tops it (like SpaceX's landing a rocket from orbital flight).
The net effect is like climbing a ladder, with each competitor's accomplishment driving its rival to climb to the next rung, while leaving Boeing and Lockheed Martin farther and farther behind. And these companies don't look likely to stop climbing any time soon -- because over the weekend, SpaceX just surpassed Blue Origin yet again.
A, B, C, easy as 1, 2, 3 (but then it gets harder)
Last month, SpaceX had the lead over its rival in successful landings of rockets launched to space. After one successful landing at Landing Zone 1 in Florida, and three successful landings on an unmanned drone barge at sea, SpaceX had accomplished not just technologically more difficult landings than its rival, but it had also conducted more of them.
SpaceX fumbled a chance to run up the score on June 15, when a Falcon 9 rocket, after delivering its "Eutelsat 117 West B" and "ABS 2A video relay" payloads to orbit, crashed on attempting to land on SpaceX's drone barge. And three days later, Blue Origin drew even at four successful landings, all on land, when its New Shephard rocket conducted its third successful relaunch on June 19, and its fourth landing that same day.
Early Monday morning, though, SpaceX pulled back into the lead with a midnight launch of its CRS-9 mission to resupply the International Space Station in low Earth orbit (LEO). A few minutes later, the Falcon 9 first-stage rocket that lofted CRS-9 skyward touched down without incident at Landing Zone 1.
Lucky No. 5
For those keeping score at home, the list of SpaceX's successful landings now includes:
- Orbcomm-2, launched to LEO and landed at Landing Zone 1 on Dec. 21, 2015.
- CRS-8, launched to resupply ISS in LEO and landed at sea on April 8, 2016.
- JCSAT-14, launched to geostationary transfer orbit (GTO) and landed at sea on May 6, 2016.
- Thaicom 8, likewise launched to GTO and landed at sea on May 27, 2016.
- CRS-9, launched to LEO and landed at Landing Zone 1 on July 17, 2016.
And by my count, that gives SpaceX five successful orbital landings to Blue Origin's four suborbital landings.
What it means to investors
In a sense, all of this feels rather esoteric to investors. We watch in awe as Blue Origin and SpaceX leapfrog from success to success -- but we can't really, fully appreciate these successes, because both Blue Origin and SpaceX are privately owned. The only companies that we are allowed to own are publicly traded laggards Boeing and Lockheed -- and yes, Airbus (OTC:EADSY), Orbital ATK (NYSE:OA), and a few others.
That's frustrating, no doubt. But it doesn't mean we can afford to ignore what Blue Origin and SpaceX are up to. By definition, each time SpaceX launches a satellite, that's a contract that Boeing and Lockheed Martin -- or their European rival, Airbus partner Arianespace -- didn't win. It's revenues going somewhere else than to the company that we might own shares of. And it's a trend that's likely to get even bigger once Blue Origin begins launching orbital rockets of its own, as it's gearing up to do.
In time, we still hope to see SpaceX and Blue Origin IPO. And we'll cheer with appropriate enthusiasm when they do. But until then, these companies are risks to investors.
They're big ones.
And they bear watching.