Space exploration has been a subject that many believe should be in the public domain. While space exploration is costly, the uncertain economic benefits are not good for profit-driven companies. Furthermore, some critics fear that private involvement in space will undermine the integrity of science and result in uncontrolled land grabs that are difficult to judge in courtrooms on the ground.

However, the private sector's participation in space is now a fact and has been since the beginning of space exploration. NASA did not design its Saturn V rocket; Boeing and its partners did. Private companies have also developed, launched, and operated satellites for a long time. They have also provided vehicles and equipment to NASA, European Space Agency, and other programs.

It appears that we are close to a major private space investment. NASA relies on commercial space missions to replenish its assets in space. In the meantime, private businesses invest in the space industry and mining operations to extract celestial bodies. But, there aren't any pure play opportunities for investors to be part of this advancing technology.

Once the Domain of Giants

Investors could gain some exposure to space, but not in a significant way. Boeing, Lockheed Martin, and Northrop Grumman build rockets, spacecraft, satellites, and various other systems used in running space-related programs. However, this kind of space-related revenue is not always visible or important for the business's general performance. Additionally, it is usually tied to military projects, so it is often difficult to distinguish "space revenue" from "defense revenue."

Additionally, the amount that NASA allocates to space exploration isn't an important factor in sales growth for many businesses. The past has shown that NASA spends most of its budget on contracting. The agency plans to invest around $22.7 billion by 2020. It will leave about $18 billion to be spent on procurement, which is generally split across multiple businesses. For comparison, Boeing 2019 reported $76.5 billion in revenue. So, it's not easy to conclude that making a bet on Boeing is investing in exploring the universe.

The First Generation of Pure Plays

The initial generation of pure space exploration is over. Orbital Sciences, which made commercial customers and government rocket systems, was formerly listed with NYSE. It was merged into Alliant Techsystems in 2014, and NG bought combined company in 2018 and renamed it Northrop Grumman Innovation Systems.

Astrotech, another pure space-themed company, has been trying to remain in orbit. It was founded in 1984 and supplied technology for NASA during that Space Shuttle era, which ended in 2011. Astrotech cannot report quarterly revenues and, in certain quarters, doesn't even post revenues. As of June 2020, it had a market capitalization of 20 million.

In With the New

What's interesting in the new batch of space entrepreneurs is their aspire to the stars. One of the best-known firms comprises SpaceX and Virgin Galactic (SPCE). SpaceX was founded by serial entrepreneur Elon Musk and was the first privately-owned company to launch a resupply vehicle for SpaceX's International Space Station and achieved this feat in 2012. In May 2020, SpaceX's vehicle transported two NASA astronauts to the space station, a first for a privately-built spacecraft.

But, SpaceX wants to be more than Grubhub or Uber to NASA. SpaceX is working on launch systems that can be reused to reduce space exploration costs drastically. The most ambitious of its projects is Starship, a vehicle with a long duration that Musk hopes to one day be able to transport a team to Mars. Another initiative is Starlink, which intends to launch up to 42,000 satellites into low earth orbit to provide worldwide internet connectivity.

The dreams for Virgin Galactic are not so lofty in contrast. The company's goal is to take wealthy individuals on short flights into space, where they can see the earth and feel a few minutes floating in the air. In the year ending in 2019 deposit amounts of $80 million, which could translate to annual revenue of $120 million if realized.

Tickets are priced at around $250,000 per. Virgin Galactic's launch platform consists of a spacecraft called the SpaceShipTwo, which is transported up to an altitude of 45,000 feet using the WhiteKnightTwo. After dissociating from the WhiteKnightTwo, the two-person crew of SpaceShipTwo and six other passengers will enjoy around an hour of flying time.