Rocket Lab (NASDAQ: RKLB) stock was up 10% yesterday. RKLB stock might be due another rise today as well. This is simply because at this size of company, this stage of development, each successful launch adds to confidence in the technology being employed.
We all know, or should know, that rocket science and technology has taken great leaps forward in the past couple of decades. This is one of those lessons that people seem hesitant to grasp though. Over when people talk about airplanes we get people shouting that everything has been stuck since Concorde was cancelled. Which is nonsense, of course it is. Back 40 years it used to take a week's wages to fly across Europe. Now it can be done - on a good day, to be fair - on half a day's minimum wage working. Price changes are economic advance.
True, we're still not sending rockets to the Moon again (tho' that is about to change) but the price per lb into orbit has dropped like a stone. This is both technological advance and something that radically - as did cheap flights - changes the world.
Rocket Lab stock price from NASDAQ
Yesterday's price rise was probably associated with the launch last night - hope will do that. It's a big enough event that even NASA is reporting on it. The launch was also successful for Rocket Lab. Not only did it go up correctly and deliver the satellites, it also came down right and the booster was recovered. So, a success then and we might well see a further boost to the RKLB stock price as a result.
Of course Rocket Lab also faces competition in the form of the 1000lb gorilla that is SpaceX. Rocket Lab is currently valued at around $3 billion. The current SpaceX funding round seems to be valuing that company at $110 billion or so. But it's possible to overdo the worry of the tiddler facing the behemoth. When prices come down orders of magnitude - as launch costs per lb have done - then the market of things to do expands by again orders of magnitude. It's not that we get the same number of launches just at cheaper prices, all sorts of things that weren't economic to do before now become economic to do at these new price levels. Rocket launches are also one of the base, structural changes in economic life. Like trains - they allowed people to live away from the office. Or the car allowed the suburb. The price change in a transport system can completely change the mode of living.
Yes, sure, we'd like to see yet another order of magnitude in launch costs before this really motors but it's possible to think we'll get there.
