SpaceX collects rockets from drones. Rocket Lab will catch them from the sky.

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Rocket Lab’s rockets are smaller than SpaceX’s.

Courtesy of Rocket Lab

The new commercial space race, based on reusable rocket technology at lower cost, is not only leading to innovations in Earth imagery and Internet services. He also generated crazy ideas for catching rockets returning to earth.


Rocket Lab United States

(ticker: RKLB) announced on Tuesday that it would try to recover one of its rockets in the air, using a helicopter. Why bother is a valid question, but there are reasons.

Rocket recovery is not as easy as investors might think. Getting to space uses a lot of fuel, so rockets usually can’t return to a launch pad when they return to earth. That’s why Elon Musk’s space company, SpaceX, uses autonomous drones sent out to sea to catch its rockets.

Using a helicopter would cost less than an autonomous drone. It also opens up more potential launch areas to consider. Space companies using helicopters for recovery might not have to launch their rockets near a coast.

Rocket Lab can use a helicopter because their rockets are still much smaller than SpaceX’s. An Electron rocket, the one that is recovered in flight, can carry about 8 metric tons of cargo into low Earth orbit. A SpaceX Falcon 9 can carry about three times that amount.

The Falcon 9 is about 230 feet tall, while an Electron is about 55 feet tall.

SpaceX is not likely to be outdone in terms of technology. Today, only the lower stage of rocket launch systems is salvaged, while the final element that propels cargo into space is not. SpaceX’s next Starship spacecraft is fully reusable: its top end is designed to return to earth.

All new technologies make new space-based business models possible. SpaceX is launching a cloud of satellites that already offer space-based broadband internet service, called Starlink. Rocket Lab can launch and build satellites; it handles launches for other companies that want to use satellites to image the Earth and sell the data.

The announcement is crazy, but it’s not a stock market event. Shares of Rocket Lab were down 2% in early trading. the


S&P500

and


Dow Jones Industrial Average

fell by about 1.4% and 0.9%, respectively.

As of Wednesday’s open trading, Rocket Lab was down about 33% year-to-date and about 62% below its 52-week high of more than $21 per share in September. . Inflation and rising interest rates have undermined investor enthusiasm for more speculative, higher-growth stocks.

Rocket Labs is one of those. Sales are expected to increase nearly 240% to around $200 million in 2022. The shares are trading at around 19 times estimated 2022 sales.

The title still enjoys strong support on Wall Street. About 85% of analysts covering the company rate the stock as buy. The average buy odds ratio for small cap stocks is around 65%.

Write to Al Root at [email protected]

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