“Foust Forward” appears in every issue of SpaceNews magazine. This column runs in the Dec. 17, 2018 issue.

At least Wall Street is paying attention to the space industry again. In December, CNBC profiled Adam Jonas, an automotive industry analyst at Morgan Stanley who has shifted to analyze the space industry. His coverage of Tesla led him to discover Elon Musk’s other company, SpaceX, and he found that there was enough going on in the space industry to warrant stronger coverage.

But Wall Street’s expertise on space is still limited, and it shows. Jonas and his team at Morgan Stanley selected a “Space 20” list of publicly traded companies last year that he felt were best positioned to benefit from growth in the industry. That included big aerospace companies like Boeing, Lockheed Martin and Northrop Grumman. There was also Softbank, an investor in OneWeb, as well as suppliers like Honeywell.

But the list also incorporated some more general technology companies like Apple, Microsoft and Alphabet, the parent of Google. Those companies either aren’t involved in space or, in the case of Google, dumped its past investment in space projects. There were also odd entries like Adobe Systems, developer of applications like Photoshop, and GoDaddy, an internet company that became infamous for its controversial Super Bowl ads. Perhaps Morgan Stanley felt a growing space economy would spur development of websites on the moon. While Adobe and GoDaddy made the list, satellite operators Intelsat and Iridium, curiously, did not.

Nonetheless, Morgan Stanley’s interest in space is music to the ears of Wilbur Ross, the secretary of commerce. In a speech Dec. 6 at a U.S. Chamber of Commerce space event, he said one priority for his department’s space efforts was getting the institutional investment community more interested in the space industry.

“We’re going to need better financing and insurance for the space industry,” he said. Angel investors and venture capital firms, who have poured more money into space startups in recent years, were not enough, he argued. “Missing from space financing are the bigger institutions, especially banks. Their participation will be necessary to execute longer-term commercial plans.”

To help get bigger banks interested in space, the department convened a space investment summit in Washington Dec. 12. The invitation-only event brought together the investment community with the space industry, in particular startups ranging from NanoRacks to LeoLabs.

In a media roundtable after the meeting, Ross said he was pleased that firms like Morgan Stanley, Bank of America and Goldman Sachs were starting to pay attention to space, with research teams devoted to the field. “For the first time, we’re starting to see thoughtful analytical work coming out of the financial community on space,” he said. “That’s a big breakthrough.”

Ross said he thinks the Commerce Department, through its Office of Space Commerce, can help raise awareness on Wall Street of the space industry’s prospects. “We think there’s a real ignorance barrier that we need to help overcome in order to facilitate lending,” he said.

That investment summit is just one part of that effort. Other aspects, he said, could include helping firms develop “sensible metrics” about space companies to illustrate their growth as well as promoting the financial successes of space companies.

This is not the first time Wall Street paid attention on the space industry. In the 1990s, firms were focused on companies like Globalstar, Iridium and Teledesic, who promised to revolutionize communications with their satellite fleets. Their bankruptcy filings ultimately left investors with billions of dollars in losses and a distaste for almost anything to do with space that has only recently faded.

Ross acknowledged that, even with its new efforts to educate the financial community about space, companies in the industry ultimately has to deliver. “What we do need are some more success stories,” he said. “That will attract more capital.”


Jeff Foust writes about space policy, commercial space, and related topics for SpaceNews. His Foust Forward column appears in every issue of the magazine.

Jeff Foust writes about space policy, commercial space, and related topics for SpaceNews. He earned a Ph.D. in planetary sciences from the Massachusetts Institute of Technology and a bachelor’s degree with honors in geophysics and planetary science...