Trading With Cody Crowd-Sourced Investment Reports on SRAC

Looks like we’re finally getting a little bit of a pullback in the markets, but whether will it turn into anything significant is yet to be determined. Steady as she goes.

Let’s do this week’s Live Q&A Chat at 3pm ET today (Thursday). See you there. Come directly to the TWC Chat Room or just email us your question to support@tradingwithcody.com.

Here are my two favorite reports about the risk/reward scenario for investing in SRAC. And let me remind you to be patient with these space names, because this is a market that is still just burgeoning. Then again, you never know when a market will price in a Revolutionary future. Be careful, ok?

SRAC REPORT #1:

Let your imagination run while and profits run even wilder. This is the basic premise of the new Space company, Momentous with ticker MNTS which plans to IPO through a special Pac with SRAC. The limitless amount of space with asteroids and planets to mine, to research and to explore, is also mixed with an untaped amount opportunity.

In 10 years the space economy is projected to triple to 1.4 trillion , making MNTS ripe for the picking, being that they have a proprietary revolutionary space technology that will not only decrease the cost of satellites but it will also increase the efficiency of them. Not bad huh?! I’m guessing that was Space X’s thoughts also, being that they awarded a contract to MNTS, for their Starlink project . Yea Elon. But not just Elon, NASA , Lockheed Martin and MNTS has also planned a satellite launch. Having some heavy hitting companies like these is a good sign their technology is truly proprietary. MSFT appears have developed and disrupting a niche between high thrust and high Isp propulsion. In lay terms, the equivalent catching a Uber from the airport to your hotel, instead of parachuting from the back of the plane mid-air. MNTS technology basically uses water and plasma to create a thrust. A simply but effective method. However nothing is that simple in space and this is what separate MNTS from the pack. MSTS says it has solved its main problem, which constructs a system that ensures plasma will not vaporize the chamber walls and nozzle.”2 Also their satellite transfer vehicles are reported to be reusable, which further lowers their operating cost.

There are an additional 20+ major private spaces companies to date where potential contracts are potentially awaiting due to the need for satellites and need for precision placement for more efficient use and to bring down the overall cots. Another note worthy participant in the space race in Amazon. Bezos has been approved to launch over 3000 satellites in a project named Kuiper. Amazon Kuiper will be in direct competition with Space X’s Starlink constellation of satellites. Having a partner that has proven revolutionary technology thus far such as MNTS, could tip the winning needle to either side. This could trigger a contract war with the ultimate beneficiary being MNTS. But one thing I do know, Elon doesn’t lose! Well to be fair, Boez doesn’t either.

This also bring to mind companies like Facebook. Remember they had a solar power drone project under the name of Aquila to beam the internet into undeveloped regions. This project has been dumped and upgraded to a new project that is expected to use satellites instead of drones, dubbed Athena. Being that about 50 percent of the worlds population does not have internet or have a 2g mobile signal,  this has the potential to increase advertisement power unimaginably.

So far MNTS has secured 90m in reported contracts and has 1.1 Billion in the pipeline for contracts in the near future.

MNTS is expecting to generate a profit by 2023 and doubling their revenue each year after with a 60+ percent profit margin.

Every time the now majority private space race expands MNTS is expected to expand also. The rockets these mad scientists are building are getting bigger and cheaper. The bigger the rocket the more satellites can catch a ride to space and the more opportunity MNTS has to generate residual income by placing and maintaining these satellites. By 2030 satellites are expected to increase 10 fold. MNTS is projected to provide in orbit serving for satellites by offering refueling, repairing, relocating or deorbiting, and with robotic operation. MNTS has also plans to develop solar power and data centers in space.

It is clear we can see the short term medium and long term investment in this stock play. This seems like the new theme for investing now a days. Im saying,  whats the difference between investing and Patience? The more you have of either or combination of both; has been proving over the last 100 years it yields massive returns. Me personally: dividend reinvestment is cool but space investment is cooler!

The younger generation of billionaires have always had a fascination with space going back to the heavily redacted report for area 51 or recently the verified unexplained flying object video surveilled by the US Navy.  As for Billionaires they would make and send a million dollar car to space while playing the Beatles, or just plan a colony on mars. And thats just for fun.

FOMO I would have to guess also applies to space.

Keep in mind this is more of an investment than a trade and expect some volatility to occur over the short to medium term. I would suggest you find a reasonable line in sand. Trading back and forth a security of such, can drive your portfolio straight into a Ditch. Remembering, Mr. Duell the US patent commissioner in 1889 rumored statement, that everything that can be invented has already been invented. So no matter who you are and what you do, we all have a fair shake at this market!

The above report was submitted to Trading With Cody by Terry Estwick

—————————-

SRAC REPORT #2: Investment Opportunity Analysis – Momentus Inc. (SPAC Ticker Symbol: SRAC)

Why we invest in The Space Revolution

Public sector interest is ramping up big for this next revolution.  Space really is the next frontier of our age.  In recent years, Private-equity ventures have increased exponentially. In December of 2019, the Trump Administration established a U.S. Space Command – including a Space Operations Force and a Space Development Agency.  The signing of the National Defense Authorization Act for 2020 will most likely benefit the U.S. Department of Defense and all the aerospace and defense industries along with it.  Bank of America expects the growing space economy will more than triple in size in the next decade, with the firm this week forecasting space will grow to become a $1.4 trillion market.  Using the growth projections that Bank of America forecasted the industry’s growth potential can yield 23% year over year for the next 10 years.  An aggregate growth projection of 230%.  The industry can expand from $424B to an estimated $1.4T by 2030.  According to the statistics that would put the aerospace industry about the size of the entire global tourism economy.  The industry is measured as the full range of activities and the use of resources that create and provide value and benefits to human begins while exploring, understanding, managing, and utilizing space.  So, this encompasses all aspects of space travel and exploration. This would include both government contracts and corporate sales that have anything to do with products and services regarding space research, infrastructure, and applications.  In May of 2020, NASA launched the first manned flight to the International Space Station (ISS) on a commercially developed U.S. rocket. It is also the first time the U.S. has flown a manned mission to the ISS since the shuttle program was retired in 2011. This represents an important milestone for the relationship between the private sector and the U.S. government in space.  With the numbers proving a rush to space is underway.  It would make sense to put some capital in front of this emerging market.

How Momentus fits into The Space Revolution

Visionary space entrepreneur and innovator,  Mikhail Kokorich founded Momentus in 2017 with an idea to enable industrialization in space.  He has more than 20 years of experience in industries ranging from manufacturing and retail to space technologies.  Mikhail started his first company at 19 years old as a physics student in Siberia in 1996.  Before entering the aerospace business, Mikhail founded and ran a chain of domestic merchandise retail stores, second in size only to Bed Bath & Beyond, successfully scaled and sold one of the largest consumer electronic retail chains as well as one of the biggest timber companies in the world.

Momentus is the first mover in building transportation & infrastructure services in space.  At the center of the commercialization of space, and key to enabling the next industrial revolution.  Momentus makes access to space significantly more affordable by combining rideshare launch with low-cost last mile delivery through the hub and spoke model of space.  Arriving in space atop large reusable rockets like the Falcon 9, their transfer vehicles will carry customers’ satellites to very specific, custom orbits.  After final drop-off, the vehicles are expendable, but will be reusable in the future.  They also provide a unique, low cost, modular approach for hosting customers’ payloads in space. The transfer vehicles are designed to move customers’ payloads to a specific orbit and stay connected to provide continual power, orbit keeping, orientation and communication for the mission duration.  Their reusable vehicles, designed to be capable of performing proximity maneuvers, docking and refueling, and equipped with robotic arms – anticipated to be well-suited for the entire range of in-orbit services. The services will include refueling or life extension for larger spacecraft, relocation, and/or deorbiting satellites, and conducting salvage missions and robotic operations, such as repair or in orbit assembly.

• First mover in providing in-space transportation and infrastructure services.
• Space Transportation Services – first hub and spoke model of space, providing last mile delivery in partnership with key launchers, such as SpaceX.
• Satellite as a Service – hosted payload services that significantly decrease the cost of developing, launching, and maintaining satellites.
• In-Orbit Services – maintaining, repairing, and refueling satellites in orbit.
• Water propulsion technology that significantly reduces costs and is reusable.
• Successfully tested water based propulsion technology on a demo flight launched in 2019 – still in operational condition.
• Founded in 2017 in Santa Clara, California.

Valuation and expectations for future valuations for Momentum.

Management Forecasted Financials

Why will the trade work?

• First mover in providing in-space transportation & infrastructure services to the space economy – Rapid near-term expected growth driven by disruptive tailwinds in commercial space
• Breakthrough water-based propulsion technology*
• Significant customer traction and deep integration with industry leaders
• Clear path to profitability and >$1B in EBITDA
• Massive long-term growth opportunities beyond current business plan**
• Well-seasoned team with experience in aerospace, propulsion and robotics piloted by visionary leader and innovator

What can go wrong?

• Potential mission failure – The Boeing effect
• Competition*
• Government involvement**

**“The Russian founder of a business going public in a $1.2 billion transaction is not allowed to work with his own company’s products because of US rules intended to keep advanced space technology away from geopolitical rivals.”

What is the timeframe?

The timeframe for this investment is best suited for an 8-10-year allocation.

What is the best way to play it?

I believe the best way to trade this equity investment in my opinion is to build the position over time.  Set a capital allocation goal and divide this into a comfortable series of tranches.  Since the timeframe is long-term, I believe time is our advantage.  We can allocate capital in strategic tranches over time and average into the position at prices that 10 years from now will have appreciated exponentially with big gains.

What is the downside risk to the trade?

The downside risk to this trade is what the industry is currently averaging. The overall risk is significant.

References

https://www.cnbc.com/2020/10/02/why-the-space-industry-may-triple-to-1point4-trillion-by-2030.html

https://www.morganstanley.com/ideas/investing-in-space

https://www.morganstanley.com/ideas/investing-in-space

https://csimarket.com/Industry/industry_valuation_ttm.php?pc&ind=201

https://qz.com/1923013/momentus-ipo-is-complicated-by-russian-ceo-barred-from-its-tech/

The above report was submitted to Trading With Cody by Christian Cifuentes