CANADA ENTERS THE NEW SPACE ECONOMY

Have the Liberals reached the precipice?

I don't normally put my faith in one political party or another, I tend to judge them by the level and regularity of missed opportunities or failed deliveries. This is probably quite common as well as the unrealistic thought that a quick change in political leadership will immediately change my fortune or standard of living. Over the years I am however perplexed by the speed of government decisions on what I consider important while socially correct posturing or affirmative action decisions are made at record breaking speed. Perhaps leaders should focus on the right decision for all Canadians rather that a pressured decision that supports a certain group or idea. With so much attention around the globe focused on space exploration and new tech revolving around delivery to lower earth orbit, its amazing how long it took for the Canadian government to get on board.

The federal government has recently supported several companies that are geared towards Canada's future in the new Space economy but has yet to identify or realize the full extent of the current absence of our own Spaceport. Supporting the new Space Port in Canso, Nova Scotia seems to be the cornerstone to the success of our space economy dreams and without it we are in line with so many companies and countries asking for ride share. I would also like to mention that many ride share requests come from third world countries that don't have the capital or experience in this field which makes Canada's lack of motivation perplexing. So many things that were once science fiction are now being played out in front of our own eyes not only by NASA but by several other entrepreneurs around the globe. 

Although most investors see this as a new start up company the grass roots of this venture started quite some time ago and the hurdles of studies and approvals were originally quite daunting. I picked up on the story as the company was thinking of going public, which only made good business sense since this would need a great deal of capital to prepare the necessary infrastructure to carry out rocket launches in a safe and economical manner. From the very start the phone started to ring at the new office of Maritime Launch as end users were hoping to align themselves with the timelines laid out in the business plan. We have all seen SpaceX launching rockets with payloads for a fee for a while now but what you don't see is the thousands of companies trying to get their satellite to space but can't hitch a ride or even get into the queue. yes I said thousands, at last count I found there were 65000 unfilled requests. That number will continue to grow while SpaceX tries to meet shareholder promises on Starlink.

SpaceX wants to create a global broadband network called Starlink. essentially a low earth orbit (LEO) satellite to provide high speed internet around the globe. One SpaceX Falcon rocket can carry up to 60 satellites and they want to put over 40000 in orbit quickly. So if you want to launch you have to get in line and wait. This could be a game changer if your technology is new and groundbreaking yet obsolete by the time you get to launch? Global demand is growing and with demand comes new players trying to get in on this lucrative market. Sounds easy right? well not so much. You need to find a site, get approvals for land use, meet with government and community leaders, coordinate with everyone one from emergency services, military, transportation etc,  just to find out who may potentially derail your plans down the road. 

After following the Maritime Launch story for a few years, it seems like yesterday, the company secured the land, jumped through years of hoops and studies and got the greenlight to build. I forgot to mention the company realized they may benefit from applying to the SIF or Strategic Innovation Fund. They provide funding for various opportunities in Canada and once you confirm your eligibility you submit an application and wait for a call to make your pitch as to why you should get support. It is not an easy or fast process, the government wants to get it right. But now that federal funding may be close this opens the door and provides streamlined access to other credit type instruments that limit dilution which is always on the minds of investors. Most Spaceports seem to be 100% government funded which seems quite obvious when you take into account the government will likely be one of the largest customers to use the facilities. 

Maritime Launch is part of Space Canada https://space-canada.ca/ and has made some strategic alliances with top industry leaders as well as new innovative companies entering the space economy as a support provider.  They plan on providing a launch alternative to those seeking a faster route than SpaceX and if you look around the world there are not many options. In a recent interview the CEO of MLS Stephen Matier commented on the margins and the fact that just one launch from the site per year would cover all costs for operations. Now imagine the profits from 12 or even 24 launches a year. Of course the true costs and fees are quite secretive in nature due to the competition that may try to enter this sector in the future. It's interesting to note that anyone trying to play catch up with MLS has a 6 to 7 year wait just to get to where MLS is today if everything goes smoothly.  When asked about the rocket they will use as a primary vehicle he was candid about their original plans for the Cyclone 4 rocket that comes with a legacy of success in the Ukraine and can carry 5 tons at a time to space. He also mentioned that Canso would likely become an operational spaceport that can service multiple rockets and multiple users. There are several rocket options but rather than stick with 2 or 3 rockets in their fleet as the go to revenue stream,  they can allow fee for launch services for other companies like Reaction Dynamics or even Lockheed Martin. 

The story becomes more real every day for those waiting on services and those in the communities around Canso that have not seen any new investments in decades. Land and home prices are going up and new hotels and restaurants are already making a move in an area with very limited lodging.  Spaceport Canso brings hope, jobs and much needed tax dollars as well. Tim Houston the Premier of Nova Scotia has been a strong supporter and recently announced an amazing investment of $100 million CDN for the spaceport. 

As we approach a new year I am hopeful Maritime Launch will deliver to it's investors and partners and help Canada catch up in this fast paced sector.

Full disclosure the writer is invested long term in Maritime Launch SVS, trading symbol MAXQ. Stock Quote

 WHATS YOUR PLAN FREEDOM 45, 55, 65?

I find it so odd that young people don't have a plan. Even some mid 30's traders I know still live day to day and just hope for the best. The markets can look very daunting from time to time but with specific goals and targets you have half the battle won. Set up some realistic time lines on your plan for success. There are a lot of ways to get creative to jump start your investing and get active in the markets. If you can't picture yourself behind the wheel of that new Audi R8 or sailing around the world one day then how get can you get yourself motivated to start. I am always hunting for the next 10-bagger and if you haven't had one yet, you are not alone. If you don't know what one is well its an investment that yields 10 times your initial amount. I have seen this happen in 2 years, 1 year and even weeks and days. Seriously the markets can be a wild ride. The ones that run like crazy in days will probably retreat in hours and leave you in their wake. The smart investor was selling during the run up and the junior investor was stunned and so excited he forgot to sell.

Ask yourself some serious questions when you put your plan in motion. Where will you start? What sector is the best for your risk level, Should you diversify a bit so that if your first pick crashes, pick 2 and 3 may be floating or running.

Here's what I would do:

Study the flow of business news and make sure you are in something that is about to trend or starting to. Don't be in something that's already had a couple of good years. Things run in cycles and you want to be at the start or in the middle of the bubble not the end.
 

Find some recently active companies in a sector you like and find out why they are active. Investigate their cash position and outstanding shares. An over diluted company with a low share price and no money in the bank is not a deal just because its share price looks cheap. Its probably holding onto it's last assets before packing it in. Don't be a bag holder.

Low floats are good but under about 25 million can mean it has no liquidity. That means its hard for you to get a position and its hard to get out when you want out.I like 35-60 million shares. Usually in that count is an insider holding and institutional holding and its nice to see who is invested with you.

Next make sure they have cash. If they don't there is probably a private placement in the works and that could mean a small sell-off is imminent as people in the know want the warrants that come along with the discounted shares in the placement.

Lets also make sure its an active issue. I like to check the stock bullboards and see if active traders are on the boards talking about the company. Don't get caught up in what they say because every post has a hidden agenda. The longs may be pumping it up to push up the price and the guys who have been shorting it want it to pull back so they can cover and pay their bills this month. The boards are full of sharks and the sooner you understand how they are played the better off you will be. It's not all bad but make sure you verify everything you read and don't take anyone's word for it. It can be an excellent place to network. I can't tell you how many times I have had inboxes from posters claiming to work for the company or their brother knows the CEO. Its all a bit like poker and if you can't tell who the sucker is in the first 30 minutes it must be you.

So you've picked your 3 stocks in your favorite sector. They all have some cash, they are active. They have good size floats relative to the junior market your playing, lets face it that's where the serious fast money is IMHO. I like the venture. Its highly regulated but its full of high paced companies flying under the radar and some are about to explode. You can go pick some blue chip stocks and make a nice 5% a year but that won't get you the Porsche 911 will it?

So your picks are doing well and along comes amazing news and you have a 5- bagger, maybe a 10-bagger. Don't forget to the pull the trigger. Its like a deer frozen in headlights as the price sets new highs and closes at a new 52 week high. There is a good chance this will retrace. Always say that over in your head. About 1 out of 10 times you will sell and take those great profits and the next day the company explodes again and you left money on the table. So what, don't look back, it's all part of survival and you have already beaten the odds with your other winners.

Always remember to protect your money, don't buy because someone said buy, and don't sell because someone is spreading fear and you will be just fine. 

On a final note there are some rare exceptions to the rules I generally follow and I would like to take a minute to mention a company that certainly seems to be a one-off investment that walks a different path. Maritime Launch Services is building a Spaceport, yes I said Spaceport. It's not run by Elon Musk or Jeff Bezos or even NASA, it"s a new company listed on the NEO exchange that intends to launch rockets from Canso, Nova Scotia. I had to look that up on the map too so don't feel bad. This historic community sits in an isolated area deemed to be the best spot in North America for launching satellites into the lower earth orbit. There will be light and medium rockets provided by MLS as well as other rockets their clients will provide and pay per use for their own payloads. From ride share programs to single use options MLS has  dozens of clients looking to fast track their own business plan rather than wait for SpaceX to tell them they can stand in line with thousands of others. 

There is a new space economy predicted to reach over 1 trillion dollars in the next couple of years and MLS has spent 6 years jumping through hoops to satisfy local, regional, provincial and federal governments they have the right stuff. Now that the political heavy lifting is done it's time to ramp up construction to meet a spring 2023 deadline for it's first launch. There is enough cash to get to the first and likely second launch and this will trigger a tsunami of contracts to kick in and the company will be flush with cash to complete phase 2. In this industry you don't pull up with your rocket and say let me launch and I will pay you later, no this is a pay well in advance to hold your spot and likely pay deposits for the next 5-10 launches you are planning or lose your spot in the lineup. 

The company looks to launch 8-12 times per year and has hinted a phase 3 may also be in the works. An extra pad or two wouldn't hurt and could help accommodate the 60,000 requests currently around the globe. This location won't suit everyone but if you look on the map this is an easy access location that is safe for the public and the cargo. The company has put together a world class team that is doing all the right things to provide an amazing opportunity for investors lucky enough to find out about this gem. There is an option to tap into federal funding as well and although the company really doesn't need the financial help due to the deposit structure, they wouldn't say no to $50 or $100 million from the Canadian government. The term "under the radar" seems so cliche but seriously though the market cap is about 1/10th of 1% of SpaceX and they put their companies launch schedule ahead of every one else. Maritime Launch Services have some strong alliances and partnerships with industry leaders and I think they are one news release away from being recognized globally. Anyone thinking of competing has years of work in front of them just to get past environmental studies alone. These guys are first to market and likely their biggest client will be the Government of Canada so I expect the Liberals will want to be part of this historic opportunity.

Maritime Launch Services trades on the NEO exchange under the symbol MAXQ and in the US under MAXQF.  Web site