Off-Nominal - 122 - Space.com Bubble

Episode Date: September 1, 2023

Jake and Anthony talk about recent financial news in the world of spaceflight and add some predictions to the 2023 list.TopicsOff-Nominal - YouTubeEpisode 122 - Space.com Bubble - YouTubeOff-Nominal Campaign for Relay FM/St. JudeRelay FM for St. Jude - St. Jude Children's Research HospitalVirgin Galactic forecasts limited revenues from initial commercial flights - SpaceNewsVirgin Galactic launches first tourist flight to space, Galactic 02Virgin Galactic (SPCE) Q2 2023 earnings reportAstra lays off, reassigns employees as it refocuses on satellite propulsion - SpaceNewsChris Kemp unplugged—Astra’s CEO dishes on the space company’s struggles | Ars TechnicaPeter Beck on X: “A Rocket Lab production line.”Momentus cuts workforce while evaluating strategic options - SpaceNewsFollow Off-NominalSubscribe to the show! - Off-NominalSupport the show, join the DiscordOff-Nominal (@offnom) / TwitterOff-Nominal (@[e-mail]) - Spacey SpaceFollow JakeWeMartians Podcast - Follow Humanity's Journey to MarsWeMartians Podcast (@We_Martians) | TwitterJake Robins (@JakeOnOrbit) | TwitterJake Robins (@[e-mail]) - Spacey SpaceFollow AnthonyMain Engine Cut OffMain Engine Cut Off (@WeHaveMECO) | TwitterMain Engine Cut Off (@[e-mail]) - Spacey SpaceAnthony Colangelo (@acolangelo) | TwitterAnthony Colangelo (@[e-mail]) - jawns.club 🐘Off-Nominal MerchandiseOff-Nominal Logo TeeWeMartians Shop | MECO Shop

TLS and go for main engine, start. Hello, Jake. Happy Thursday. I was up there. You're going to wish me some obscure American holiday that I just didn't know about? You were like, happy, happy. Labor Day. It's coming up.

Fighter Day. Happy, wrap yourself in a flag day. Only celebrated in Maryland, turns out. I'm trying to make up stereotypical, not real American holidays. And that's what I came up. Wrap yourself a flag day. wrap yourself in a flag day how are you doing

how's your life going over there in Philadelphia Philadelphia Philadelphia never never ever call it that that's the San Fran of Philadelphia Oh yeah Philadelphia

What's a cute nickname Which is Philly Yeah We'd do That's it That's the only one Yeah There's not any of

Creative ones coming up Thanks to the internet I mean the city of brotherly love. You've heard that. That's old though. Sorry, he didn't ask for recent ones. Don't you have like your own kind of Drake that's giving you like cool nicknames and songs that are popularized or anything? Yeah, but none of them name the city differently.

Just meek Mill mostly doing his thing. All right, man. Will Smith. You know, Kobe Bryant, but he didn't really like Philly. That was a thing. What? I feel like I'm really zoomed in. You're pretty zoomed in.

Your head's a lot bigger than I am. Your head's just so full of all these stock tips. All these stock tips. Yeah, we're going to talk about my name. We're going to give you very bad stock tips today. That's the game of the show. I mean, I thought it would just be fun to tack on a couple of predictions because everything seems to be reaching a critical moment.

So if nothing else. Everyone's going broke, so it's a fun time to make sense. So let's just dunk on some. Both companies. and the government. Everyone's going broke. Listen, to put it in a bad way, we're just dancing on the graves of space companies. To put it into good way,

many of our listeners probably work at these companies, and this is just a good heads-up that they should be on the market. Yeah, you should be moving up the ladder right now. For all the people that listen to our shows that worked at the Virgin Orbit, or general virgin companies, number one, version orbit, number two, like, you had some heads up, is all I'm saying. Yeah, thanks to us, you got out of time.

And no, nothing to do with your life. scenario that may or may not have led you to that company or the people around it that you really enjoy working with or the problems that you were solving just purely should have operated on us alone so this is the new the new thing that we're offering here which is just straight up job consulting we will help you figure out whether you should or should not work there you know we do have a LinkedIn networking group for anomalies so this is not our first foray into this I don't even know if I'm a part of that to be honest yeah yeah you're not very involved you're not very participatory in these things Anthony yeah

Ike. Ouch. Ouch. I have to do a two-factor for LinkedIn. So Jake can post the link of the show notes. No, I'm not doing it. I'm not doing it live. I'm not doing it live. It's for anomaly. So you have to come into the Discord to find it. That's the pitch. Hey, Wal. Hey, Walt's networking group. And wait until you find out what the never fly ride share tier of LinkedIn is. It's just awesome. What are we doing? This is what happens when we're left alone to our own devices. I know. What do you drink? You don't, okay, so I have like a coconut-y thing today.

So this is like a liqueur mix. There's coconut and sour orange and tamarind in here with pineapple and coconut juice. Nice and easy. I had it. I made it. I picked some fruits I liked and put it together. I realized at the end of last show, I did not review the new gin that I was drinking, the Ghostbomber Gym.

Oh, yeah. And it was freaking delicious. Like, it's so good. So what I did was I made another one today. but you might think this is my normal size one, but it is, in fact, a tall boy ginantonic today. All right. Yeah.

These octaves pretty going to be excellent. Oh, yeah. Well, the pro tip is that I usually have some lime and extra ice off screen here and then I make a second one somewhere in the show, but now I've just got it all at once. So it's going to be lit. It's going to be lit, in fact. So you want like kind of the one big launch

instead of multiple small launches is what you're saying? Pretty much. that's exactly this is definitely a dedicated genitonic kind of situation dedicated G&T

oh wow I realize Jake before we ask everyone to spend all their money on stocks we should talk about a thing right

yeah we should talk about a thing so you may there's like two different angles to this Jake there's a podcast angle and a space angle you may if you're someone

who listens to podcasts two things we both like two things that we end the people running this both like you may listen to other podcasts that's an option we do put out a lot of content i put out amico right before the show we're doing this show now but you all listen to many podcasts you may listen to some podcasts from a podcast network called relay fm uh you may know or you may not and this is more for the people that may not know actually honestly it's stay tuned if you already know about this because it's actually for both of you more coming on that every september

they run a fundraiser for st jude the space connection of course is that Inspiration 4 and Polaris program all run in the fundraising efforts of St. Jude. It's the space funded hospital, yeah. It's totally the space funded hospital. And Relay runs a fundraiser. They're not careful. Spack. Oh my gosh.

Too relevant. Content too relevant. They run a fundraiser every September to raise money for St. Jude. So you can go to St. Jude.org slash relay. And they've got all their info about their very sweet. fundraiser that they do every year. Stephen and Mike from Relay. I listen to a ton of their shows.

They're awesome. What they've added this year is this capability to sign up as a fundraiser and join together a group of people to fundraise. And I thought, man, we've done pretty good at that in the past when we've done this, Jake. Yes, we have. So I've created an off-nominal campaign for us to contribute to their podcast network fundraising for St. Jude. They do a podcast-a-thon at the end of the month where it's like this very long live

stream. It's awesome. I thought we should probably kick in on this as the general orphanoma community. I got to be honest, I set our goal pretty low. I said it at 1% of what their goal was set, which is already kind of low because they've been blown past it this past several years. So I put it at straight up 1% of their goal. So it's $2,930. That is like nothing compared to the money that we've raised when we've done these kind of things historically. So we should be able to crush this. And I think so. Yes. I'm going to be throwing some money in here in a little bit, but I'll post this link here in the feed. I'll post it because it's a weird link.

It's like a, I don't even want to really spell this. Tiltify.com slash at a Kalangelo slash offnom. It's a bad link. I should use the link that we've used before for Offnom.com. I'll set something like that up. I just slashed donate or something. I can't remember what we have. Well, I think that's it.

I'll change that redirect after this show. So Offnom.com slash donate will be a thing. We're not going to do it live. But let's blow this up. And I've set a single goal, Jake, for our fundraising situation here, that if we hit this goal, what we're going to do with Stephen Hackett from Relay. He's going to come on October 19th on this show. And we're going to do the first terrible space movie review show. We're going to watch a series of terrible space movies, which Jake in particular is known to love really bad sci-fi.

So we got to figure out what the list is. maybe three of them, right? I don't know, probably three. We will watch these. A lot of movies, but we'll figure it out, you know. And then we're going to review them. We'll do it. I don't know if Stephen's going to be able to watch the movies in time,

but it actually might be better if he does not watch any of the movies, and we try to pitch him the movies that we watched and see which one he would financially support. So if we hit this goal, we are doing this terrible space movie review show. All right. I'm excited. I'm excited for getting money into good spots and also, you know, some bad movies. I realized I should have grabbed the St. Jude dog that I have. I have the...

Oh, you've got the puppy from the river, right? It's the next room over because Will really enjoys that. He sleeps with it every night. He thinks it's great. He does take the helmet off in like the Jeb-Kerman style of taking your helmet off. So there's that. So now that we've spent money on children, should we spend money on stocks, Jake? Maybe not.

I've been putting together some numbers here just to, yeah. So, okay. I actually put numbers on a piece of paper for this show this time because we have gotten into ourselves into trouble before where we just kind of come on a show and talk and don't have anything. You know, that happens sometimes. It's fun. It's fun. But I thought maybe we had put some actual numbers in place at times.

So I went and grabbed like a bunch of, you know, just simple top line, bottom line kind of numbers, cash flow stuff, and put some companies on this thing here. And I don't know, man, it doesn't look great. It's not good. This is exactly why I wanted to do this right now. There was like a week or two ago, a bunch of companies did their quarterly earnings. So there's a bunch of updates. And like, this is when all the chickens are coming home to roost to use that turn of phrase, right? We've known several of these names. We're in weird spots for years, but it feels like this point in 2023, many companies have like months left of runway. Uh, yeah. Like this many or less months.

Like, it's getting close. Like many of these storylines will have a resolution by the end of the year. Yeah, I was like, I mean, something that I knew, you know, we started with some of the companies that we knew were kind of like not doing so well. And then you look at the numbers, you're like, oh, that's what people are talking about when they say that. Okay, cool. How much do you think about this stuff, though, before I mentioned that we should do this on the show? I mean, I think about it, but I don't pour over the like the 10 cues like every three months. It's like, you know, that's not like in my regular workflow.

So doing this was kind of a fun exercise because it's like, I love opening 10, maybe I should make this part of workflow because I love it apparently. I love opening 10 Q's because it's fun to read the like the beginning of. You love the risk section. Pages and pages of like ways our business can fail. And it's like the most, it's such a humbling thing for a company to have to put that at the top of every earnings report. every 90 days. It's so funny to me. I don't know. I just can't get over it. But yeah, no, but so some of these companies not doing great, which we knew, but even some of the ones that I thought were doing like A-OK, I'm like, wow, you're still not profitable.

Like, planet, looking at you, planet, still not profitable? How does that happen? Let's start there. Let's start there. I did not know that was a thing. Yeah. So that was merely your shock. But you want to read, you want to rattle off this table? Yeah, well, I don't want to read numbers on the show. But, I mean, like, the biggest thing is it. I mean, they're pretty consistent, right? So they're kind of like bringing in about 50 million a quarter and losing that much money a quarter as well, maybe 40 million or so, right? So they're, and it's been the same for like a year. They got lots of money on hand.

They don't have a lot of debt. So like they're healthy, you know, like they're going to be fine. They're not going to like go. They're not, they're not in this many months. Yeah, yeah. I'm waiting my hand for all the listeners and waving all five of my gangly fingers. They're not in the this many months club. But, like, I don't know.

I just, I kind of, we read that book, you know, by Ashley Vance when the heavens went on sale and there was a story of planet there. And planets often, like, cited as like a, you know, a big success. A legitimate business. A legitimate business and a big success of the new space renaissance. And like, you know, along with SpaceX, like, this is what we want to this new industry to look like. And I was just sort of, I kind of thought they were making money by now. I don't know. I guess that was the thought.

And so I was kind of taken it back by that. Yeah. imagery is in a weird spot, right? Black sky you have in here as well, which is a smaller scale, but in a similar spot, like revenue and operating income wise. They're like revenue is 19, operating income negative 20 millions. Yeah, yeah, yeah. Not a lot of cash.

They just have less cash and a little more debt than planet, but yeah. Right. And I feel like this is the kind of situation that most of the imagery companies find themselves in that we, at least the ones we know numbers on, right? And it's coming at the same time where there is, is, you know, five years ago, everyone was working on optical imagery, and those are the companies out there. Now everyone's working on synthetic aperture radar imagery, and they're the ones out there. And the newest startups are thermal imaging. That's the new, the new hotness,

I guess. I need the way to put it. So the, like, interest in imagery shifts every couple of years, and it doesn't replace entirely. It adds on, right? Like, some of the coolest uses are optical overlaid over synthetic aperture radar imagery or in tandem with. So you get kind of like the dual imagery of that. Right. And that's really interesting. But there are so many imagery companies. And because of the way that market developed from going, you know, the biggest customers of imagery data are also the people that have launched spy satellite since the 1960s. So it's, it's been this weird market where every couple of months there's an article in space news about the National Reconnaissance

Office wanting all this commercial data, also launching spy satellites still. And it's like, okay, well, how much money are they actually spending on the data? Does it matter how expensive the data is? Are they just going to buy it all anyway? Because that's literally their role in the government. Like, their stated goal is like, know everything about Earth. So, like is there a price that you could put on this imagery data that the NRO would be like too high I'm sure there is but we have almost no insight because private financials and the NRO like it's just a weird market that I can't figure out how to like get a grasp on because it's such inherently useful data in a lot of cases and in other cases like I guess I

need that current of information you know I do if I have a legitimate use like if I'm a farmer and I want to know about land use or the crop yields and all that kind of stuff. Otherwise, you know, whatever shows up on Google Earth is what most people are good with. Yeah, yeah, yeah. Yeah. I don't know what to say about that.

It's interesting. Yeah, the imagery government relationship is kind of... I almost wonder if there's like pent-up demand for this And we're not really seeing, and we still don't have a good idea of what that market is because every time like new capacity comes online, like you said, the government just keeps buying it.

We'll buy that too. Yeah, and just like, okay, so maybe I'll make some more and some more and some more and some more. And it's like where, yeah, maybe not so much the price going too high,

but like when is there just enough data? Or it's like, listen, we don't need any more ones and zeros. Like, we're good. We got 30 centimeter resolution of every square meter on the planet every hour.

Like, we're all fine. Right. That's true. I mean, yeah, the upper end on how recent and high-res data you need is closer in this market than, like, you know, you could say the same crap about like storage space or bandwidth. Like, oh, how could anyone ever use 100 megabytes? You know, and then here we are a bunch of years later, and we grow into that capability. But when the upper end of it is like physical existence, it's a hard cap, you know?

Every time you make the product better, you unlock new use cases, right? that's the issue. Every time you improve the product, the market just grows to fill that space. And so you don't ever actually catch up to it, right? Like, you know, at some point you're going to be able to like, you won't need surveillance cameras anymore because there'll just be so many satellite images with such high resolution

that you can just buy planet surveillance of your property as a service and get images within the last, you know, like, you know what I mean? Like you can get unlocked an early ring ever. Yeah. You could unlock some really wackless up if you keep improving that. every order of magnitude is going to make it better, right? So, oh, yeah. All right, that's the imagery ones.

We have no idea what to do with them. And they're also not the fun ones to talk about. So let's move on. No, no. Because like I said, planet, even though they're not profitable, they got, you know, they got 400 million cash on hand and hardly any debt. So they're, they got planning a runway. Yeah, so they keep growing.

They're fine. So whatever. But no, but then the fun ones are like the rocket stuff. That's swear. That's where it gets spicy, I think. I don't skip over the space stations yet, because this one's a short, this one's a short topic. Axiom raised $350 million. Finally.

I'll say finally because I heard from like at least, let me count, it's probably at least five or six people individually that don't know each other, that I know, that told me that Axiom was several months late on their Series C funding. And now this comes through that they've raised 350 million. This is an unbelievable amount of money But then when you look at what they're developing You're like, is that enough money? Space stations and spacesuits? That's the problem with ACU. They're inventing an entire ISS

Which I don't know if you remember Cost NASA about $100 billion. Yeah, but people said that they're months, if not more than that. I mean, because now that was months ago that people told me that. So that means, you know, a year or more late on what they ideally intended Series C to be. They're in a weird spot because they are, so they're, we know, I mean, we don't know, but we kind of know that they're losing money on every one of these crew flights that they're flying to the ISS today. These are lost leaders.

They're, you know, I feel like everyone just keeps quoting the numbers that get thrown around of like 55 million a seat, 200 million for a. Dragon with what I view as almost no confirmation of any of those details, but it feels like it's tossed around so much by reputable individuals that I don't know, I assume that they picked up that information from somewhere.

No? Yeah, have they published any of those numbers? I don't think so, right? No, but like legitimate individuals say those numbers, so. Yeah. Like, whatever. So anyway, if they're selling to their customers

for 50, whatever million, even if it's $80 million a seat, they're making like almost no money on this thing because they have to buy the whole dragon, they've got to train this crew, they've got to buy the time on the ISS. Like, unless these three individuals that fly on each Axiom flight as paying customers are paying north of $100 million a seat, there's no way they're making money on those. But to the same extent for Axiom, when you look at like a long-term market, they want to lock up themselves as the premier provider of this sort of tourism, right? or when you go out beyond the tourism

into like national astronauts flying to the ISS separate from NASA crew flights, there's a value for Axiom to just purely lock up the rest of the demand in that market and not ever let anyone fly a private astronaut mission to the ISS. Yeah, you want a dragon with your name basically printed on the side.

And no one else is ever, right? Yeah. So that's the way I read it. It's not that they see that. as like a, we're going to make money by flying people of the ISS, but we are going to like snub out the rest of the competition by, you know, being able to grind them into nothingness by just like eating all the available schedule real estate. But then how much money's left over to build yourself a space station?

Not that much, a couple hundred mill. Yeah, I feel like the space station story is still largely unwritten for them. Like, it's still, you know, it's an idea. They have some agreements and stuff locked up. They started the work that got some funding. But I don't think they have the roadmap to operational figured out yet. I think the spacesuits is like cleaner for them because it's like, you know, they've got like a NASA contract and it's laid out for requirements and everything.

And they can kind of feed some of that forward to their, yeah, we'll get there. You can feed forward to some of their other stuff with the, you know, their own space station, is great. And they're getting money for that right, right? Like the they've got like over 300 million already in the bank from those just from milestones and stuff. Just from milestones. So, which is like wild to me because it seems like all they did was take the XEMU suit and paint it black. But so, yeah, the space station thing, I just don't know. Like it feels like they're, like they're hopeful that there's a business case for it, but they're still working out the details of what that means.

Yeah. And the other confounding factor is that I have a strong spidey sense that Axiom is going to build out their first module that is an attached to ISS module, right? And then they're going to assemble a couple more modules before they fly away on their own. I have a strong suspicion that they will just get completely leapfrogged by the first person to put a free-flying station in orbit. And being attached to the ISS is... like literally increasing the drag that it takes for them to maintain their station capability.

You know what I mean? Like, just because there's, it adds an additional layer of complexity to figure out how your thing interrupts at the station and then decouples from it. And you're tied into the entire geopolitical scenario of the ISS right now, which could fall apart tomorrow. And that does not feel like a good place when you have. you know, regardless of what people tend to think about Blue Origin and their current plans, they have money they would like to sink into space. It's just, you know, how well can they

decide which projects they want to put it into? You have other players in the market like that that are intent on putting up a free-flying space station. You don't really have a lot of wiggle room to like miss by a couple of years on this market if they are coming that hot and heavy on free flyers. Yeah. And I don't know. Do you do you buy any, buy into any of the, like, like this is this is not a conspiracy theory but it's like a wild ass idea of like axiom just like straight up taking over the iss like you know if there's if there's some sort of agreement like let's say the the russia u.s thing completely falls apart and the isss needs to not be a thing anymore you can sink into the ocean or maybe you just like disconnect the russia part sink that because they

can't do anything with it axiom fills that gap with their own stuff and they have this like hybrid axiomysess thing maybe they i don't know if they buy it off the u.s government or if they lease it and then they make money you know like is there a situation there where they go through with that that would be such a better idea than what the car plan is like if they were purely building out let's make a redundant thing that replaces the russian capability on the station which is like propulsion and station keeping and attitude control or whatever else you know power generation we need to do all that god that would be such a better plan than what we're going to do with this thing. Yeah. I mean, it would, it would certainly,

it would be a smart move for them because, like I said, the result, let's just run the scenario out, okay? They get their first module up. They always planned on 2025. Let's say it's like 26 or 27, right? A module is attached to the ISS. They have to add two or three more modules before they could fly away on their own. So they're, I mean, just timeline-wise, they're kind of screwed on it, unless they can figure this out, because the ISS is currently going to, 2030. I'm sure it'll be extended to like 2032 or 34, but will the hardware make it by then? So, you know, Axiom not only has to launch a module by 26 or 7 and then launch two more in the next four years. Can they make enough money in that time to fund all that? Can they find

enough funding to continue to make that many modules? Is there going to be some chaotic element to the ISS? We're building a deorbit tug at the same time. Like, there's just, just so much, I can't figure out the ISS program. I've talked about it's 8,000 times on this show, but it's just so confounding to me. Yeah, yeah. No, it's, it's like, it's a boat anger right now, right? Like, it's what do you do with it? That's kind of what I kind of wonder, like, if the U.S. had an opportunity for that kind of exit? Because, like, you know, what is the exit that makes NASA and the United States look good, right? If you just think it, it's like, okay, all right, that's a responsible, but kind of like a waste, I guess, right? If you let Russia,

you know, basically drive it into the ground, like, so that where it doesn't work anymore and it's like, you know, maybe the Russia just breaks it. Like, like through negligence, you let Russia destroy this station. That doesn't look good. Like, if you had the opportunity where, and even if it's pennies on the dollar, but you can get some money for it and get it to a private US company and say we are promoting US spaceflight right here at home in the United States, blah, blah, blah, American company, you know, and we're a revolutionizing commercial space. Like, you know, you can say all those buzzwords. Totally.

Yeah. Do you go for it? Like, you know, I don't know. It's a pretty good plan. I don't think you'd make any money off of it. Oh, no, God, no. For sure not. Yeah.

Yeah. Well, so, Jake, hypothetically, how could they pump enough money into Axiom to do that sort of thing. If you had to just conjecture about a grand thesis that ties all this together, do you have any current theories? You get them to bail on the other two modules, and either they go in partnership for the deorbit tug, which then becomes a propulsion module instead. And like, they don't need to build any more modules because they have the ISS, right? Like, you'd have to divert some of that funding, right? So it'd be a, you know, a, what? How do we not see that all along? How did we not see that?

I don't know. I'm just saying, like, there's a path there. It's still a weird idea. But how did we not see this deorbit tug just not deorbiting and being the orbiting tug? How did we not see that all along? I don't know. Because that's the 100%. Yeah.

I mean, so what are the other things that the Russian half provides right now that they would need to replicate? I think if there's some, the U.S. provides the power and attitude control. What are there? More radiators on the Russian side? There's something else. I'm missing. Well, they do, yeah, so... It's just propulsion?

I thought there was one other thing. Well, but the propulsion serves two purposes, right? So they do boost to keep it in orbit, but they also desaturate the gyros, I think, too, right? Because the U.S. segment can stay pointed, but that also be saturated. So then you burn off that with thrusters on the Russian side, I think. We got some... In the chat used to be oxygen, Philip says. I was to say life support has something...

Yeah, but the Russian oxygen stuff is broken, okay? That's good intel. Yeah. Okay, we can handle that. It's a deorbit and oxygenation tug. Jake, this is 1,000% the plan. Okay, all right. Wait, I don't understand why it took us so long to realize this.

God, we're idiots. Too many guests. Too busy making jokes. Yeah, I guess. Man, all right. We need to go on more treat. Yeah. We figured out the ISS conundrum, which is

they're way ahead of us. Yeah, $1 billion for a deorbit tug. Somehow I think that's more involved than, yeah. Hey, one percent of the cost of the ISS. Got that one. We're good on that. Yeah. Where do you want to go next?

Okay, do you want to talk rockets? Let's talk rockets. Astra. Astra. Oh, dark days for Astro. It's got hot in the Discord, Jake, in the last week or stuff. It didn't get hot. Yeah, we've had some very fun discussions about

the viability of small launch. I don't think we got anywhere. Some of our discussions, they go nowhere. That's fine. That's how they go sometimes. But it was interesting. And I don't know, I guess there's like, is small launch viable? And then there is Astra viable.

And those are very different questions. Yes, 100% different questions. But yeah, no, it is not looking good for Astro. These numbers are, I knew they were bad, but even put him in front of me. I'm like, oh. they're burning money fast and they don't have any. Yeah. Yeah.

So previously on Astra, they bailed on the most recent version of their rocket that was failing all over to place. They were successful on two of seven launches with the previous version of the rocket. So then they said, whoops, sorry, we're actually going to scrap that entirely and build a bigger rocket, because this is a way to success. Bigger rocket. We're going to launch 600 kilograms to orbit instead of 50.

or whatever they were at, 60, half yet. They were like very low. And then we'll do the other thing where we buy a propulsion provider, Apollo Fusion, so that we look a little bit like Rocket Lab, who up until this most recent quarter we're talking about, made all their money on space services and none of their money on launch. And then we will look diversified. So our stock price will go up from 20 cents to above a dollar

and we can stay on the stock market. Is this a good summation? of what was happening there? At least on paper, yeah. I have some big feelings about Apollo Fusion right now. Yeah, I also do. Let's hear yours. Okay, so that's the comparison that I've heard more than once.

It's like they're doing what Rocket Lab did. They're diversifying. They're buying these services, things that are higher margin, and it's great, right? And it has been great for Rocket Lab because, you know, I think they're expecting this next quarter to be more than 50% of their revenue is like not Rockets. And so, like, they're, it really is floating them a lot of extra cash. How much money do you think that Astra has made up Apollo Fusion this year? Like, no dollars.

Yeah. $700,000. Yep. In the last two quarters. The 700 last quarter and nothing the quarter before that. And Jake, guess how many of the Apollo fusion, guess how many of the Apollo fusion engineers are left around Asha? Yeah.

I've heard very little. Yeah. Like almost none. Yeah. But I mean, the workforce thing, I don't know. We can talk about workforce management and whether it's good or not. I don't know. That is what it is.

But like, $700,000 is nothing. It is zero money in a rocket launch company. It's the rounding error. Like, you know, on the financial statements, you do things in like thousands or millions of dollars. So if I do it in millions, I need a zero decimal to start this number. Like, that's how bad this is. you know they're burning like 50 million a cash. They're burning 30 million,

50 million a quarter and they made 700, and Kemp was bragging about the margins on it. I'm like, dude, if I find a loony in my couch cushions, it's 100% margin and changes nothing about my financial situation. Like you have to, you have to think of this a little bit bigger.

Like I don't, and they were like, oh, we got all these orders, you know, 70 million in orders backed up on it. I'm like, okay,

great, but like you're going to burn that. Like it's our, you've burned that four times. over since you bought this company. I think it would have to, yeah, right. I think it would have to be, it was like $200,000 or $300,000 per engine is how that the math worked out based on the backlog that they have.

But they'd have to, like you're saying, they'd have to ship all the engines this quarter. Yeah. And then they'd be out of engines to ship. And then what do you do the next one? You don't have any more orders. So, yeah, even if they were able tomorrow to get all the money that everyone owed them for engines that have yet to be delivered, they would make it two more quarters than they would the current pace.

Well, I mean, all the money they have, like, as accounts receivable for engines is about as much as they have as accounts payable, like, in work for the launches. And other stuff. Yeah. So, like, you know, it just kind of, it's a wash at this point. So, can you, did you, did you read the, so, all right, let me just lay out my current take on Astra. They are totally screwed.

And Chris Kemp, as disingenuous as I have always found him, which I'm sure we know people that know him. Ashley Vance seems to like him, yada, yada. He, to me, has always committed the Dwight Shrut assistant to the regional manager thing, because I've seen him many times say he was the CTO of NASA, and then I looked up and it was like the CTO of IT or something of at NASA, right? So it's like a different thing. And from that moment forward, I was like, oh, like something here's going on. So anyway, he's going on a roadshow to make this look as attractive as possible to then sell the remaining stuff. They set up Apollo Fusion as a subsidiary again.

What was Apollo Fusion and now Astra Space? What is it? Do you remember this? Astra, something propulsion. A fully owned subsidiary so they could sell that. And then they've also taken a bunch of people. They had a big layoff round. Took a bunch of people that were working on the rocket previously

and put them over on engines to try to ship a couple out the door, to have some revenue. to me it just all looks like, you know, rearranging the chairs to make it a really attractive Titanic to buy. That's kind of what is going on. So did you read the Ars Technica Stephen Clark interview with Chris Kemp of during this road show? I did. I did.

Okay. It was interesting. Hilarious in many instances. There was a, I mean, the big point he was trying to make is that like all the tooling's done. Like, yes, we're burning a lot of cash, but that's behind us now. And now we can just make the rockets and fly. Which I like, A, I just don't believe.

Like, I just straight up don't believe that that's where you're at right now. And B, even if it was, like, I just don't think that like you have the runway for it. You know, so the quote in there that really struck out to me was this one because he talks about how he's trying, you know, pumping up the value of the company. And then they talk about funding and he says, I'll read this to you. he says we've got this public company now with a stock trading at 25 cents a share that makes it nearly impossible for us to raise any meaningful amount of capital in public markets. That's a wild thing for him to say. So then, continuing the quote, so that basically means that we need to take the cash coming in

from our spacecraft business, $700,000 a quarter, and whatever cash comes in from our launch business, zero, and make it work. Okay, like that is a brutal self-examination. own in that quote. Like, there's nothing you could take from that to be like, well, let's go. Let's buy it. You know? Can I read my favorite section of this? Because I have a better. Yeah, you can. I have one that I literally stopped reading this article and then went and did something else for a while and came back because I cannot believe this part of the article. Did you do old man walk where you walk where you walk outside with your arms behind your back and like look up with the trees?

First, what I did was I scrolled to the top of the article to see if this was Stephen Clark or Eric Berger because I was going to text Eric Berger immediately when I read this. And I realized it wasn't him that was talking to Chris Kemp. And I don't have Stephen Clark's phone number. So this is a different scenario. So what I did was take a walk and I came back and I read this again to make sure I was reading all these words in a row correctly. This is a direct quote per transcribed by Stephen Clark at ours, Technica. I mean, there are three private or venture-backed companies right now operating that have put satellites in orbit.

SpaceX, Rocket Lab, and Astra, full stop. Fireflies stuff deorbited in a few. days. ABL blew up everything. Relativity failed and scrub the program. It won't fly again until 2027. So like, all right, ABL blew up everything is a pretty extreme statement. I have no idea of the extent of which they blow up stuff.

I can't imagine it was all of the things they've ever owned. I assume that they did retain hardware, people, like, they probably didn't blow up their entire existence. So that's fine. Relativity, I'm here to dunk on relativity all day. Every day when it comes to launch programs, I'm totally cool with completely sidecar, like, jacking up relativity. That's fine.

So I'm just going to read this one part again. There are three companies that have put satellites into orbit, SpaceX, Rocket Lab, and Astra. Full stop, Firefly stuff deorbited in a few days. Doesn't even make any sense. So they launched stuff successfully to orbit. They have another rocket on the launch pad ready to roll right now. But because they're stuff deorbited, they are not one of the three companies that have put stuff into orbit successfully. Yeah, yeah.

Like, just, and that's the thing where I'm like, okay, you're just doing like a weird gatekeeping. Do you have a comment, Firefly? No, we're busy launching for the Space Force right now. Call us back when we have all that money in our bank account. Admittedly, Firefly, it's been a while since, since, you know, they were actually flying and they've had, like, I don't really know what was going behind the scenes. There was something going on, but they're now ready to roll again, and they're doing a responsive launch demo that, took six months to get to the pad, which is super responsive, and I'm like, I thought that is kind of hilarious. But just to go from one sentence of three companies full stop, Firefly

stuff is deorbited. It's like, okay, so just not happy with the orbital mechanics or the time situation here? I don't know. You know, Chris Temp would have really well in our Discord, where we have very pedantic debates like that about whether it counts as orbit. He would be really good at the random gatekeeping that the space industry does. My definition of orbit means you have to stay in orbit for at least five orbit. And at least until your next launch, your thing has to be, you have to always have something in orbit in order to have ever made orbit. That's so funny.

That's really funny. There were some other very choice lines. I would recommend reading this from start to finish and letting us know what your favorite part is. Because there's some really good stuff. If you're listening, Chris Kemp, and you're going to have some free time coming up, you should come into the Discord, man. It's only five bucks a month. Oh, I was going to just straight up invite him on the show.

We should get him on. Apollo Fusion can pay for it. He's clearly the game to go out and say things like this. Yeah, he is. We should. To like Stephen Clark, who's been around a while. Like, he's definitely covered a lot of stuff. Yeah, I think there was even one part.

Let me throw this up on the screen so we can really just post-game analysis this interview. Where's it at? There's, so, you know, there we go. This is the part. my favorite placement of a headline of all time. Yeah, so Rocket Lab, he's talking about Rocket Lab buying other, you know, service providers and stuff like that or solar ray producers and all that kind of stuff. It's a very low margin.

They're at a $3 billion valuation and we're at $50 million or whatever it is today. And then the headline, that's because Rocket Lab is flying. And he says, they're flying, yeah. Making a rocket work and actually deploying satellites in orbit is extremely hard. It is. It is. Yeah. Totally.

I don't know. This was just one of the most disingenuous interviews I've seen in a long time. And listen, I've never done a roadshow to try to sell a company that has single digit months left in the bank account. So I can't imagine it's a great position. Oh, it's a hard job. No one's saying Chris Krem doesn't have a hard job. Right. The way that we got here at this point in the industry, right, there's all these companies public that we're actually looking at their data because they went public through these specs or whatever means.

And now they have to survive. I'm intensely curious about that phase of space history when all these companies went public in the same couple of months stretch, you know, the SPAC craze. Yeah. When all of them, even Rocket Lab, who I give the most credit to because they are a functional operational business. We didn't even look at their financials, but like they actually made money on launch in the last quarter for, I think they were literally positive in the launch department. Wasn't that accurate, ish? Close. I don't I didn't look at the launch profitability specifically but I thought it was like just over the line but whatever the case is they are functional they fly a lot of rockets they are spending a ton of

money because they're making a bigger different rocket like everyone is but they're doing so with an operating successful rocket that flies frequently for valuable customers today they have revenue they have revenue is the key distinction between them and yeah they brought in 62 million dollars last quarter, not 700,000. That's the big difference, yeah. But even then, their presentation when they were going public via spec also included

the stupid hockey stick graph that every other company did, which was like, space is going to be a $16 billion industry tomorrow, and we're going to launch all of the satellites that exist. And it's like, there aren't that many satellites. There never have been. There never will be that many that need to be launched in the next year.

You're just doing a hockey stick projection on the current trend, which is only driven by Starlink, which no one has any, there's no way that anyone's capturing that market. So that is a completely ridiculous graph. The number of satellites is not a good indicator of the actual volume of the industry that needs to be launched. And they all, they all went public on these like weird, you know, I guess, I guess legally defensible slides in their road shows. But I'm just wondering if, like, is anyone going to revisit that era and file lawsuits about the, stuff that was in those documents.

Is this going to be like the space.com bubble? Is that what you're asking? Space.com bubble, yes. I'm sure the employees at space.com and really appreciate that. The space equivalent of the dot com bubble. There you go. Put a couple more words in between. Dot com bubble, but in space.

There you go. Yeah, like, I don't know. I'm, I don't feel like anyone really has the appetite to go and file lawsuits in that way. but given the fact that like everyone's stock minus a few exceptions are at 20 cents and they all raised several hundred million dollars I mean momentous you look at momentous they raised like 30 some million private went SPAC raised 200 million dollars and there's no money left and they're going to sell for like a couple tens of millions at best you know yeah like they're all they're all shaped like that, whether or not the exact absolute values are the same.

Is that just how it goes? I mean, I guess here's the bigger financial question that probably neither you nor I are qualified to answer. But is this actually a space problem or like, is the market in 2020, 2021, 2022, 2023, like, just, like, is it just, you know, not, it's just chaos and tumultuous and volatile and no one knows what's going on and there's just like there was no money and then there was all the money, then there was no money again.

Like it was just a roller coaster ride for the last few years in terms of like the financial market, right? So like is this really a space thing or were they just kind of caught up in wrong place, wrong time? I don't know. That's a thing.

Yeah, I mean, when you look at the tech market, they're all going to like, they all raise money on unbelievable valuations. Like not to get too design nerd about it, but the Figma people have to be just praying that that thing closes. any day with Adobe. It's like 20 billion for, you know, Figma is like, wow, that was really, that might, Figma may be the Pets.com of this era. We'll see. It depends. It could go that way,

you know. 20 billion. I don't think I've read into this. 20 billion for Figma. That is wild. Were we all, like, laughing, like, incredulously when they bought Instagram for what was it, $5 billion or something? $1 billion. One billion? One billion dollars. What was the, uh, Salesforce just bought something big. What was the Slack purchase?

Slack 10 or something. Welcome to the X-N-L tech podcast. 27.7 billion. 27. Wow. Yeah. Yikes. And then no one ever used Slack again. Yeah.

That is it. We all have discords now. Great, I've uninstalled it. Yeah. I thought that would happen with Figma, but anyway. my thesis on this Jake is that no the leading indicator the canary in the coal mine in this situation is chamath polyopatia I feel like this is my this is because he's involved in Virgin Galactic and is involved in relativity a bit but he was like the SPAC guy and yeah he is a completely

confounding person when you look at like the politics and pop culture of tech and investment and stuff like that. And I feel like if and when anyone goes for Chamath, then you'll know, like, there's some, there's some something going on in this area of like the way that money was raised in the last five years. But otherwise, until that happens, we're going to be the first one's landing on his doors. I think that's like he's going to be the idol of that scenario. So, if I was any of these companies, I would just be watching and waiting for that. And if, if nothing happens, then you're good. Like, you know, go have nice dinner tonight. It's fine. I don't know. I just, it's tough because at the time when everyone was going public,

and raising all this money, like, we were probably talking about how disingenuous some of that data was and how laughable it was in many instances. And to end up here is completely not surprising in many of these cases. Yeah, the one time we actually had good financial advice is when all the SPACs were happening and were like, this is stupid. Yeah. But the weird part is there's like some, there are a list of businesses that are that I believe in that were in that craze. know? Yeah. Rocket Lab, planet, black sky. We talked about a couple of them that I'm like,

the fundamentals there are good. But to the same extent, it's like the stock market does not care about that necessarily. It's just, you know, it's different incentives overall. So it's annoying that the stock price has become a thing that we talk about in the space industry because it distracts from the actual storyline, which is like, I mean, in many ways, it's actually tracking now, which ones are good and which ones are bad. But I don't know what's going to happen. Virgin Galactic. We didn't even talk about it.

We got 10 minutes left. Yes. That should be enough time. Yeah, there's not much to say about this. They have a spending problem. There's not. There's not a lot to say. That's my takeaway.

I know that space is expensive to develop, but how is it that Rocket Lab can develop a fully reusable launch vehicle for $40 million a quarter and Virgin Galactic is making a bigger version of what they already have for $140 million a quarter. Like, why are they spending three times, four times as much as a Rocco Lab?

I don't understand. I don't get it. I don't know what's happening there. But that is a big, big problem, right? Yeah. And they have Astra revenue. I was going to say, their chart is Astra more glamorous. Like bigger revenue, bigger losses, but the same kind of effect.

Now, the difference, Jake. Pretty much the same revenue. Let's get serious. They made $1.9 million last quarter. That's a, that's the, that's the, same revenue as far as I'm concerned. The difference, though, is that they have an unbelievable amount of, unbelievable ability to raise money out of nowhere.

Like, for whatever the reason is, the, every once in a while you see, like, Michael Sheets tweeting, like, Morgan Stanley thinks X, Y, or Z about a particular space company, and they're still all, like, Virgin Galactic, totally good. Like, this is a legit business that's going to work out for whatever reason. Yeah, I mean, you're right. Each flight is going to make them, well, it's not going to make them. It's going to produce $600,000 of revenue if they sold, if all three of their available seats are the paying customers from the original batch, then if they are able to add a fourth customer by removing their employee from the fourth seat, they can go to $800,000. And every once in a while, they'll do a research-focused flight, like the Italian Air Force one, that makes them 600 grand per seat.

and they can fly once a month. So they will be in the hundreds of thousands of revenue for... And the thing, yeah, and the thing is with the actual flight, marginal flight is still profitable. So like, if they fly one more time, they get extra money. Like, so they, like, there is... I don't know what that means, though. Like, how do you...

This is the same as how much does an SLS cost to me? It's like, to me, the flight costs as much as it costs to run Virgin Galactic and their current iteration. It does. It does. Right. So, but like here, so they have to, they have to stop spending money is what I'm saying. Right. Like, if they can get spending under control, then like there is a business underneath there that they can run, right? Um, if they can get this thing flying, I don't know, every couple weeks, maybe it would be like a good, good kind of like target to go out. I mean, they're doing monthly right now. Right now they're doing monthly. So if you double that and

you get this, you know, burning 140 million a quarter down to, I don't know, 30 million a quarter or something so that your cash on end can give you two years of runway. Like, that would be nice. That makes it a lot safer, but I don't know, I don't know how much dev time is left on this Delta vehicle, but given their history, I just, I feel like it's not done next week, you know? They say two years. They say flights late 25. So yeah, I mean, you're like... The last quarter, their runway is...

Not that. Three quarters. Right. Well, but wasn't there wasn't there something else that they like had something else they would tap into at a certain point? I don't know. I mean, they've got... Whatever the case is, they don't have enough runway to get to the development of the next vehicle.

So more money has to come in. Which again, they've shown a bizarre ability to raise money. Yeah. Which is wild. But yeah, I mean, like, and again, two years is ridiculous if they think they're going to build the new vehicle in two years. I think based on track records and complexity, it will not be two years. Is Delta is supposed to be that much bigger, or is it just like...

No, it's just built different. Spaceship two, three, full thrust. To quote ours, Technica again, there was a really good... Yeah, they had that interview, right? that I will put in the show notes. Yeah. Really good interview about what exactly are the changes to Delta and the way that it's put together and how things are going to run.

It makes Unity look like a prototype, right? Like, it's basically just like the refined production version of, yeah, okay. Yeah, this is like more producible, more maintainable. They could build many of them and fly more frequently. But it's, again, like, the multiplication problem there is bizarre to me, right? like two years from now is we've got one of these new vehicles ready. That's not a fleet ready in two years. They're going to need to build a bunch of other ones,

which then puts it at six years down the line or whatever. Based on build it, test it and then go to build the other ones. It's far away. There was another version of the current ship that they shell, right? Yes, yeah. VSS Imagine. Imagine. Yeah, yeah.

Very Disney. Yeah. Real Disney. Yeah. Real Disney. Yeah. Real cold glacier. Okay.

So yeah, I just, I guess maybe you can say that if it's really just sort of like a bigger, better version of Unity, like, and you can leverage a ton of the design work already and you're good. And I think they say that in the interview, right? Like the airframe profile is exactly the same. So they have all the dynamics data. They don't need to test say that, right? So I guess you can say like that should be a.

easier time developing that, like iterating on that. But I just, if that's true, then what the hell are they spending money on? It's the question I have. Right. Right. I can't quite figure out. It's just like, they're just burning so much cash. That's actually a great way to put it. If all those statements are true, why is it $100 million still? I mean, that's a pretty nice astronaut lounge they have there, Jake. It's pretty glitzy looking. And it's been like that for the last year. So, like, reading back the operating profit from the last year, it's like 140, 160,

150, 145. So, you know, that's like $700 million that they've spent in the last year. Yeah. It's wild. Yeah, I don't want to get too dark, but I feel really bad about Virgin Galactic generally. You know, I've never been a big fan. I hate the architecture. I'm terrified every time one of those launches happen.

Yeah. I don't like it. And I don't think it's going to work out. That's going to be weird when that goes down, though. it's then there's going like this the spaceport America subplot is is bizarre right like there's some if new mexico was a more populous state i feel like this would be a much bigger deal in the news but because there's like 10 people that live there yeah i think it's literally like is it like the 49th most populous state or something it's really low right and lovely it's pretty low yeah with

the most wonderful time in new mexico i really want to go back i loved it uh but like i just feel like that would be a much bigger storyline. If that was in California, I feel like we'd hear about it every other day. If and when Virgin Galactic is no longer operating and there's just this beautiful, weird-looking spaceport in the middle of nowhere in New Mexico that they spent all that money on and then no one's using it. We know at least one person from New Mexico that's in our Discord, and I'm very curious what the viewpoints will be on that. So two minutes, best guess on who sneaks in and buy Spaceport America time for pennies on the dollar

after Virgin Galactic's gone. It's slightly more accessible than Van Horn. So it's not that far of a drive and it's more accessible. So could you fly a new shepherd out of Spaceport America? I don't know. I don't know who else would want it.

What are you going to do out there? Uh-oh. Uh-oh. It's less accessible than Mojave. Right? Anyone that would fly at Mojave would just stay there because it's a two-hour drive or whatever from L.A. Yeah.

So, I don't know. You got any ideas at all? No, no, because it's like, it's really designed as a horizontal kind of space port, isn't it? Yeah. An airport. Yeah. I mean, it functions as an airport.

They take off and they land the same way airplanes do, yes. Yeah, yeah. I can't think of anything. No. Sorry, New Mexico. You're lovely. I go. missed on that one.

Swinging a whiff. All right. Who's going out of business first, Jake? Astra. Astra. 100%. Easy. Yeah.

Of the ones we talked about today, Astra's going on first. I guess the question is, does Astro go to business for Momentus? Yeah, right. I strangely believe Momentos will get a sale before Astra. All right.

So here's the thing. so RocketLab Number one, Peterback is ruthless I love, after that interview came out with Chris Keb We're going to go one minute over on this, but it deserves it Because there was a lot of side swiping at Rocket Lab in that interview, as you shall read So now I'm going to have to find this picture Sorry, I have to scroll back through the pictures of them launching, but here you go

This tweet, just unreal. A Rocket Lab production line, and there's like I didn't even count them. Yeah, there's so many. There's so many. My eyes can't count how many rockets are in this picture. One, two, three, four, five, six, seven, eight, nine, ten, eleven. There's a lot of rockets.

And yeah, that was, uh, so this was, this interview with Chris Camp was August 21st, and that was August 22nd that that was posted. Absolutely brutal. The other aspect of, of the, uh, oh, that's just me. I don't need a full shot for this. when Rocket Lab bought the production facility of Virgin Orbit for like $16 million, then they come out this week and were like, effectively we saved $84 million by buying that on during their bankruptcy sale.

Like that would have cost us $100 million. We got it for $16. I kind of feel like, you know, I don't think that they're interested in Apollo Fusion engines in particular, but, and I don't think they're interested in momentous stuff. But Rocket Lab is the company that's like the sharks swimming around of like, oh, we'll scoop that one up. We'll scoop that one up. So if there is something that they would be interested in there,

they have like $30,300 and some million dollars of cash on hand. So maybe they can scoop up a good deal, but... You're waiting for that tweet where he says, a rocket lab production line, and it's the old Astra factory. It's full of electrons in the truck. Hilarious. We got to go out on that. Oh, man.

We're at next week, Anthony. What's going on? Oh, next week. Lauren Grush is coming back. Her book will be out in, I think, the week after that, but she'll be here next week to talk about it. It's finally done. We've been having her on like every year to talk about her upcoming book.

She announced it on the show. So I was quite thrilled when she was like, I'll come back for the Junkett. So we are an official stop on the Junkett now, which is great. And yeah, I don't know if you've been doing your homework, but it's pretty good. It's a good book. I've started it. Yeah, it's pretty good. It's good.

I'm excited to talk to her about it. Yeah, me too. It's going to be fun. So that's it. In the show notes, raise some money for St. Jude. I see, let's see, quick check. We got $150 in there with Benjamin and Brad are in there first. Nice. Thanks, guys.

And all you other non-live show viewers hop in there because we're going to do the terrible space movie review show on October 19th here with Stephen Hackett. It's going to be wild. We have some good ones. The listeners have been suggesting some stuff, and there's some good movies out there. I'm excited. All right. All right, y'all. Thanks, everyone.

Bye. Bye. Bye. One, two, three, four, five, four, three, two, one. Two, three, two, one, and the death.