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Historic SpaceX launch postponed due to weather

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Sam Korus, an analyst at ARK invest, joined Yahoo Finance's Seana Smith, Myles Udland, Andy Serwer, and Rick Newman to discuss the postponed SpaceX launch and his outlook for the Space sector.

Video Transcript

SEANA SMITH: Let's talk about the big news of the hour, and that's the fact that SpaceX and NASA have postponed a historic launch due to bad weather. This was one of the most hyped events now for quite some time. It was expected to launch NASA astronauts from US soil for the first time since 2011 into space. It has now been postponed until Saturday. So for more on this, I want to bring in Sam Korus of ARK Invest, an analyst there. And Sam, this is now expected to take off on Saturday. Can we just take a step back and talk about the significance of this event? What's your take on just how big of a milestone this mission is?

SAM KORUS: This is a huge milestone, not just for space and the US as a whole, but really just from the economic perspective. To put that into context, in 2011, NASA was paying Soyuz, so the Russian rocket, roughly $25 million for a seat to get to space and to the ISS. This most recent seat they bought this year cost over $90 million, right? So since the US hasn't had an option for launching astronauts, the price has just been going up and up and up. And finally, SpaceX is reclaiming that and bringing it in at a huge discount.

And I this really marks a milestone of the aerospace industry being driven by the government to now being commercially driven. And there are a ton of things that, come with that including more competition. So you get declining costs. And with declining costs, you get more demand. So this is going from kind of a steady state growth based on government demand to a real growth industry that could be very attractive to invest in.

MYLES UDLAND: And I guess, Sam, thinking about the investment thesis with respect to space, I mean, I guess, you know, we have the one publicly-traded vehicle. I suppose in theory, there could be a SpaceX IPO at some point down the line. But from an investment standpoint, I mean, how quickly do you think more opportunities are going to come online for investors to get involved here when you have events like this? Because OK, today's launch was cancelled. These guys are going to go up into space at some point, and the public is going to know that this happened. I mean, do you think that, you know, there will be more opportunities, I guess, for the public to get involved in some of these investment opportunities?

SAM KORUS: I definitely think so. And I think more importantly, not just in the future, there already exists a large number of plays out there that you can get access to, right? Because it's not just the launch providers, but there's the key enablers. So one of those key enablers is 3D printing. You know, people like to think back to the hype cycle of, you know, printing out a fork and plate at home.

But really, this has taken off in aerospace because weight is so important. And you're doing, you know, low number, so low quantity, but high-performance pieces. And so this is really critical to the aerospace play, and there are a number of 3D printing companies out there who are publicly traded. So you have Stratasys out there, which is being used in airplanes already, and a lot of these-- even in the SpaceX rocket, for-- the engine and different components are being 3D printed. So that is one angle to play the aerospace industry.

ANDY SERWER: Hey, Sam, how involved do you think Elon is in all this?

SAM KORUS: I mean, he's definitely the visionary of it. So I mean, can you really extract that from it? He's organized all of these people together. I think you definitely see-- and he mentioned it today when he was being interviewed-- his probably personal touch on the spacesuits, right? Something that Elon Musk has been extraordinarily good at is not just the high performance of hardware but the style of it as well. And that's been important to him throughout all of his companies. And I think-- right? This is one of the first space launches where you look at the-- you know, the vehicle and the spacesuits and it actually looks like a movie where people are going to space.

RICK NEWMAN: Hey, Sam, OK, putting aside the Buck Rogers element for a second, what are the revenue streams here for SpaceX other than government contracts? I mean, so some of the farther out things we hear about, space mining from asteroids, obviously space tourism. Where are they going to start making money here after government contracts?

SAM KORUS: Sure. So I think the first thing that we will see, already has started, is the rideshare program for smaller satellites. And there have been a number of commercial customers for that. But really the next and probably key component will be the Starlink Constellation. And so this is their constellation of low-Earth orbit satellites going all around the Earth providing broadband access. And in the US, there are roughly 42 million people who don't have broadband access. So just in the US, that could be a $10 billion opportunity annually. And this is probably what they're likely to target there and use that to continue to fund for further out opportunities.

SEANA SMITH: Yeah, Sam, I have a quick question, just in terms of-- SpaceX is obviously dominating the headlines. But it's interesting when you take a look at the fact that there's a large number of these small launch startups that are poised to fail right now, struggling especially with the latest downturn. They operate on very thin margins. What do you think is the likelihood that we'll see some of them acquired by some of these big names, or will many of them be left to fail eventually?

SAM KORUS: I think it's possible that you could see some consolidation. I think, you know, that's kind of been the history of innovation is you've got a huge number of companies that emerge, and then you get consolidation. And those companies that survive are now stronger for it, exactly for the reason you said, right? Talent is scarce right now, and I think that's a big part of it as well is getting all of the right talent in the right place to be able to survive and continue to innovate.

RICK NEWMAN: Sam, what's going on with Jeff Bezos's space startup Blue Origin? Will Blue Origin be competing with SpaceX for these types of launches in the future, or is it going a different direction?

SAM KORUS: So Blue Origin is competing less so with SpaceX. I think probably a more apt competitor would be Virgin Galactic for the time being, right? Both of them are targeting space tourism as their initial starting point. Blue Origin is also working on a lunar lander, so that piece does overlap with what SpaceX is doing with its Starship as well. But I think really their focus currently is on that space tourism aspect.

RICK NEWMAN: Is space tourism coming into focus, in terms of a time or a date?

SAM KORUS: Yes, so the are the loudest out there would be Virgin Galactic, and their goal is to fly Richard Branson into space by the end of this year. I think, you know, already we've seen some delays there. And I think it's the history of the aerospace industry to have delays, right? Like, the average project is delayed close to two years. So hopefully they'll be able to come in under that. But it is exciting because all of this is happening right now. We're getting US astronauts, and we'll probably have US space tourists in the next 12 months if they can continue to execute. So space is happening now, which is very exciting.

ANDY SERWER: That's very exciting, Sam, for Rick. Rick is asking for a friend about the space tour, just to be clear.

RICK NEWMAN: You won't get me up there. I'm sorry.

SEANA SMITH: All right, Sam Korus, ARK Invest analyst, thanks so much for joining us this afternoon. Great to get your perspective on all this.