u/dutch1664

This trade opened in February is now closed for a 28% increase in $RKLB shares in my IRAs (Plus the gains from the increase in stock price itself). Here's how I did it.

Sold 3,200 shares for leaps (feb)
Repurchased 4,100 shares (may)
Gain: 900 shares (+28%)

Strategy: No cash or margin available in my IRAs to buy-the-dip in Feb. Added leverage by swapping shares to leaps, and now back. This let me add leverage at the lows and realize it at the highs.

It also means staying "in the trade" the whole time, no need to worry about missing a move - just higher volatility.

Tax free because IRA. Didn't mirror the move in my cash accounts for tax reasons - Just added on the dip on margin and still holding.

Two years ago all my accounts added to $120K, this trade saw $900K change hands in minutes, in a shopping mall cafe. What a world of difference and what an opportunity retail investors have these days.

https://preview.redd.it/s3fgxx5l6l0h1.png?width=1942&format=png&auto=webp&s=e3654b3a200dfecde08fb22c48795bb46884d165

Updated positions for those following:

https://preview.redd.it/dn4ho1jp6l0h1.png?width=2188&format=png&auto=webp&s=03a0604afc121c0edfab86925847bdcd450fcd83

Previous DD:

https://www.reddit.com/r/wallstreetbets/comments/1st8ahc/100k_rdw_bet_200_gain_and_about_to_take_off/

https://www.reddit.com/r/wallstreetbets/comments/1st4o9q/rockets_are_worth_their_weight_in_gold_aka_rklb/

https://www.reddit.com/r/wallstreetbets/comments/1szb1za/launch_commoditization_doesnt_exist_and_may_never/

https://preview.redd.it/7woewo2sdzzg1.jpg?width=1080&format=pjpg&auto=webp&s=f515f007d7e7d4f79385c7945c5b89f2ecdd5f8a

Relevant DD. Positions in comments. This is the trade of the next of decades.

https://www.reddit.com/r/wallstreetbets/comments/1st4o9q/rockets_are_worth_their_weight_in_gold_aka_rklb/

https://www.reddit.com/r/wallstreetbets/comments/1szb1za/launch_commoditization_doesnt_exist_and_may_never/

HNL to PDX arriving 5AM today. First class attended was proactive and attentive without a hint of snobbyness. Got the be the best service I've had in the last 100 flights I've taken. And totally redeemed my first poor experience on Alaska a few weeks ago 👏👏

[This article has zero AI. This is a companion piece to my other article that got 1 million views here - thank you so much!🥳]

Launch Commoditization Doesn't Exist, and May Never.

Launch commoditization is a term that has been thrown around a lot recently, generally as a bear case against launch providers ($RKLB, $X, $FLY). I don't personally buy into the launch commoditization narrative for two reasons:

1. Launch is not fungible
2. In a duopoly or oligopoly, there is no incentive to lower prices

For commoditization to emerge would require multiple, scaled and profitable players within each market segment. I doubt we get there in <10 years, if at all. Since I wrote this article a few days ago; numerous industry analyst have come out with the same message.

Let's dig in a little deeper.

Rockets Are Not Commodities

Copper is a commodity because it is fungible. Any piece of .999 fine copper is identical regardless of where it came from, who supplied it, etc. Assuming the seller is honest about the purity, copper is copper, and the cheapest copper will do. Mesopotamian merchants be damned.

Rockets or launch are not fungible. Launch varies by payload class, orbit, schedule flexibility, reliability, contract eligibility, insurance cost, etc.

Clearly launch is not a commodity in the true sense of the word.

Is it similar to a commodity then?

The closest analogy would be the trucking industry. For all intents and purposes trucking is a priced as a commodity. If you have ever shipped anything large, like a car, across country, you'll know you can choose from thousands of providers that compete solely on price.

This is possible because there are ~50,000 trucking companies in the US (Companies with over 5 trucks. More than 10x that including owner-operators). These trucking companies all use the same trucks from a small number of vendors, run the same routes, abide by the same legal restrictions, have the same maintenance costs, the same staffing costs, etc.

There are not thousands, hundreds, or even tens of launch companies operating in the same segment.

What Would It Take for Launch to Be In a Comparable Position?

Before launch can commoditize you will need:

1. Multiple players; lets say at least 3 (but more like 5+)
2. Offering comparable services
3. That are scaled (10+ successful launches)
4. That have capacity
5. That are profitable

Lets highlight the importance of each line item:

1. Multiple players is self explanatory. No competition = no pricing pressure.
2. Comparable services means similar payload capacity with similar schedule availability and the capability to reach the same orbits.
3. Rockets that have not scaled yet come with a different risk profile. Higher insurance costs means the total cost might be much higher than the list price. Why pay for an unproven launch if a proven one is available? Maybe you pay less, but at what cost?
4. It's no good having a launch provider if they have 4+ years of backlog when you need to launch in 1-2 years.
5. It's easy to undercut on price in the short-term. Rocket Lab did this with Electron and regretted it. They won't make the same mistake with Neutron. Relativity Space is rumored to have secured their large backlog by offering low price deals on very flexible terms. This works short term, but long term, companies will either have to raise prices or go out of business.

Lets stress test each point against todays market reality within each segment.

Dedicated Small launch:

Scaled, profitable launch providers with capacity: 1 - Rocket Lab.

Potential new entrants:

• Astra
• Firefly
• Gilmour Space
• Isar Aerospace

Many more than have already failed or left:

• Relativity Space - Terran 1, cancelled.
• ABL - RS1, cancelled.
• Virgin Orbit - LauncherOne, bankrupt.
• Astra - Rocket 3, cancelled and bankrupted.

Rocket Lab is currently the sole provider in their market segment and has pricing power. Can that change? Yes. Will it? Remains to be seen but the odds don't look good.

How long will investors continue to fund companies with such a low probability of success? ABL already pivoted to military. Astra seems to be trying the same.

Can those that succeed technically, become viable, long term profitable businesses?

There is no evidence that Rocket Lab is under pricing pressure or is likely to be in the future. In fact, Electron prices have risen from $7.5M to $8.2M over the last few years.

Medium & Heavy Launch:

This is where things look a lot more competitive; however the number of scaled, profitable launch providers with capacity is still arguably only one today - Falcon 9. In the near future, will medium and heavy launch each reach 3 or more scaled players with heritage and capacity?

Ariane 6 has 30+ flights in their backlog and did 4 launches in 2025. With their 2nd launch of 2026 planned for tomorrow (April 28) they're on pace for 6 launches in 2026 - that's 5 years to clear the existing backlog and they just had to go through a restructuring after being technically bankrupt as of end 2025.

Vulcan Centaur is in an ever worse position with 70 launches in backlog and only 4 launches in 3 years. The rocket is currently grounded following 2 SRB anomalies and the Space Force has moved launches over to Falcon 9.

Blue Origin is in a similar position with a healthy backlog but a shaky, albeit impressive, start to their launch campaign. 1 in 3 failures for a new vehicle is okay, if it becomes 2 in 4 things shift.

The bottom line for the heavy launch segment is companies struggling to execute. Cutting prices in a race to the bottom does nothing to help any of these launch providers when their challenge is technical execution, not lack of demand.

Firefly, Relativity Space, Stoke, and Rocket Lab are hoping to bring their medium lift vehicles Eclipse, Terran R, Nova, and Neutron to market, respectively. These are all coming up against the Falcon 9.

Let's assume 2 out of 4 make it to commercial scale, giving us Flacon 9 and two of the upcoming new medium lift launch vehicles.

What incentive is there to cut prices in a race to the bottom? Throughout history oligopolies drive prices higher, not lower - Why? Game theory. If one cuts prices, the other two will have to cut prices to match, this hurts everyone, and since everyone is aware of this, no one wants to cut. Why cut prices when you can maintain you existing price level.

You can try to undercut the competition to put them out of business. This favors companies with strong capital efficiency, see SpaceX and Rocket Lab. Even then, given the technical risks companies face, better to let the competition put themselves out of business through poor execution.

The Bottom Line

We do not have the market conditions for commoditized pricing to emerge. Even if we get, there is no incentive for a race to the bottom. It's proven game theory.

The Elephants in the Room - Starship/Rideshare/Space Tugs

There is no doubt that for large payloads launched on Starship the cost per KG will be lower than say, Falcon 9. That's simple economies of scale and great news for those that need it.

Space tugs and rideshare show up here too - but space tugs are added cost, added risk, and schedules are still tied to rideshare availability. Peter Beck says the math doesn't work. Impulse Space and True Anomaly obviously see a market there. As yet, it's unproven and costs are an unknown. What we do know is it means a second vehicle and a second operator, greatly changing the risk profile of the mission.

Peter Beck has pointed out that rideshare is useful to a point but that it actually drives demand for dedicated launch - proving the two services are again, not fungible. He highlights three customers that started launching their demo satellites on Falcon 9 rideshare before moving to dedicated launch with Rocket Lab. The companies are Kinéis, IQPS, and Synspective.

Summary

The market conditions required for commoditized pricing to emerge simply do not exists today and to exist in future will require a level of success that the industry simply has never delivered on.

For the companies that do make it, there is no incentive to cut prices in a race to the bottom. Launch costs for dedicated launch on Falcon 9 and Electron - the two most frequently launched vehicles in the world (ex-China) - have risen over time, not fallen.

Maybe in 20 years the world will look different, but for the decade ahead, I won't be making investment decisions reliant on falling launch costs.

*** Evidence from industry analysts ***

April 28, Impulse Space, COO, Eric Romo, strongly echoed my sentiments live on NYSE Space & Defense Special. Eric was SpaceX employee #13 and at Impulse Space he stands to benefit from falling launch costs, yet his bias is rising costs. Here are the quotes:

“Assuming that you’re going to crater the prices in the launch market because of Starship, I think, is a bad assumption in the near term. Long term maybe… but in the long term we’re all dead”

On Neutron, Terran R pushing prices down “I’m not so sure… I think pricing if anything is going to float upward…”

“... makes me nervous, any business plan that starts with like, when Starship enables 200KG price to LEO… I think is going to be hard in the near term…”

Also April 28, Jack Kuhr, Director of Research at Payload Space had the following comments in an interview with Dave G Investing.

On Starship “What’s their incentive for launching customer payloads? Why would SpaceX even want to launch commercial payloads when their revenue from Starlink, xAI, and their own orbital datacenters is going to be so significant, that lower margin customer payloads might just be a nuisance for them”

On Falcon 9 pricing “They’re up 40% in 5 years… they are increasing pricing which is great for Rocket Lab & Firefly".

*****

Long $RKLB

Positions:

3,680 RKLB Shares

69x Jan 28 $75 Calls

[This article has zero AI yet the absolute morons at r/space refuse to accept it, so posting here. This is a companion piece to my other article that got 1 million views here - thank you so much!🥳]

Launch Commoditization Doesn't Exist, and May Never.

Launch commoditization has been thrown around a lot recently, generally as a bear case against launch providers ($RKLB, $X, $FLY). I don't personally buy into the launch commoditization theory for two reasons:

1. Launch is not fungible
2. In a duopoly or oligopoly, there is no incentive to lower prices

For commoditization to emerge would require multiple, scaled and profitable players within each market segment. I doubt we get there in <10 years, if at all.

Let's dig in a little deeper.

Rockets Are Not Commodities

Copper is a commodity because it is fungible. Any piece of .999 fine copper is identical regardless of where it came from, who supplied it, etc. Assuming the seller is honest about the purity, copper is copper, and the cheapest copper will do. Mesopotamian merchants be damned.

Rockets or launch are not fungible. Launch varies by payload class, orbit, schedule flexibility, reliability, contract eligibility, insurance cost, etc.

Clearly launch is not a commodity in the true sense of the word.

Is it similar to a commodity then?

The closest analogy would be the trucking industry. For all intents and purposes trucking is a priced as a commodity. If you have ever shipped anything large, like a car, across country, you'll know you can choose from thousands of providers that compete solely on price.

This is possible because there are ~50,000 trucking companies in the US (Companies with over 5 trucks. More than 10x that including owner-operators). These trucking companies all use the same trucks from a small number of vendors, run the same routes, abide by the same legal restrictions, have the same maintenance costs, the same staffing costs, etc.

There are not thousands, hundreds, or even tens of launch companies operating in the same segment.

What Would It Take for Launch to Be In a Comparable Position?

Before launch can commoditize you will need:

1. Multiple players; lets say at least 3 (but more like 5+)
2. Offering comparable services
3. That are scaled (10+ successful launches)
4. That have capacity
5. That are profitable

Lets highlight the importance of each line item:

1. Multiple players is self explanatory. No competition = no pricing pressure.
2. Comparable services means similar payload capacity with similar schedule availability and the capability to reach the same orbits.
3. Rockets that have not scaled yet come with a different risk profile. Higher insurance costs means the total cost might be much higher than the list price. Why pay for an unproven launch if a proven one is available? Maybe you pay less, but at what cost?
4. It's no good having a launch provider if they have 4+ years of backlog when you need to launch in 1-2 years.
5. It's easy to undercut on price in the short-term. Rocket Lab did this with Electron and regretted it. They won't make the same mistake with Neutron. Relativity Space is rumored to have secured their large backlog by offering low price deals on very flexible terms. This works short term, but long term, companies will either have to raise prices or go out of business.

Lets stress test each point against todays market reality within each segment.

Dedicated Small launch:

Scaled, profitable launch providers with capacity: 1 - Rocket Lab.

Potential new entrants:

• Astra
• Firefly
• Gilmour Space
• Isar Aerospace

Many more than have already failed or left:

• Relativity Space - Terran 1, cancelled.
• ABL - RS1, cancelled.
• Virgin Orbit - LauncherOne, bankrupt.
• Astra - Rocket 3, cancelled and bankrupted.

Rocket Lab is currently the sole provider in their market segment and has pricing power. Can that change? Yes. Will it? Remains to be seen but the odds don't look good.

How long will investors continue to fund companies with such a low probability of success? ABL already pivoted to military. Astra seems to be trying the same.

Can those that succeed technically, become viable, long term profitable businesses?

There is no evidence that Rocket Lab is under pricing pressure or is likely to be in the future. In fact, Electron prices have risen from $7.5M to $8.2M over the last few years.

Medium & Heavy Launch:

This is where things look a lot more competitive; however the number of scaled, profitable launch providers with capacity is still arguably only one today - Falcon 9. In the near future, will medium and heavy launch each reach 3 or more scaled players with heritage and capacity?

Ariane 6 has 30+ flights in their backlog and did 4 launches in 2025. With their 2nd launch of 2026 planned for tomorrow (April 28) they're on pace for 6 launches in 2026 - that's 5 years to clear the existing backlog and they just had to go through a restructuring after being technically bankrupt as of end 2025.

Vulcan Centaur is in an ever worse position with 70 launches in backlog and only 4 launches in 3 years. The rocket is currently grounded following 2 SRB anomalies and the Space Force has moved launches over to Falcon 9.

Blue Origin is in a similar position with a healthy backlog but a shaky, albeit impressive, start to their launch campaign. 1 in 3 failures for a new vehicle is okay, if it becomes 2 in 4 things shift.

The bottom line for the heavy launch segment is companies struggling to execute. Cutting prices in a race to the bottom does nothing to help any of these launch providers when their challenge is technical execution, not lack of demand.

Firefly, Relativity Space, Stoke, and Rocket Lab are hoping to bring their medium lift vehicles Eclipse, Terran R, Nova, and Neutron to market, respectively. These are all coming up against the Falcon 9.

Let's assume 2 out of 4 make it to commercial scale, giving us Flacon 9 and two of the upcoming new medium lift launch vehicles.

What incentive is there to cut prices in a race to the bottom? Throughout history oligopolies drive prices higher, not lower - Why? Game theory. If one cuts prices, the other two will have to cut prices to match, this hurts everyone, and since everyone is aware of this, no one wants to cut. Why cut prices when you can maintain you existing price level.

You can try to undercut the competition to put them out of business. This favors companies with strong capital efficiency, see SpaceX and Rocket Lab. Even then, given the technical risks companies face, better to let the competition put themselves out of business through poor execution.

The Bottom Line

We do not have the market conditions for commoditized pricing to emerge. Even if we get, there is no incentive for a race to the bottom. It's proven game theory.

The Elephants in the Room - Starship/Rideshare/Space Tugs

There is no doubt that for large payloads launched on Starship the cost per KG will be lower than say, Falcon 9. That's simple economies of scale and great news for those that need it.

Space tugs and rideshare show up here too - but space tugs are added cost, added risk, and schedules are still tied to rideshare availability. Peter Beck says the math doesn't work. Impulse Space and True Anomaly obviously see a market there. As yet, it's unproven and costs are an unknown. What we do know is it means a second vehicle and a second operator, greatly changing the risk profile of the mission.

Peter Beck has pointed out that rideshare is useful to a point but that it actually drives demand for dedicated launch - proving the two services are again, not fungible. He highlights three customers that started launching their demo satellites on Falcon 9 rideshare before moving to dedicated launch with Rocket Lab. The companies are Kinéis, IQPS, and Synspective.

Summary

The market conditions required for commoditized pricing to emerge simply do not exists today and to exist in future will require a level of success that the industry simply has never delivered on.

For the companies that do make it, there is no incentive to cut prices in a race to the bottom. Launch costs for dedicated launch on Falcon 9 and Electron - the two most frequently launched vehicles in the world (ex-China) - have risen over time, not fallen.

Maybe in 20 years the world will look different, but for the decade ahead, I won't be making investment decisions reliant on falling launch costs.

*** Today, Impulse Space, COO, Eric Romo, strong echoed my sentiments live on NYSE Space & Defense Special. Eric is former SpaceX and stands to benefit from falling launch costs, yet his bias is rising costs. Here are the quotes:

“Assuming that you’re going to crater the prices in the launch market because of Starship, I think, is a bad assumption in the near term. Long term maybe… but in the long term we’re all dead”

On Neutron, Terran R pushing prices down “I’m not so sure… I think pricing if anything is going to float upward…”

“... makes me nervous, any business plan that starts with like, when Starship enables 200KG price to LEO… I think is going to be hard in the near term…”

*****

Long $RKLB

Positions:

3,680 RKLB Shares

69x Jan 28 $75 Calls

Note: Zero AI in this article.

Launch commoditization has been thrown around a lot recently, generally as a bear case against launch providers. I don't personally buy into the launch commoditization theory for two reasons:

1. Launch is not fungible
2. In a duopoly or oligopoly, there is no incentive to lower prices

For commoditization to emerge would require multiple, scaled and profitable players within each market segment. I doubt we get there in <10 years, if at all.

Let's dig in a little deeper.

Rockets Are Not Commodities

Copper is a commodity because it is fungible. Any piece of .999 fine copper is identical regardless of where it came from, who supplied it, etc. Assuming the seller is honest about the purity, copper is copper, and the cheapest copper will do. Mesopotamian merchants be damned.

Rockets or launch are not fungible. Launch varies by payload class, orbit, schedule flexibility, reliability, contract eligibility, insurance cost, etc.

Clearly launch is not a commodity in the true sense of the word.

Is it similar to a commodity then?

The closest analogy would be the trucking industry. For all intents and purposes trucking is a priced as a commodity. If you have ever shipped anything large, like a car, across country, you'll know you can choose from thousands of providers that compete solely on price.

This is possible because there are ~50,000 trucking companies in the US (Companies with over 5 trucks. More than 10x that including owner-operators). These trucking companies all use the same trucks from a small number of vendors, run the same routes, abide by the same legal restrictions, have the same maintenance costs, the same staffing costs, etc.

There are not thousands, hundreds, or even tens of launch companies operating in the same segment.

What Would It Take for Launch to Be In a Comparable Position?

Before launch can commoditize you will need:

1. Multiple players; lets say at least 3 (but more like 5+)
2. Offering comparable services
3. That are scaled (10+ successful launches)
4. That have capacity
5. That are profitable

Lets highlight the importance of each line item:

1. Multiple players is self explanatory. No competition = no pricing pressure.
2. Comparable services means similar payload capacity with similar schedule availability and the capability to reach the same orbits.
3. Rockets that have not scaled yet come with a different risk profile. Higher insurance costs means the total cost might be much higher than the list price. Why pay for an unproven launch if a proven one is available? Maybe you pay less, but at what cost?
4. It's no good having a launch provider if they have 4+ years of backlog when you need to launch in 1-2 years.
5. It's easy to undercut on price in the short-term. Rocket Lab did this with Electron and regretted it. They won't make the same mistake with Neutron. Relativity Space is rumored to have secured their large backlog by offering low price deals on very flexible terms. This works short term, but long term, companies will either have to raise prices or go out of business.

Lets stress test each point against todays market reality within each segment.

Dedicated Small launch:

Scaled, profitable launch providers with capacity: 1 - Rocket Lab.

Potential new entrants:

• Astra
• Firefly
• Gilmour Space
• Isar Aerospace

Many more than have already failed or left:

• Relativity Space - Terran 1, cancelled.
• ABL - RS1, cancelled.
• Virgin Orbit - LauncherOne, bankrupt.
• Astra - Rocket 3, cancelled and bankrupted.

Rocket Lab is currently the sole provider in their market segment and has pricing power. Can that change? Yes. Will it? Remains to be seen but the odds don't look good.

How long will investors continue to fund companies with such a low probability of success? ABL already pivoted to military. Astra seems to be trying the same.

Can those that succeed technically, become viable, long term profitable businesses?

There is no evidence that Rocket Lab is under pricing pressure or is likely to be in the future. In fact, Electron prices have risen from $7.5M to $8.2M over the last few years.

Medium & Heavy Launch:

This is where things look a lot more competitive; however the number of scaled, profitable launch providers with capacity is still arguably only one today - Falcon 9. In the near future, will medium and heavy launch each reach 3 or more scaled players with heritage and capacity?

Ariane 6 has 30+ flights in their backlog and did 4 launches in 2025. With their 2nd launch of 2026 planned for tomorrow (April 28) they're on pace for 6 launches in 2026 - that's 5 years to clear the existing backlog and they just had to go through a restructuring after being technically bankrupt as of end 2025.

Vulcan Centaur is in an ever worse position with 70 launches in backlog and only 4 launches in 3 years. The rocket is currently grounded following 2 SRB anomalies and the Space Force has moved launches over to Falcon 9.

Blue Origin is in a similar position with a healthy backlog but a shaky, albeit impressive, start to their launch campaign. 1 in 3 failures for a new vehicle is okay, if it becomes 2 in 4 things shift.

The bottom line for the heavy launch segment is companies struggling to execute. Cutting prices in a race to the bottom does nothing to help any of these launch providers when their challenge is technical execution, not lack of demand.

Firefly, Relativity Space, Stoke, and Rocket Lab are hoping to bring their medium lift vehicles Eclipse, Terran R, Nova, and Neutron to market, respectively. These are all coming up against the Falcon 9.

Let's assume 2 out of 4 make it to commercial scale, giving us Flacon 9 and two of the upcoming new medium lift launch vehicles.

What incentive is there to cut prices in a race to the bottom? Throughout history oligopolies drive prices higher, not lower - Why? Game theory. If one cuts prices, the other two will have to cut prices to match, this hurts everyone, and since everyone is aware of this, no one wants to cut. Why cut prices when you can maintain you existing price level.

You can try to undercut the competition to put them out of business. This favors companies with strong capital efficiency, see SpaceX and Rocket Lab. Even then, given the technical risks companies face, better to let the competition put themselves out of business through poor execution.

The Bottom Line

We do not have the market conditions for commoditized pricing to emerge. Even if we get, there is no incentive for a race to the bottom. It's proven game theory.

The Elephants in the Room - Starship/Rideshare/Space Tugs

There is no doubt that for large payloads launched on Starship the cost per KG will be lower than say, Falcon 9. That's simple economies of scale and great news for those that need it.

Space tugs and rideshare show up here too - but space tugs are added cost, added risk, and schedules are still tied to rideshare availability. Peter Beck says the math doesn't work. Tom Mueller says it does. As yet, it's unproven and costs are an unknown. What we do know is it means a second vehicle and a second operator, greatly changing the risk profile of the mission.

Peter Beck has pointed out that rideshare is useful to a point but that it actually drives demand for dedicated launch - proving the two services are again, not fungible. He highlights three customers that started launching their demo satellites on Falcon 9 rideshare before moving to dedicated launch with Rocket Lab. The companies are Kinéis, IQPS, and Synspective.

Summary

The market conditions required for commoditized pricing to emerge simply do not exists today and to exist in future will require a level of success that the industry simply has never delivered on.

For the companies that do make it, there is no incentive to cut prices in a race to the bottom. Launch costs for dedicated launch on Falcon 9 and Electron - the two most frequently launched vehicles in the world (ex-China) - have risen over time, not fallen.

Maybe in 20 years the world will look different, but for the decade ahead, I won't be making investment decisions reliant on falling launch costs.

Launch commoditization has been thrown around a lot recently, generally as a bear case against launch providers. I don't personally buy into the launch commoditization theory for two reasons:

1. Launch is not fungible
2. In a duopoly or oligopoly, there is no incentive to lower prices

For commoditization to emerge would require multiple, scaled and profitable players within each market segment. I doubt we get there in <10 years, if at all.

Let's dig in a little deeper.

Rockets Are Not Commodities

Copper is a commodity because it is fungible. Any piece of .999 fine copper is identical regardless of where it came from, who supplied it, etc. Assuming the seller is honest about the purity, copper is copper, and the cheapest copper will do. Mesopotamian merchants be damned.

Rockets or launch are not fungible. Launch varies by payload class, orbit, schedule flexibility, reliability, contract eligibility, insurance cost, etc.

Clearly launch is not a commodity in the true sense of the word.

Is it similar to a commodity then?

The closest analogy would be the trucking industry. For all intents and purposes trucking is a priced as a commodity. If you have ever shipped anything large, like a car, across country, you'll know you can choose from thousands of providers that compete solely on price.

This is possible because there are ~50,000 trucking companies in the US (Companies with over 5 trucks. More than 10x that including owner-operators). These trucking companies all use the same trucks from a small number of vendors, run the same routes, abide by the same legal restrictions, have the same maintenance costs, the same staffing costs, etc.

There are not thousands, hundreds, or even tens of launch companies operating in the same segment.

What Would It Take for Launch to Be In a Comparable Position?

Before launch can commoditize you will need:

1. Multiple players; lets say at least 3 (but more like 5+)
2. Offering comparable services
3. That are scaled (10+ successful launches)
4. That have capacity
5. That are profitable

Lets highlight the importance of each line item:

1. Multiple players is self explanatory. No competition = no pricing pressure.
2. Comparable services means similar payload capacity with similar schedule availability and the capability to reach the same orbits.
3. Rockets that have not scaled yet come with a different risk profile. Higher insurance costs means the total cost might be much higher than the list price. Why pay for an unproven launch if a proven one is available? Maybe you pay less, but at what cost?
4. It's no good having a launch provider if they have 4+ years of backlog when you need to launch in 1-2 years.
5. It's easy to undercut on price in the short-term. Rocket Lab did this with Electron and regretted it. They won't make the same mistake with Neutron. Relativity Space is rumored to have secured their large backlog by offering low price deals on very flexible terms. This works short term, but long term, companies will either have to raise prices or go out of business.

Lets stress test each point against todays market reality within each segment.

Dedicated Small launch:

Scaled, profitable launch providers with capacity: 1 - Rocket Lab.

Potential new entrants:

• Astra
• Firefly
• Gilmour Space
• Isar Aerospace

Many more than have already failed or left:

• Relativity Space - Terran 1, cancelled.
• ABL - RS1, cancelled.
• Virgin Orbit - LauncherOne, bankrupt.
• Astra - Rocket 3, cancelled and bankrupted.

Rocket Lab is currently the sole provider in their market segment and has pricing power. Can that change? Yes. Will it? Remains to be seen but the odds don't look good.

How long will investors continue to fund companies with such a low probability of success? ABL already pivoted to military. Astra seems to be trying the same.

Can those that succeed technically, become viable, long term profitable businesses?

There is no evidence that Rocket Lab is under pricing pressure or is likely to be in the future. In fact, Electron prices have risen from $7.5M to $8.2M over the last few years.

Medium & Heavy Launch:

This is where things look a lot more competitive; however the number of scaled, profitable launch providers with capacity is still arguably only one today - Falcon 9. In the near future, will medium and heavy launch each reach 3 or more scaled players with heritage and capacity?

Ariane 6 has 30+ flights in their backlog and did 4 launches in 2025. With their 2nd launch of 2026 planned for tomorrow (April 28) they're on pace for 6 launches in 2026 - that's 5 years to clear the existing backlog and they just had to go through a restructuring after being technically bankrupt as of end 2025.

Vulcan Centaur is in an ever worse position with 70 launches in backlog and only 4 launches in 3 years. The rocket is currently grounded following 2 SRB anomalies and the Space Force has moved launches over to Falcon 9.

Blue Origin is in a similar position with a healthy backlog but a shaky, albeit impressive, start to their launch campaign. 1 in 3 failures for a new vehicle is okay, if it becomes 2 in 4 things shift.

The bottom line for the heavy launch segment is companies struggling to execute. Cutting prices in a race to the bottom does nothing to help any of these launch providers when their challenge is technical execution, not lack of demand.

Firefly, Relativity Space, Stoke, and Rocket Lab are hoping to bring their medium lift vehicles Eclipse, Terran R, Nova, and Neutron to market, respectively. These are all coming up against the Falcon 9.

Let's assume 2 out of 4 make it to commercial scale, giving us Flacon 9 and two of the upcoming new medium lift launch vehicles.

What incentive is there to cut prices in a race to the bottom? Throughout history oligopolies drive prices higher, not lower - Why? Game theory. If one cuts prices, the other two will have to cut prices to match, this hurts everyone, and since everyone is aware of this, no one wants to cut. Why cut prices when you can maintain you existing price level.

You can try to undercut the competition to put them out of business. This favors companies with strong capital efficiency, see SpaceX and Rocket Lab. Even then, given the technical risks companies face, better to let the competition put themselves out of business through poor execution.

The Bottom Line

We do not have the market conditions for commoditized pricing to emerge. Even if we get, there is no incentive for a race to the bottom. It's proven game theory.

The Elephants in the Room - Starship/Rideshare/Space Tugs

There is no doubt that for large payloads launched on Starship the cost per KG will be lower than say, Falcon 9. That's simple economies of scale and great news for those that need it.

Space tugs and rideshare show up here too - but space tugs are added cost, added risk, and schedules are still tied to rideshare availability. Peter Beck says the math doesn't work. Tom Mueller says it does. As yet, it's unproven and costs are an unknown. What we do know is it means a second vehicle and a second operator, greatly changing the risk profile of the mission.

Peter Beck has pointed out that rideshare is useful to a point but that it actually drives demand for dedicated launch - proving the two services are again, not fungible. He highlights three customers that started launching their demo satellites on Falcon 9 rideshare before moving to dedicated launch with Rocket Lab. The companies are Kinéis, IQPS, and Synspective.

Summary

The market conditions required for commoditized pricing to emerge simply do not exists today and to exist in future will require a level of success that the industry simply has never delivered on.

For the companies that do make it, there is no incentive to cut prices in a race to the bottom. Launch costs for dedicated launch on Falcon 9 and Electron - the two most frequently launched vehicles in the world (ex-China) - have risen over time, not fallen.

Maybe in 20 years the world will look different, but for the decade ahead, I won't be making investment decisions reliant on falling launch costs.

I didn't think I could love Rocket Lab CEO Peter Beck more as a Engineer, a CEO, and all round good guy... until that is, I found out he owns a gold mine.

I intend today to convince you that valuing rocket launch companies is analogous to valuing gold mining discoveries. (I'm not joking!)

TL;DR: Two or three survivors have to amortize the costs of all failed attempts (over 100+). This is a well proven and understood centuries old concept in commodities. I think it's an even stronger thesis in space.

Before switching focus to investing in space companies, I spent 12 years investing in gold, silver, copper, and uranium exploration companies. I've noticed a strikingly similarity in valuing these commodity discoveries to rocket companies.

I'll start you off with this wonderful quote from the 1948 movie "Treasure of the Sierra Madre". The scene is two men discussing the value of gold.

Howard:
Say, answer me this one, will you? Why is gold worth some twenty bucks an ounce?

Flophouse Bum:
I don't know. Because it's scarce.

Howard:
A thousand men, say, go looking for gold. After six months, one of them's lucky. One out of a thousand. His find represents not only his own labor, but that of nine hundred ninety-nine others to boot. That's six thousand months, five hundred years, scrambling over a mountain, going hungry and thirsty. An ounce of gold is worth what it is, mister, because of the human labor that went into the finding and getting of it.

*End quote*

I thoroughly enjoy this quote and the premises rings true to me. Here is a simple thought exercise to clarify the point.

If 1,000 people compete for a chance that one of them would make $10, very few would take up the challenge. But if 1,000 people compete for a chance that one of them would make $10,000. Then the incentive is there, and rightly, to the victor goes the spoils.

Back to Gold, we can say that if 1,000 people search for gold, the reward needs to pay for all 1,000 peoples efforts including their time and expenses, even if only one person is ultimately successful.

This remains as true today as in 1948. It's hard to pin down an exact number but I've seen an estimate that only 1 in 4,000 grass roots prospects ever turn into a producing gold mine.

There are ~1,600 junior mining companies listed in Canada & Australia today and maybe 2-5 new gold mines go into production globally each year.

When it does work, the rewards generated by those 2-5 new producing gold mines needs to cover the expenses of all 1,600 companies that went looking for new mines. Here is the proof:

In 2015, Great Bear Resources purchased the Dixie project for CAD$210,000. After successfully discovering gold, they sold the project for total consideration including a royalty spinout of approximately CAD$2B, a 9,523x difference.

Great Bear spent a total of approximately CAD$80M working on the project before selling it, showing that the return (incentive) covered far more than their own efforts - the reward had to amortize not just their costs but the costs of the dozens of other companies that tried but failed to make discoveries in the same area.

(I was fortunate enough to invest in Great Bear Resources - you can see why the sector appealed to me. I was late but early investors made 58x returns.)

Thus we have proven that indeed the premise is true, the incentive required to generate a replacement gold mine equals not only the expenses of the discoverer but also those who tried and failed.

Now onto rockets 🚀

What is SpaceX worth? Well, what is the replacement cost for SpaceX? How much different would it cost to build your own SpaceX vs. buying SpaceX as it exists today. What incentive is needed to justify even trying to build your own SpaceX from scratch.

Thus far, entire governments (China) with essentially unlimited funding, cannot replicate SpaceX. Thus the replacement costs for SpaceX approaches infinity. No amount of money can replicate SpaceX today.

When Rocket Lab were developing Electron, there were more than 100 companies trying to build a competing small launch vehicle.

How many companies succeeded in building a small launch vehicle with cadence: ZERO

Rocket Lab is the 1 in >100 that succeeded.

The other way of saying this is that, to get another Rocket Lab, you would need to fund 100 companies to go out and try again.

What makes more sense, giving 100 start-ups $0.5B each to try and replicate Rocket Lab. Or just buying Rocket Lab for $50B today.

Electron is less than 1/3 of Rocket Labs valuation today so lets adjust and say: Would it make more sense to give 100 companies $150M each to try, or just buy Rocket Labs Electron business for $15B.

History shows you'd be better of lighting your money on fire than funding rocket start ups - but at least we'd get a sequel to Wild Wild Space.

Bottom Line = Permanently High Valuations

Don't be surprised to see successful launch & space companies sit at permanently high valuations based on traditional metrics.

It's easy to compare companies using metrics like Price to Earnings or Price to Sales and say 100 P/S is overvalued for SpaceX or 60 P/S is overvalued for Rocket Lab - but when you're competing in a market segment of 1 - companies will migrate towards their replacement cost.

What exactly that replacement costs is the market will determine - it's too complicated for one person to calculate but the market says it's around $1.75T for SpaceX.

Arguably at those high traditional metrics, Rocket Lab should be $80B today and $300B if you buy based on 2030 rev estimates ($3B rev x 100 P/S if the market is right about SpaceX).

For those curious, that puts RKLB at $519/share.

*** Notes ***

1. The intent here is not to provide a way to value companies - merely to provide an explanation as to why they can stay at permanently high valuations. I kept the SpaceX comparison in for fun.
2. The gold prospect analogy ends at the point the gold prospect is sold. Gold mines are depleting assets and lose value over time. Value is typically crystalized in a one time takeout. Space companies are not depleting assets, this difference strengths the thesis for space companies, making valuations permanently high.
3. The core thesis - that in a market where only 2 or 3 survivors emerge from 100+ failed attempts, & that the value of the survivors must amortize the cost of all failed attempts - is well understood by institutional gold investors and has been for a century. It's not clear if institutional investors in space follow this principal. Time will test the thesis.

Thanks for reading.

******

Positions:

3,680 RKLB Shares

69x Jan 28 $75 Calls