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SpaceX Reveals Starship Timeline

It's happening.

At long last, SpaceX will begin test flights of the Starhopper -- an abbreviated version of Elon Musk's long-awaited Starship interplanetary spaceship -- this week.

In fact, according to a tweet from the SpaceX CEO over the weekend, Starhopper's first "untethered" (i.e., free-flying) attempt to launch and hover at an altitude of 20 meters in the air before landing could happen as early as July 16.

And that's only the beginning.

Artist's rendering of a SpaceX Starship against background of the moon.
Artist's rendering of a SpaceX Starship against background of the moon.

Baby steps to space

Standing 80 feet tall and bearing a polished stainless steel shell measuring 30 feet in diameter, Starhopper looks like nothing so much as an enormous, shining silver bullet on its launch pad -- aimed at the stars.

Flight tests for Starhopper, under construction in the form of two separate prototypes at two separate sites, arguably began back in April. That was the date of Starhopper's first "static" testing of its $2 million Raptor engines, conducted with Starhopper firmly tethered to the ground and unable to fly away. But hinting at an ambitious launch schedule, Musk now says he hopes to have Starhopper going as much as 20 kilometers into the sky as early as "a few months" from now.

Assuming this week's test goes well, multiple hops are likely "later this year," says SpaceX VP of commercial sales Jonathan Hofeller. It's even possible that Starhopper will "get orbital...this year."

Next will come testing of a "full stack" -- a full-size prototype of Starship -- in 2020, followed by commercial operations as early as 2021. Hofeller recently confirmed that SpaceX is in talks with three separate telecom companies to see who might want to become Starship's inaugural customer on an orbital launch in 2021.

What Starhopper means to investors

Designed with the capacity to carry 100 colonists to Mars, the Starship space vehicle that Starhopper represents offers arguably the best hope humankind has for colonizing the Red Planet -- or even simply visiting it. For investors in SpaceX, though (and you may be one and not even know it), Starship has bigger -- even existential -- implications.

While best known for its business launching satellites into orbit, you see, SpaceX doesn't actually earn a lot of profit from launching satellites. In fact, while data from S&P Global Market Intelligence confirms the company is generating in excess of $1 billion in annual sales, bankers reviewing a recent SpaceX debt offering say the company is currently generating no GAAP profits from its launch business.

To remedy this, the company hopes to earn the profits it will need to finance a mission to Mars by developing a worldwide system of 12,000 satellites offering broadband internet. Starship, with its massive internal cargo capacity and insanely low payload price per kilogram to orbit, offers the company its best chance of getting that system up and running before anyone else can beat them to it.

What Starhopper means to other investors

And the possibilities might not even end there. In what I believe may be the first mention of the idea, Hofeller revealed in June that SpaceX is contemplating an entirely new mission for Starship once it's operational.

According to the Union of Concerned Scientists, there are currently nearly 3,000 satellites orbiting Earth but no longer functioning as they were intended. These satellites represent millions -- probably billions -- of dollars of potentially monetizable investment, and NASA -- and companies including Lockheed Martin, Northrop Grumman, and Maxar -- have proposed finding a way to repair and refuel some of these satellites with use of robotic "space tugs" at some point in the future.

But here's the thing: Given the large size of Starship's cargo bay, which will be empty after it delivers a payload to space, it seems a waste to bring that big ol' spaceship all the way back down to Earth still empty. So what if Starship could also be used to transport malfunctioning satellites from orbit back down to Earth for repair?

"You could potentially recapture a satellite and bring it down" to Earth, says Hofeller. There, the satellite could be repaired hands-on by the people who built it and then returned to orbit in another Starship. Granted, in so doing, SpaceX would probably short-circuit plans by Lockheed Martin, Northrop, and Maxar to repair satellites in space -- but it would create a brand new revenue stream for SpaceX.

Long story short

Whether you're a fan of space launch, an investor in telecoms, or even just a customer seeking cheap, reliable internet service not provided by Comcast, SpaceX's Starhopper test Tuesday should be one to watch.

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Rich Smith has no position in any of the stocks mentioned. The Motley Fool recommends Maxar Technologies Ltd. The Motley Fool has a disclosure policy.