Narrowing the CCDev candidate list

[Political Hack Wannabe]

That's a long way of saying - yeah, I think they'll stay if they don't get NASA funding for CCiCAP.

Question - how long do they need SLS to stay alive to stay in the game to get to independent viability? 

[Downix]

That's a long way of saying - yeah, I think they'll stay if they don't get NASA funding for CCiCAP.

Question - how long do they need SLS to stay alive to stay in the game to get to independent viability? 

Until Athena III is flying I suspect.

[rmencos]

That's a long way of saying - yeah, I think they'll stay if they don't get NASA funding for CCiCAP.

Question - how long do they need SLS to stay alive to stay in the game to get to independent viability? 

NASA contracts represent 10% of ATK's business, down from 18% just two years ago, so I think they can stay alive now and remain viable.  The problem is that they are not as diversified outside of government contracts.  SNC may have the same problem.  Boeing and SpaceX less so.  ATK is making a calculated long-term bet with SLS.  And a short-term "safe" bet with its Liberty program.  What will be interesting is whether NASA sees Liberty as a good "commercial" plan that ATK can expand without relying only on NASA.  SpaceX and Boeing have shown that their products may be used by others commercially (i.e. Bigelow).  SNC and ATK less so. It would great if ATK could partner with another space effort to show its viability outside of NASA.  SNC tends to be the darling of the bunch, and it's performing by creating hardware, so that issue is probably not as important.

[PeterAlt]

Getting closer to a NASA decision.  I bet on SpaceX, Boeing and Sierra Nevada Corp. to come through - - - but wait, here comes ATK flailing its arms and making a case to anyone who will listen (although only a few select NASA individuals are the ones that count).  It's a great competition and I'm glad to be a spectator.  Historic really.

I can't really stress how much more interesting it becomes when you have L2 subscription. I'm sorry I can't go into specifics, but thrust me. It's extremely interesting.

shameless plug:  Yes L2 is worth the investment.

Could ATK stay in if they remain unfunded?

I think I'll put some money in my PayPal account and try L2.  Thanks.

Concerning ATK funding.  They've stated that they will continue to fund Liberty even if they do not win a NASA contract.

An underlying question is, what is the extent of ATK's commitment to self-funding?  If I were to invest in ATK, one of my concerns would be the exposure that my investment would receive if the company lost on its proposal.  A good (albeit imperfect) window into ATK's commitment is its current 10K statement, which it filed in May with the SEC (attached and available on the ATK website).  It reveals some interesting facts about its business.  First, Liberty is not mentioned.  What's important to ATK are the cash cow of its space business, which of course are its boosters.  ATK assures its investors that it will provide boosters for two SLS missions and that it will be able to compete in a future competition that will decide what permanent boosters the SLS program will use.  Second, Boeing is not listed as a competitor in Aerospace.  Which is strange given that many on the NSF forums believe that Boeing is the strongest competitor for CCiCAP.  Finally, R&D is mentioned in the context of tax off-sets.

As an investor, I would not be too worried if ATK loses on this current round of CCiCAP.  ATK does not see it as a risk factor, which means it isn't pumping a lot of money into the project.  Instead, it seems to have its eye on the SLS contract.  My conclusion: ATK's Liberty project will allow it to maintain a good relation with NASA, through SAAs, for the big prize - SLS boosters.  In the meantime, tax deductions can off-set its R&D and it maintains its edge during these lean years.  It's win win for ATK and it seems to be a good plan.

That's not to say that ATK is not serious about Liberty.  It seems to be very serious if it presented a proposal to NASA.  It's just not a big enough deal to present a risk and to tell to its investors about it. 

That's a long way of saying - yeah, I think they'll stay if they don't get NASA funding for CCiCAP.

Great post and a analysis! Besides NASA, are there any other potential customers that could buy launch services? If so, that alone could mitigate the financial risk to justify continued development.

[Jim]

Great post and a analysis! Besides NASA, are there any other potential customers that could buy launch services? If so, that alone could mitigate the financial risk to justify continued development.

The same ones that buy launch services now, they would be just as likely as NASA, which isn't very likely.  And no, it isn't enough to mitigate the risk since the market is flooded with ULA and Spacex.

[Jim]

An underlying question is, what is the extent of ATK's commitment to self-funding?  If I were to invest in ATK, one of my concerns would be the exposure that my investment would receive if the company lost on its proposal.  A good (albeit imperfect) window into ATK's commitment is its current 10K statement,

Very inperfect and not really applicable in a case like this

[rmencos]

Great post and a analysis! Besides NASA, are there any other potential customers that could buy launch services? If so, that alone could mitigate the financial risk to justify continued development.

The same ones that buy launch services now, they would be just as likely as NASA, which isn't very likely.  And no, it isn't enough to mitigate the risk since the market is flooded with ULA and Spacex.

The space market has matured so that governments are relying more and more on space systems (with the US leading the pack) and countries without space technology support (such as communications, broadband, weather etc.) are actively seeking it.  Commercial companies, like Iridium, Globalstar, DirectTV and Sirius (and many others) are also starting to realize profits and becoming mainstream and crucial to the world market.  There is no reason to believe that these markets will stop growing.  In fact, as technology gets better, they will want to replace their systems at a faster pace.  Then we have the outliers, such as Bigelow, Space Resources and Excalibur Almaz.  The success of those companies is speculative, but one thing is for sure – they’ll send something up before they call it quits.  And if they’re right about their business plans, then their launch vehicle partners stand to profit.  So I think that there’s a healthy market out there for ATK to exploit.
   
Here’s the thing though, the beauty of CCiCAP is that it showcases the technical talent that the US has at its fingertips.  It’s an awesome, benign, unparalleled, show of power.  And the US is exploiting that talent.  But the US’s vision is limited.  Basically, “take our guys/cargo up and then bring them down.”  For a company like ATK, which is arguably sitting on technology every bit as good as SpaceX and ULA, if (and I do mean if) it’s taking a government contractor approach, then it isn’t opening its eyes.  At stake is a pool of other business that will only grow.  It would need to commit to an aggressive development schedule whether NASA funds it or not.  SpaceX is cleaning house right now, but it doesn’t have to be that way. 

[rmencos]

An underlying question is, what is the extent of ATK's commitment to self-funding?  If I were to invest in ATK, one of my concerns would be the exposure that my investment would receive if the company lost on its proposal.  A good (albeit imperfect) window into ATK's commitment is its current 10K statement,

Very inperfect and not really applicable in a case like this

10K's lack substantive detail and do not provide guidance on a company's future reactions.  But the fact remains, the Liberty program is not mentioned.

[Jim]

So I think that there’s a healthy market out there for ATK to exploit.
 

Not true, because they will be at a disadvantage compared to ULA and SpaceX.

A. they can't do GTO with the current vehicle
b.  They don't have a VAFB capability
c.  They have a kludge for a vehicle.
d.  They can't really improve that much.
e.   They will have legacy cost issues.

[Jim]

But the fact remains, the Liberty program is not mentioned.

Which again does mean anything.

[Jim]

1.    Commercial companies, like Iridium, Globalstar, DirectTV and Sirius (and many others) are also starting to realize profits and becoming mainstream and crucial to the world market.  There is no reason to believe that these markets will stop growing.

2.   In fact, as technology gets better, they will want to replace their systems at a faster pace.

3.   Then we have the outliers, such as Bigelow, Space Resources and Excalibur Almaz.  The success of those companies is speculative, but one thing is for sure – they’ll send something up before they call it quits. 

1.  not really, same unfounded speculation as the 90's.  DirectTV and Sirius do not need to expand their onorbit assets.  It doesn't change whether they have one or a hundred million customers.  They get more money from selling more receivers, not more satellites.

2. wrong, spacecraft are lasting more than a decade.


3.  No, it is more for sure that they will never fly anything before calling it quits.

[rmencos]

But the fact remains, the Liberty program is not mentioned.

Which again does mean anything.

Well . . . it actually does.  If Liberty is not mentioned, investors are being told "don't worry about it, it's not a big factor for your investment."  Let's say ATK was pumping a lot of money into Liberty, and then they lost, and lost big.  Shareholders aren't like tax payers.  Shareholders will sue for lack of disclosure and bunch of other stuff tied to ATK's fiduciary duties.  ATK's been around the block, it's to smart to make that mistake. My only point is, if Liberty were a major investment, ATK would disclose that as a risk factor.  They don't.  A case on point, look at Boeing's 10K.  They mention CST-100 a few times.  They even have a sketch of the thing. And that's just for a capsule, not and entire integrated launch system.

[Jim]

But the fact remains, the Liberty program is not mentioned.

Which again does mean anything.

Well . . . it actually does.  If Liberty is not mentioned, investors are being told "don't worry about it, it's not a big factor for your investment."  Let's say ATK was pumping a lot of money into Liberty, and then they lost, and lost big.  Shareholders aren't like tax payers.  Shareholders will sue for lack of disclosure and bunch of other stuff tied to ATK's fiduciary duties.  ATK's been around the block, it's to smart to make that mistake. My only point is, if Liberty were a major investment, ATK would disclose that as a risk factor.  They don't.  A case on point, look at Boeing's 10K.  They mention CST-100 a few times.  They even have a sketch of the thing. And that's just for a capsule, not and entire integrated launch system.

no, it doesnt
The liberty announcement was after the 10k
it is a major investment, they cant go much further than powerpoint without some real money

[rmencos]

So I think that there’s a healthy market out there for ATK to exploit.
 

Not true, because they will be at a disadvantage compared to ULA and SpaceX.

A. they can't do GTO with the current vehicle
b.  They don't have a VAFB capability
c.  They have a kludge for a vehicle.
d.  They can't really improve that much.
e.   They will have legacy cost issues.

Good points, although clients are not all the same.  The keys for clients will be an LV's capability for the particular payload, reliability and price point.  ATK can make a case for their system if they can be competitive on those points.  Of course that's IF they want to truly compete.  For all I know ATK's leadership may be like the kid who just wants to watch TV and hang out with the same ugly girl for the rest of his life - they may want to limit their existence to government contracts.

[Jim]

they may want to limit their existence to government contracts.

Same issues are applicable to gov't contracts too.  Liberty is basically limited to crew despite all what they say.

[rmencos]

But the fact remains, the Liberty program is not mentioned.

Which again does mean anything.

Well . . . it actually does.  If Liberty is not mentioned, investors are being told "don't worry about it, it's not a big factor for your investment."  Let's say ATK was pumping a lot of money into Liberty, and then they lost, and lost big.  Shareholders aren't like tax payers.  Shareholders will sue for lack of disclosure and bunch of other stuff tied to ATK's fiduciary duties.  ATK's been around the block, it's to smart to make that mistake. My only point is, if Liberty were a major investment, ATK would disclose that as a risk factor.  They don't.  A case on point, look at Boeing's 10K.  They mention CST-100 a few times.  They even have a sketch of the thing. And that's just for a capsule, not and entire integrated launch system.

no, it doesnt
The liberty announcement was after the 10k
it is a major investment, they cant go much further than powerpoint without some real money

They announced their LV in February 2011 and their complete system on May 9, 2012.  Their prospectus is dated May 25, 2012.  Although the 10k is for a period that ended in March 2012, they can't play those kinds of games if it was a major investment - the program was obviously in the works long before March.  I'm not doubting that they're laying down real money - but they're also not risking the company's financial health either.

[Jim]

neither is Boeing

[rmencos]

1.    Commercial companies, like Iridium, Globalstar, DirectTV and Sirius (and many others) are also starting to realize profits and becoming mainstream and crucial to the world market.  There is no reason to believe that these markets will stop growing.

2.   In fact, as technology gets better, they will want to replace their systems at a faster pace.

3.   Then we have the outliers, such as Bigelow, Space Resources and Excalibur Almaz.  The success of those companies is speculative, but one thing is for sure – they’ll send something up before they call it quits. 

1.  not really, same unfounded speculation as the 90's.  DirectTV and Sirius do not need to expand their onorbit assets.  It doesn't change whether they have one or a hundred million customers.  They get more money from selling more receivers, not more satellites.

2. wrong, spacecraft are lasting more than a decade.


3.  No, it is more for sure that they will never fly anything before calling it quits.

1.  The entire market is built on the assumption that expenses will remain high.  But changes are occurring.  Look at SpaceX's launch manifest - not bad for company that's barely ten years old. They nabbed iridium's business.  Look at Virgin Galactic, which, at a time when Pegasus is being contemplated for retirement for lack of missions, has found paying clients.  The business is out there, just not under the old model.  DirectTV and Sirius are just examples, but even they will need to upgrade their hardware or may decide to compete elsewhere.  Who are they going to go with? ULA and their Delta IV? or SpaceX and its cheaper Falcon rockets? or maybe, just maybe, ATK.

Here's a link to a recent article on the subject.
http://www.aviationweek.com/Article.aspx?id=/article-xml/AW_07_09_2012_p32-473122-01.xml&p=1

2.  The point isn't longevity.  I could care less if my hardware stays up there for 100 years working fine if my competitor is sending up better technology and offering better service.  And if I can get a cheap LV to get my technology up there, I'm going to make sure that happens.

3.  That's why they're outliers.  Perhaps I am being too optimistic. I hope you're wrong though.

[Prober]

But the fact remains, the Liberty program is not mentioned.

Which again does mean anything.

Well . . . it actually does.  If Liberty is not mentioned, investors are being told "don't worry about it, it's not a big factor for your investment."  Let's say ATK was pumping a lot of money into Liberty, and then they lost, and lost big.  Shareholders aren't like tax payers.  Shareholders will sue for lack of disclosure and bunch of other stuff tied to ATK's fiduciary duties.  ATK's been around the block, it's to smart to make that mistake. My only point is, if Liberty were a major investment, ATK would disclose that as a risk factor.  They don't.  A case on point, look at Boeing's 10K.  They mention CST-100 a few times.  They even have a sketch of the thing. And that's just for a capsule, not and entire integrated launch system.

no, it doesnt
The liberty announcement was after the 10k
it is a major investment, they cant go much further than powerpoint without some real money

They announced their LV in February 2011 and their complete system on May 9, 2012.  Their prospectus is dated May 25, 2012.  Although the 10k is for a period that ended in March 2012, they can't play those kinds of games if it was a major investment - the program was obviously in the works long before March.  I'm not doubting that they're laying down real money - but they're also not risking the company's financial health either.

you should email their "investor relations" dept with your concerns and see what they say to you.

[Prober]

1.    Commercial companies, like Iridium, Globalstar, DirectTV and Sirius (and many others) are also starting to realize profits and becoming mainstream and crucial to the world market.  There is no reason to believe that these markets will stop growing.

2.   In fact, as technology gets better, they will want to replace their systems at a faster pace.

3.   Then we have the outliers, such as Bigelow, Space Resources and Excalibur Almaz.  The success of those companies is speculative, but one thing is for sure – they’ll send something up before they call it quits. 

1.  not really, same unfounded speculation as the 90's.  DirectTV and Sirius do not need to expand their onorbit assets.  It doesn't change whether they have one or a hundred million customers.  They get more money from selling more receivers, not more satellites.

2. wrong, spacecraft are lasting more than a decade.


3.  No, it is more for sure that they will never fly anything before calling it quits.

Here's a link to a recent article on the subject.
http://www.aviationweek.com/Article.aspx?id=/article-xml/AW_07_09_2012_p32-473122-01.xml&p=1

"With Delta/Atlas manufacturer United Launch Alliance “essentially out of the market for commercial launches,” "

brings up a point......what stops ULA from the commercial market?