The enigma of Elon Musk, and why he is the best and worst thing to happen to Orbital SciencesWashington Business Journal
Jill R. AitoroSenior Staff Reporter- Jan 6, 2015, 2:03pm EST Updated: Jan 6, 2015, 2:30pm EST
Space junkies will have to wait a few more days to see whether Space Exploration Technologies Corp. can succeed at its latest and greatest experiment to date. But regardless of the outcome, what we have here is one more example of why Orbital Sciences Corp. is probably wishing Elon Musk would just go away. Patrick T. Fallon | BloombergSpace junkies will have to wait a few more days to see whether Space Exploration Technologies Corp. can succeed at its latest and greatest experiment to date — Orbital Sciences Corp. included. At the same time, regardless of its outcome, the next SpaceX launch will be one more reason why the Dulles-based company is probably wishing Elon Musk would just go away.
Like everybody else, I was disappointed to hear California-based SpaceX scrubbed Tuesday's launch of its Falcon 9 rocket carrying cargo to the International Space Station, anxious mostly to see whether the company would pull off an attempt to recover the rocket, landing it upon reentry on a barge floating in the Atlantic.
As we wrote in December, if it works, it would be the first step toward a new method of space launches that could save the government millions.
It's worth noting SpaceX isn't the first company to attempt this. As Steve Wilhelm of our sister paper Puget Sound Business Journal reports, Kistler Aerospace in Kirkland, Washington, aspired to create a reusable space launch vehicle but ran out of money before it ever flew. In 2003, the company went bankrupt.
Therein lies the rub: Such an experiment, even when combined with a contracted launch as will be the case for SpaceX's rescheduled Friday launch, is expensive. No estimates have been released for how much added cost is involved, but it includes research and development ahead of time, as well as the added technology and production that allows rockets to sprout legs and land on what Musk described in a tweet as a " autonomous spaceport drone ship."
This is no cheap endeavor. And Musk himself pegs the odds of success at only 50 percent.
So what about competitor Orbital Sciences? Even if the Dulles company had the cash to do such a thing, it could never rationalize the investment to shareholders. Not with those odds.
"I have to think that Orbital would be interested to see what SpaceX's financials look like, if the company ever were to go public. But in the meantime, SpaceX just doesn't have the same degree of accountability," said Joe DeNardi, vice president of the airlines, aerospace and defense group at Stifel Equity Research.
What the company does have is a multi-billionaire at the helm, with a pretty unrelenting hankering with space travel. And that's not necessarily a bad thing for Orbital. If SpaceX succeeds Friday — or if SpaceX even just learns from this first attempt then succeeds later — Orbital and other competitors and the federal government would learn, too. And eventually, the whole industry could adapt. I'd guess that Orbital CEO David Thompson is to some degree grateful to have a person like Musk, albeit an engima of sorts, filtering so many dollars toward an industry that has actually seen federal funds shrink in recent years.
But that doesn't change the fact that all eyes are on SpaceX, nor would it make any more palatable to competitors that Musk is earning accolades as the ultimate spaceman. And the reality is it does pay to be first, since for a good long while, everybody else needs to scramble to catch up.
"It's good to have someone like Elon Musk involved in the industry from the innovation standpoint," DeNardi said. "But as a company that has to make investment decisions based on financial returns, Orbital is in a completely different place. It makes SpaceX a far more challenging competitor to go up against."
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