Here's Why the Blue Origin Rocket Explosion Could Drive the SpaceX IPO Even Higher
Written by Justin Pope for The Motley Fool -> Blue Origin's latest test launch failure illustrates the gap between SpaceX and the competition. SpaceX is leveraging the hype to maximize its IPO pricing. It's generally wise to use caution when stocks have this much hype. A sust
Blue Origin's latest test launch failure illustrates the gap between SpaceX and the competition.
It's generally wise to use caution when stocks have this much hype.
A sustained competitive advantage is the best way to sustain a company's growth and raise its stock price. But it's not always obvious to the market where one company stands relative to its competitors. Elon Musk's SpaceX is the global leader in rocket launch services, and it's more obvious than ever.
One of its primary challengers, Blue Origin , founded by billionaire Jeff Bezos, recently had a rocket explode during a test launch. Beyond the explosion going viral, it reminds investors of the high stakes of launching powerful rockets into orbit. Here's why the Blue Origin explosion is likely to add more fuel to SpaceX's upcoming blockbuster initial public offering (IPO).
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It's not that SpaceX hasn't had explosions during test launches. However, it's very different when you're the industry leader pushing new boundaries, rather than a challenger playing catch-up. SpaceX is currently the leader in the space launch arena. According to the company's recent S-1 filing, SpaceX rockets launch 80% of the world's mass (cargo and crew) into orbit. SpaceX's Falcon 9 and Falcon Heavy rockets are also reusable, dramatically lowering per-launch costs.
That dominance has helped it build out its Starlink satellite constellation to over 9,600 satellites in orbit, bringing connectivity to 164 countries to date. It also makes SpaceX an overwhelming favorite to land government launch contracts. The U.S. Space Force recently awarded SpaceX contracts totaling $6.45 billion, another reminder of the unmatched scale at which SpaceX operates versus its competitors.
It could be an understatement to call SpaceX's IPO a big deal. I mean, the company could go public at a market valuation of $1.77 trillion. It will be the largest IPO in history. As much as the Blue Origin explosion illustrates SpaceX's industry leadership, the IPO process has shown how hungry the market is to buy shares.
