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Every admin in the U.S. should consider increasing spending for space exploration: ProcureAM CEO

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SpaceX's newly designed Crew Dragon capsule launched four astronauts into orbit on Sunday. Andrew Chanin - ProcureAM CEO weighs in on the succesful launch and breaks down why more people should invest in the space industry.

Video Transcript

MYLES UDLAND: Earlier this morning, investors cheering the scientific breakthrough we saw on the vaccine side, but, last night, we had more yay science news when SpaceX sent four astronauts into space headed towards the International Space Station. They are set to dock up there right about 12 hours from now, this, of course, bringing into focus, once again, the potential Wall Street space trade. One company trying to help investors play it-- excuse me, one company trying to help investors play it is ProcureAM, and Andrew Chanin, the company's CEO, joins us now.

Andrew, it's great to talk with you once again. So I guess, last night, we saw kind of what SpaceX did. And, as you see that, thinking about the strategy you guys are trying to, you know, play through your fund, how does it-- where do you think we are, I guess, within this space investment boom?

ANDREW CHANIN: So we're really excited to see companies, such as SpaceX, which, although, may not be holdings of the portfolio because it's a private company, its achievements are fantastic for the broader space industry. And, predominantly, their ability to lower costs for sending people or things into outer space could have huge ramifications across the entire space industry in the future.

INES FERRE: Hey, Andrew, Ines here. Nice to see you again. President Trump was a big driving force behind Space Force. You also had the Artemis project to send boots back to the moon by 2024. What do you think that these programs will look like under a Biden administration?

ANDREW CHANIN: Well, as our-- our resident space expert Micah Walter-Range frequently tells us, space is not a bipartisan issue. It is a nonpartisan issue. Space is something that every administration in the US ought to consider increasing spending on in the future or, at least, staying steady because we cannot afford, as a nation or even as the human race, to actually stop moving forward because space is one of these domains that, if another, potentially, an adversary is able to start leading the way, they have the potential to set the rules moving forward. And that's not a position that the US can really allow itself to fall into.

- Andrew, what's the-- what's the status on Amazon CEO Jeff Bezos' Blue Origin? Why aren't they launching rockets? Are they launching Rockets? All the rockets I see going out there, right now at least, seem to be from SpaceX.

ANDREW CHANIN: So everyone talks about a space race, but, looking at how Blue Origin is trying to move along, they're not necessarily seeing it as a race. They're trying to do things very slow and methodically, and they want to make sure that, everything that they do, they do it safely and correctly. So, whereas some companies are in a rush to do things first, I think they have a longer game plan of trying to look back and say we want to make sure that, when we do things, we do it correctly.

And, yes, that might come at the sacrifice of taking longer to actually get their projects into-- into motion, but, at the same time, that's their strategy, and that's their game plan. And, you know, they might not be in a huge rush if they are able to have Jeff Bezos sell a billion dollars of Amazon stock every year to help fund it, whereas other companies that are reliant upon raising additional outside capital might feel a little bit more pressure to move things along quicker.

- You know, Andrew, as cool as all of this is from a science perspective, it hasn't necessarily paid off yet for public investors, right? Maybe if you were, you know, Jeff Bezos, obviously, you've got nothing to worry about, but, you know, your-- your ETF is still down on the year. It hasn't necessarily recovered. When do you think-- where do you think we are sort of in phases of the space trade so to speak? And when might-- what might be a catalyst for it to start to pick up?

ANDREW CHANIN: Well, the pandemic definitely proved to be a headwind for the broader space economy. And, you know, unfortunately, that slowdown cost some companies to reposition themselves. And, sometimes, doing so can take a while, but really what we're looking at is a reduced cost of sending things into space. And how that can open up the space economy can happen in many different ways. Whether it's sending satellites up, whether it's setting up new research, whether it's sending up researchers to the Space Station and beyond, these are all new opportunities that are currently being opened today.

If you just look at NASA, from switching from relying upon Roscosmos to send us astronauts to the ISS, they're saving about $30 million or so per seat. So just this most recent launch yesterday has actually saved NASA about $100 million from what they would have had to have spent. So, if you think about that, how lowering the cost of sending things into space can actually also free up budgets to allow space agencies like NASA and beyond to achieve what they're trying to do at a lower cost and, potentially, allocate dollars into other areas, it might take a while to see what those benefits can be, but being able to send things into outer space can bring so many different players that maybe would have been prevented due to the high cost of barriers to entry.

So, really, doing this repeatedly, doing it safely should, hopefully, bring more confidence to the space industry, but, if you look at the breakdown of UFO, there's many different companies. There's over 30 companies from around the world specializing in all different areas, which is why-- because space can be a volatile industry-- to us, it makes sense to look at something that could give you diversified, instant exposure to a very wide range of companies from around the world.

INES FERRE: And, Andrew, in speaking of other companies, Boeing has also been contracted by NASA for that Starliner, which has been delayed, and Boeing is saying that it'll be operational next year. So how beneficial is this for SpaceX to gain even more contracts? And are there other companies also that investors should be looking at when we're talking about space?

ANDREW CHANIN: You know, whenever people are looking at kind of emerging economies and industries, to me, diversification is a really interesting way to play it. It's very difficult to predict who is going to be the winner. Whether it's geopolitical tensions or government restrictions, you know, slowdowns in being able to produce goods because of a pandemic or other things like that, it's difficult to put too much individual company risk into any one name.

But Boeing isn't even doing things on their own. They have, you know, a partnership with Lockheed for the ULA, the United Launch Alliance. And so there's different ways that each of these companies are finding ways to engage new clients, whether it's government contracts, whether it's companies. So we're at a really interesting time right now where I think a lot of the ground has been-- has been laid for companies to be able to partner, to contract, whether it's domestic partners or even abroad.

NASA has made it very aware that, you know, they're open for business. They want to contract companies that are able to help them achieve their goals. So, to me, you know, it makes sense to look at, you know, many different companies. Right now, UFO has as a large satellite exposure, as well as manufacturing of satellites and rockets as well. So each of these companies may be affected at different times versus different economic cycles, but, you know, the one common thread is that they're all trying to help progress what-- you know, how people and companies are able to access space.

MYLES UDLAND: All right, Andrew Chanin is the CEO of ProcureAM. Yahoo Finance's Ines Ferre joining us as well. Thank you both so much for joining the program on this Monday morning.

ANDREW CHANIN: Thank you.