Granted, technically Masten has only filed for Chapter 11 bankruptcy proceedings to "reorganize" its business and try to keep going, but things sure don't look great for Masten right now -- or for NASA's efforts to mine the moon in the future.
A key player in the moon effort
Up until last month's bankruptcy filing, Masten's press releases had been full of nothing but good news:
- In April 2020, the company won a $76 million NASA Commercial Lunar Payload Services contract to use its XL-1 lunar lander "to deliver a suite of nine science and technology experiments to the lunar service" by December 2022. And once there, Masten hopes to find ice to mine.
- Later in 2020, NASA awarded Masten a Phase 1 NASA Innovative Advanced Concepts (NIAC) contract to develop "instant landing pads" that could be deployed on the moon to prevent lunar regoliths from getting kicked up by rockets as they land; a Metal Oxidation Warming System (MOWS) to insulate spacecraft in the lunar shadow; and a "Xogdor" aerospace testbed for testing out entry, descent, and landing technologies on the moon.
- Most recently, and most impressively, in July of 2021 the Air Force Research Laboratory awarded Masten a Phase II SBIR contract to develop a "positioning and navigation network for the moon" -- basically, a lunar GPS system to help astronauts move around once they arrive on Earth's oldest satellite.
But since then -- crickets. Masten hadn't put out an official press release in more than a year, until all of a sudden it filed its bankruptcy petition with the U.S. Bankruptcy Court District of Delaware.
According to this filing, the company owes somewhere between $10 million and $50 million to upwards of 50 separate creditors that include fellow space companies Astrobotic (which, like Masten, is developing a lunar lander for small deliveries) and SpaceX -- which is both developing a lunar lander and had been Masten's ride, having inked a contract to carry the XL-1 to the moon in August 2020.
What happens next
That's the bad news. Now here's the good: Masten may owe $10 million to $50 million, but it also has between $10 million and $50 million in assets. And with these numbers so close to one another, management seems optimistic that it will be able to right its ship in relatively short order. Management hopes to "move quickly ... to use the Chapter 11 process to streamline Masten's expenses, optimize its operations, and conduct sale processes that maximize value for its unsecured creditors," and then emerge from bankruptcy and get on with its work.
Before you get too excited about that prospect, though, remember: Just because that's the way management says things will work out doesn't mean that's how things actually will work out.
To that point, on Friday space news site ParabolicArc noted that, in the course of its bankruptcy proceedings, Masten has already turned to rival Astrobotic for a $1.4 million loan to tide it over through the bankruptcy process. Moreover, Astrobotic has offered to buy Masten out of bankruptcy for $4.5 million! Additionally, another space news site ("SpaceNews" itself) has noted that yet another lunar lander contract-holder, Intuitive Machines, is interested in buying Masten's "launch credit" with SpaceX for a ride to the moon.
As of today, it's looking more likely that Masten gets sold entirely, or broken up for parts by rival space concerns, than that Masten will emerge from bankruptcy whole and unscathed.
The upshot for investors
This isn't good news for Masten of course. In fact, it's downright sad. But creative destruction is a feature of capitalism, not a bug, and the best news for space investors is probably this: As weaker players in the space market falter and fall by the wayside, stronger players will snap up their assets -- and their contracts. Those companies that survive could find their growth rates turbocharged as they pick up the extra business, improving the chances they'll one day be strong enough to IPO.
As investors in the nascent space industry, that's the day we're waiting for.