Why Astra Space Stock Popped 10% This Afternoon | The Motley Fool

What happened

Barely a week after completing its SPAC IPO, Astra Space (NASDAQ:ASTR) is going to the moon again today — or at least, moving in that general direction.

After rising more than 10% in early trading Friday, shares of the start-up launch vehicle company are holding onto about a 5.8% gain as of 12:30 p.m. EDT.

Image source: Getty Images.

So what

Why is Astra stock up? There’s no particular news today to explain the rise. No news, that is, other than general investor enthusiasm over space stocks in the context of a duel between Virgin Galactic Holdings and Blue Origin, to see which company can put its founder in space first.

That being said, earlier this week Astra CEO Chris Kemp made a comment in an interview with Yahoo! Finance, which — interpreted wrongly — may explain why investors are suddenly piling back into the stock today. Specifically, the CEO confided that in his opinion, while Virgin founder Sir Richard Branson and Blue Origin founder Jeff Bezos “made their billions here on Earth … the next billionaires will be made in space.”

Now what

Now why do I think that comment could be subject to misinterpretation? Simply because of this: When Kemp was speaking of “billionaires” in this context, he wasn’t talking about Branson or Bezos. Nor was he promising that individual investors (like you and me) can expect to become “billionaires” by investing in these companies.

Kemp wasn’t even talking about himself, I don’t believe, as the CEO of a company that launches satellites into space, but that only hopes to do perhaps $1.5 billion in annual sales four years from now. Rather, I think he was talking about the potential for other, as-yet-unseen companies leveraging the infrastructure created by space launch companies to build new businesses in space, working to build “a new low-Earth orbit space economy in order to improve connectivity and life on Earth,” as Yahoo! put it.

Make no mistake: As one of the several companies helping to lower the cost of space launch, Astra could be instrumental in laying the foundation for this future space economy. Just don’t expect to become a billionaire overnight by investing in it.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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