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Investment bounces back from COVID-19

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A Falcon rocket launches a Starlink mission in October 2020.

SpaceX

Private investment into space companies in the third quarter of 2020 bounced back after a significant dip in the prior quarter, according to a report Thursday by NYC-based firm Space Capital.

“After the slowest quarter on record for [space infrastructure] investment since 2009, investment in this layer of the stack rebounded in Q3 to pre-COVID levels,” Space Capital managing partner Chad Anderson wrote in the report. “With just three quarters booked, 2020 is already the largest year on record for infrastructure investment with $5.5 billion invested [this year].”

The quarterly Space Capital report divides investment in the industry into three technology layers, with space infrastructure including what many would typically consider to be space companies: Those which build rockets, satellites, spacecraft, space exploration projects and more. The report found that space infrastructure companies brought in $3.6 billion during the third quarter, the largest single quarter of investment on record. More than half that investment came through SpaceX’s about $2 billion raise in August.

An investment freeze due to the coronavirus pandemic was seen as a serious risk by space companies earlier this year. But executives from companies such as Sierra Nevada Corporation, Virgin Galactic, Relativity Space and Virgin Orbit have recently told CNBC about the progress each have made in spite of the pandemic, while companies like Kymeta, ICEYE and Astroscale have successfully closed new fundraising.

The space application and distribution layers also brought in $1.2 billion and $102 million, respectively. That represents slower growth than the previous quarters, when both layers brought in the bulk of this year’s space investment. Despite the slower growth, the distribution layer has seen even the largest U.S. tech companies join in – such as Microsoft’s Azure Orbital satellite service, which seeks to compete with Amazon’s AWS Ground Station service.

“The increased involvement of these tech companies will service as yet another catalyst for growth in this sector,” Anderson wrote. “In the same way that every company today is a technology company, the companies of tomorrow will be space companies.”

NASA doles out over $370 million in space tech awards

An Electron rocket gets ready to launch.

Rocket Lab

Space Capital’s latest quarterly report comes a day after NASA awarded more than $370 million in fixed price contracts to 14 companies to develop various space technologies. Although the NASA contracts technically come in the fourth quarter, and would not be counted under Space Capital’s investment criteria, the awards represent the U.S. space agency’s continued support for a growing field of companies.

SpaceX’s prototype Starship launches in a short first flight test at the company’s facility in Boca Chica, Texas.

SpaceX

The awards were made under NASA’s Tipping Point program, which seeks to fund new technologies. Lockheed Martin, SpaceX, and United Launch Alliance won contracts worth $89.7 million, $53.2 million and $86.2 million, respectively, to conduct demonstrations of new cryogenic fuel transfers and storage. Small rocket builder Rocket Lab will launch a demonstration mission for Eta Space, which won $27 million for a small-scale orbital flight demo of a cryogenic fluid management system. Multiple awards for lunar lander technologies were awarded, including $41.6 million to Intuitive Machines, $10 million to Masten Space Systems, and $5.8 million to Astrobotic.

“Tipping Point is a fantastic program designed to significantly mature a technology for use in commercial space applications. These are not R&D projects that are going to get filed away in a basement and collect dust. These awards give next generation technologies the capital they need to reach their next milestones and get one giant leap closer to commercial use,” Anderson told CNBC.

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Five ‘Covid-proof bull markets’ to find stock opportunities

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Jim Cramer sees positives for investors after sell-off on Covid fears

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CNBC’s Jim Cramer said he sees positives for investors after steep market declines Wednesday as Wall Street grew further concerned about the coronavirus pandemic.

“I recognize the carnage, but I do think the carnage is reversible,” Cramer said Wednesday on “Closing Bell,” after the Dow Jones Industrial Average gave up 943 points, or 3.4%, in its worst day since June. The benchmark S&P 500 declined 3.5%, and the tech-heavy Nasdaq Composite fell 3.7%.

“It’s just that you do need to get past the election, and you have to start accepting the fact that because people don’t wear masks, they don’t practice social distancing, we don’t do contact tracing … that we’re going to have a lot of case loads,” Cramer said.

The “Mad Money” host said by recognizing the shortcomings of the U.S. response to the pandemic, investors will be able to spot individual opportunities in the market where there is upside. He pointed to the strong earnings report from Ford Motor, which illustrates the strength in the auto market, and General Electric.

“You get a one-off like Ford and a one-off like GE, and you get a couple more one-offs. Next thing you know you’re saying, ‘Why am I just selling everything?'” he said.

Cramer said the coronavirus case count in the United States is sure to rise in the coming days. That echoes comments made earlier Wednesday by former Food and Drug Commissioner Dr. Scott Gottlieb, who said that “things are going to get worse.”

“[Investors] know, and we have to build in the Covid case load,” Cramer said. “We have to build in the restaurant shutdowns. We have to build in who the heck knows with the election? At a certain point, it gets built in.”

“And then we say, ‘Well listen, I’m not inured to Covid. I don’t want anyone to have it. I don’t want to catch it,'” he added. “But at a certain point, how many times are you going to discount Covid?”

Wednesday’s sell-off was broad, with all 11 S&P 500 sectors finishing in the red, led by technology’s 4.33% decline. However, Cramer said that type of market movement lays the foundation for opportunities. “I’m not saying it’s artificial. But I am saying good news will create an upswing.”


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