Jan 13, 2021
Cathie Wood's ARK Invest plans 'ARKX' space exploration ETF to tap the growing industry
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Virgin Galactic's spacecraft Unity reaches space for the first time.Source: Virgin Galactic
Ark Invest, which operates the largest actively managed exchange-traded fund, plans to add a "Space Exploration ETF" under the ticker ARKX, according to a securities filing on Wednesday.
While the ETF's constituents have yet to be announced, shares of space companies Virgin Galactic and Maxar Technologies each jumped more than 8% in after hours trading.
Ark Invest is coming off a wildly successful 2020, with its flagship ARK Innovation fund returning more than 170% last year and growth in assets under management to $17 billion. The fund's largest holding is electric car maker Tesla, which accounts for more than 10% of its weighting.
Ark founder and CEO Cathie Wood told CNBC last month that investors should "get on the right side of change and stay on the right side of change because it has hit escape velocity in the aftermath of the coronavirus." Wood, a long-time Tesla bull, has a $7,000 a share price target for the company to hit by the end of 2024.
The Space Exploration ETF would focus on companies that are "leading, enabling, or benefitting from technologically enabled products and/or services that occur beyond the surface of the Earth," the filing said.
The space industry grew steadily in 2020 despite delays due to the COVID-19 pandemic, with investment bouncing back after a brief lull. Investor interest in space companies has continued at heightened levels, despite only a few publicly-traded companies.
But more space companies plan to enter public markets in the year ahead, with both traditional IPOs and SPAC deals expected in 2021.
Ark divided the industry into four categories: orbital aerospace, suborbital aerospace, enabling technologies, and aerospace beneficiary.
"Space exploration is possible due to the convergence of a number of themes, and a Space Exploration Company may not currently derive any revenue, and there is no assurance that such company will derive any revenue from innovative technologies in the future," Ark's filing said.
Ark further explained the four categories of companies that will be in the Space Exploration ETF:
"Orbital Aerospace Companies are companies that launch, make, service, or operate platforms in the orbital space, including satellites and launch vehicles. Suborbital Aerospace Companies are companies that launch, make, service, or operate platforms in the suborbital space, including drones, air taxis and electric aviation vehicles. Enabling Technologies Companies are companies that create the technologies required for successful value-add aerospace operations, including artificial intelligence, robotics, 3D printing, materials and energy storage. Aerospace Beneficiary Companies are companies that stand to benefit from aerospace activities, including agriculture, internet access, global positioning system (GPS), construction and imaging."
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Lime Plans to Add Moped-Sharing to Scooter and Bike Services
Coronavirus updates: CDC researchers say schools can reopen safely; UK variant has now spread to 25 states; 425K US deaths AstraZeneca: EU vaccine delivery dates werent guaranteed, says CEO Pascal Soriot Lime Plans to Add Moped-Sharing to Scooter and Bike Services © Bloomberg Lime electric scooters sit parked on a street. Lime, the scooter and bike-sharing platform, plans to introduce mopeds to some fleets starting this spring as it continues to assemble a range of transportation options intended to tempt people to give up their cars. The additions will bring the company into direct competition with Revel Transit Inc., the Brooklyn, New York-based startup that has popularized moped-sharing in a handful of American cities over the last year. Lime, whose official name is Neutron Holdings Inc., sees mopeds as a form of transportation that’s more appropriate for travel distances of up to five miles, or for lugging around groceries. The company will launch first with 600 scooters in Washington in March, followed by Paris later this spring. It is considering expanding to other cities later in the year. Wayne Ting, Lime’s chief executive officer, said the company chose Washington and Paris because it already operates fleets of bikes and scooters in those cities, whose local governments are amenable to new mobility options. “They’re committed to showing there’s something better than the car,” Ting said. Lime is in active conversations with most cities about permitting.
The Washington,D.C., Department of Transportation, which is currently running a pilot program for moped sharing , said it has not yet approved companies other than Revel to operate in the district. Lime, whose mopeds will be manufactured by the Beijing-based Niu Technologies — the same supplier Revel uses — says it has added such features to the motorbikes as infrared sensors that will help ensure riders return helmets to the cases attached to the vehicles.
Load ErrorWhen it launched in 2017, Lime was solely focused on bicycles. It added scooters later that year, after Bird Rides Inc. gained overnight success with a scooter-sharing service in Santa Monica, California. The two companies began racing to launch in new cities, fueled by an astonishing amount of venture capital. Lime expanded its service to include other forms of transportation. Its founders said in 2018 that they were working on creating a network of go-kart-esque “transit pods,” and the company briefly ran a car-sharing service in Seattle. Lime and Bird burned through money, and both were forced to retrench even before Covid hit the mobility industry hard early last year. Ting said Lime’s attempt to expand into car-sharing came too early, and that it didn’t make sense to add a fleet of vehicles that relied on combustion engines, given that company’s mission to reduce carbon emissions. The electric mopeds are a better fit, he said, adding that the company also plans to launch other vehicle types by the end of the year. Gabe Klein, a former Zipcar executive who now runs CityFi, a consultancy, said that it’s logical for mobility companies to expand into various types of vehicles. “I’m less impressed on the business side with companies that are married to just one form factor,” he said. But mopeds bring their own set of concerns. They are bigger and faster than scooters, which makes them more dangerous. Klein said more riders will inevitably mean more accidents, which he fears could make insurance costs untenable. Revel has already faced controversy over fatal crashes involving its vehicles, which could make public officials less receptive to moped-sharing programs in the future. Even if city governments embrace moped-sharing, they could undermine its economics with regulations. In New York, some officials have argued for safety measures that seemed almost impossible to comply with. Polly Trottenberg, the former commissioner of transportation for the city, acknowledged last fall that the requirements the city was considering for Revel “may make it hard for the company to be financially viable.” Mopeds cost more than scooters for companies like Lime to purchase, and it’s not clear how much more people will pay to ride them; Lime says it is still working on pricing for Washington. Ting said he guesses people will take longer trips on mopeds than on scooters, translating to higher revenue for each ride. But he acknowledged that many questions remain open. “We’re going to find out,” he said. "What happens in Excel doesn’t always happen in real life.”
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